0001 1 2 3 * * * * * * * * * * * * * * * * * 4 5 BINGO ADVISORY COMMITTEE 6 MEETING 7 8 NOVEMBER 21, 2002 9 10 * * * * * * * * * * * * * * * * * 11 12 13 14 15 16 17 18 BE IT REMEMBERED that the BINGO ADVISORY 19 COMMITTEE meeting was held on the 21ST of NOVEMBER, 20 2002, from 9:00 a.m. to 4:00 p.m., before Brenda J. 21 Wright, RPR, CSR in and for the State of Texas, 22 reported by machine shorthand, at the Offices of the 23 Texas Lottery Commission, 116 East Sixth Street, 24 Austin, Texas, whereupon the following proceedings 25 were had: 0002 1 APPEARANCES 2 3 Chairman: Ms. Virginia McCormick Brackett 4 5 Committee Members: Ms. Suzanne Taylor 6 Mr. Mario Manio Mr. Saleem Tawil 7 Mr. Pete Pavlovsky Mr. Larry Whittington 8 Mr. Daniel Moore Ms. Marilyn Matthews 9 10 Charitable Bingo Operations Director: Mr. Billy Atkins 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 INDEX 2 3 Appearances...................................... 2 4 AGENDA ITEMS 5 Item Number 1.................................... 4 6 Item Number 2.................................... 4 Item Number 3.................................... 6 7 65 Item Number 4.................................... 34 8 265 Item Number 5.................................... 96 9 265 Item Number 6.................................... 136 10 Item Number 7.................................... 141 Item Number 8.................................... 141 11 Item Number 9.................................... 34 Item Number 10................................... 158 12 Item Number 11................................... 161 Item Number 12................................... 163 13 Item Number 13................................... 164 247 14 263 264 15 Item Number 14................................... 185 206 16 Item Number 15................................... 194 Item Number 16................................... 209 17 Item Number 17................................... 227 Item Number 18................................... 250 18 Item Number 19................................... 250 19 Reporter's Certificate........................... 270 20 21 22 23 24 25 0004 1 NOVEMBER 21, 2002 2 CHAIR BRACKETT: It's five after 10:00, 10:03 3 so we'll call the Bingo Advisory Committee meeting to 10:03 4 order. And we're happy to see everyone here today and 10:03 5 get to welcome you here. We're glad that Chairman 10:04 6 Clowe is here from the Texas Lottery Commission. 10:04 7 Thank you for being here. He says that later in the 10:04 8 meeting that Commissioner Cox will be joining us, 10:04 9 which means that Chairman Clowe has to leave when he 10:04 10 comes in. 10:04 11 Today for lunch, we will probably take 10:04 12 a lunch break, beginning at -- as close to 12:00 as we 10:04 13 can. If we are in the middle of business, then we 10:04 14 will continue the business and adjourn temporarily for 10:04 15 lunch and then reconvene back in this office. 10:04 16 The first item of business on the 10:04 17 agenda is to approve the minutes of the last two 10:04 18 minutes -- I mean, approve the minutes of the last two 10:04 19 meetings. That would be the August 23rd and the 10:04 20 September 9th. And we probably need to take those 10:04 21 separately. Are there any corrections or changes to 10:05 22 the August 23rd meeting? 10:05 23 MS. TAYLOR: I have a couple. 10:05 24 Throughout the minutes, the court reporter wrote down 10:05 25 that card-minders were card-binders, so it wasn't one 10:05 0005 1 time. It's the whole way through. So I would like to 10:05 2 show that those are card-minders, with an M, not a 10:05 3 card-binder. The other thing is that I noticed that 10:05 4 the front of it talks about that it's the Bingo 10:05 5 Advisory Committee public hearing. And I think that 10:05 6 it should be -- it was our meeting, not a public 10:05 7 hearing. 10:05 8 Also, under -- I don't even know how to 10:05 9 refer to this, but it's 0216, I made reference to 10:05 10 where the eight-liner establishments were, that they 10:05 11 were five minutes from my hall, not from my home. And 10:05 12 also in here, it -- it mentions that Mr. Atkins has 10:05 13 become a distributor, I guess. I think it should be 10:05 14 Mr. Griffith and not Mr. Atkins, under 0012, starting 10:06 15 line five. It keeps referring to Mr. Atkins when I 10:06 16 don't think that he has become a distributor recently, 10:06 17 so probably all of that should be Mr. Griffith's 10:06 18 stuff. 10:06 19 And under 0165, it's Rowanda, with an R 10:06 20 instead of Worlanda, when it references her. 10:06 21 CHAIR BRACKETT: Are there any other 10:06 22 corrections to the August 23rd minutes? All those in 10:06 23 favor of approving the minutes as they were amended, 10:06 24 please say aye. Any opposition? So the minutes are 10:06 25 approved. 10:06 0006 1 On the September 9th meeting minutes, 10:06 2 are there any corrections on those? 10:06 3 I have a correction on -- and it's 10:06 4 probably really a typographical error. In what I 10:06 5 printed off the Internet, it comes out on page 59 that 10:06 6 seven percent, so it's our understanding that seven 10:07 7 percent or thereabouts, and it should be 70 percent on 10:07 8 that. Any other corrections? Are you ready to 10:07 9 approve the minutes of the September 9th meeting? All 10:07 10 those in favor, please say aye. There is no 10:07 11 opposition, so those minutes are approved. 10:07 12 All right. We need to talk about the 10:07 13 Sunset Commission's report to the Texas Lottery 10:07 14 Commission. And all of that is in your notebook 10:07 15 there. And I'm going to let Billy talk to you about 10:07 16 this and also explain a little bit about something 10:07 17 else he passed out this morning. Billy Atkins. 10:07 18 MR. ATKINS: Thank you, Madam Chairman. 10:07 19 Nelda Trevino is the Sunset coordinator for this 10:07 20 agency and she could not be here today due to illness 10:07 21 and she expresses her regret for that. I would like 10:08 22 to discuss the information you have in your notebook. 10:08 23 The first thing you have is a letter from the chairman 10:08 24 of the Texas Lottery Commission, dated October 30th, 10:08 25 2002, to the Sunset Advisory Commission, which 10:08 0007 1 includes decisions reached by the Texas Lottery 10:08 2 Commission at their September 24th, 2002 meeting 10:08 3 relating to issues four and five of the Sunset staff 10:08 4 report and alternate recommendations. 10:08 5 The next document that you have is 10:08 6 titled Sunset Commission Decision Material, November 10:08 7 2002. And that is the information that the members of 10:08 8 the Texas Sunset Commission had at their November 12th 10:08 9 meeting when they considered the recommendations made 10:08 10 by the Sunset staff on the Texas Lottery Commission. 10:08 11 I have subsequently handed out to you this document, 10:09 12 which the only difference is, the title is Sunset 10:09 13 Commission Decisions. And this document is 10:09 14 essentially the same as the document that is contained 10:09 15 in your notebook, except for the fact, if you just 10:09 16 turn to the first issue, which starts on page three 10:09 17 and concludes on page four, the document that I handed 10:09 18 out today, the one labeled Sunset Commission 10:09 19 Decisions, contains one additional line. And that 10:09 20 line, on page four, at the very bottom of page four, 10:09 21 contains the Commission decision reached by the Sunset 10:09 22 committee at their hearing. 10:09 23 Now, the only issues that the Sunset 10:09 24 Commission adopted, apart from what the Sunset staff 10:10 25 recommended, relate to issue four, issue five, issue 10:10 0008 1 eight -- no, I'm sorry. They did adopt Sunset staff's 10:10 2 recommendation on that, and the new issue 26, which is 10:10 3 located in the back of that document on page 44. The 10:10 4 new issue 26 deals with the concept of unit 10:10 5 accounting. 10:10 6 At this time, since the Sunset 10:10 7 Commission has issued their decisions, Sunset staff is 10:10 8 now working with the legislative council to draft the 10:10 9 Sunset bill which will be introduced in the upcoming 10:10 10 legislative session, and that bill is being drafted in 10:10 11 accordance with the decisions reached and contained in 10:11 12 this decision document that I handed out today. 10:11 13 I would be happy to try and answer any 10:11 14 questions you may have. 10:11 15 CHAIR BRACKETT: So this would be the 10:11 16 document you would need to work with in working with 10:11 17 any elected officials in getting changes made or 10:11 18 adoptions? 10:11 19 MR. ATKINS: Yes, ma'am. The document 10:11 20 that I handed out today is the most recent. 10:11 21 CHAIR BRACKETT: Okay. Well, now is 10:11 22 the time to discuss these issues and ask Billy any 10:11 23 questions, clarifications. 10:11 24 Mario, you look like you have something 10:11 25 you want to say. 10:11 0009 1 MR. MANIO: Not yet. 10:12 2 CHAIR BRACKETT: Not yet? Okay. All 10:12 3 right. How do you want to take this discussion on 10:12 4 this, on these? 10:12 5 Is there anyone in the audience that 10:12 6 would like to address it? Okay. 10:12 7 MR. BRESNEN: My name is Steve Bresnen 10:12 8 on behalf of the Bingo Interest Group. That's 10:12 9 B-r-e-s-n-e-n. First, I want to thank Chairman Clowe 10:12 10 and members of the Commission and staff for working 10:12 11 with us on the recommendations that eventually came 10:12 12 from the Lottery Commission and went to the Sunset 10:12 13 Commission. I think, although we're not in agreement 10:13 14 with every jot and tittle of those, I think it's a big 10:13 15 improvement over what the Sunset staff did, so I think 10:13 16 we made some progress. I particularly appreciated the 10:13 17 fact, Billy, that you and Phil and the rest of the 10:13 18 staff worked with us so closely on cranking some 10:13 19 numbers on the impact of things. And it was the kind 10:13 20 of discussion that I would like to see us have on all 10:13 21 these rules and everything that we do here, because I 10:13 22 think we made some big progress. 10:13 23 One of the things -- the unit 10:13 24 accounting issue is a real important issue to the 10:13 25 people that I represent. I think we can save a lot of 10:13 0010 1 money, eliminate a lot of violations, streamline the 10:13 2 process. And so we're real interested in seeing that 10:13 3 being followed up on. And, Billy, I'm -- I won't put 10:13 4 you on the spot to make any commitments today about 10:14 5 that, but I know you told Senator Jackson that, I 10:14 6 think, prior to the session that you would have some 10:14 7 report or something to him on that. And we would like 10:14 8 an opportunity to work with you on that, flesh out the 10:14 9 details. If there is problems that you guys are 10:14 10 seeing, it seems incumbent upon us to come forward 10:14 11 with some possible answers to those problems. So 10:14 12 given the opportunity to do that, we will. 10:14 13 The other items in the new issue list 10:14 14 there, we championed a lot of those items and, 10:14 15 frankly, we didn't get anywhere on them. I don't feel 10:14 16 like the -- I don't recall members of the Bingo 10:14 17 Advisory Committee being there. You may have had 10:14 18 contact with members of the legislature about those 10:14 19 new items, but there is a lot of important things to 10:14 20 bingo in those new items. And so I felt like we 10:14 21 weren't fully armed on behalf of the charities and the 10:15 22 other players in the industry out there, and I'm 10:15 23 calling upon y'all as individuals. I know your job as 10:15 24 a committee is to advise the Lottery Commission, but 10:15 25 I'm calling on y'all as individuals to get involved 10:15 0011 1 directly with members of the legislature on those 10:15 2 issues. Nobody was there championing the things that 10:15 3 y'all voted for here as a committee, to my knowledge. 10:15 4 Maybe you were. Maybe I wasn't aware -- 10:15 5 MS. TAYLOR: Which meeting are you 10:15 6 talking about? The first Sunset meeting? 10:15 7 MR. BRESNEN: No. I'm talking about 10:15 8 the meeting where they voted and prior to them voting. 10:15 9 Prior to them voting is really what I'm talking about, 10:15 10 because there was no opportunity for public comment at 10:15 11 the meeting that they voted. 10:15 12 MS. TAYLOR: Well, actually, Virginia 10:15 13 and I were both present at that first one, I know for 10:15 14 a fact. 10:15 15 MR. BRESNEN: Yeah. I understand that. 10:15 16 I know. What I'm saying is, it's a matter of follow 10:15 17 through. And, you know, I've been down there pounding 10:16 18 the halls, I've been talking to members of the 10:16 19 legislature. I hope y'all have. Maybe I just don't 10:16 20 know about it. We need to know about it and we need 10:16 21 to work in a little more concerted fashion if we're 10:16 22 going to get somewhere on behalf of the industry, and 10:16 23 all I'm saying is, as we go forward, I would 10:16 24 appreciate it if you guys would do that. If I can 10:16 25 help in any way, please let me know. Thanks. 10:16 0012 1 CHAIR BRACKETT: I tell you one way you 10:16 2 can help is keeping us informed when we need to be 10:16 3 there. 10:16 4 MR. BRESNEN: I'll be glad to help with 10:16 5 that. 10:16 6 CHAIR BRACKETT: Okay. 10:16 7 MR. BRESNEN: And we need to -- maybe 10:16 8 we need to -- I'll get with you, Virginia, and figure 10:16 9 out what the most efficient way to do that is. I've 10:16 10 been keeping a lot of people informed about that. And 10:16 11 I feel like a handful of people, namely, the people 10:16 12 who pay me, are sort of carrying the ball on that. 10:16 13 That costs money, it takes time and effort, and 10:16 14 somehow or another, I've got to get some other folks 10:16 15 involved in this deal. Because I personally am 10:16 16 feeling a little overwhelmed and I -- keep in mind, we 10:17 17 have not advocated a single thing on behalf of the 10:17 18 commercial lessor. We haven't come in here and asked 10:17 19 to -- for the gross receipts tax to be changed, to 10:17 20 maybe redistribute the financial burden for carrying 10:17 21 this industry and the money it contributes to the 10:17 22 State to the distributors and manufacturers and away 10:17 23 from us. We haven't done any of that. Everything we 10:17 24 have focused on has been for the charities and trying 10:17 25 to help the charities thrive and do better. And so 10:17 0013 1 I'm happy to do that with you because I know you're a 10:17 2 volunteer, but I've had some people who get paid 10:17 3 pretty good money call up and ask me to carry the load 10:17 4 for them while everybody else is footing the bill, and 10:17 5 so I'm -- in y'all's case, I'll certainly do that. 10:17 6 Thanks. 10:17 7 CHAIR BRACKETT: Does anyone have 10:17 8 anything they would like to ask Steve while he's here 10:17 9 and -- and under oath? Did you sign a -- 10:18 10 MR. BRESNEN: Yes, ma'am. I may talk 10:18 11 about a couple more, so I will turn it in then. 10:18 12 MS. MATTHEWS: Steve, were you 10:18 13 referring to the new issues on page 39? 10:18 14 MR. BRESNEN: Yes, ma'am. Well, I 10:18 15 don't know what you -- I don't have what you have, so 10:18 16 I can't say what page. And, you know, we didn't push 10:18 17 all of those issues. There are some of those issues 10:18 18 that we don't agree with. But there -- let me just 10:18 19 give you an example. A real simple thing like the 40 10:18 20 percent rule. It's a trap -- 10:18 21 MR. ATKINS: Steve, let me -- the page 10:18 22 numbers are going to be the same for the November 12th 10:18 23 document, so if you have that. 10:18 24 MR. BRESNEN: I'll -- rather than take 10:18 25 the time to dig through my folder back there. But let 10:18 0014 1 me just give you two or three examples and maybe it'll 10:18 2 be illustrative of what I'm talking about. The 40 10:18 3 percent rule, even the agency agrees, is a problem. 10:18 4 It's a trap for people in the industry. You know, we 10:18 5 go around talking to the members about the 40 percent 10:18 6 rule, legislators, you know, their eyes glaze over 10:18 7 and, you know, they can't really grab it right away. 10:18 8 They need to hear it repeatedly and they need to hear 10:19 9 it from some people in the industry about that. 10:19 10 That's just one small example. 10:19 11 The unit accounting deal, which is the 10:19 12 big deal. I think you can save some money, I think 10:19 13 you can streamline the agency processes. I think it's 10:19 14 a huge deal. And I feel the staff moving in the 10:19 15 direction and they said very positive things about it, 10:19 16 but they're not quite ready to sign off on it. And 10:19 17 that's fine. There is no stampede to do that. But my 10:19 18 sense is, from talking to members of the legislature, 10:19 19 that there is a handful of us that are up here working 10:19 20 on those issues, and it needs to be more than a 10:19 21 handful if we're going to get those things done. 10:19 22 MS. MATTHEWS: I wasn't even aware that 10:19 23 those things were going to be brought up or when they 10:19 24 were going to be brought up, so somehow we're not 10:19 25 being made aware of these things. 10:19 0015 1 MR. BRESNEN: Yes, ma'am. Well, 10:19 2 I'll -- just out of a spirit of generosity, I'll take 10:19 3 responsibility for that. At any rate, I'm -- the 10:19 4 session starts the middle of January, and that's when 10:20 5 the real fun will begin, so somehow or another we've 10:20 6 got to get y'all plugged in on a more consistent 10:20 7 basis. 10:20 8 MR. WHITTINGTON: Steve, on the 40 10:20 9 percent rule, you know, you're right. I really don't 10:20 10 understand it because I'm not going to turn the 10:20 11 customer away. Number one, we don't have too many 10:20 12 bingo customers as it is. If one wanted to come in 10:20 13 and play a -- the same thing on the 40 percent, I'm 10:20 14 going say, no, you can't, and, no, I don't think 10:20 15 that's right. I don't even think it should be there, 10:20 16 personally, you know, because I don't want to turn 10:20 17 away nobody as far as when it comes to bingo or 10:20 18 playing whatever they want to play. 10:20 19 MR. BRESNEN: Have you told any members 10:20 20 of the legislature that? 10:20 21 MR. WHITTINGTON: That's what I'm 10:20 22 planning on doing. 10:20 23 MR. BRESNEN: Okay. Great. But I just 24 picked that out because it's so stupid. It's a stupid 10:20 25 thing. It shouldn't be there. It's a problem for the 10:20 0016 1 staff. So I just picked an easy one. We had about 10:20 2 ten or 11 items, and I'll be glad to share them with 10:20 3 you, that we wanted them to pay attention to so people 10:20 4 in bingo would have something done for them instead of 10:21 5 to them. And, you know, frankly, I feel a little 10:21 6 defeated right now. We put a lot of time and effort 10:21 7 into those things during the last year, as y'all well 10:21 8 know, and -- but we're not going to quit. We're going 10:21 9 to triple up. I'm just asking y'all to help us triple 10:21 10 up. Okay? Thanks. 10:21 11 MR. ATKINS: Let me make one 10:21 12 clarification for the record. There has been a 10:21 13 discussion of the 40 percent rule. There is no 10:21 14 administrative rule regarding any type of percentage 10:21 15 that is language contained in the statute. So I think 10:21 16 probably a more accurate representation is the 40 10:21 17 percent law. 10:21 18 CHAIR BRACKETT: So this is a law, 10:21 19 which is harder to change than a rule? 10:21 20 MR. ATKINS: That's correct. 10:21 21 CHAIR BRACKETT: Okay. Any other 10:21 22 comments? Any comments on that or anything else? I 10:21 23 would like to hear from members of the Advisory 10:22 24 Committee, too. 10:22 25 MR. WHITTINGTON: Billy, where did that 10:22 0017 1 come from? I mean, who adopted it? Why did they 10:22 2 adopt that? Because of the card-minding devices 10:22 3 coming out? 10:22 4 MR. ATKINS: The 40 percent 10:22 5 requirement? 10:22 6 MR. WHITTINGTON: Yes. 10:22 7 MR. ATKINS: You know, I'm not going to 10:22 8 speak to the legislative intent, why they -- why they 10:22 9 would have done that. There were restrictions that 10:22 10 were initially placed in the Act when card-minders 10:22 11 were first introduced, and that's a modification to 10:22 12 the original restriction. But there has always been 10:22 13 an intent by the legislature, in my opinion, to limit 10:22 14 the number of card-minding devices that could be used 10:22 15 during a bingo occasion. I see we have a 10:22 16 representative of a card -- a distributor, who may be 10:22 17 able to comment on that. 10:22 18 MS. MORRIS: Excuse me. Is this within 10:23 19 the Sunset report, this 40 percent? I just want to 10:23 20 make sure if this is still on the agenda. 10:23 21 MR. ATKINS: There was a new issue 10:23 22 proposed -- 10:23 23 MS. MORRIS: Okay. It was one of the 24 new issues -- 10:23 25 MR. ATKINS: -- that is contained in 10:23 0018 1 this document to eliminate that 40 percent 10:23 2 requirement. 10:23 3 MS. MORRIS: Okay. Thank you. 10:23 4 MR. GARCIA: Yes. My name is Joe 10:23 5 Garcia and we advocated the legislature for a change 10:23 6 in the 30 percent rule, as it used to be. When 10:23 7 card-minders first came in -- 10:23 8 MR. ATKINS: 30 percent statute. 10:23 9 MR. GARCIA: Yes. 30 percent statute. 10:23 10 Right. Let me clarify that. 10:23 11 When card-minders first came in, there 10:23 12 was various groups that were concerned about the 10:23 13 proliferation of the card-minders, let's say, to an 10:23 14 all-electronic bingo hall, and it scared the smaller 10:23 15 halls. And I remember the Elks specifically were 10:23 16 involved and got legislators to put the 30 percent 10:23 17 cap, fearing the unknown, I guess. So when we went 10:23 18 back to the legislature to try to have that cap 10:24 19 removed or raised, we found that there was still some 10:24 20 opposition to it. And so what we did is we previewed 10:24 21 it, came up with some language that we thought -- you 10:24 22 know, using an average of attendance would help -- I 10:24 23 guess, kind of lift the limits a little bit, and 10:24 24 essentially that's how we got the 40 percent rule. 10:24 25 MR. WHITTINGTON: So how many years ago 10:24 0019 1 has that been? 10:24 2 MR. GARCIA: That was in '99. 10:24 3 MR. ATKINS: '97. 10:24 4 MR. GARCIA: Well, '97 was the 30 10:24 5 percent and then we changed it. 10:24 6 MR. TAWIL: '95 was the 30 percent and 10:24 7 '97 on the 40 percent? 10:24 8 MR. GARCIA: On the 40 percent, yes. 10:24 9 MR. WHITTINGTON: So, you know, like I 10:24 10 say, I just see that a lot of stuff just lay dormant 10:24 11 or we vegetate on it and it goes nowhere. We need to 10:24 12 be more innovative and people should decide what they 10:24 13 want to do when it comes to bingo, whether play 10:25 14 computer or cards or whatever. And it's 2002. 10:25 15 MR. GARCIA: I agree. 10:25 16 MR. WHITTINGTON: And, you know, we 10:25 17 really should do something about that. 10:25 18 CHAIR BRACKETT: As a little bit of 10:25 19 history, there was a lot of -- a lot of halls really 10:25 20 did fear the electronics. That it was -- that, you 10:25 21 know, that the small halls would cease to exist. That 10:25 22 it's all anybody would want to play and et cetera, et 10:25 23 cetera. But I do think it's -- well, anyway, that's 10:25 24 just a little bit of history on it. 10:25 25 We're going to have to get somebody to 10:25 0020 1 tell us if there is still that fear. I don't know if 10:25 2 there is still that fear or not. 10:25 3 MR. WHITTINGTON: Well, just most 10:25 4 Americans, they're going to do what they want to 10:25 5 anyway, no matter what you say. What kind of rule you 10:25 6 have there. They're going to do exactly what they 10:25 7 want to do. If they want to play computers, they're 10:25 8 going to play computers. 10:25 9 CHAIR BRACKETT: Well, you're saying, 10:25 10 if one hall is sold out of electronics, they're going 10:25 11 to go to the next hall to play. 10:25 12 MR. WHITTINGTON: It still depends on 10:26 13 the personnel and the person that's running that keeps 10:26 14 the customers, as far as I'm concerned. Because 10:26 15 people play off of personalities. 10:26 16 MR. HEINLEIN: David Heinlein with 10:26 17 Jetta Management. Since y'all are talking about the 10:26 18 40 percent law, I thought I might make a comment. 10:26 19 I've not been a proponent of electronics from the very 10:26 20 beginning. 10:26 21 CHAIR BRACKETT: I'm sorry. I didn't 10:26 22 understand you. You haven't been -- 10:26 23 MR. HEINLEIN: I have not supported the 10:26 24 electronics from the very beginning because of their 10:26 25 cost. Their cost has been so extravagant that it's 10:26 0021 1 been difficult for the charities to make a profit on 10:26 2 it. I've done the accounting on these charities. 10:26 3 Now, the cost has been greatly reduced over the last 10:27 4 few years. It's beginning to get to a point where it 10:27 5 is affordable. I don't like the 40 percent rule. It 10:27 6 is, as everybody understands, it's very hard to manage 10:27 7 that. And so we have difficulty. We produce a report 10:27 8 for each of our charities that gives them the number 10:27 9 that they have -- average attendance for the two 10:27 10 previous quarters, which is the number then we have to 10:27 11 go by as to what they're able to sell in any one 10:27 12 session to -- and that many people. We manage it, but 10:27 13 it's not easy to manage, and it's -- you know, I think 10:27 14 it's not really a good thing to do. Because we do 10:27 15 have some times and occasions where there are more 10:27 16 electronic players, that they would like to use more 10:27 17 of them than the mandated amount that we tell them 10:27 18 that they can only sell to people. The cost, as it 10:27 19 comes down, as I say, has gotten a little bit more in 10:28 20 line, but one of the comments that I will be making as 10:28 21 we get down in the agenda, though I'll make it now 10:28 22 just for this particular purpose, as we have looked at 10:28 23 our new program of pull tabs, one of the things I have 10:28 24 observed is a reduced amount of electronic sales. And 10:28 25 I'm actually glad to see that, because I still have a 10:28 0022 1 problem with the amount of money that it costs. 10:28 2 Cost of goods sold is a percentage of 10:28 3 your gross receipts and it's still way too high on the 10:28 4 electronics, even at ten or 15 percent. It started 10:28 5 out at 30 percent. The paper cost, you know, is under 10:28 6 two percent. And the cost of goods sold is a very big 10:28 7 cost to the charities and it has to be carefully 10:28 8 looked at. So that's all I have on that particular 10:28 9 item, but I will have other comments in other 10:28 10 sections. Thank you. 10:28 11 CHAIR BRACKETT: Thank you. In your 10:29 12 books, why don't we turn back to the beginning of the 10:29 13 report from the Sunset Commission and kind of go 10:29 14 through that. See if have you a comment on page to 10:29 15 page on that, or an observation, or anything. And 10:29 16 that way, I think we can give the people who are here 10:29 17 a chance to speak to various issues. Is that 10:29 18 agreeable? Is that a good way to do that? 10:29 19 Okay. In your book there, the first 10:29 20 issue is 4.1. 10:29 21 MR. MOORE: I'll throw in my two cents 10:29 22 on that. I think that proposal is much better than 10:29 23 where we were in 25 and then they bantered about ten 10:30 24 percent, which is actually an option on that. The 10:30 25 only thing that concerns me on this is, who is going 10:30 0023 1 to decide what the operating account is going to hold? 10:30 2 Bingo is cyclical. They're going to need more money 10:30 3 in their operating account, the charities will, over 10:30 4 the summer months, and I am just curious how they're 10:30 5 going to decide, if this becomes the law, how we 10:30 6 decide that. And, Billy, you may have a comment. I'm 10:30 7 sure you guys discussed it in your meetings. I wasn't 10:30 8 present, so if you have any input on that, I would 10:30 9 appreciate it. 10:30 10 MS. MATTHEWS: I would like to mention, 10:30 11 modification four, the sentence that says the 10:30 12 Commission would be allowed to set different 10:30 13 percentages according to the categories of conductor 10:31 14 licenses, which are based on the amount of a 10:31 15 conductor's gross receipts. What does that mean 10:31 16 exactly? 10:31 17 CHAIR BRACKETT: Okay. Billy, do you 10:31 18 want to comment first on Danny's and then we'll -- 10:31 19 MR. ATKINS: Oh, I'm sorry, Danny, I 10:31 20 was making a note. 10:31 21 MR. MOORE: Yeah. I thought maybe you 10:31 22 were writing down what I was saying. What I asked is, 10:31 23 I wasn't in on any of these meetings when you talked 10:31 24 about this, and I'm concerned about the operating -- 10:31 25 MR. ATKINS: When we talked about? 10:31 0024 1 MR. MOORE: 4.1, the new proposal that 10:31 2 talks about the charities being allowed to have an 10:31 3 operating account and -- or a percentage of something. 10:31 4 Obviously, there is periods in bingo, obviously, June, 10:31 5 July, August, where things are a little leaner, the 10:31 6 charities lean on those bank accounts to get them 10:31 7 through those times. I can't see that always being a 10:31 8 steady amount. I don't know if you guys have 10:31 9 discussed this between you and your staff and Steve 10:31 10 Bresnen, maybe Bill Pewitt. Is there any ideas on 10:32 11 what to do in that respect? 10:32 12 MR. ATKINS: There were, I think, some 10:32 13 broad figures that -- well, I take that back. In the 10:32 14 discussions that we had in -- for the members who 10:32 15 aren't aware of it. I know that the chair and I think 10:32 16 Suzanne were copied on some e-mails that were sent 10:32 17 out. The staff held a series of meetings with 10:32 18 Mr. Bresnen, Steve Fenoglio. Bill Pewitt and Joe 10:32 19 Garcia attended some of the latter meetings to discuss 10:32 20 these issues and possible solutions. And I think that 10:32 21 a -- it might have been Steve Bresnen who originally 10:32 22 broached the idea of an operating account or something 10:32 23 for the rainy day fund, whatever you want to call it, 10:32 24 for the organizations to be able to draw on in the 10:32 25 event that their organizations suffer any kind of 10:32 0025 1 downturn. We never -- in those meetings, I don't 10:32 2 recall us ever discussing an amount. It seems like in 10:33 3 the Commission hearing that was held when these issues 10:33 4 were decided on, I believe that Mr. Heinlein proposed 10:33 5 as a starting point some figures -- and I can't 10:33 6 recall, and I don't see him in the audience now, of 10:33 7 either 15,000 or 50,000. 10:33 8 MR. MOORE: I think it was 15, 10:33 9 actually. 10:33 10 MR. BRESNEN: It was a range. 10:33 11 MR. ATKINS: It was a range? Steve 10:33 12 Bresnen is indicating, from the audience, it was a 10:33 13 range from 15 to 50,000. 10:33 14 MR. MOORE: Yeah. I do remember that 10:33 15 discussion. I don't know if it was at our last 10:33 16 meeting or maybe even a lot -- the Texas Lottery 10:33 17 meeting. 10:33 18 MR. ATKINS: My recollection is it 10:33 19 occurred at the Lottery Commission meeting on 10:33 20 September 24th. 10:33 21 MR. MOORE: Yeah, that sounds right. 10:34 22 Okay. Yeah, that helps. 10:34 23 MR. ATKINS: And Mr. Heinlein stepped 10:34 24 back in. If you would like to ask him. Do you mind 10:34 25 coming up, David. 10:34 0026 1 Danny Moore had asked in the 10:34 2 Commission's recommendation on issue 4.1 and the 10:34 3 discussion of allowing the organizations to develop 10:34 4 and maintain an operating account, Danny was asking if 10:34 5 there had been any discussion regarding what that 10:34 6 amount should be. And my recollection is that there 10:34 7 had not been any discussion in the working group, but 10:34 8 that at the Commission meeting on September 24th, when 10:34 9 these items were discussed, you had been asked that 10:34 10 question, I think, by one of the Commissioners and had 10:34 11 offered a suggestion. 10:34 12 MR. HEINLEIN: Yes, I did. And I still 10:34 13 believe that that's a pretty fair approach. It's not 10:34 14 on a percentage basis, Danny. What I said -- and I've 10:35 15 discussed this with my charities in the past, not even 10:35 16 with that rule, is that we need a minimum of 15,000 10:35 17 dollars in our operating account. And if we want to 10:35 18 put a cap on that to eliminate some of those who carry 10:35 19 very large sums in that account, and they do, because 10:35 20 the idea was to try to get this out of the bingo 10:35 21 account and into distribution so it's counted in our 10:35 22 profit mode, you know, which is the distribution 10:35 23 total, that we might limit that to something like 10:35 24 50,000 dollars. So the range that I've seen to be 10:35 25 reasonable would be 15,000 minimum to perhaps a 50,000 10:35 0027 1 dollar maximum. There may be some individual cases 10:35 2 that the agency ought to have the flexibility, you 10:35 3 know, to make some decisions on it. If there is a 10:35 4 particular circumstance that it might require more 10:35 5 than 50, that they be allowed to do that. I mean, 10:35 6 that's one of the major points I think needs to be 10:36 7 looked at as Billy works with the legislative council, 10:36 8 is building something that he can live with long term 10:36 9 throughout the whole state because the conditions are 10:36 10 so varied and the scope of the bingo activity is so 10:36 11 different in each area. And he needs the flexibility 10:36 12 in this law, the 40 percent law, you need some 10:36 13 flexibility that he can make good judgment calls and 10:36 14 decisions that will benefit the charities and they can 10:36 15 make a profit. 10:36 16 MR. MOORE: Yeah, I'm just concerned, 10:36 17 the end of August and the coffers are empty and, you 10:36 18 know, it could really be a problem, so I just -- 10:36 19 MR. HEINLEIN: Well, this year I think 10:36 20 we will see that the bingo activity is the worst yet. 10:36 21 Year 2000 was the worst that we had, and then in 2001 10:36 22 it came up, but 2002, I think we'll see at the end of 10:36 23 it as having been our worst year. And so many of the 10:36 24 charities have depleted their working capital below 10:36 25 that 15,000 dollar minimum and they're having a 10:37 0028 1 difficult time. 10:37 2 MR. MOORE: David, you and I just 10:37 3 discussed this the other day. We're going through 10:37 4 another period right here where there is nobody in the 10:37 5 bingo halls again, the last couple of weeks, which is 10:37 6 kind of unprecedented here. We're usually getting 10:37 7 into some periods where we're seeing some good 10:37 8 deposits, and we've had a couple of weeks there where 10:37 9 it's been pretty sad. Right? 10:37 10 MR. HEINLEIN: And I'll be sharing 10:37 11 later in the agenda something that is going on that is 10:37 12 helping keep that from being worse than it is. 10:37 13 MR. MOORE: Okay. Thank you, David. 10:37 14 CHAIR BRACKETT: Are there any further 10:37 15 observations or discussions on these issues 4.1, 4.2? 10:37 16 Are we ready to move on to -- 10:37 17 MS. MATTHEWS: I would still like a 10:37 18 clarification -- 10:37 19 CHAIR BRACKETT: I'm sorry. I'm sorry. 10:37 20 Marilyn would like a clarification. Repeat that, 10:37 21 Marilyn. 10:37 22 MS. MATTHEWS: Clarification on 10:38 23 modification four to 4.1 and 4.2, the sentence that 10:38 24 says, the Commission would be allowed to set different 10:38 25 percentages according to the categories of conductor 10:38 0029 1 licenses, which are based on the amount of the gross 10:38 2 receipts. 10:38 3 MR. ATKINS: Marilyn, are you reading 10:38 4 from this document? 10:38 5 MS. MATTHEWS: Page 12. 10:38 6 MR. ATKINS: And again -- tell me again 10:38 7 what you're reading from? I'm sorry. 10:38 8 MS. MATTHEWS: Third sentence of 10:38 9 modification four. 10:38 10 MR. ATKINS: And what is your -- 10:38 11 MS. MATTHEWS: I don't understand how 10:38 12 that would work. 10:38 13 MR. ATKINS: Okay. The Bingo Enabling 10:38 14 Act provides for different classes of licensees based 10:38 15 on the gross receipts that that organization has 10:38 16 experienced. There are classes A through J, A being 10:38 17 the smallest organization. Those organizations 10:39 18 generally -- they may only conduct once a week. They 10:39 19 have gross receipts of less than 25,000 dollars a 10:39 20 year. Phil? 10:39 21 MR. SANDERSON: Yes. 10:39 22 MR. ATKINS: As opposed to a class J 10:39 23 that has gross receipts in excess of 400,000 dollars a 10:39 24 year. This is similar to language that is already 10:39 25 contained in the Bingo Enabling Act that allows sort 10:39 0030 1 of different requirements to be developed for 10:39 2 organizations based on their class size, and this 10:39 3 language mirrors that. 10:39 4 MS. MATTHEWS: Okay. I understand 10:39 5 that. And then the modification that has been 10:39 6 adopted -- this is one of them that has been adopted 10:39 7 by the Commission? Allows the Lottery Commission to 10:39 8 set the required distribution percentage? That's the 10:39 9 same modification? 10:39 10 MR. ATKINS: No. Modification four was 10:40 11 not adopted. The Commission adopted modification one, 10:40 12 which is on page ten. 10:40 13 MS. MATTHEWS: Okay. 10:40 14 MR. ATKINS: And then modifications 10:40 15 five and six. 10:40 16 CHAIR BRACKETT: Is there any 10:40 17 discussion on issue five? If there is not, we'll move 10:40 18 on to the next one. Anything you want to ask Billy on 10:40 19 any of these? Now is your time. 10:40 20 Issue six. 10:40 21 MR. MOORE: Hold on. I don't 10:40 22 understand five that well. I think a lot of people 10:40 23 were confused. What exactly took place with the 10:41 24 tiered system? I know the focus changed from the 10:41 25 grandfathered to the tiered. Is that what we're 10:41 0031 1 talking about on 5.1? Is that -- without looking at 10:41 2 it. Yeah. 10:41 3 MR. ATKINS: The Commission decision 10:41 4 and what they adopted was to abolish the tiered lessor 10:41 5 structure and to go back to the lessor structure that 10:41 6 existed prior to 1989. 10:41 7 MR. MOORE: Okay. It's still confusing 10:41 8 to me. So I guess in layman's term, can I -- a person 10:41 9 that has a building, can they go out and lease that 10:41 10 building to a group of charities at this point -- if 10:41 11 this were to become the law? 10:41 12 MR. ATKINS: If this were to become 10:41 13 law, a person with a commercial lessor's license could 10:41 14 lease to up to seven charities. 10:42 15 MR. MOORE: Okay. They would have to 10:42 16 get licensed through the Lottery. They do have to be 10:42 17 licensed. 10:42 18 MR. ATKINS: Yes. 10:42 19 MR. MOORE: Okay. That's fine. I 10:42 20 just -- I knew -- I thought there were some questions 10:42 21 about it or there were some loopholes in this thing, 10:42 22 but that's fine. I'll discuss it with some other 10:42 23 people. Thanks. 10:42 24 CHAIR BRACKETT: Ready to move to issue 10:42 25 six? Any questions or points of information there? 10:42 0032 1 Do you have any observations, Billy? 10:42 2 MR. ATKINS: No, ma'am. 10:42 3 CHAIR BRACKETT: Okay. Issue seven, 10:42 4 which deals with, the Advisory Committee does 10:42 5 effectively advise the Commission in the needs of the 10:42 6 bingo industry. This is really an opinion with a 10:42 7 recommended action, the management action. Is that 10:43 8 correct? 10:43 9 MR. ATKINS: Well, their recommendation 10:43 10 identifies what they call two statute changes, 7.1 and 10:43 11 7.2. the rest, 7.3 through 7.7, yes, are management 10:43 12 actions. 10:43 13 CHAIR BRACKETT: Any comments or 10:43 14 observations on this? Ready to move on to issue 10:43 15 eight? If you don't speak up, I'm just going to move 10:43 16 on. 10:44 17 Issue nine, which has to do with the 10:44 18 Lottery act -- key elements do not conform to the 10:44 19 commonly-applied licensing practices. We don't need 10:44 20 to make comment on that at all. 10:44 21 Ten has to do with the Bingo Enabling 10:44 22 Act. It recommends a change in statute. And I'm glad 10:44 23 all of you have done your homework. You've probably 10:44 24 worn your book out reading it before you got here and 10:44 25 marking it. But now is your time. We can put -- 10:44 0033 1 Billy is on the spot here. He'll answer anything. 10:45 2 Then we have a nice across the board 10:45 3 chart. This is a good chart to work with on things 10:45 4 just across the board. 10:45 5 Any further observations or comments 10:45 6 from anyone in the audience on any of these? 10:45 7 MS. MORRIS: I have a comment. I 10:45 8 just -- I want to remind you with respect, 10:45 9 Mr. Bresnen, that your body is subject by the 10:45 10 administrative rules -- 10:45 11 MR. ATKINS: Diane, would you identify 10:45 12 yourself and come up. 10:45 13 MS. MORRIS: I don't think there will 10:45 14 be any disagreement. I just want to make sure that 15 we're not saying things differently. 16 My name is Diane Morris. Remember, I'm 10:45 17 the attorney that's assigned to assist you in any Open 10:45 18 Meetings issues. Remember, that if you appear 10:45 19 somewhere and there is a quorum, you should not be 10:45 20 talking to each other unless that meeting is noticed. 10:46 21 And so it may be that you have heard that it would be 10:46 22 very beneficial for you to be over at the legislature 10:46 23 at their hearings, and there is a part of the Open 10:46 24 Meetings Act that allows for that to occur without 10:46 25 notice of that meeting. But it talks about when 10:46 0034 1 you're there to respond to questions, to visit with 10:46 2 legislators, and to participate in that hearing of the 10:46 3 legislature, that does not give you the go-ahead to 10:46 4 have discussions out in the hallways or -- and I think 10:46 5 y'all know what I'm saying, but I just feel compelled 10:46 6 to remind you of that. Thank you. 10:46 7 CHAIR BRACKETT: Thank you. All right, 10:46 8 then. Well, let's move on to item number four, 10:46 9 report, possible discussion and/or action on bingo 10:46 10 advertising. And Suzanne Taylor will address that. 10:46 11 MS. TAYLOR: I would like to know if we 10:46 12 could go ahead and talk about two agenda items at the 10:46 13 same time, item number four and item number nine, 10:47 14 because they're so closely related and one kind of 10:47 15 flows right into the other one. Is there a problem 10:47 16 with that? 10:47 17 MS. MORRIS: There is no problem with 10:47 18 that. Just try to be clear with yourselves that 10:47 19 you're taking up the agenda items together. 10:47 20 MS. TAYLOR: Okay. So we will be -- I 10:47 21 would like to talk about item number four and item 10:47 22 number nine at this time. We've talked about bingo 10:47 23 advertising at several of the meetings. The last 10:47 24 meeting, there was a motion made that we would like to 10:47 25 work on promoting bingo more. And I wanted to ask the 10:47 0035 1 rest of the committee if they had seen this really 10:47 2 awesome anniversary poster. And Worlanda made copies 10:47 3 of it for you, but -- which don't do justice to what 10:47 4 the poster really looks like. It's a really sharp 10:47 5 looking poster. Unfortunately, if you want this 20th 10:47 6 anniversary poster, it's going to cost you 15 dollars, 10:48 7 which I would like to -- which is -- in our little 10:48 8 advertising part of it, because obviously that's 10:48 9 advertising bingo, and it's a great poster. I just 10:48 10 feel that it's -- you aren't going to sell very many 10:48 11 at 15 dollars, and I would like to know if there is a 10:48 12 way that we could possibly see if the cost of that 10:48 13 could come down for the charities, so that the 10:48 14 individual charities purchasing this. And does 10:48 15 anybody -- I wanted to talk to you about -- this is 10:48 16 all with the advertising thing, but the Texas bingo 10:48 17 Web page. Have any of y'all looked at that recently? 10:48 18 Real recently? I don't know when the Web page 10:48 19 changed, but I was dismayed when I looked on the bingo 10:48 20 Web page, I thought I got onto the lottery Web page 10:48 21 last night, because what actually came up was an 10:48 22 advertisement for the lottery, nine million estimated 10:48 23 jackpot, 575,000 dollar estimated jackpot. It tells 10:48 24 me all of the last numbers for the last drawings. 10:48 25 Instead of telling me all these great things about 10:49 0036 1 bingo that it's telling me on this poster. I mean, 10:49 2 these awesome things and how much money has been 10:49 3 raised, how many people have attended, how much has 4 been given out, how much has gone to charitable 10:49 5 causes. Instead of appearing on the bingo Web page, 10:49 6 this is on a side page. You have to go to the link 10:49 7 and go to the poster to see these great things that 10:49 8 bingo has done, and on our Web page, we're advertising 10:49 9 the Texas Lottery Commission. So I go to the Texas 10:49 10 Lottery Web page to see what they're advertising on 10:49 11 the Texas Lottery Web page and lo and behold, it's the 10:49 12 same Web page that is advertising for bingo. So we 10:49 13 don't have anything more on their Web page, which goes 10:49 14 into the 1-800 number. So I made a copy. I called it 10:49 15 this morning to see if it had changed, because we 10:49 16 discussed this change of this at the last meeting. 10:49 17 And it still says the same thing. It advertises the 10:49 18 Lottery on the bingo number, instead of advertising 10:49 19 bingo. So this is all advertising that could be done 10:49 20 for us that it's not going to cost a dime. It's 10:49 21 things that -- it's not going to cost any more than 10:49 22 whatever the cost of the Web page is now, or whatever 10:50 23 the cost of the phone line is now. And since it's for 10:50 24 bingo, I would love to see it advertising bingo 10:50 25 instead of advertising the Lottery. 10:50 0037 1 The other thing that I wanted to ask 10:50 2 about the 1-800 number is if there is a way -- I think 10:50 3 most -- and I love the idea of having the locator 10:50 4 service on the number. But unfortunately, I think 10:50 5 that if anybody is really using the number for the 10:50 6 locator service, it's going to be after 5:00 o'clock 10:50 7 in the afternoon. And after 5:00 o'clock in the 10:50 8 afternoon, there is -- the locator service is not 10:50 9 available any more, because you get the voice thing 10:50 10 saying that -- call back tomorrow morning at 8:00 10:50 11 o'clock when we open. And I feel that if somebody is 10:50 12 calling that number to find the bingo hall, it's going 10:50 13 to be after 5:00 o'clock. I think probably 95 percent 10:50 14 of the halls in operation are evening halls, and your 10:50 15 customers are going to be calling after 5:00 o'clock 10:50 16 in the afternoon after they get out of work. So it's 10:50 17 all linked together. I mean, we're back to the -- I 10:50 18 know that at the last meeting, Billy, you said that 10:50 19 you were going to look into the 1-800 number and see 10:51 20 about working on that, and so I just wanted to bring 10:51 21 it back up to see what you had found out, and if we 10:51 22 could get that changed to do a better promotion of 10:51 23 bingo or else have bingo be advertised on the Lottery 10:51 24 number. 10:51 25 So I was just wondering if you were 10:51 0038 1 going to look into it, what was happening and when 10:51 2 that was going to happen and... 10:51 3 MR. ATKINS: Sure. Let me address 10:51 4 that. And I'll address -- I'm going to address this 10:51 5 specifically under item nine because, as you know, 10:51 6 Suzanne, the issues that you have raised under item 10:51 7 four, I had no prior knowledge of. They involve two 10:51 8 separate divisions within this agency, so 10:51 9 unfortunately, I'm not able to comment on them today. 10:51 10 MS. TAYLOR: Well, this I didn't know, 10:51 11 Billy. This was a surprise to me last night when I 10:51 12 was looking on the website, because I was trying to 10:51 13 get a chance to read through the minutes before I came 10:52 14 to the meeting today, and that's the first time I had 10:52 15 ever seen that the Web page had changed. And it 10:52 16 evolved into this. And I mean, it was not a pleasant 10:52 17 surprise, so I want to talk about it, because it is 10:52 18 advertising bingo, and I would like to either -- there 10:52 19 is more things about advertising that I would like to 10:52 20 talk about, also, besides this. 10:52 21 MR. ATKINS: And you're free to discuss 10:52 22 it. What I'm explaining to you is, I'm not prepared 10:52 23 to respond to it. 10:52 24 MS. TAYLOR: Okay. 10:52 25 MR. ATKINS: I'm happy to take the 10:52 0039 1 questions, go back and get the pertinent divisions 10:52 2 involved and report back. So let's talk about the 800 10:52 3 number. I did look into that, and it's not the bingo 10:52 4 800 number, it's the Lottery Commission 800 number 10:52 5 that the Bingo Division uses. And the equipment that 10:52 6 is utilized through that phone system, I was apprised 10:52 7 by our IT telecommunications department, costs several 10:52 8 hundred thousand dollars. So we are looking at if 10:52 9 there are ways that we can put a direct contact on 10:53 10 that system. It is going to result in an increased 10:53 11 cost to the division. And what we're having to do is 10:53 12 go back and calculate what that cost is, and if we can 10:53 13 incorporate it into our existing budget. 10:53 14 CHAIR BRACKETT: So that is being 10:53 15 worked on? 10:53 16 MR. ATKINS: Yeah. It's being worked 10:53 17 on. We don't have all of the information, but it's 10:53 18 not resolved at this time. 10:53 19 MS. MATTHEWS: So that if you call 10:53 20 1-800-BINGO77, you hear this discussion, or if you 10:53 21 call 1-800-37LOTTO, you hear this discussion. Why 10:53 22 can't there be a different message under 1-800-BINGO77 10:53 23 that puts bingo before the Lottery? 10:53 24 MR. ATKINS: Well, it's possible that 10:54 25 we could have a message that would just reference 10:54 0040 1 bingo, and that's what we're looking at. And what 10:54 2 we're analyzing is what that cost is going to be. 10:54 3 MS. MATTHEWS: Just to add a message, 10:54 4 it would be costly? 10:54 5 MR. ATKINS: It's not just -- I'm 10:54 6 not -- well, what we have to deal with is the fact 10:54 7 that this agency receives 5700 telephone calls a week. 10:54 8 About 200 of those are bingo related. So I mean, I'm 10:54 9 kind of hard pressed to justify, on the one common 10:54 10 number, to put bingo ahead of lottery when the 10:54 11 overwhelming majority of the calls that they get in 10:54 12 are lottery related. I mean, I'm also kind of at a -- 10:54 13 I guess, part of it may be that I'm not fully 10:55 14 comprehending, Suzanne, what your concern with the 800 10:55 15 number is. 10:55 16 MS. TAYLOR: Desperate to find 10:55 17 advertising for bingo, because there is no funds for 10:55 18 doing that. So all I'm trying to look at, ways that 10:55 19 we can get an extra little bit of -- a little bit of 10:55 20 attention to bingo. That's what it is. 10:55 21 MR. ATKINS: Well, and I appreciate 10:55 22 that. I'll just follow that up with, the overwhelming 10:55 23 majority of those 200 calls that we get are from 10:55 24 licensees. So while we've -- you know, we probably, 10:55 25 since June of -- I don't remember when it was. June 10:55 0041 1 of '99, when the Lottery bingo ticket was instituted 10:55 2 with the 800 number on there, that's received about 10:55 3 44 -- 45,000 phone calls. So -- to the 800 number. 10:55 4 So apart from the 800 number that the licensees call 10:56 5 in -- 10:56 6 MS. TAYLOR: And the locator service? 10:56 7 Do you still receive calls? 10:56 8 MR. ATKINS: Uh-huh. Daily. 10:56 9 MS. TAYLOR: How many calls do you 10:56 10 receive for the locator service? 10:56 11 MR. ATKINS: About 40 per day. 20 to 10:56 12 40. 10:56 13 MS. TAYLOR: I just -- because the 10:56 14 Lottery is such a competitor for bingo, and we're 10:56 15 scratching for every dime and trying to plug all the 10:56 16 holes that we're leaking. It would just be nice, if 10:56 17 somebody is calling in about bingo, that they hear 10:56 18 bingo first. That's all -- that we're promoting bingo 10:56 19 first. We're not telling them, you know, maybe you 10:56 20 need to be buying a lottery ticket. I mean, they log 10:56 21 on to the website. Why should they go play bingo? 10:56 22 There is a 90 million dollar estimated jackpot at the 10:56 23 Lottery, let's go buy the Lottery ticket instead. And 10:56 24 I'm just trying to survive. 10:56 25 MR. WHITTINGTON: You know, we should 10:56 0042 1 have money somewhere for that. For -- I mean, how 10:57 2 much do a phone number cost? I mean, that's the way I 10:57 3 feel. And as far as when it comes to bingo, this is 10:57 4 the foundation. This is where it all starts. Just 10:57 5 like the Lottery Commission. And rather than a hall 10:57 6 where it says, Texas Lottery Commission, Charitable 10:57 7 Bingo, side by side in the same letter, it seems like 10:57 8 we're just pushed aside and we've got to have some 10:57 9 type of advertising. I know there is some type of 10:57 10 distribution coming in to cover advertising. I know 10:57 11 that. So you can't sit there and tell me that a phone 10:57 12 number is going to cost you five, 600 dollars a month, 10:57 13 which I know it's not, because most calls are not 10:57 14 collect. They're basically calling from their phone 10:57 15 numbers to get some information about bingo. And I 10:57 16 think it should be addressed bingo -- I mean, at least 10:57 17 we can start there, having a bingo number and a 10:57 18 Lottery Commission number. 10:57 19 MR. ATKINS: Well, Larry, let me 10:57 20 address that. I don't agree with what you're saying. 10:57 21 And what you're saying gets to pretty much the heart 10:57 22 of the frustration that I have with the advisory 10:57 23 committee, is that their opinion is, we've got to be 10:58 24 able to just snap our fingers and get it done. And 10:58 25 that's not the case. And what I would like to suggest 10:58 0043 1 and, you know, again, unfortunately, we haven't had 10:58 2 the opportunity to talk about it beforehand, but I 10:58 3 know there has been a discussion about formulating 10:58 4 subcommittees to look at these issues. And I think 10:58 5 that it would be a more effective use of the entire 10:58 6 committee's time if we had that subcommittee to 10:58 7 independently look at all of the issues Suzanne has 10:58 8 raised, and the issues you've raised, and be able to 10:58 9 come back with one concise recommendation. 10:58 10 MR. WHITTINGTON: What I'm saying, 10:58 11 Billy, it wasn't snapping your fingers, because 10:58 12 nothing ain't never been snapping your fingers and 10:58 13 done here. Okay? It takes a while. It takes a 10:58 14 process. I mean, everybody is talking about what is 10:58 15 happening now. Let's talk about what is going to 10:58 16 happen later in the future. That's what we're talking 10:59 17 about. We can't change nothing now. We sure can look 10:59 18 at something for next year or something else to 10:59 19 improve bingo as far as advertising dollars. Okay? 10:59 20 And I know it takes money, and, of course, that issue 10:59 21 laid on too. We've got to have money coming in to 10:59 22 generate everything for bingo and every business start 10:59 23 advertising. That's number one. Okay? If we're 10:59 24 going to have some type of advertising thing taking 10:59 25 place, maybe some money needs to be taking up the 10:59 0044 1 percentages we're talking about on ten percent for 10:59 2 charities and stuff, so we can set aside for 10:59 3 advertising. I mean, we need to talk about that, too. 10:59 4 I'm talking about innovations, though. 10:59 5 MR. ATKINS: We do need to talk about 10:59 6 it, and I think we need to talk about it in a lot more 10:59 7 detail because there is no appropriation for 10:59 8 charitable bingo for advertising. 10:59 9 MR. WHITTINGTON: Right. 10:59 10 MR. ATKINS: So we can sit around, you 10:59 11 know, and talk about it all we want to, but until we 10:59 12 start getting to a lot of those underlying issues -- 10:59 13 MS. TAYLOR: Well, it's because of -- 10:59 14 because of the fact that I know there is no 10:59 15 appropriation, that's why I thought, if we just 10:59 16 started with bingo on the phone line, I mean, maybe it 10:59 17 would just mean a customer, two customers. I mean, 10:59 18 who knows what it could mean? On the Web site, I 11:00 19 mean, if we could just start with bingo on the bingo 11:00 20 website, because I know there is no appropriation, so 11:00 21 I'm trying to look at ways that we could get a little 11:00 22 bit of advertising with no appropriation. And that's 11:00 23 why when I look at these things -- but back to -- I'm 11:00 24 glad you're looking into the number. Call me. I will 11:00 25 make myself available if there is anything I can do. 11:00 0045 1 If you're looking for a subcommittee, I would be glad 11:00 2 to do that, to work with that. 11:00 3 But, for instance, I know that there 11:00 4 has been some kind of an appropriation or somewhere 11:00 5 the money is coming for this 20th anniversary 11:00 6 celebration. How is that being paid for? 11:00 7 MR. ATKINS: It's coming out of our 11:00 8 regular appropriation. It's information we provide on 11:00 9 bingo. 11:00 10 MS. TAYLOR: Is the true cost of the 11:00 11 poster, is the cost to the Commission 15 dollars a 11:00 12 piece for the poster? 11:00 13 MR. ATKINS: I don't have the Open 11:00 14 Records specialist here to address that. 11:00 15 MS. TAYLOR: How long is the poster 11:00 16 going to remain available? For the whole year, for 11:00 17 months, for -- 11:01 18 MR. ATKINS: You know, there is no 11:01 19 reason it -- it shouldn't remain available forever. I 11:01 20 don't know how meaningful it will be after the 20th 11:01 21 anniversary. 11:01 22 MS. TAYLOR: Well, what I would like to 11:01 23 see -- I mean, this is a beautiful poster. I would 11:01 24 be -- 11:01 25 MR. ATKINS: Thank you. 11:01 0046 1 MS. TAYLOR: -- that people can afford 11:01 2 it. I mean, but I want the poster. I would love for 11:01 3 us to be able to get the poster and put it around 11:01 4 businesses in town. But unfortunately, at 15 dollars 11:01 5 a piece, the charities are not going to purchase that. 11:01 6 And I know I can't afford to purchase it. So if you 11:01 7 could at least get them for cost. I mean, is the cost 11:01 8 truly 15 dollars a piece or is that a profit? Is that 11:01 9 paying -- 11:01 10 MR. ATKINS: No. I think that's what 11:01 11 we charge as cost. Again, I would prefer to have the 11:01 12 Open Records address that specifically. But my 11:01 13 understanding of the Open Records Act is that that is 11:01 14 what they charge. 11:01 15 MS. MATTHEWS: Billy, could one reason 11:01 16 that 200 of the 5700 calls might be that they're 11:01 17 hanging up before they get to the part that says, if 11:02 18 you're calling about bingo? 11:02 19 MR. ATKINS: No. 11:02 20 MS. MATTHEWS: Because that comes after 11:02 21 the Spanish interpretation of the Texas Lottery 11:02 22 Commission, and then it's -- I think I would be 11:02 23 hanging up by then. 11:02 24 MR. ATKINS: I don't know how to read 11:02 25 this exactly. But out of the 225 calls that we got, 11:02 0047 1 eight hung up. 11:02 2 MR. WHITTINGTON: All I'm saying is, 11:02 3 we've just got to start somewhere. Of course, I bring 11:02 4 up certain things, and I'm sitting here listening to 11:02 5 Suzanne about just a small minimum amount of 11:02 6 advertising, which is not a big expenditure to do. 11:02 7 And, of course, I talk about it because I think I'm 11:02 8 sitting here to talk to you. Because you are, you 11:02 9 know, the director. Okay? About it. And this is 11:03 10 just a suggestion that we need something to go forward 11:03 11 when it comes to bingo, because we're dying. We're 11:03 12 dying out there. We are. 11:03 13 CHAIR BRACKETT: Larry, I would like to 11:03 14 take some action on that. I would like to appoint a 11:03 15 committee to investigate this and bring a plan back to 11:03 16 us that we can recommend to the Texas Lottery 11:03 17 Commission. And I would like for you to be chair of 11:03 18 that committee. I would like for Suzanne to serve 11:03 19 with you, and for Saleem to serve on there because of 11:03 20 Saleem's TV industry experience. And can y'all bring 11:03 21 us a report at our next meeting, which we have not yet 11:03 22 set and do not know when we'll be meeting again, so -- 11:03 23 MR. WHITTINGTON: Sure. 11:03 24 MR. ATKINS: I would like, Madam Chair, 11:03 25 for it to be on the record that there is an 11:03 0048 1 expectation for that committee, that they're working 11:03 2 in consultation with the staff. 11:03 3 CHAIR BRACKETT: Oh, definitely. 11:03 4 Because you're not going to be able to just think of 11:03 5 these things and you are going to have to consult with 11:04 6 staff and see on the different things on there. 11:04 7 MR. TAWIL: Can I make a -- we are -- 11:04 8 Larry, this is kind of like deja vu. We've already 11:04 9 been through this. If you go back and look at the 11:04 10 minutes of the meeting, we've discussed this, we had 11:04 11 the director of communications from the lottery come 11:04 12 in. We talked about all of this, and it was 11:04 13 determined then that the thing to do is for us to 11:04 14 lobby the legislature and have some either attachments 11:04 15 to other legislation or brand new legislation that 11:04 16 says, this is the money that is going to be utilized 11:04 17 for advertising charitable bingo, period. It ain't 11:04 18 going to happen any other way. But I'll be glad to 11:04 19 serve on the subcommittee anyway. 11:04 20 MS. TAYLOR: I think, Saleem, that our 11:04 21 biggest thing is, what can we do with what we have 11:04 22 right now. Because whatever happens in January isn't 11:04 23 going to happen until September, so with what is 11:04 24 available to us now, we need to figure out if there is 11:04 25 anything that we can do with what we have. 11:04 0049 1 MR. TAWIL: We're going to have to have 11:05 2 all this done and submitted to the legislature before 11:05 3 the deadline, which is going to be in March. And the 11:05 4 only way that I've seen anything happen is through the 11:05 5 legislature. That's the only way anything is going to 11:05 6 get done. And if everybody here has the energy like 11:05 7 they show when they're sitting at these meetings, is 11:05 8 let's all go lobby the legislators individually as 11:05 9 well as collectively. We can be as individuals. We 11:05 10 don't have to be BAC. We can be people in the bingo 11:05 11 industry. We can get legislation filed and get it 11:05 12 done. You have just got to really want to do it. 11:05 13 MR. WHITTINGTON: So basically, what 14 you're saying is, for a phone number with bingo on it, 11:05 15 we've got to go to the legislature? 11:05 16 MR. TAWIL: Give Billy an advertising 11:05 17 budget and then we'll go from there. We've got to 11:05 18 give him a budget. He can't go to the Commissioners 11:05 19 and ask for it, because it's not a -- it's part of 11:05 20 appropriations. It doesn't exist. He is taking money 11:05 21 out of other areas and doing the 20-year anniversary 11:05 22 thing, as he told us. It's not money there that 11:05 23 exists. 11:05 24 CHAIR BRACKETT: Okay. Before we get 11:05 25 into committee work, do I need to change that deadline 11:05 0050 1 that -- when we need the report because of 11:05 2 legislative -- should it be like January that you have 11:05 3 a plan? Is that workable plan to come back to -- 11:06 4 MR. ATKINS: I would just shoot for the 11:06 5 next BAC meeting, with the understanding that if the 11:06 6 next meeting is in two weeks, I don't know, given the 11:06 7 holidays, if we'll be able to get together, but I 11:06 8 think that should be our goal. 11:06 9 CHAIR BRACKETT: Okay. So we'll stick 11:06 10 with the next Bingo Advisory Committee meeting. Does 11:06 11 that sound good? Well, it sounds like y'all are ready 11:06 12 to get to work, so that's the important thing. 11:06 13 I have one question on the anniversary. 11:06 14 It says that the 20th anniversary, it's 1982. When 11:06 15 2002 is over, does that mean the anniversary is over? 11:06 16 Because that's only like -- that's not that many days 11:06 17 away. 11:06 18 MR. ATKINS: (Nods head.) 11:06 19 CHAIR BRACKETT: Well, then, the 11:06 20 posters -- 11:06 21 MR. ATKINS: Let me readdress that. 11:06 22 The majority of our planned activities are over. I 11:06 23 mean, I think organizations can whoop it up as much as 11:06 24 they want to. As a matter of fact, I did an interview 11:07 25 yesterday out in your part of the woods, with Amarillo 11:07 0051 1 on the 20th anniversary, so... 11:07 2 CHAIR BRACKETT: What did you say? 11:07 3 MR. ATKINS: I said that bingo is 11:07 4 swell. 11:07 5 CHAIR BRACKETT: Well, I invite you to 6 come to Lubbock and do the same thing. 11:07 7 MS. TAYLOR: Are these posters 11:07 8 preprinted already? 11:07 9 MR. ATKINS: No. 10 MS. TAYLOR: They're printed as they're 11:07 11 ordered? 12 MR. ATKINS: They are printed as 11:07 13 they're ordered, yeah. And I don't recall how many -- 11:07 14 MS. TAYLOR: Are they printed in-house? 11:07 15 MR. ATKINS: Yes. And I don't recall 16 how many -- 17 CHAIR BRACKETT: Well, that's too bad. 11:07 18 I was hoping you had stacks of thousands that you'd 19 put on sale because they were out-of-date merchandise. 11:07 20 Okay. But they are lovely posters. 11:07 21 MR. PAVLOVSKY: One question. Billy, 11:07 22 on the poster that we have here about the 11:07 23 texasbingo.org. 11:07 24 CHAIR BRACKETT: That's the Web site. 11:07 25 MR. PAVLOVSKY: The Web site, yes. 11:07 0052 1 What is the process to modify that, to make it a bingo 11:07 2 Web page? Do you know? 11:08 3 MR. ATKINS: I don't, Pete. I know 11:08 4 that the agency that -- our website is maintained by a 11:08 5 third-party vendor and that we're currently -- we've 11:08 6 issued an RFP for a new vendor and are in the process 11:08 7 of finalizing that. But their primary responsibility 11:08 8 is with development, et cetera. 11:08 9 MR. PAVLOVSKY: And if you get some 11:08 10 proposals, when would the new -- the new person take 11:08 11 over, or the corporation? When would they take over? 11:08 12 MR. ATKINS: In a month. We hope 11:08 13 within the month. 11:08 14 MR. PAVLOVSKY: Okay. 11:08 15 MS. TAYLOR: Do you know when the 11:08 16 website, when it was changed to look like this? 11:08 17 MR. ATKINS: When it was changed to 11:08 18 look like what? 11:08 19 MS. TAYLOR: Like this one that I made 11:08 20 a copy of. Because it used to be the bingo -- 11:08 21 MR. ATKINS: This is what the home page 11:09 22 has always looked like, The Texas Lottery Commission 11:09 23 home page. 11:09 24 MS. TAYLOR: But the bingo -- 11:09 25 MR. ATKINS: Now, if you're going to 11:09 0053 1 the address, txbingo.org, and that's coming up -- 11:09 2 MS. TAYLOR: This is what comes up. 11:09 3 MR. ATKINS: Then we're going to have 11:09 4 to look into that, because that should not be the 11:09 5 case. txbingo should -- 11:09 6 MS. TAYLOR: That's why I was so upset. 11:09 7 This is what comes up. Last night, this is what came 11:09 8 up. 11:09 9 MR. ATKINS: Members, we have Mike 11:09 10 Fernandez, who is the director of the IT division with 11:09 11 us who can address some of those... 11:09 12 . 11:09 13 MR. FERNANDEZ: Thank you, Madam Chair, 11:09 14 Mr. Atkins. 11:09 15 That -- when they key that in, that 11:09 16 should go directly to txbingo and show that site. 11:09 17 I'll immediately go upstairs and look at that. The 11:09 18 other thing that we did, as I'm sure that most all of 11:09 19 you know, or all of you know, the State of Texas has a 11:09 20 portal called TexasOnline for employers, for citizens, 11:09 21 or for anyone to come in through one entryway, if you 11:09 22 will, and look for services or find information out 11:09 23 about state agencies or taxes, or whatever. And what 11:10 24 Mr. Atkins asked us here a week ago or a couple of 11:10 25 weeks ago, if we could include a button the Texas 11:10 0054 1 portal, so if you came in to TexasOnline, which 11:10 2 represents the State of Texas, there would be a button 11:10 3 that would identify charitable bingo. And that if you 11:10 4 as a citizen clicked on that button, it would take you 11:10 5 directly to your home page. So I know that DIR is 11:10 6 working on that, so that would be something that 11:10 7 anyone, if they came up on the State of Texas website, 11:10 8 would go directly to your home page, not to the 11:10 9 lottery's. 11:10 10 MS. TAYLOR: And I appreciate that. 11:10 11 But that's why I didn't like this, Billy, was the fact 11:10 12 that this is -- the web address that I wrote on the 11:10 13 top is the Web address I was at when I got this 11:10 14 website. Then I went ahead and typed in lottery, and 11:10 15 the same website pulled up. So then I typed back in 11:10 16 bingo again and it pulled the same website back up 11:10 17 again. 11:10 18 MR. FERNANDEZ: Well, I will go 11:10 19 upstairs -- 11:10 20 MS. TAYLOR: And this was last night at 11:10 21 10:30, 10:00 o'clock. 11:10 22 MR. FERNANDEZ: I will go upstairs and 11:11 23 check that. But as Mr. Atkins said, we did issue an 11:11 24 RFP, it has gone through the review process, we have 11:11 25 made, I guess, a tentative award, pending contract 11:11 0055 1 signature, and hopefully we will have that new company 11:11 2 operating fully within a month. But I will have that 11:11 3 checked. When they type in txbingo, it should go 11:11 4 directly to your home page, not to the Texas Lottery, 11:11 5 and I apologize that that is occurring. It should not 11:11 6 be. 11:11 7 CHAIR BRACKETT: Are there any other 11:11 8 questions or observations? Steve Bresnen. 11:11 9 CHAIR BRACKETT: Steve, I still don't 11:11 10 have your -- 11:11 11 MR. BRESNEN: Yes, ma'am. I'll give it 11:11 12 to you right now. I might have to add to it later, 11:11 13 though. That's not a threat. 11:11 14 Two quick suggestions. One is, you 11:11 15 know, the thing that struck me about the poster, I 11:11 16 thought it was a really cool poster and it had a 11:11 17 really great message about what a great thing 11:11 18 charitable bingo does for the state. And it 11:11 19 contrasted with the Sunset staff report, which 11:12 20 basically said that bingo is really a paltry thing, 11:12 21 and it was like complete cognitive dissonance when I 11:12 22 looked at the two things. So what I would like to 11:12 23 suggest is that we turn around that, in my opinion, 11:12 24 error on the Sunset Commission staff's part and 11:12 25 send -- ask the agency to send every member of the 11:12 0056 1 legislature a copy of the poster. So if you've got 11:12 2 181 of them, and one for the Lieutenant Governor, 11:12 3 maybe one for the Governor, Billy. 11:12 4 MR. ATKINS: Sorry? 11:12 5 MR. BRESNEN: If you've got 183 posters 11:12 6 left, I would like to see one go -- or I would like to 11:12 7 suggest that one go to every member of the legislature 11:12 8 and the Lieutenant Governor and the Governor, if 11:12 9 possible. 11:12 10 Number two, if there is a -- I would 11:12 11 like to suggest that the agency consider that the 11:12 12 bingo director be advised of any change in the system 11:12 13 out there on the Internet site, with regard to bingo 11:12 14 and sign off on any changes on that site before the 11:13 15 vendor or anybody in-house or out-house does the -- 11:13 16 makes a change to that, so you will know and you've 11:13 17 got control over that. Thanks. 11:13 18 MR. ATKINS: Well, let me address one 11:13 19 of those things. Any changes to the website do go 11:13 20 through me, dealing with bingo. And another 11:13 21 interesting fact is that the staff just went and 11:13 22 entered txbingo.org and the home page came up. 11:13 23 MS. TAYLOR: I did that last night 11:13 24 several times. 11:13 25 MR. ATKINS: You know, I think we're 11:13 0057 1 looking at a lot of the flukes that sometimes come 11:13 2 with technology. But, again, I think addressing a lot 11:13 3 of the issues that we talked about today through 11:13 4 subcommittee and coming back with recommendations 11:13 5 would be very beneficial. 11:13 6 MR. GARCIA: I just -- 11:14 7 CHAIR BRACKETT: Just a minute. 11:14 8 A recommendation? Which 11:14 9 recommendation? 11:14 10 MR. ATKINS: On the proposal Suzanne 11:14 11 has brought up and put forward on the use of the 11:14 12 Website, the 800 number, et cetera. 11:14 13 CHAIR BRACKETT: Okay. Would anyone 11:14 14 like to suggest any action on Steve's recommendation 11:14 15 that the posters get to each member of the House and 11:14 16 Senate? 11:14 17 MR. PAVLOVSKY: I think it's a great 11:14 18 idea, but at 15 dollars a pop, where are you going to 11:14 19 get the money? Billy? 11:14 20 CHAIR BRACKETT: Well, Steve just told 11:14 21 Billy to do it, but -- 11:14 22 MR. ATKINS: Maybe -- 11:14 23 CHAIR BRACKETT: And Billy was not 24 listening. 25 MR. ATKINS: Maybe Steve would like to 11:14 0058 1 pay for it. 11:14 2 CHAIR BRACKETT: Well, if we would 11:14 3 like -- if you get a motion on the floor, maybe we can 11:14 4 have some ideas on things. Will you so move? 11:14 5 MR. PAVLOVSKY: I will. 11:14 6 CHAIR BRACKETT: Is there a second to 11:14 7 that? 11:14 8 MS. TAYLOR: I'll second it. 11:14 9 CHAIR BRACKETT: One way -- it's been 11:14 10 moved and seconded that we get the 20th anniversary 11:14 11 celebration poster to all of the elected officials, 11:14 12 all of the members of the House and Senate. I had 11:15 13 wondered if one way to do it would be that we would 11:15 14 get people responsible in the different legislative 11:15 15 districts to take this responsibility. That I could 11:15 16 take the responsibility of doing it to the Senator and 11:15 17 the Representatives from -- in the Lubbock area. 11:15 18 Marilyn could do it for Midland. And Billy can do it 11:15 19 next time he's in Amarillo. And -- is that a workable 11:15 20 plan? And, of course, I would write the check to pay 11:15 21 for these out of the bingo account. No. I want to go 11:15 22 on the record, I will not do that. I promise I will 11:15 23 not do that. But that is a suggestion. 11:15 24 MR. WHITTINGTON: I would like to ask a 11:15 25 question, Billy. Is it hard to get the Governor or 11:15 0059 1 Attorney General here to one of these meetings? Is 11:15 2 that impossible? So they can know what is going on? 11:16 3 MR. ATKINS: No idea, Larry. 11:16 4 MR. WHITTINGTON: I thought about that. 11:16 5 MR. ATKINS: You can call them and 11:16 6 invite them. 11:16 7 MR. WHITTINGTON: Well, I'm just 8 asking, I mean, is it impossible for them to attend a 11:16 9 BAC meeting? 11:16 10 MR. GARCIA: Maybe you need to go to 11:16 11 the capitol -- you know, as the BAC, go to the 11:16 12 capitol. 11:16 13 MR. TAWIL: Well, I was going to tell 11:16 14 you, I had -- I invited Governor Clements and he 11:16 15 accepted to my Rotary Club meeting here in Austin when 11:16 16 he was the Governor, so it can be done. They have a 11:16 17 staff that handles those kinds of things. You are 11:16 18 just going to have to do it a long ways in advance. 11:16 19 MR. WHITTINGTON: I think they need -- 11:16 20 MR. TAWIL: I'm not sure he would come 21 here, though. 22 MR. WHITTINGTON: I think they need to 11:16 23 know more about bingo. I mean, the Governor as well 11:16 24 as the Attorney General, so they know what is going 11:16 25 on. 11:16 0060 1 MR. ATKINS: I don't know how -- and 11:16 2 this may be what Diane is getting ready to address. I 11:16 3 don't know how this fits under -- 11:16 4 MS. MORRIS: I have sat -- and I didn't 11:16 5 want to interrupt Saleem earlier. It's Diane Morris 11:17 6 again. The BAC is not authorized -- 11:17 7 CHAIR BRACKETT: Let me make that 11:17 8 statement, Diane. We are not an action-taking group, 11:17 9 but we can certainly as individuals -- I can call on 11:17 10 my people in Lubbock and get them a poster. Correct? 11:17 11 MS. MORRIS: I agree with you, ma'am. 11:17 12 I heard some comment earlier, the L word, lobbying. 11:17 13 Saleem, you said it. And I didn't want to interrupt 11:17 14 you. But then you said, well, we can go individually 11:17 15 or as BAC, and then you started talking individually. 11:17 16 MR. TAWIL: No, no. Not as BAC. 11:17 17 MS. MORRIS: Well, what it says on 11:17 18 there, what it says. But the point is, I didn't want 11:17 19 to interrupt you. I'm going to remind you again. The 11:17 20 charge, the duties, the responsibilities of the BAC, 11:17 21 you are not a lobbying group. You individually can do 11:17 22 whatever you want. But it's not part of this function 11:17 23 of this group to lobby. The Texas Lottery 11:17 24 Commissioners don't lobby. They provide information, 11:17 25 they serve as resources. It may be that there is 11:18 0061 1 somebody here from our intergovernmental division that 11:18 2 may wish to clarify this for you, if there is any 11:18 3 question. But when I start hearing these words about 11:18 4 going over together as a group or going over, I'm just 11:18 5 telling you, you can do anything you want 11:18 6 individually. It's under the cloud called BAC that 11:18 7 I'm just here reminding you again of your limitations. 11:18 8 MR. TAWIL: Let's get the record 11:18 9 straight. I didn't say as the BAC. That needs to be 11:18 10 corrected if -- 11 MS. MORRIS: Yeah. If you want to have 12 her read it back, have her correct it, because I don't 11:18 13 want to -- I don't think you meant that either. And 11:18 14 that's why I did not jump in and that is not why I 11:18 15 didn't -- I did not interrupt you, because I did not 11:18 16 think that. 11:18 17 MR. TAWIL: Right. And what I did say 11:18 18 was, we individually or all of us can go over there if 11:18 19 we wish. We can all individually -- 11:18 20 MS. MORRIS: Would you please read back 11:18 21 the record. 11:18 22 MR. TAWIL: As long as we don't go as 11:18 23 the BAC. 11:18 24 MR. ATKINS: Why don't you just let him 11:19 25 put the clarification on there without reading back 11:19 0062 1 the record. 11:19 2 CHAIR BRACKETT: Should we proceed with 11:19 3 that motion or should we withdraw it or defeat it? 11:19 4 That we take the posters? But the whole point is to 11:19 5 contact your local represented officials, whether you 11:19 6 voted for them or not. They still represent you, 11:19 7 so... 11:19 8 MR. ATKINS: I don't know that that 11:19 9 requires a motion. I mean, if the members want to do 11:19 10 that, they can. 11:19 11 CHAIR BRACKETT: Okay. Did we have a 11:19 12 motion for it? Maybe we didn't have a motion on the 11:19 13 floor. All right. Well, let's move on. 11:19 14 MS. TAYLOR: No. There was a motion on 11:19 15 the floor because I seconded it. But maybe we could 11:19 16 change the motion just a bit to say, we would like 11:19 17 every member of the legislature to have one of these, 11:19 18 in whatever way they get there. 11:19 19 CHAIR BRACKETT: So you are wanting 11:20 20 to -- well, can you read that motion back to me, 11:20 21 please. 11:20 22 THE REPORTER: That was the motion that 23 Mr. Pavlovsky made? 11:21 24 MR. ATKINS: Yes. 25 THE REPORTER: Okay. Actually, Madam 11:21 0063 1 Chairman, you are the one who proposed the 2 recommendation that -- you said, "Would anyone like to 11:21 3 suggest any action on Steve's recommendation that the 4 posters get to each member of the House and Senate. 5 And Mr. Pavlovsky said, "I think it's a 6 great idea, but at 15 dollars a pop, where are you 11:21 7 going to get the money, Billy?" 8 We had a little bit of discussion, and 9 then you said, "If you can get a motion on the floor, 10 maybe we can have some ideas on things. Will you so 11 move?" 12 That was the discussion. 13 CHAIR BRACKETT: And did anyone so 14 move? 15 THE REPORTER: Mr. Pavlovsky did, and 16 Ms. Taylor seconded. 17 CHAIR BRACKETT: Okay. Are you ready 11:21 18 to take action on that proposal? And that is that we 11:21 19 be personally responsible for -- is that it? All 11:21 20 those in favor, please say aye. All those opposed? 11:22 21 Okay. Then the motion carries, and you have accepted 11:22 22 the responsibility of educating your elected officials 11:22 23 on that, so... 11:22 24 Before we get into item number five -- 11:22 25 MR. HEINLEIN: Are we still on 11:22 0064 1 advertising? 11:22 2 CHAIR BRACKETT: Yes. I'm sorry. Go 11:22 3 ahead. I thought you had said, no, you wanted to 11:22 4 speak on something else. 11:22 5 MR. GARCIA: No, I just didn't want to 11:22 6 comment on your motion. 11:22 7 CHAIR BRACKETT: That's okay. I've 8 been doing everything wrong anyway. Just come on. 9 MR. GARCIA: I just have a suggestion 11:22 10 on advertising to the subcommittee or the committee, 11:22 11 is that maybe, working with staff, you can come up 11:22 12 with a plan that can give a number that maybe some 11:22 13 industry lobbyists would be happy to work on behalf of 11:22 14 the industry to get in the appropriations act. You 11:22 15 know, obviously, with the budget the way it is, you 11:22 16 know, there is some difficulty in that. But it would 11:22 17 be helpful if we had a number that was reasonable that 11:23 18 met some goals that the division may want to 11:23 19 accomplish that we could go to legislators as industry 11:23 20 folks that work on behalf of the industry and say, we 11:23 21 would like to try to get this money in order to 11:23 22 advertise. And if we can be very specific about what 11:23 23 our needs are, we have more capability of being 11:23 24 successful at it. And so if you say that we would 11:23 25 like, you know, 50,000 dollars to create a website for 11:23 0065 1 bingo alone, or whatever, it just helps us make the 11:23 2 argument a little bit better. And so my suggestion to 11:23 3 you is, if you do create a subcommittee, working with 11:23 4 the division, that you could come up with a reasonable 11:23 5 plan, marketing plan that y'all think would at least 11:23 6 start the process of that advertising, that I would be 11:23 7 happy to work on that at the capitol. 11:23 8 CHAIR BRACKETT: Thank you. 11:24 9 Chairman Clowe. 11:24 10 CHAIRMAN CLOWE: If I may, my name is 11:24 11 Tom Clowe and I'm chairman of the Texas Lottery 11:24 12 Commission. I would like to address you, and I think 11:24 13 it comes under agenda item two, issue seven, in regard 11:24 14 to the Sunset Committee advisory that the Bingo 11:24 15 Advisory Committee does not effectively advise the 11:24 16 Commission on the needs of the bingo industry in 11:24 17 Texas. I think that is a proper agenda item. And, 11:24 18 you know, I sense some frustration in sitting here 11:24 19 this morning and listening to what you're doing. And 11:24 20 I would like to make some remarks that may be helpful 11:24 21 to you and may make you mad. I don't know. 11:24 22 MR. ATKINS: Mr. Chairman, I'm sorry. 11:25 23 Let me clarify. You're speaking -- it's under item 11:25 24 three on the agenda, the Sunset report, issue seven of 11:25 25 that report? 11:25 0066 1 CHAIRMAN CLOWE: Yes. 11:25 2 MR. ATKINS: Thank you. 3 CHAIRMAN CLOWE: But I don't think 11:25 4 you're very satisfied with some of the work that 11:25 5 you're trying to do here this morning, and I would 11:25 6 like to ask you to listen to me for a minute, and 11:25 7 maybe I can be helpful to you. 11:25 8 The Commission, if this legislation 11:25 9 goes through, is going to have some direction in the 11:25 10 form of legislation and maybe some rulemaking in 11:25 11 regard to the Bingo Advisory Committee. And I think 11:25 12 it's appropriate for me to try to help you at this 11:25 13 point with some thoughts that I have about how you are 11:25 14 attacking some of these situations. And I think I 11:25 15 have earned the right to try to help you. You know 11:26 16 that I have been interested in bingo and that I have 11:26 17 come to all of the meetings and I have tried to help 11:26 18 you as much as a commissioner can, and a number of you 11:26 19 in the industry have come up to me and thanked me for 11:26 20 some of the work that I've done, and I have said, I am 11:26 21 just trying to do what I think a commissioner ought 11:26 22 to, particularly the designated bingo commissioner. 11:26 23 But I do want to say that I think 11:26 24 you're not focusing so far this morning on what the 11:26 25 real purpose of the Bingo Advisory Committee is. And 11:26 0067 1 it's hard. I know you make the same big dollars as a 11:26 2 member of this committee that I make as a 11:26 3 commissioner. And yet, you know, you have to work at 11:26 4 these jobs to make them productive. And you won't be 11:26 5 able to come to Austin and attend one of these 11:27 6 meetings if, during the period leading up to this, you 11:27 7 don't work hard on the subjects that are going to be 11:27 8 discussed and come to these meetings with worked-out 11:27 9 solutions for the most part, rather than questions or 11:27 10 wants or complaints or using these sessions as times 11:27 11 where you can air things that you want to discuss that 11:27 12 would really better be handled before the meeting, in 11:27 13 conversations with Billy or with each other, and 11:27 14 through the use of these subcommittees. 11:27 15 Many of you are doing public service 11:27 16 for the first time. And it's frustrating, and it's 11:27 17 difficult for you, I understand. But it isn't going 11:28 18 to be productive for you, and I have to say as one 11:28 19 commissioner, I don't think it's going to bring to the 11:28 20 Commission what the Sunset Committee recommendation 11:28 21 envisions, and that is, a clear understanding of what 11:28 22 the needs of the bingo industry are and a formulated 11:28 23 solution to those problems. And that's what the 11:28 24 Commission, I think, needs. 11:28 25 A recommendation that, you know, the 11:28 0068 1 bingo 1-800 number be changed or the website is not 11:28 2 working properly, those are really details that need 11:28 3 to be worked out outside of the forum of this 11:28 4 committee, as I see it. And that requires maybe a 11:28 5 higher level of commitment on your part and of your 11:28 6 time than you have been able to give, and you need to 11:29 7 give it to make this committee effective. You just 11:29 8 can't come here on the morning of the meeting and 11:29 9 shoot these desires at Billy and expect him to come 11:29 10 back and say, well, you know, you can have this and 11:29 11 I'll do this and -- he can't do it. 11:29 12 The Bingo Division is different. It 11:29 13 has an appropriation, it has different rules, it has a 11:29 14 statute that has to be followed. The Lottery 11:29 15 Commission is operated by the State. The earnings, if 11:29 16 you want to call it that, the profit goes to the 11:29 17 State. And the Commission operates on a percentage of 11:29 18 the revenue that it's got to stay within. It's an 11:29 19 entirely different operation. And so I think you're 11:29 20 going to frustrate yourself if you start thinking, 11:29 21 well, we want the Lottery Commission to give us 11:29 22 something, or we ought to operate like the Lottery. 11:30 23 It's just two different animals. 11:30 24 Diane is correct. You cannot lobby as 11:30 25 a member of this committee. Just like the 11:30 0069 1 Commissioners can't lobby. The agency can't lobby. 11:30 2 But I have said to you before, and Steve Bresnen gave 11:30 3 you the advice here this morning, Joe Garcia has 11:30 4 volunteered it. The effective way for this industry 11:30 5 to communicate about its needs within the statute is 11:30 6 in a formal way, the Bingo Advisory Committee. But 11:30 7 outside of that forum, it's as individuals to your 11:30 8 legislators. And I think Virginia came up with the 11:30 9 right answer when she said, you know, we can't send 11:30 10 something to a legislator's office. Have you ever 11:30 11 been in a legislators office? You see all the stuff 11:30 12 they've got in there? It's one percent, I reckon, of 11:30 13 all of the stuff that gets sent to them. What makes 11:31 14 anything you do with a legislator effective is when 11:31 15 you go see that person, and if you want to take them 11:31 16 something and you want to talk to them about what your 11:31 17 needs are, you get, I think, better attention then 11:31 18 than you do just mailing something through the mail to 11:31 19 them. 11:31 20 These are hard lessons that I've 11:31 21 learned over my period of time as a business person, 11:31 22 and what I'm trying to do here this morning is coach 11:31 23 you a little bit on some of the frustration and, 11:31 24 frankly, I think, the spinning of wheels that I see 11:31 25 here this morning. And I think that's my obligation 11:31 0070 1 as the bingo commissioner to do that. 11:31 2 As I say, I hope I'm not hurting 11:31 3 anybody's feelings, but I would like to get your 11:31 4 attention about the fact that I think you've got to 11:31 5 take a different mind set about how you're going to 11:31 6 get organized to be an effective advisory group to the 11:31 7 Texas Lottery Commission, to be effective. You know, 11:31 8 I appreciate your commitment to these days that you 11:32 9 come to Austin, the expense, and the time. I am in 11:32 10 favor of continuing the Bingo Advisory Committee. 11:32 11 That's a -- that's a question that the Sunset 11:32 12 committee has put on the table. I think you need this 11:32 13 forum to advise the Commission on things that are 11:32 14 going on in the bingo industry, because you don't have 11:32 15 a large organization that serves that purpose. 11:32 16 There are some very effective bingo 11:32 17 industry spokesmen, but in my view, they are paid 11:32 18 individuals who articulate a certain viewpoint. And, 11:32 19 again, I think there is nobody like Larry, for 11:32 20 example, and he and I met with Diane -- or excuse me. 11:32 21 With Kim Kiplin on another issue, and Larry 11:32 22 articulated what his program was more effective, I 11:32 23 think, than any lobbyist could. But this is not the 11:32 24 forum to bring your individual problems in your 11:33 25 business to the attention of the Bingo Advisory 11:33 0071 1 Committee, and therefore, the Texas Lottery 11:33 2 Commission. This is a forum, as I see it, to have a 11:33 3 program of work and to develop projects that will 11:33 4 offer solutions that the Lottery Commission can 11:33 5 evaluate and then take action on. And I will tell you 11:33 6 that I don't like the staff of the Texas Lottery 11:33 7 Commission bringing a problem to me as an individual 11:33 8 commissioner, much less dropping it on the table in 11:33 9 the middle of a Lottery Commission meeting, and say, 11:33 10 oh, Commissioners, we want you to look at this 11:33 11 problem. I don't want to look at that problem in that 11:33 12 meeting. I want them to come to the Commission and 11:33 13 say, here is the problem, and here is the solution, we 11:33 14 would like for you to help us. And if you want to 11:34 15 change it or you want to do something different, but 11:34 16 here is the -- that's what they get paid for. And 11:34 17 that is sort of the role that you have in advising 11:34 18 your commission. And as I say again, you don't get 11:34 19 paid for anything. I understand that. But you have 11:34 20 committed to public service, just like I have. But it 11:34 21 doesn't entitle you, in my view, to, you know, fussing 11:34 22 at Billy about some things. You can do that, but this 11:34 23 isn't the forum for it. 11:34 24 Now, I'll say the last time, I'm sorry 11:34 25 if I hurt anybody's feelings, but I think it's 11:34 0072 1 incumbent on me to give you this observation. And now 11:34 2 I would like to ask you, you know, do you understand 11:34 3 what I'm saying? Do you think I'm harsh or do you 11:34 4 think I'm helping you get in focus what your role is 11:34 5 as we go through this Sunset process? 11:34 6 And, Diane, is that all within the 11:34 7 item? Tell me how you feel about it. 11:34 8 MS. MATTHEWS: I would like to say 11:34 9 that's very helpful to me, being a new member. That 11:34 10 gives me some framework. The one question I have, as 11:35 11 you're saying, we should communicate with one another. 11:35 12 Doesn't that, then, violate the Open Meetings Act? 11:35 13 CHAIRMAN CLOWE: Not if you don't have 11:35 14 a quorum and if you're in a subcommittee that the 11:35 15 chair appoints. 11:35 16 MS. MATTHEWS: But you have to be in a 11:35 17 subcommittee? 11:35 18 CHAIRMAN CLOWE: No. Can you talk with 11:35 19 each other. 11:35 20 Can't they, Billy? Let's have Diane 11:35 21 answer that question. 11:35 22 MR. ATKINS: Yeah. I'm going to have 11:35 23 Diane come up and address that question, Mr. Chairman, 11:35 24 because -- 11:35 25 CHAIRMAN CLOWE: Get on the microphone, 0073 1 Diane, so that you can be on the record. 11:35 2 MR. ATKINS: What Diane is going to 11:35 3 advise the committee is that they cannot, through 11:35 4 individual conversations with one another, bypass, 11:35 5 circumvent the Open Meetings Act. But I think you can 11:35 6 expand on that a little more. 11:35 7 MS. MORRIS: I agree with that. I did 11:35 8 not know how much you wanted to develop the 11:35 9 subcommittees, and your thinking on whether those 11:35 10 should be subject -- or if you thought they should be, 11:35 11 are not subject to the Open Meetings Act. Remember, 11:35 12 your rule makes you subject to the law, not the law 11:36 13 itself. I was going to visit with you later to truly 11:36 14 understand how you see these subcommittees working. 11:36 15 Because there is some argument, if you are a body that 11:36 16 is subject to the law, that even subcommittees 11:36 17 themselves must comply with the Open Meetings, which 11:36 18 means posting and open meetings. In other words, it 11:36 19 doesn't mean conference calls on the phone with four 11:36 20 people or three or two. So I still wanted to visit 11:36 21 you with more on how you saw that working before I was 11:36 22 willing to land on how you're going to structure the 11:36 23 meetings of these subcommittees. But certainly, it 11:36 24 would seem that the visiting amongst each other, 11:36 25 one-on-one, to try to understand things, is what is 11:36 0074 1 being suggested, is to open up communication. You 11:36 2 temper that with, you cannot attempt to violate the 11:36 3 rule that makes you subject to the law by carrying 11:36 4 messages between each other and trying to circumvent 11:36 5 what is otherwise discussion that is supposed to be 11:37 6 done in the open. So that all of these people out 11:37 7 here can understand what you're thinking and can have 11:37 8 their input as well. And you can benefit from that. 11:37 9 MR. ATKINS: There is no -- make sure I 11:37 10 say this correctly, Diane. There is no prohibition, 11:37 11 Marilyn, against you talking to -- individually to all 11:37 12 of the advisory committee members, but what you can't 11:37 13 do is you can't call Suzanne and say, Suzanne, on item 11:37 14 seven, let's vote yes. Okay? Hanging up, calling 11:37 15 Saleem and saying, Saleem, on item seven, let's vote 11:37 16 yes. Okay? Hanging up, calling Virginia and doing 11:37 17 that. 11:37 18 CHAIRMAN CLOWE: But you can exchange 11:37 19 views and you can discuss subjects, and you can have a 11:37 20 subcommittee. 11:37 21 MR. ATKINS: Yes. 11:37 22 CHAIRMAN CLOWE: And you see the one 11:37 23 Sunset recommendation for the Lottery Commission is 11:37 24 that it be increased from three to five members. And 11:37 25 if that occurs, my understanding is, then, one of the 11:38 0075 1 desires they have is that we form subcommittees so the 11:38 2 Commissioners can sit together and can work on 11:38 3 problems and that they can speak to each other. The 11:38 4 way it is now, when Commissioner Cox comes, I must 11:38 5 leave the room or he can't come in. So we're in a 11:38 6 very strict situation and which we observe 11:38 7 scrupulously. But the thrust of it, the thrust of my 11:38 8 remark is, you do a lot of work before you come to 11:38 9 this meeting. That's what I'm trying to say. If you 11:38 10 read this book, this agenda, and you study these items 11:38 11 before you come here, and you have worked on these 11:38 12 problems, and you are part of the solution, it takes 11:38 13 time. I spend one, two, three days a week down here 11:38 14 in Austin, trying to be a good commissioner. And I'm 11:38 15 not asking you to -- that you would consider anything 11:38 16 like that. But from your homes and from your offices, 11:39 17 I ask you, are you spending enough time on this 11:39 18 material and have you looked at it and have you 11:39 19 thought about it? 11:39 20 Larry, I know you're in trouble. You 11:39 21 made that point with me. I mean, the industry is 11:39 22 needing help. But just saying it and just, you know, 11:39 23 bringing it out again is not going to get you where 11:39 24 you want to go. And you're going to appear before the 11:39 25 Lottery Commission tomorrow to articulate a concern 11:39 0076 1 that you have. It had to be put on the agenda, you 11:39 2 and I met and talked about it with counsel. You know, 11:39 3 you're going through the procedure. You're devoting 11:39 4 the time and attention to it that is, I think, proper. 11:39 5 And we discussed what other steps you might take. 11:39 6 I'm just trying to get this in focus 11:39 7 for you. Mario, did you have a question? 11:39 8 MR. MANIO: Yes. Thank you so much for 11:39 9 the words of encouragement and advice. Now, I don't 11:39 10 want to be critical, but this thing came in the mail 11:40 11 two days ago, so we did not have enough time to go 11:40 12 through the material. 11:40 13 CHAIRMAN CLOWE: That's very true. 11:40 14 MR. MANIO: So I would like to offer 11:40 15 the request through the proper channels, please get 11:40 16 this to us. 11:40 17 CHAIRMAN CLOWE: I couldn't agree more. 11:40 18 And we face the same thing as commissioners. We get 11:40 19 our book a few days before, and I tell the staff, you 11:40 20 haven't given me enough time on this issue. I'm not 11:40 21 going to vote on it. I'm not going to discuss it. 11:40 22 I'm not prepared. And you need to institute that 11:40 23 discipline yourself. And if you don't feel like 11:40 24 you've gotten it in time, you need to call Billy and 11:40 25 fuss at him. Tell him. 11:40 0077 1 MR. MANIO: I will. 11:40 2 MR. ATKINS: That would be me. And 11:40 3 just so everybody knows, the converse is, when someone 11:40 4 has asked for something to be placed on the agenda, if 11:40 5 they don't supply us the backup material, that slows 11:40 6 down the process. And I'll reserve the right to call 11:40 7 you up and fuss at you. Which I've done. 11:41 8 CHAIRMAN CLOWE: Fair enough. But your 11:41 9 point is well taken. 11:41 10 Anybody want to say anything to me now 11:41 11 or think I'm all wet and fussing back at me? I am 11:41 12 trying to help you. That's the only reason I've come 11:41 13 up here and tried to give you my thoughts. I really 11:41 14 want this to be an effective group and I want to see 11:41 15 you bring value to the bingo industry and help the 11:41 16 Lottery Commission in the things that the Commission 11:41 17 can help you with. And this is your opportunity with 11:41 18 Sunset. I'm singing that song over and over and over 11:41 19 again. And Steve Bresnen came up here and he asked, 11:41 20 how many of you have said something to the legislative 11:41 21 members as individuals, not as a member of the BAC. 11:41 22 Steve gets paid for that. You don't. But you folks 11:41 23 are the ones who have businesses that need help, and 11:41 24 you are much more articulate and the elected 11:41 25 representatives, in my opinion, are much more 11:42 0078 1 responsive to you than they are a paid lobbyist. 11:42 2 MR. WHITTINGTON: Let me just clarify. 11:42 3 I wasn't really directing it at Billy. It was just 11:42 4 frustration. It's just statements made to basically 11:42 5 just kind of like -- 11:42 6 CHAIRMAN CLOWE: But see, Larry, in 11:42 7 this forum, you're getting it off your chest, but it's 11:42 8 not going anywhere. It's dying. 11:42 9 MR. WHITTINGTON: I understand that. 11:42 10 CHAIRMAN CLOWE: And so you've got to 11:42 11 take, I think, a different approach. And this comes 11:42 12 from 40 years of experience in this state of trying to 11:42 13 work with regulatory agencies, elected officials. I'm 11:42 14 just trying to give you the benefit of some of the 11:42 15 lessons that I've learned over the years. 11:42 16 MR. PAVLOVSKY: I liked the one comment 11:42 17 you made, Chairman. If you perceive a problem, you 11:42 18 are bound to perceive a solution. 11:42 19 CHAIRMAN CLOWE: You've got to. You 11:42 20 know, we as truckers used to whine at the Railroad 11:42 21 Commission, give us this, give us that. They didn't 11:43 22 give us anything. We had to kind of go out and craft 11:43 23 it and work it, and then we got to it to where it 11:43 24 could be considered. And we never got everything we 11:43 25 wanted, but you've got to work at this thing. If 11:43 0079 1 you're in an industry that's regulated, and most every 11:43 2 industry is regulated now to some extent or another, 11:43 3 doctors, even lawyers. But I just -- and I thank you 11:43 4 for your public service. Don't let me hurt your 11:43 5 feelings and sul up, because that is not my purpose. 11:43 6 My purpose is to help you get focused in the direction 11:43 7 and try to motivate you to be more effective. 11:43 8 MR. WHITTINGTON: But a lot -- I 11:43 9 understand that, too. But what I was saying is, a lot 11:43 10 of times when you say something, and then you go 11:43 11 through the proper procedure and put it on paper, a 11:43 12 lot of times -- of course, you tell me, Larry, this is 11:43 13 what I want you to do, this certain play. Then you 11:43 14 give me that play on paper, I look at it, and I say, 11:43 15 oh, yeah, he said that. Then I go back and you tell 11:43 16 me again, then I understand it a lot better. 11:44 17 CHAIRMAN CLOWE: Sure. 11:44 18 MR. WHITTINGTON: Okay. Thank you, 11:44 19 Virginia. 20 CHAIR BRACKETT: Well, thank you. 21 While the chairman is here, does anyone 11:44 22 have any questions or comments? 11:44 23 Thank you. We appreciate that. 11:44 24 MR. HEINLEIN: I'm the one that raised 11:44 25 my hand and said, let's keep on with the advertising. 11:44 0080 1 I'm sorry. You don't -- 11:44 2 CHAIR BRACKETT: I'm not getting 11:44 3 witness forms from you. 11:44 4 MR. HEINLEIN: My problem is, I gave 11:44 5 you the wrong one. 11:44 6 MR. HEINLEIN: David Heinlein of Jetta 11:44 7 Management. 8 I think you could do the Texas Lottery 11:44 9 Commission a great service to inform them of -- in 11:44 10 this area of advertising, give them some idea of the 11:45 11 scope. Advertising is a very important part of 11:45 12 promoting our industry and changing where we are 11:45 13 today. So I think it's a subject that we do need to 11:45 14 discuss. As an accountant, I find myself in meetings 11:45 15 where we're doing cost analysis in bingo, and this is 11:45 16 going to -- part of this relate back to the Sunset 11:45 17 report, which goes to the 4.1 that we have given some 11:45 18 attention to this morning. And as we meet, I'm always 11:45 19 trying to control costs. And when we start talking 11:45 20 about advertising costs, you know, sometimes they have 11:45 21 to gag me, tie me up, and put me in the closet so they 11:45 22 can approve a budget on advertising. And I've seen -- 11:45 23 and for your benefit, I want Billy to get this, so 11:45 24 I'll wait until he comes back. 11:45 25 We're seeing some varied amounts of 11:45 0081 1 money being spent in advertising. It would be helpful 11:46 2 if your subcommittee, on this advertising issue, 11:46 3 defined possibly the scope that we need to look for 11:46 4 help with from the State, in the appropriations, 11:46 5 which -- however that can be done. You would be doing 11:46 6 us a service to help us understand how we can get 11:46 7 involved in that legislative action. Because it's not 11:46 8 a small thing. You know, I'm looking -- I'm thinking 11:46 9 in terms of numbers like ten or 15 million dollars 11:46 10 spent in this state for advertising bingo. Because 11:46 11 what Chairman Clowe said several months ago, and he 11:46 12 has repeated it at least once, maybe twice, and he is 11:46 13 very correct. We are dealing with a shrinking market. 11:46 14 And it just continues to shrink. And we also see 11:46 15 the -- the clienteles focusing down to a very tight 11:46 16 group of those bingo players who are just consistent, 11:47 17 daily bingo players. We need a different kind of 11:47 18 bingo clientele. We need a clientele that comes from 11:47 19 many different areas, where it can go back to the way 11:47 20 it was 20 years ago and it was an entertainment 11:47 21 industry where you actually had people who came 11:47 22 occasionally for entertainment. Well, that means that 11:47 23 instead of having 200 people that come to a hall, you 11:47 24 need 1500 people that come to a hall, but not every 11:47 25 day. But it's an entertainment thing to them, and so 11:47 0082 1 you would scatter your client base over a broader 11:47 2 area. To do that, we need advertising. And 11:47 3 advertising is going to be very expensive, and I don't 11:47 4 think it can be totally done by just the charities in 11:47 5 any particular bingo hall. There needs to be some way 11:47 6 of consolidating the efforts in that area. We thought 11:47 7 of -- one of the things in the Houston area, of 11:48 8 getting several halls together to do television 11:48 9 advertising, and maybe if they shared the load, they 11:48 10 could reduce the cost to the charities. And I look at 11:48 11 everything on a per session basis, and this is the 11:48 12 part I wanted Billy to hear, so I guess he'll have to 11:48 13 read it back. 11:48 14 I find some of our halls where the 11:48 15 charities are spending as little as 25 dollars a 11:48 16 session on advertising. Recently, I had a hall who 11:48 17 really recognized the value of advertising, spend well 11:48 18 over 200 dollars a session in advertising. And I am 11:48 19 making that point, Billy, is in the area of the 4.1 11:48 20 where we're going to take expenses and they will be 11:48 21 looked at as having to be reasonable. This would be 11:48 22 an area of particular concern on how to call what 11:48 23 would be reasonable. I have kind of used a number of 11:48 24 like 70 dollars a session as being an appropriate 11:48 25 amount for advertising, not -- kind of a not to 11:49 0083 1 exceed. And then when I've seen some of the halls 11:49 2 exceeding that, and I've begun to pull on them and try 11:49 3 to pull them down on that advertising, and in one 11:49 4 case, cut their advertising budget out because they 11:49 5 just didn't have the money, and they suffered from it. 11:49 6 And so I'm having to rethink that and say, you know, 11:49 7 there is some times that maybe you're going to have to 11:49 8 spend 200 or 300 dollars a session on advertising to 11:49 9 refocus and get the area that the clientele that 11:49 10 you've been accustomed to coming back to your hall. 11:49 11 And some people -- I've got two 11:49 12 extremes. Kind of what we were talking about, Billy. 11:49 13 I've got some that won't advertise at all and some 11:49 14 that advertise so much that they put themselves in 11:49 15 debt. And both extremes have to be discounted and 11:49 16 you've got to get somewhere in the middle. 11:49 17 But advertising is something that we 11:49 18 cannot overlook. As I was driving down Frasier Street 11:49 19 a couple of days ago, in Conroe, I came upon a 11:50 20 Coca-Cola bottling plant. And I looked at it and I 11:50 21 said, you know, these people have been around a long 11:50 22 time, well-known worldwide, but guess what? They 11:50 23 still advertise and continue to advertise. And I 11:50 24 said, you know, maybe some of these guys that have 11:50 25 been talking about increasing their advertising budget 11:50 0084 1 are correct. We have to advertise. And so I'm trying 11:50 2 to loosen up a little bit on allowing and not coming 11:50 3 down on them so hard about spending their money for 11:50 4 advertising. They may have to cut in some other 11:50 5 areas, but maybe one of the things they've got to 11:50 6 spend when business is going down the tube and is so 11:50 7 bad, we're going to have to spend more money on 11:50 8 advertising. Maybe we can't spend as much on 11:50 9 electronics or some other things, but we've got to 11:50 10 advertise. And I think you would do the Commission a 11:50 11 great service to identify the scope of what 11:50 12 advertising probably ought to be. And if you talk in 11:50 13 terms of ten or 15 million dollars a year that ought 11:50 14 to be spent as an industry, you know, that's a 11:50 15 starting number. I'm talking about being something of 11:51 16 that magnitude. The Lottery certainly advertises on 11:51 17 TV and everywhere to try to get the people to buy the 11:51 18 Lottery tickets. But we need to focus on a different 11:51 19 kind of clientele. We need to spread that clientele 11:51 20 base beyond the avid bingo player. Because we can't 11:51 21 depend on just the avid bingo players to come to the 11:51 22 bingo halls and support the bingo operation in the 11:51 23 state of Texas any longer, because they continue to 11:51 24 shrink. There is some of them dying. They've been 11:51 25 playing bingo for 30 years and they're not doing it 11:51 0085 1 any more. We have to find a new base. So when we 11:51 2 look at authorized expenses being reasonable, I think, 11:51 3 Billy, we have to look at that particular area, it 11:51 4 would be a hard shot to call as to what would maybe be 11:51 5 reasonable. Because it could be reasonable to pay as 11:51 6 much as 300 dollars a session for advertising. We 11:51 7 would have to look at that very carefully. 11:51 8 I just wanted to emphasize, I think you 11:51 9 need to think about how advertising -- what the role 11:51 10 of advertising ought to be in our industry. And I 11:52 11 think it's been passed over and overlooked. 11:52 12 CHAIR BRACKETT: Any questions? 11:52 13 MS. TAYLOR: I do. What was the -- you 11:52 14 mentioned that the charities in Houston had come 11:52 15 together to work on a joint advertising campaign. 11:52 16 What was the outcome of that? 11:52 17 MR. HEINLEIN: Television. Well, we're 11:52 18 still working on that. We've gotten some bids on TV 11:52 19 advertising and they're too expense for one hall to 11:52 20 sustain the cost of it, and if we can get two or three 11:52 21 halls to participate and do a generic bingo 11:52 22 advertising, but give them the locations of those 11:52 23 particular halls and show pictures of those halls, you 11:52 24 know, that would, you know, help advertise it in that 11:52 25 particular area. 11:52 0086 1 MS. TAYLOR: We had a meeting in Nueces 11:52 2 County the 13th of the month talking about this same 11:52 3 thing. And I think almost all of the halls except 11:52 4 maybe two were represented that were outside of Corpus 11:52 5 Christi. And they all agreed, which was pretty 11:52 6 shocking, to do a joint commercial, a joint generic 11:52 7 advertising commercial, just about how much fun bingo 11:53 8 is, and how helpful it would be if there was some kind 11:53 9 of a generic commercial available that we could get 11:53 10 and just dub in the names where they needed to be. 11:53 11 MR. HEINLEIN: But you have to give 11:53 12 some consideration to what could be the reasonable 11:53 13 cost. What could be afforded. And that's the area 11:53 14 where I get real nervous about. I met with a hall 11:53 15 yesterday where they had spent 1800 dollars on 11:53 16 something for advertising, and I like to croaked. I 11:53 17 said, who approved that, you know. Because we're 11:53 18 trying to focus that advertising and get the best use 11:53 19 of those dollars. We've got to find the best way to 11:53 20 use such limited funds that we have for advertising. 11:53 21 But something needs to be -- I think, 11:53 22 really needs to be looked at and thought about, and 11:53 23 it's been passed over. We've got to advertise bingo. 11:53 24 And we're going to continue to shrink if we don't. 11:53 25 CHAIR BRACKETT: Let me ask a question 11:53 0087 1 on this. You said you had gotten bids on TV. Do you 11:53 2 do any print media advertising? 11:53 3 MR. HEINLEIN: Yes. 11:54 4 CHAIR BRACKETT: Examples? 11:54 5 MR. HEINLEIN: We do newspaper 11:54 6 advertising. One of the things -- 11:54 7 CHAIR BRACKETT: What kind of 11:54 8 newspapers? Is it the Chronicle -- 11:54 9 MR. HEINLEIN: Local, Chronicle. 11:54 10 CHAIR BRACKETT: The big papers. 11:54 11 MR. HEINLEIN: Yeah, the big papers. 11:54 12 And it's very expensive. 11:54 13 CHAIR BRACKETT: Yeah. You do Thrifty 11:54 14 Nickel and that type of thing, too? 11:54 15 MR. HEINLEIN: We do Thrifty Nickel. 11:54 16 And, of course, the bingo news lines, like the Bingo 11:54 17 Newsline, and the Bingo Bugle, those kinds of 11:54 18 advertisements. But we're doing one in Conroe on 11:54 19 advertising a particular session and we're doing 11:54 20 leaflets. You know, where they put the leaflet in the 11:54 21 advertisement, and it's only going to cost us 500 11:54 22 dollars, five or 600 dollars. Just one time, but it's 11:54 23 advertising one particular event. But then that 11:54 24 promotes it -- you know, if you get them to come in on 11:54 25 that particular occasion -- 11:54 0088 1 CHAIR BRACKETT: A leaflet in what? 11:54 2 MR. HEINLEIN: They put the leaflet 3 inside the newspaper, and when you open the newspaper, 11:54 4 it falls out. You can't help but see it, so I think 11:54 5 it's a very effective way of advertising. So I 11:54 6 support that particular -- because of its cost. It 11:54 7 was cost effective, you know, at 500 some-odd dollars, 11:55 8 and it reaches 17,000 households. 11:55 9 MR. ATKINS: The estimates that you 11:55 10 got, were they related to television? 11:55 11 MR. HEINLEIN: Yes. 11:55 12 MR. ATKINS: Were those for production 11:55 13 or for actual time? 11:55 14 MR. HEINLEIN: Both. 11:55 15 MR. ATKINS: What -- 11:55 16 MR. HEINLEIN: Production costs and 11:55 17 the -- like three or 4,000 dollars for production, and 11:55 18 16,000 dollars for air time for a three-month period. 11:55 19 MR. ATKINS: How often? 11:55 20 MR. HEINLEIN: It seems like it was 30 11:55 21 times a day, these spots, 15 seconds. 11:55 22 MR. ATKINS: A 15-second spot? On 11:55 23 cable or -- 11:55 24 MR. HEINLEIN: A myriad of channels, 11:55 25 different channels. And I think that could be 11:55 0089 1 effective. But it's very expensive. 11:55 2 CHAIR BRACKETT: Well, advertising is 11:55 3 just expensive. I think that's a good price you got 11:55 4 for that much. Now, what time of day, though? Is it 11:55 5 2:00 a.m. or is it -- 11:56 6 MR. HEINLEIN: It varies. There is a 11:56 7 lot of 2:00 a.m. stuff and it -- we actually started 11:56 8 working on this a year ago. They didn't gag me and 11:56 9 put me in the closet, so I voted it down. I just 11:56 10 said, you can't do it. It's too much money. You 11:56 11 can't do it. But I'm now starting to look at it 11:56 12 favorably, if we could identify the cost and see that 11:56 13 it's focused on an area that you could expect some 11:56 14 results. If it's not just 2:00 o'clock in the morning 11:56 15 and 4:00 o'clock in the morning, but if it's in some 11:56 16 prime time slots, reduce the amount of coverage, but 11:56 17 put it in a more appropriate time slot. That's just 11:56 18 like this leaflet. It would have cost us 11:56 19 1200-something dollars to put it on a Wednesday 11:56 20 newspaper, Chronicle, because they do the 11:56 21 entertainments at that time. And I said, well, I 11:56 22 don't want to be at that time. They've got all this 11:56 23 other stuff coming at them. Why would I want to put 11:56 24 it at that time, and it costs 1200 dollars. Let's put 11:56 25 it on the Friday where it won't cost but 569 dollars 11:56 0090 1 and it's at the exact time that we need it for a 11:56 2 Saturday mega bingo. So it works. Then I can vote 11:57 3 for that. That sounds cost effective. So you have to 11:57 4 very carefully look at your advertising budget and 11:57 5 advertising things. But you've got to think 11:57 6 advertising. If you don't advertise, you're not -- 11:57 7 you're going to continue this shrinking market. 11:57 8 You've got to get the market going back up. And 11:57 9 you're going to have to advertise it to do it. 11:57 10 MR. WHITTINGTON: We used to -- we did 11:57 11 TV one time about three years ago, and it did pretty 11:57 12 well. But at the end of the quarter, the charities 11:57 13 said, where is our money? We ain't got no money. We 11:57 14 said, well, we'll pay for advertising. They said, 11:57 15 well, we need money. We need to come up -- find some 11:57 16 kind of way to donate that money, helping us out. 11:57 17 MR. HEINLEIN: Well, in your scope of 11:57 18 advertising the Commission of our industry needs, you 11:57 19 can certainly focus on telling them that, you know, 11:57 20 we've got some advertising issues and we need to -- we 11:57 21 maybe even need some help and advice on the stuff, 11:57 22 what to do. 11:57 23 MS. MATTHEWS: David, is there any way 11:57 24 we can use PSAs, since we are not-for-profit entities? 11:58 25 MR. HEINLEIN: We have done some of 11:58 0091 1 that. In fact, we did it -- a few years ago, we did a 11:58 2 TV advertisement in Victoria County like that. 11:58 3 MS. MATTHEWS: How do you convert an 11:58 4 advertisement into a -- 11:58 5 MR. HEINLEIN: We even had the 11:58 6 production time donated. I didn't have any problem 11:58 7 voting for that issue because it didn't cost us 11:58 8 anything. And we did some get some effective 11:58 9 advertising. Yes, that's something, definitely, to be 11:58 10 looked at is public service advertising. You know, 11:58 11 you can get on some air time and you may be able to 11:58 12 find a sponsor to do your production cost from your 11:58 13 charity. That's worth looking at. 11:58 14 MR. MANIO: I have some comments and 11:58 15 maybe a question for you afterwards. I cannot speak 11:58 16 for the Commission, but I do feel from what I have 11:58 17 seen that the Commission is not adverse to advertising 11:58 18 bingo. It's a question of money. They don't have the 11:58 19 funds. Now, what you have told us is very 11:58 20 interesting, because what you're doing now is you're 11:58 21 getting together a group of charities and then buying 11:59 22 local advertising. So it seems to me there are two 11:59 23 approaches now, and tell me which ones -- which way to 11:59 24 go. 11:59 25 MR. HEINLEIN: Well, the only one that 11:59 0092 1 we can do is the one that we're able to do ourselves. 11:59 2 MR. MANIO: Well, that's what -- we can 11:59 3 do this on a regional basis or city-by-city basis, get 11:59 4 together some charities and buy local advertising. 11:59 5 And the other way is, we can get the Lottery 11:59 6 Commission to do the advertising on a statewide basis, 11:59 7 but they would need the funds. 11:59 8 MR. HEINLEIN: Right. 11:59 9 MR. MANIO: So which way should we go? 11:59 10 MR. HEINLEIN: We need both. I mean, 11:59 11 we definitely the statewide, but I don't know the 11:59 12 method of getting to that part, and that's where this 11:59 13 subcommittee I'm hoping can help identify what we can 11:59 14 do individually to find the -- where do you go to get 11:59 15 that done. I thought perhaps with the Sunset 11:59 16 committee thing with the legislative council and your 12:00 17 riding act, if there is any -- I don't know if that's 12:00 18 possible. But could that be part of that scope to 12:00 19 write in the need for advertising, and then it has to 12:00 20 be a separate appropriation? I don't know. You have 12:00 21 to help us identify what -- 12:00 22 MR. MANIO: But there is another 12:00 23 argument that can be derived from this. If some 12:00 24 charities are willing to spend money on local 12:00 25 advertising, then perhaps they would be amenable, 12:00 0093 1 let's say, to a special tax for one year or two years, 12:00 2 to go to the State fund or bill that to the -- for 12:00 3 statewide advertising. That's something to think 12:00 4 about. 5 MR. HEINLEIN: I was thinking myself 12:00 6 like that. 12:00 7 MR. TAWIL: I think what needs to be 12:00 8 done on that, Mario, and I think it'll go under the 12:00 9 subcommittee, is that it's been proven -- I say it's 12:00 10 proven. I haven't seen it personally, but I know 12:00 11 Suzanne has brought it up and Billy has supported the 12:00 12 fact that bingo generates more for the Lottery 12:01 13 Commission than is required to run it, but what we 12:01 14 have to do is ask the legislature for permission to 12:01 15 allocate ten percent of the funds or whatever to these 12:01 16 functions. Once that's done up there, his hands are 12:01 17 tied here. You can develop whatever you need to 12:01 18 internally to spend it -- they won't have a problem 12:01 19 with you doing that. We've got to get permission to 12:01 20 do it. 12:01 21 MR. HEINLEIN: Billy, is that something 12:01 22 that can be written in this legislative council thing 12:01 23 that you're working on now? Is there any part -- 12:01 24 MR. ATKINS: I don't think it would be 12:01 25 germane to the draft that they're working on now. The 12:01 0094 1 draft that they're working on now is going to address 12:01 2 the specific decisions they made at their last 12:01 3 meeting, and there wasn't a discussion of advertising. 12:01 4 MR. TAWIL: I think what we need to do 12:01 5 is have a -- we'll have an amendment -- 12:01 6 MR. HEINLEIN: So we have to come at it 12:01 7 from a different direction -- 12:01 8 MR. TAWIL: We can submit it at the 12:01 9 hearings at the legislature. An individual can do it. 12:01 10 Once we all agree on it, you can just submit it and it 12:01 11 can be attached. 12:01 12 MR. HEINLEIN: Well, think big. Think 12:02 13 in terms of ten or 15 millions dollars a year to 12:02 14 advertise bingo statewide. 12:02 15 MR. TAWIL: I don't think a million 12:02 16 dollars is out of the question if it's done right. 12:02 17 MS. TAYLOR: But something that could 12:02 18 help all of us. David is talking about, the Houston 12:02 19 charities are putting together a charity commercial. 12:02 20 I know the charities in Nueces County are talking 12:02 21 about putting together a charity commercial. All the 12:02 22 generic commercials, it's a shame that there isn't a 12:02 23 commercial that the Lottery has available that we 12:02 24 could purchase at, you know, a cheap price. Since all 12:02 25 of us are talking almost about doing the same type of 12:02 0095 1 thing, because we've all come to that conclusion that 12:02 2 we can't afford to advertise one hall at a time. If 12:02 3 we're going to do it, we've got to do it as a group. 12:02 4 Because, Larry, you advertise your hall. If I -- it 12:02 5 doesn't really matter. If anybody sees the ad, is 12:02 6 going to most likely go to the nearest bingo hall. 12:02 7 And if I'm closer, your ad is helping me also. So we 12:02 8 all benefit from advertising bingo and from making 12:03 9 people think about bingo. The Lottery -- I don't see 12:03 10 commercials when I see the Lottery that says, go to 12:03 11 Maverick Park and buy your lottery ticket, or go to 12:03 12 7-Eleven. They advertise the Lottery, how much fun it 12:03 13 is to play the Lottery. Just play it. So if we had a 12:03 14 generic commercial that would just advertise bingo. 12:03 15 Play bingo, bingo is fun, you know, then we could 12:03 16 possibly blip in whatever other requirements we would 12:03 17 need locally. You know, whatever the charity's names, 12:03 18 if we just have to flash it on the screen as a 12:03 19 picture. If there is something generically available 12:03 20 to us, I think it would be a savings to all the 12:03 21 charities, because so many charities are paying the 12:03 22 production costs. Instead of paying that for 12:03 23 production costs, I would like to use that money to 12:03 24 run the ad more times. 12:03 25 CHAIR BRACKETT: Okay. Is that 12:03 0096 1 something that this committee will -- 12:03 2 MR. WHITTINGTON: Subcommittee. 3 CHAIR BRACKETT: You will look into 12:03 4 that, and that would be a wonderful thing to have 12:03 5 something we could just drop in on that. 12:03 6 We're on item number five, which is, 12:04 7 report and possible discussion and/or action on the 12:04 8 satellite bingo. Danny, I'm sorry that it's gone on 12:04 9 and on. It's a little bit after noon. Is your 12:04 10 pleasure to go ahead and hear this report and maybe to 12:04 11 take a lunch break at 1:00? But I feel like for the 12:04 12 court reporter's mental and physical health, we need 12:04 13 to take at least a five or a ten-minute break right 12:04 14 now. Is that okay with everyone? Can we -- is anyone 12:04 15 getting light-headed from hunger or can we -- 12:04 16 MR. MOORE: It doesn't matter to me. 12:04 17 These guys are free for the day. I think his 12:04 18 presentation will be about 15 minutes and then any 12:04 19 questions anybody had. I wouldn't say it's going to 12:04 20 run over 30 minutes here, unless we really get into -- 12:04 21 MR. ATKINS: You mean, like everything 12:04 22 else? 12:04 23 CHAIR BRACKETT: Like item number four? 12:04 24 All right. Let's do that. Let's let the court 12:04 25 reporter have a break and then we will get to your 12:05 0097 1 report. That way we will miss the 12:00 o'clock crowd 12:05 2 at the sandwich shop, too. 12:05 3 But before we do anything, I want to 12:05 4 welcome Commissioner Cox. Our tag team has tagged off 12:05 5 and Commissioner Clowe has left and Commissioner Cox 12:05 6 is here. Thank you for being here. 12:05 7 (RECESS.) 12:05 8 CHAIR BRACKETT: We're on item number 12:21 9 five. Danny, would you like to introduce this? 12:21 10 MR. MOORE: Yeah. We have a couple of 12:21 11 gentlemen here today from a company out of Canada 12:21 12 called Canadian Bank Note. They operate -- or have a 12:21 13 system that provides linked bingo to bingo halls in 12:21 14 Canada. It's -- this kind of is -- the agenda items 12:22 15 seem to be in the right order here, because I think 12:22 16 this product serves kind of as a promotional tool for 12:22 17 bingo halls. And Commissioner Clowe mentioned 12:22 18 solutions. I think that's what we're looking for is 12:22 19 solutions. Maybe this isn't the one we need, but it's 12:22 20 something that's available. 12:22 21 First of all, this is information for 12:22 22 everybody here today. This isn't a product that's 12:22 23 available. It would have to be lobbied, put in a bill 12:22 24 and passed. But it is product that has been used. 12:22 25 It's successful in Canada. I believe they use it in 12:22 0098 1 England. No? Okay. 12:22 2 Anyway, I'm going to let them go ahead 12:22 3 and make this presentation. This is Peter Stevens 12:22 4 here. He is with Bob Miller, and we'll let them take 12:23 5 it away. 12:23 6 MR. STEVENS: Good afternoon, members 12:23 7 of the Bingo Advisory Committee and ladies and 12:23 8 gentlemen. My name is Peter Stevens and my colleague 12:23 9 here is Bob Miller. As Daniel said, we're both with 12:23 10 the Canadian Bank Note Company. I'm located out of 12:23 11 Ottawa, Canada, and Bob is located in Atlanta. 12:23 12 I would like to really introduce what 12:23 13 we have is a linked bingo system and speak you in the 12:23 14 vein of providing you information. It is a solution 12:23 15 and -- amongst a number of solutions for 12:23 16 rehabilitating bingo. And it's in this vein that I am 12:23 17 speaking to this audience, is to give you some 12:23 18 insights into one kind of solution that was successful 12:23 19 in the jurisdiction. 12:23 20 I understand that this group has been 12:24 21 looking into and evaluating a number of options to 12:24 22 improve bingo in the state of Texas. You have 12:24 23 discussed such things as satellite bingo, network 12:24 24 bingo, and linked bingo, and have expressed a desire 12:24 25 to hear about a jurisdiction that actually plays a 12:24 0099 1 linked bingo game. 12:24 2 I'm here to tell you a little about how 12:24 3 the Ontario Lottery and Gaming Corporation developed a 12:24 4 linked bingo system as part of their larger plan to 12:24 5 rehabilitate bingo in the Province of Ontario. For 12:24 6 those of you who may not know, and I'm sure most of 12:24 7 you do, Ontario Lottery and Gaming Corporation is a 12:24 8 agency of the government of the Province of Ontario 12:24 9 that operates all lotteries and casinos and racetracks 12:24 10 in Ontario, regulates bingo, and runs bingo games for 12:24 11 the Province. 12:24 12 Several years ago, the Province of 12:24 13 Ontario was faced with many of the same problems you 12:24 14 have here in Texas regarding the decline of bingo and 12:24 15 the loss of important revenues to charitable causes. 12:25 16 Bingo halls in Ontario are either operated by 12:25 17 charities or run professionally with some volunteers, 12:25 18 were experiencing a dramatic decline in attendance and 12:25 19 the resultant revenues. This was due to many reasons, 12:25 20 including competition from the lotteries, rapid growth 12:25 21 of casinos in the province and the sorry state of many 12:25 22 bingo halls within the province. In short, bingo was 12:25 23 becoming uncompetitive in the gaming market. The 12:25 24 charities asked the Ontario Lottery and Gaming 12:25 25 Corporation to come up with a plan to address this 12:25 0100 1 decline. The bingo situation as it was in Ontario is 12:25 2 very similar to what it is in Texas today. And 12:25 3 through this imitation of a plan, they were able to 12:25 4 stem the decline. 12:25 5 First some statistics that are 12:25 6 important, as it shows the similarities between Texas 12:25 7 and the Province of Ontario. Ontario is a one billion 12:25 8 bingo market. You can add another 600 million for 12:25 9 pull tabs that are sold in the bingo halls. The 12:26 10 population of eight million adults are approximately 12:26 11 one-third the size of Texas. Four percent play bingo 12:26 12 on a regular basis. Five play at least once a month. 12:26 13 So, therefore, in the statistics, nine percent are 12:26 14 considered regular players of bingo. 12:26 15 The bingo games are very similar to the 12:26 16 Texas game in that they're paper-based games with some 12:26 17 electronic games being played. But primarily, the 12:26 18 whole thing is done on a paper-based basis. 12:26 19 Ontario came out with what is known as 12:26 20 their three-year plan that took into consideration -- 12:26 21 and I give their quote -- as their Three Pillars to 12:26 22 Success: Quality products and competitive games 12:26 23 utilizing new technologies; quality service in the 12:27 24 halls that includes delivery and training of staff; 12:27 25 quality facilities upgraded to meet the customer 12:27 0101 1 needs. 12:27 2 So they didn't drive into just 12:27 3 technology as the panacea for helping bingo, they took 12:27 4 an overall strategy for this. I can speak of the two 12:27 5 and three, but I'll concentrate my comments today on 12:27 6 item number one, quality products. OLGC invested 12:27 7 several million dollars to develop a linked bingo game 12:27 8 for Ontario. The uniqueness of the linked game is 12:27 9 that it plays on paper. It is not electronic, not on 12:27 10 electronic devices. It was originally called 12:27 11 SuperStar Bingo, and has been succeeded recently by 12:27 12 Big Link and an evening game called The Link. 12:27 13 Currently, SuperStar links over 90 12:27 14 halls in the Province of Ontario. The game is very 12:27 15 similar to what is played normally in the halls, on 12:28 16 paper. The game is played on patterns. You can play 12:28 17 full board games. But most importantly, there is a 12:28 18 progressive game that is played through linking of all 12:28 19 of the halls, and the other important aspect of it is 12:28 20 that it has an uncapped jackpot. The system is 12:28 21 designed to augment, and this is important, not 12:28 22 replace the existing games played and enjoyed 12:28 23 currently in the halls. So, in fact, the halls do all 12:28 24 of their normal things, and the SuperStar Bingo comes 12:28 25 on at a prescribed time. So to speak, interrupts the 12:28 0102 1 hall's normal games, and is played for a 15, 20-minute 12:28 2 period. So it doesn't -- it's not perceived as a 12:28 3 replacement of bingo hall games and the things that 12:28 4 normally go on in the halls. 12:28 5 The overall program they developed is 12:29 6 called the Bingo Gaming and Administration System. 12:29 7 This was a game, as I say, developed by OLGC with 12:29 8 their own proprietary bingo -- own proprietary 12:29 9 information and software, and it generates bingo games 12:29 10 just like those currently played in the halls on 12:29 11 paper. It is run and managed by a central computer 12:29 12 system located in their secure facility in 12:29 13 Sault Ste. Marie, Ontario, just north of 12:29 14 Sault Ste. Marie, Michigan. The halls are linked by 12:29 15 dedicated telephone lines, and it's important here, 12:29 16 it's not the Internet, it's not space satellite 12:29 17 telecommunications, it's simply by dedicated telephone 12:29 18 lines. 12:29 19 The system is robust. It has numerous 12:29 20 security features. You'll have to remember here that 12:30 21 OLGC was primarily a Lottery organization, and this 12:30 22 system was developed on all of the knowledge that 12:30 23 they've gained in developing on-line lottery systems, 12:30 24 so it has numerous security features all throughout 12:30 25 it. The system is interactive with each hall. In 12:30 0103 1 other words, the hall sends and receives information 12:30 2 from the central system. In addition, the system has 12:30 3 an extensive financial and management information 12:30 4 capability. 12:30 5 What does a hall need? Pretty simply, 12:30 6 it needs a standard PC, two laser printers, one for 12:30 7 backup. The hall PC is hooked up through the phone 12:30 8 system to the central computer to receive and send 12:30 9 information. And the PC is also connected to the hall 12:30 10 monitors and PA system to broadcast the games when 12:30 11 they're broadcast. Security bingo paper is provided 12:31 12 to each hall. 12:31 13 Here is an example of what a standard 12:31 14 sheet of paper looks like that is currently used in 12:31 15 the Ontario game. This paper can be designed for the 12:31 16 Texas Lottery, it can be designed for any other 12:31 17 jurisdiction, so it's not -- I just want to give you 12:31 18 an example of what it looks like. 12:31 19 MR. MILLER: This also has a perf 12:31 20 that's cut in the center, and actually what you end up 12:31 21 with, you've got two cards right there with three on 12:31 22 them. This prints six of them. So in other words -- 12:31 23 do you have a copy of it? There you go. Billy has 12:31 24 one. 12:31 25 MR. STEVENS: We've got samples here 12:31 0104 1 you can take a look at after the presentation. 12:31 2 There is built-in security features in 12:31 3 this paper as well. 12:31 4 How does the game work? An hour or so 12:31 5 before the linked game commences, the hall dials into 12:31 6 the central computer and gets the numbers and receives 12:31 7 the games. The numbers are generated by a random 12:32 8 number generator, and this piece of equipment was also 12:32 9 developed by OLGC, and that is part of the central 12:32 10 system. The numbers are printed on secure bingo paper 12:32 11 in the hall and the game strips are also shortly 12:32 12 before game time. Here is what it looks like after 12:32 13 it's printed in the hall. Now, there is a couple of 12:32 14 features. You'll see the Bingo Country Steels out of 12:32 15 New West (phonetic)? Every hall will have its own 12:32 16 name on it. You have the date, you have the evening 12:32 17 session, you have the game time, the game number. If 12:32 18 you notice on the bottom right-hand corner of every 12:32 19 bingo sheet, there is a small number, like 10098867. 12:32 20 That's a serial number as well. And that's an 12:32 21 important number I'll get into later. You see over on 12:33 22 the side, there is 074. That's an additional play 12:33 23 feature. In other words, if someone calls bingo on 12:33 24 074, they can get an additional amount of money as a 12:33 25 bonus. So you can play different games along the side 12:33 0105 1 here. 12:33 2 As I said, the in-hall games conclude 12:33 3 and SuperStar commences at a prescribed time. That 12:33 4 could be a morning session, it could be an afternoon 12:33 5 session, it could be an evening session. It all 12:33 6 depends on what the marketplace dictates and what 12:33 7 attracts the customers. The key here is, all the 12:33 8 halls play the same game at the same time in real 12:33 9 time. So let's play SuperStar. 12:33 10 (Videotape presentation commences.) 12:34 11 MR. STEVENS: And this is what you'll 12:34 12 actually see in the bingo hall. 12:34 13 Most of the people there come up in 12:34 14 limousines to play bingo. 12:34 15 MR. HEINLEIN: Just like Texas. 12:34 16 MR. MILLER: I might add that at the 12:37 17 top of top of the board where the B-3 is, it shows 12:37 18 you -- the H needs to be presented at 32 numbers. 12:37 19 We're on ball three right now. It tells you every 12:37 20 number of the balls, there are always three balls 12:37 21 displayed, the last three balls. 12:37 22 We've advanced and went ahead. We 12:37 23 didn't show you the whole presentation of the balls 12:37 24 being called, so we've advanced it forward. This is 12:37 25 what happens when there is a bingo called. 12:37 0106 1 (Videotape presentation concludes.) 2 MR. STEVENS: As you can see, the game 12:38 3 is played very similar to those normally played in 12:38 4 each hall. You can have a roving L or H pattern, 12:38 5 straight line or four corners, full card. The 12:38 6 progressive game can be set starting at 46 balls and 12:39 7 then move up on increments. That could be done on a 12:39 8 nightly basis or a weekly basis, or whatever way you 12:39 9 want to set it up. The largest jackpot in Ontario so 12:39 10 far for the progressive bingo was 825,000 dollars. 12:39 11 Mind you, that's Canadian dollars, so it's rather 12:39 12 debatable as to what it is in U.S. dollars. And 12:39 13 normally, the pots grow within a few sessions to 12:39 14 75,000 or 100,000, and that is five to ten times the 12:39 15 normal prize in Ontario. 12:39 16 The SuperStar system has other features 12:39 17 as well, and these are in the administration areas, 12:39 18 the financial management packages, retailer management 12:39 19 system, a coupon management system, inventory 12:39 20 management system, and a draw security system. Again, 12:39 21 I bring you back to OLGC inventing the all-seeing, 12:39 22 all-dancing system in that they thought of it not 12:39 23 being marketed to any other jurisdiction and had the 12:40 24 resources to put quite a bit of sophistication into 12:40 25 the system. Since 1997, to September of this year, 12:40 0107 1 Superstar Bingo and its successors, The Link and the 12:40 2 Big Link, have generated about 272 million in total 12:40 3 sales, 130 million in prizes, 58 million for charities 12:40 4 in Ontario, and 31 million for the bingo halls. So it 12:40 5 gives you some ideas. 12:40 6 In a nutshell, the benefits of 12:40 7 Superstar Bingo increases hall revenue. Most -- more 12:40 8 importantly, it creates player excitement. It brings 12:40 9 new and, many of them, the younger players into the 12:40 10 halls. And it offers a true progressive jackpot. And 12:40 11 you saw from the video, it's live, it's interactive, 12:40 12 people know the winners, the winners are displayed. 12:40 13 Part of the program, to bring all of the big winners 12:41 14 in for a big party once a year and have a big bingo 12:41 15 game. So ladies and gentlemen, the Bingo Gaming 12:41 16 Administration System is a well-developed, 12:41 17 fully-tested linked bingo system that has been in 12:41 18 operation for over five years. The same SuperStar 12:41 19 system from OLGC is currently running linked bingo in 12:41 20 the Provinces of British Columbia and Quebec. OLGC 12:41 21 provided that information to them, the software to 12:41 22 them. OLGC developed the system for its own unique 12:41 23 use in Ontario with no thought to its applicability 12:41 24 elsewhere. In addition, OLGC by its charter cannot 12:41 25 provide the system to any other jurisdiction outside 12:41 0108 1 of Canada. Our company, the Canadian Bank Note 12:41 2 Company, Limited, only recently acquired the worldwide 12:41 3 rights to make this product available. 12:41 4 It is our understanding that this 12:41 5 forum's mandate is to examine all aspects of bingo to 12:42 6 determine how it can improve the state of bingo in 12:42 7 Texas. As part of this due diligence process, I'm 12:42 8 able to speak for Ron Ko, who is the Director of Bingo 12:42 9 Operations at OLGC, who invites those of this 12:42 10 committee to come to Toronto, visit OLGC, see their 12:42 11 linked lingo system. In addition, OLGC will share 12:42 12 with you their overall plan for rehabilitating bingo 12:42 13 and assisting bingo in the Province. 12:42 14 Now, I understand there is a little 12:42 15 glitch in this invitation in that there is problems of 12:42 16 the lottery group, this group traveling to Canada. We 12:42 17 can reverse it. We can have OLGC people come down 12:42 18 here, put on a demonstration of the system far more 12:42 19 sophisticated than this one to demonstrate the system. 12:42 20 And again, this is only part of the solution of the 12:42 21 overall bingo. This system doesn't preclude other 12:42 22 systems being put into place and other solutions being 12:43 23 tried in the state as well. 12:43 24 I've been a little brief to try to get 12:43 25 it in within a short period of time, but we certainly 12:43 0109 1 welcome any questions that you may have. 12:43 2 MR. MOORE: Do y'all understand how the 12:43 3 system works? 12:43 4 (Inaudible.) 5 MR. MOORE: Well, that's obvious. This 12:43 6 is just an information-gathering session here. 12:43 7 It's -- it's unique and it addresses some of the 12:43 8 things that we're -- we have in our positive agenda 12:43 9 here as far as progressive bingo. Satellite bingo is 12:43 10 also mentioned in there. 12:43 11 MR. STEVENS: The satellite -- I'll 12:43 12 clarify that. The satellite portion of that, there 12:43 13 has been advancements of the Superstar Bingo. And one 12:43 14 of the newer features was, there is an organization in 12:44 15 Toronto known as Stewart Broadcasting. Now, Stewart 12:44 16 Broadcasting's claim to fame is doing the old Second 12:44 17 City Reviews we saw about 20 years ago on television, 12:44 18 and they started that and then it grew from there. 12:44 19 That organization owns quite a number of the bingo 12:44 20 halls in Ontario. And they felt, from their studio, 12:44 21 they could put a broadcast portion to that. So they 12:44 22 put a satellite dish on a number of bingo halls, and 12:44 23 so it can be broadcast, the video portion of it, over 12:44 24 the television. So they do this for Ontario 12:44 25 presently, and we understand for television bingo in 12:44 0110 1 Miami, for example, and in Florida, they produce those 12:44 2 shows right from their broadcast studios in Toronto. 12:44 3 So the people in Florida are really seeing Toronto 12:44 4 with a backdrop of Miami there. So I just wanted to 12:44 5 clarify the confusion. It's not a satellite linkage 12:45 6 per se. It's a tested system through the telephone 12:45 7 lines. 12:45 8 MR. TAWIL: Explain how the sales take 9 place. I'm kind of confused. They download cards 12:45 10 that are -- they download the balls drawn in the 12:45 11 cards? 12:45 12 MR. MILLER: No. You have a central 12:45 13 computer system. 12:45 14 MR. ATKINS: Bob, would you please come 12:45 15 up so you can be picked up on the microphone. 12:45 16 MR. MILLER: You have a central 12:45 17 computer system that is where the random number 12:45 18 generator resides. Each hall is hooked up at a 12:45 19 prescribed time to the central system, and when the 12:45 20 hall operator decides it's time for him to go ahead 12:45 21 and print tickets, he'll go ahead and type in on his 12:46 22 PC how many tickets he wants to print. That goes to 12:46 23 the central system, the random number generator is 12:46 24 activated, it spits out the numbers, sends them back 12:46 25 to his printer, which is in his hall. Those tickets 12:46 0111 1 are printed locally at the hall, and we've got a 12:46 2 sample -- I think you have a sample there that has 12:46 3 been passed around. And each one of those tickets is 12:46 4 unique and individual in the fact that it has its own 12:46 5 serial number, and the information from those tickets, 12:46 6 as I said, resides in the central computer. 12:46 7 So there is a tracking device -- this 12:46 8 is part of the security features that are built into 12:46 9 this system that prevents anybody from manipulating or 12:46 10 trying to play with the bingo paper itself prior to 12:46 11 the draw on the session. 12:46 12 MR. TAWIL: So you don't have a set 12:46 13 burner? 12:46 14 MR. MILLER: No. It is a written -- a 12:46 15 true real random generated. 12:47 16 MR. TAWIL: For the cards only. 12:47 17 MR. MILLER: For the cards only. 18 MR. TAWIL: Then the balls are drawn in 12:47 19 realtime? 20 MR. MILLER: In realtime. 21 MR. TAWIL: How does the operator know 12:47 22 how many cards that he wants? 12:47 23 MR. MILLER: He has the ability to go 12:47 24 ahead and print, prior to the session, as many as he 12:47 25 thinks he's going to need. And what he doesn't sell, 12:47 0112 1 he can go ahead and void out. That's the reason for 12:47 2 the bar code across the bottom of the card. It's very 12:47 3 easy for him to take a bar code reader and scan them 12:47 4 and it just deletes them from the system. 12:47 5 MR. TAWIL: How do you know how many 12:47 6 you sold? 12:47 7 MR. MILLER: The system keeps track of 12:47 8 all -- this is what I'm saying. It's all -- 12:47 9 MR. TAWIL: If he downloads a hundred 12:47 10 cards and he is charged with a hundred cards -- 12:47 11 MR. STEVENS: -- he cancels ten of them 12:47 12 and he's charged with 90 cards. If he doesn't cancel 12:47 13 the ten of them, he is charged with a hundred cards. 12:47 14 So it behooves him to cancel those unsold cards. 12:47 15 MR. MILLER: And there is plenty of 12:48 16 time for him to do that prior to the game being 12:48 17 launched. 12:48 18 MR. ATKINS: Can the cards be canceled 12:48 19 after the game? 12:48 20 MR. MILLER: No. Once the game is 12:48 21 active and live, those cards are in play. He's 12:48 22 charged for them. The reason for that is all of the 12:48 23 sales are tabulated at one time, and then the 12:48 24 announcement goes out over the network of what the 12:48 25 prize is. So you can't have a prize unless you know 12:48 0113 1 what you have sold. 12:48 2 MR. TAWIL: Is it similar to the system 12:48 3 in Sweden? The TV bingo game? I forgot that name. 12:48 4 MR. MILLER: I know what you're talking 12:48 5 about. It is somewhat similar. There is -- there are 12:48 6 some differences. They don't have the back end that 12:48 7 this offers. 12:48 8 MR. TAWIL: I'm talking about the game 12:48 9 itself. Basically, the organization location was 12:48 10 charged with a block of cards that they get, unless 12:48 11 they faxed back to them that we don't want them. 12:48 12 MR. MILLER: Right. 12:48 13 MS. TAYLOR: Are the organizations 12:48 14 billed for the cards? Are they billed on a weekly 12:49 15 basis, do they do this on a daily -- how do you get 12:49 16 the money to make the payouts? 17 MR. MILLER: That's open for 12:49 18 discussion. The way it's currently done in Canada, 12:49 19 they use what they call electronic funds transfers. 12:49 20 It's exactly the same as the lottery. The bingo hall 12:49 21 is considered to be a retailer. At night, their 12:49 22 accounts are -- the money is collected out of their 12:49 23 account electronically. And that's one aspect of it. 12:49 24 The other aspect is, if they have a winner that wins 12:49 25 six or 7,000 dollars, they can go ahead and give them 12:49 0114 1 a check that night because that money will be in their 12:49 2 account that night from the central system. So it 12:49 3 works both ways. But it's open for how that could be 12:49 4 implemented here, different laws and different 12:49 5 jurisdictions, on what you can do and what you can't 12:49 6 do on electronic funds transfers. But that's the way 12:49 7 it's done in Canada. 12:49 8 MS. TAYLOR: How many halls don't 12:49 9 participate? 12:49 10 MR. STEVENS: In Ontario, I think there 12:49 11 is about 30 halls that are probably not on board. 12:49 12 MS. TAYLOR: And how many do 12:50 13 participate? 12:50 14 MR. STEVENS: 90-something. 12:50 15 MS. TAYLOR: I can't imagine not. 12:50 16 MR. MILLER: Well, the fact of the 17 matter is, it's not just one way. Some halls, they 12:50 18 don't want to participate because they're not up to 12:50 19 the standards of what they're looking for. The OLGC 12:50 20 requires a certain level of cleanliness, convenience 12:50 21 for the customers, and things like that. Some of them 12:50 22 don't want to do that. 12:50 23 MR. MOORE: The charities don't 12:50 24 actually buy the paper. They -- do they purchase it 12:50 25 at that point or are they collecting the money from 12:50 0115 1 the players and that's what is transferred in and out 12:50 2 of the accounts? 12:50 3 MR. MILLER: In Canada, the paper is 12:50 4 provided by the Lottery Corporation to the halls. 12:50 5 Okay? 12:50 6 MR. STEVENS: In Ontario, for example, 12:50 7 for this system, what OLGC did was become the great 12:50 8 grandfather here. It provided the entire system and 12:50 9 the systems for each hall. And it takes a percentage 12:51 10 of the take as the provider, as the service provider. 12:51 11 So it provides all of the paper, it provides the 12:51 12 investment in each hall, it provides the advertising, 12:51 13 for example, promotion of the games. It also develops 12:51 14 new games and it has refreshed the entire system for 12:51 15 the five years. So it's taken the position that it's 12:51 16 a shareholders, shall we say, with the halls. 12:51 17 Now, the prize structure is slightly 12:51 18 different than you would normally see in a hall. 12:51 19 Usually, 50 percent goes to the prize, so you've got 12:51 20 another 50 percent back that is shared between OLGC, 12:51 21 the halls, the charities, the bingo association, and 12:51 22 another association. So those are the prime takers of 12:51 23 that 50 percent. That's the Ontario model. 12:51 24 What I'm saying here is, there could be 12:51 25 a different model for -- for Texas. It's up for 12:51 0116 1 grabs. We're just -- at this juncture, we're 12:52 2 providing you the information. Yes, there is a 12:52 3 system, it's a proven system, it's a linked system, it 12:52 4 works. It's proven its benefits. Then how do you get 12:52 5 it to Texas. What are the impediments, what are the 12:52 6 issues, and how can you get it here. What would be 12:52 7 the model here, the way to bring it to the Texas -- 12:52 8 MS. MATTHEWS: Is there an up front 12:52 9 cost to the halls or is the cost recovered? 12:52 10 MR. STEVENS: There is no cost to the 12:52 11 halls. You could run that model. No cost to the 12:52 12 halls. 12:52 13 MR. MANIO: Can you give us an idea of 12:52 14 the numbers, like what was the attendance before and 12:52 15 the attendance after the system was installed? 12:52 16 MR. STEVENS: Honestly, I don't. And 12:52 17 that's why I invited the participants to go to Ontario 12:52 18 lottery. They will have a trail on all of the 12:52 19 previous attendance, i.e., the downturn, and I was 12:52 20 careful when I indicated, they stemmed the tide. It 12:52 21 didn't necessarily bring it back up and you have lots 12:53 22 of more people, because there is lots of additional 12:53 23 influences on bingo attendance in the province. But 12:53 24 it was beneficial. It made returns for the charities, 12:53 25 and I think there is a great deal of evidence that it 12:53 0117 1 stemmed the tide, so to speak. 12:53 2 In Ontario, for example, we currently 12:53 3 have a no smoking bylaw that's sweeping the province. 12:53 4 In Ottawa, there is no smoking in any bar, restaurant, 12:53 5 or any public facility, in Ottawa whatsoever. 12:53 6 Obviously, that had an impact on the bingo halls, so 12:53 7 it skews the distribution and it skews your analysis 12:53 8 if you're not careful. 12:53 9 MR. ATKINS: Now, let me clarify, 12:53 10 Peter, because I'm not sure I understand. Your 12:53 11 presentation represents that it will bring in new 12:53 12 players. Now I thought I heard you just say that you 12:53 13 don't know that it did bring in new -- 12:54 14 MR. STEVENS: What is your definition 12:54 15 of new players? It did bring in new players. It 12:54 16 brought in a different demographic of players, for 12:54 17 example. It brought in a younger set of players. And 12:54 18 it did bring in some older players that had left it. 12:54 19 It brought in new players because when your jackpot 12:54 20 marches up to the 800,000 or so, Hilda brings in Mary 12:54 21 and Shirley, who have never been in to a bingo hall. 12:54 22 MR. ATKINS: Did you see any change to 12:54 23 average spend after this was introduced, or players on 12:54 24 average spending more, spending less? 12:54 25 MR. STEVENS: Well, that's a good 12:54 0118 1 question, and it deals with the frequency of going to 12:54 2 the bingo hall. So when you get a more frequency, in 12:54 3 other words, if they go once a week and this brings 12:54 4 them in twice or three times a week because they want 12:54 5 to win the big Super jackpot, then they have a 12:55 6 tendency to spend more over the three sessions. We 12:55 7 have what is known as a buy-in, so there may be a 12:55 8 nightly buy-in. You have to spend 15 dollars on the 12:55 9 nightly buy-in. Not just for this game. This game is 12:55 10 just a portion of it. But within the halls, the 12:55 11 spectrum of games. 12:55 12 MR. ATKINS: Well, let me kind of 12:55 13 follow up on -- 12:55 14 CHAIR BRACKETT: Before you do that, I 12:55 15 don't think people can hear you in the back. You need 12:55 16 to talk more into your microphone. 12:55 17 MR. STEVENS: Sure. 12:55 18 MR. ATKINS: Let me follow up kind of 12:55 19 on Mario's question a little. You referenced 272 12:55 20 million in additional revenue? 12:55 21 MR. STEVENS: That is the SuperStar 12:55 22 revenue isolated from bingo revenue in general. 12:55 23 MR. ATKINS: Okay. So the 272 million 12:55 24 references just the Superstar Bingo. Do you know if 12:55 25 there was any corresponding increase or 12:56 0119 1 cannibalization of other bingo games from the 12:56 2 introduction of SuperStar? 12:56 3 MR. MILLER: We can get that 12:56 4 information for you, Billy. I can tell you, I've 12:56 5 talked to the folks at Stewart. They own 36 halls in 12:56 6 Ontario. And they said -- what they told me is that 12:56 7 this -- they wouldn't do anything except this if they 12:56 8 could. They would run it all the time. But there are 12:56 9 only three games offered during the day. So they were 12:56 10 at a point where they were paying, and still are, on 12:56 11 the regular sessions 80 percent of their take just for 12:56 12 prizes to cover the cost of getting people in there, 12:56 13 because the prize -- the daily prizes are not that 12:56 14 great. It's when this thing comes on that they seem 12:56 15 to fill their halls up, and they're very, very 12:56 16 supportive of it and have said many times, as I told 12:56 17 you, what they've told me is that they would run this 12:56 18 game after game after game if they could. So they 12:57 19 haven't shared any numbers with me. It's a private 12:57 20 organization. But apparently they're very much sold 12:57 21 on it. 12:57 22 MR. ATKINS: And can we explore a 12:57 23 little more Marilyn's question about the cost to the 12:57 24 organizations? And if I understand you correctly, in 12:57 25 Ontario, there was no cost to the organizations. 12:57 0120 1 MR. MILLER: The Lottery Corporation 12:57 2 put the system in. 12:57 3 MR. ATKINS: Okay. But under another 12:57 4 scenario, there could be a cost to the organization of 12:57 5 up to? 12:57 6 MR. MILLER: Basically, there is a cost 12:57 7 for a central system, which has to be established some 12:57 8 place. Then there is a cost to hook up each one of 12:57 9 the halls, and that's roughly 5,000 dollars. Now, if 12:57 10 you have a system where it's going to be operated by 12:57 11 a, quote, operator, then you would expect them to take 12:57 12 care of that cost where there is no expense to the 12:58 13 halls themselves. But then the operator, of course, 12:58 14 is going to want a return because they're not going to 12:58 15 do it for free, which means that they would be taking 12:58 16 a percentage of whatever is sold -- on every ticket 12:58 17 that's sold on the SuperStar system and used for 12:58 18 SuperStar only. 12:58 19 MR. ATKINS: What about maintenance of 12:58 20 that equipment? 12:58 21 MR. MILLER: It all would be the 12:58 22 operator's responsibility. 12:58 23 MR. ATKINS: Okay. Has the system 12:58 24 experienced any down time? 12:58 25 MR. MILLER: Not to our knowledge. The 12:58 0121 1 only -- of course, there are glitches every now and 12:58 2 then, but nothing substantial. And that's one of the 12:58 3 reasons why they have chosen the phone lines to 12:58 4 communicate with, because they seem to be a little bit 12:58 5 more tolerant of weather conditions and outside 12:58 6 activities than -- than some of the other 12:58 7 communication devices. 12:58 8 MR. ATKINS: Okay. And Peter, I think 12:59 9 you said the highest -- the biggest jackpot so far has 12:59 10 been 825,000 dollars? 12:59 11 MR. STEVENS: Uh-huh. 12:59 12 MR. ATKINS: Did I hear you reference 12:59 13 75 to a hundred thousand? 12:59 14 MR. STEVENS: Yeah. It generally 12:59 15 rounds up to 75 or hundred thousand dollars. 12:59 16 MR. ATKINS: Generally, that's the 17 higher -- 12:59 18 MR. STEVENS: Yeah. 19 MR. ATKINS: What is just the average 12:59 20 jackpot? 12:59 21 MR. MILLER: I think -- it's hard to 12:59 22 answer, Billy, and I'll tell you why. Because there 12:59 23 are three jurisdictions that are currently running 12:59 24 this program, and each one does it differently. The 12:59 25 BC Lottery, the way they do it is they add a number, a 12:59 0122 1 ball every night. If the jackpot is not won, then 12:59 2 they go ahead and add a ball for the next night draw, 12:59 3 which consequently means that the pot goes a lot 12:59 4 faster. Their pots don't last maybe three or four 12:59 5 days before somebody wins one. Ontario, on the other 13:00 6 hand, they hold back and don't add a ball but every 13:00 7 week. So you'll have a buildup on a weekly basis, and 13:00 8 if that thing rolls over and nobody has won it on the 13:00 9 29th day, that's when they have a must-go night. 13:00 10 That's how they ended up with one of these 13:00 11 800-something thousand dollar jackpots. So on the 13:00 12 average, it's hard to say. 13:00 13 MR. STEVENS: But more in the range of 13:00 14 75 to a hundred thousand. 13:00 15 MR. MILLER: Is what the pots -- as far 13:00 16 as what they normally won, yeah. Before somebody wins 13:00 17 it. 13:00 18 MR. ATKINS: Again -- 13:00 19 MR. MILLER: And, again -- excuse me 13:00 20 for interrupting you. But, again, you've got 13:00 21 variables here that are not consistent because you're 13:00 22 dealing with 90 halls in Ontario and in British 13:00 23 Columbia, you're dealing with 46 halls. 13:00 24 MR. ATKINS: Then don't try and lump 13:00 25 them all together. Maybe if we could just get those 13:00 0123 1 figures for each jurisdiction. I mean, what is the 13:00 2 average in Ontario -- 3 MR. MILLER: I'll go out on a limb and 13:00 4 I will say that on a nightly basis, you're probably 13:00 5 talking anywhere from -- well, I know for a fact that 13:01 6 they -- they had a 25,000 dollar every night 13:01 7 guaranteed jackpot. 13:01 8 MR. ATKINS: Who does? Ontario? 13:01 9 MR. MILLER: Ontario. Now, whether 13:01 10 they're selling against that or whether they're 13:01 11 guaranteeing it, I have to find that out. But I know 13:01 12 that every night it starts at 25,000 dollars. 13:01 13 MR. MANIO: Do people just come for 13:01 14 this game or do they stay for the regular games or -- 13:01 15 MR. STEVENS: It depends on the policy 13:01 16 of the hall, whether they have to -- SuperStar is part 13:01 17 of the hall buy-in. But, yes, I've gone to some halls 13:01 18 where you can just play this game. 13:01 19 MR. MILLER: Some halls feature it as 13:01 20 strictly a drop-in where you just come in and buy that 13:01 21 ticket and play that game. Other halls, it is part of 13:01 22 the buy-in. 13:01 23 MR. MOORE: And if a hall's monitor 13:01 24 system was down during the drawing, they would refund 13:01 25 the money? 13:01 0124 1 MR. MILLER: Well, there are two -- 13:02 2 yeah. It depends on if they're knocked off line. 13:02 3 What happens if -- with the central computer, there 13:02 4 are people there monitoring what is going on. You've 13:02 5 got what we call a pit, which is a -- it has a -- a 13:02 6 visual reference of every one of the halls that's 13:02 7 hooked on line. They can see all of the halls that 13:02 8 are playing and where they're located. If there is 13:02 9 trouble on one of the lines to one of the halls, they 13:02 10 can call them immediately and find out what's going 13:02 11 on. Use a cell phone. We've had instances in Ontario 13:02 12 where one or two of the halls got knocked off line for 13:02 13 some reason, somebody ran into a telephone pole and 13:02 14 knocked a telephone line down, they called right back 13:02 15 in to central system, they were able to go ahead and 13:02 16 give them the ball draws as the numbers were announced 13:02 17 and the hall was able to stay on and continue playing 13:02 18 the game. 13:02 19 If you have a massive catastrophe of 13:02 20 some sort, or something where they cannot get back and 13:02 21 forth with communications, they just drop them and the 13:02 22 hall, at that point, unfortunately, we just have to 13:02 23 refund the money to the people who are not able to 13:03 24 continue the game. It's just like the Lottery here. 13:03 25 When you're selling tickets on line, you've got a 13:03 0125 1 retailer that for some reason, his machine doesn't 13:03 2 work, well, they don't cancel the game statewide 13:03 3 because we've got a group of retailers over here that 13:03 4 can't sell tickets. They continue with the game, and 13:03 5 the retailers, unfortunately, are just off line. 13:03 6 MS. TAYLOR: Is any separate 13:03 7 advertising done for this? 13:03 8 MR. MILLER: Yes. Out of the 13:03 9 proportion -- I mean, out of the money that's 13:03 10 collected, a proportion is isolated strictly to 13:03 11 advertise this game. And it is -- in fact, the 13:03 12 opening that you saw right there, with the multimedia 13:03 13 presentation, is part of one of the TV ads that they 13:03 14 ran. 13:03 15 MR. STEVENS: So it's quite dynamic. 13:03 16 They'll do TV ads, they do in-hall ads, they do 13:03 17 posters, they did informational sessions for the new 13:03 18 games that they developed, The Link and The SuperLink, 13:03 19 or whatever it's called. All of these things are -- 13:03 20 MR. MILLER: -- promotion. This is not 13:04 21 just a bingo game. This is a promotional game. It's 13:04 22 a bingo promotional game designed to bring people into 13:04 23 that hall. Once they get into the hall, I don't think 13:04 24 they're just going to leave immediately after the game 13:04 25 is over with, and the idea is, you bring them in when 13:04 0126 1 you necessarily want them in, that's when you 13:04 2 conduct -- set the times of when this game takes 13:04 3 place. 13:04 4 MS. TAYLOR: When you're working up 13:04 5 what time the game is going to take place, do you 13:04 6 survey the halls that are interested in being linked 13:04 7 and see what is the most common time? 13:04 8 MR. MILLER: There has to be a 13:04 9 consensus among the halls, and another feature that we 13:04 10 have is that the system is capable of running multiple 13:04 11 games. Not simultaneously, but if you were to 13:04 12 establish a game at 12:00 and a game at 9:00, if there 13:04 13 is a group of charities that they want to run their 13:04 14 own game at 1:00 o'clock, they could all be linked 13:04 15 together. If there is a city that wants to run, among 13:04 16 the bingo halls within that city, they can run their 13:04 17 own linked game. But the system can handle all of 13:05 18 that. 13:05 19 MR. STEVENS: They're currently looking 13:05 20 at a Midnight Madness game, for example. They're 13:05 21 seeing that people on shift work at night are deprived 13:05 22 of playing bingo, so they're starting this, and it 13:05 23 seems to be working in some of the halls. 13:05 24 MR. MILLER: It's a very flexible 13:05 25 system. Nothing is carved in stone except for the 13:05 0127 1 administration part of it, which nobody can mess with 13:05 2 as far as the different software applications. But 13:05 3 it's very flexible. It can run multiple types of 13:05 4 games. It's not just limited to the L or the roving 13:05 5 H. As Peter said in his presentation, you can -- you 13:05 6 can pretty much design any format you want that would 13:05 7 be a normal bingo game. It will run these and play 13:05 8 them. 13:05 9 MR. WHITTINGTON: You know, obviously, 13:05 10 the system is working great along with an in-house 13:05 11 progressive game as well? Keeping people there? I 13:06 12 think it would be fantastic. 13:06 13 MR. STEVENS: There is another -- maybe 13:06 14 it didn't show up too well on the presentation, but 13:06 15 early on when they had the progressive game and then 13:06 16 the progressive game stopped. It literally wasn't won 13:06 17 that night, so it went to the next night or so, the 13:06 18 halls sort of felt like, gee, there is not much fun in 13:06 19 that, you know. So what really happens is that the 13:06 20 game then shuts down as the progressive game, but each 13:06 21 in hall then continues with the same game that 13:06 22 everybody started daubing with, and they get a 13:06 23 consolation prize within the hall, whatever that 13:06 24 number is, a couple of hundred bucks. So there was a 13:06 25 consolation prize. And each hall will have a 13:06 0128 1 consolation prize every night against the larger 13:06 2 prize. 13:06 3 MR. MANIO: In the three jurisdictions 13:06 4 in Canada, have you ever had an outage of the central 13:06 5 system? 13:06 6 MR. MILLER: Have we ever had an outage 13:06 7 of the central system? No. 13:06 8 MR. MANIO: Just out of curiosity, what 9 is the -- how big a computer is it and what operating 13:06 10 system? 13:07 11 MR. MILLER: As far as the technical 13:07 12 aspects of it? 13:07 13 MR. MANIO: Yeah. Just -- in the 13:07 14 discussion today -- 13:07 15 MR. STEVENS: There is -- in Ontario, 13:07 16 the main computer runs out of Sault Ste. Marie. There 13:07 17 is a whole backup system in Toronto, running the same 13:07 18 games, so if that one in Sault Ste. Marie is out, 13:07 19 Toronto picks it up. So there is a redundancy feature 13:07 20 in it right there. And within each one of the cells 13:07 21 or pits, as Bob described them, there is two or three 13:07 22 of them running the same thing at the same time, the 13:07 23 computers. So there is triple triple. 13:07 24 MR. MANIO: Thank you. 13:07 25 MR. ATKINS: I'm sorry, Robert. You 13:07 0129 1 mentioned that bingo play in Ontario is similar to 13:07 2 play in Texas. 13:07 3 MR. STEVENS: I simply meant the games. 13:07 4 The types of games being played. 13:07 5 MR. ATKINS: Okay. Help me understand 13:08 6 how, in Texas, an organization is allowed to conduct 13:08 7 bingo three times a week. So is it just more or less 13:08 8 the luck of the draw for the organization that's 13:08 9 conducting on a given night what the jackpot is and 13:08 10 what their players are -- 13:08 11 MR. STEVENS: It's my understanding in 13:08 12 Ontario, there is no restrictions on nights. 13:08 13 MR. ATKINS: There is no restrictions 13:08 14 on nights. It's -- 13:08 15 MR. STEVENS: Not on the times. I 16 mean, the bingo hall is open when it's open. 13:08 17 MR. ATKINS: There is no restriction on 13:08 18 the time. An organization can only conduct three 13:08 19 times a week. 13:08 20 MR. STEVENS: In your jurisdiction. 13:08 21 MR. MILLER: I think that would be 13:08 22 something that would need to be discussed. The system 13:08 23 would be up and operating, and how the different 13:08 24 charities or halls were allowed to access it would be 13:08 25 something, I would think, that some other organization 13:08 0130 1 other than us would come up with that solution. But 13:08 2 whatever you felt would be the best way to handle it. 13:08 3 All we're saying is, the system is there and it's able 13:09 4 to operate. Now, how it operates within the confines 13:09 5 of this community would be something that I think 13:09 6 would be determined by you guys and the legislature 13:09 7 and who else. 13:09 8 MS. MATTHEWS: So you could operate two 13:09 9 of these games in one evening? 13:09 10 MR. MILLER: Yes. We can offer as many 13:09 11 games -- in other words, the system -- if it takes 25 13:09 12 minutes to -- or 20 minutes to run a game, it could be 13:09 13 running a game every 20 minutes. They would just be 13:09 14 different times and different halls would log on. 13:09 15 Now, there would be a -- a pot associated with each 13:09 16 one of those games. Now, you would not have a common 13:09 17 pot for all of the different halls that -- just to 13:09 18 access. Each group would have their own pot. 13:09 19 Ideally, the best thing would be just to be able to 13:09 20 hook everybody up at the same time because you would 13:09 21 be getting massive jackpots, which will generate 13:09 22 traffic. Anybody in the lottery business will tell 13:10 23 you, that's what people come out for is the big 13:10 24 jackpots. 13:10 25 One other thing I might add. This 13:10 0131 1 system has been operating for a little over five years 13:10 2 in Ontario. And the state of Michigan had 13:10 3 prohibitions against progressive linked games. The 13:10 4 legislature just last year, because of the competition 13:10 5 that they were experiencing from people going across 13:10 6 the border into Canada to play Superstar Bingo, has 13:10 7 changed the law and they now are experiencing in-hall 13:10 8 progressives. They are soon going to be allowing 13:10 9 linked games from hall to hall. They realized the 13:10 10 need for it. 13:10 11 MR. ATKINS: In Michigan? 13:10 12 MR. MILLER: Yeah. 13:10 13 MR. ATKINS: Okay. 13:10 14 MR. MILLER: Bob blessing is a 13:10 15 gentleman similar to yourself in the same position, in 13:11 16 Michigan. 13:11 17 CHAIR BRACKETT: Any questions from 13:11 18 anyone in the audience? 13:11 19 MR. HEINLEIN: Did I understand the 13:11 20 percentage payout to be 50 percent? 13:11 21 MR. MILLER: The model in Ontario, 13:11 22 that's what they're utilizing because the volume of 13:11 23 money that is generated is so large, if you were to 13:11 24 continue on with an 80 percent payout, it would be 13:11 25 just be huge. It would be a lot more -- plus, it 13:11 0132 1 gives the charities a lot more opportunity to realize 13:11 2 funds out of this thing. 13:11 3 MR. HEINLEIN: So with that 50 percent 13:11 4 payout, there is 50 percent profit? 13:11 5 MR. STEVENS: There is 50 percent -- 13:11 6 there is 50 percent left to look after the service 13:11 7 provider, to look after the charities, to look after 13:11 8 the hall owners, to look after the bingo associations, 13:11 9 to look after advertising, to look after (inaudible). 13:11 10 MR. HEINLEIN: So that 50 percent, 13:12 11 then, will be taken care of in percentage format? 13:12 12 What would be the advertising percentage of that? 13:12 13 MR. MILLER: That's open for 13:12 14 discussion. And that's just -- 13:12 15 MR. HEINLEIN: In your model, what -- 13:12 16 MR. MILLER: Well, in the model, I 13:12 17 think it's only one percent going for everything. 13:12 18 MR. HEINLEIN: One percent for 13:12 19 advertising? And so your gross was 272 million? So 13:12 20 that means 136 million, one percent of that would be 13:12 21 going to advertising? 13:12 22 MS. KIPLIN: Can I ask him to speak 13:12 23 into his microphone? I've got a court reporter who is 13:12 24 trying to record this, and I'm sorry, she can't do 13:12 25 that if you don't -- she can't hear you. 13:12 0133 1 MR. HEINLEIN: I was just trying to get 13:12 2 a handle on possibly what the gross amount per year 13:12 3 would be going into advertising. 13:12 4 MR. STEVENS: Advertising, one percent 13:12 5 of the 272. 13:12 6 MR. HEINLEIN: Only half of that, 13:12 7 though, would be -- 13:12 8 MR. MILLER: One percent of the whole 13:12 9 number. 13:12 10 MR. HEINLEIN: Oh, one percent of the 13:12 11 whole number. Okay. I thought you meant one percent 13:13 12 of the 50 percent. 13:13 13 MR. MILLER: No. It would be 49 13:13 14 percent left of the 20 percent of the hundred percent, 13:13 15 and then 49 percent of that. 13:13 16 MR. STEVENS: But, again, you can 13:13 17 design the formula the way you want. I mean, if you 13:13 18 felt -- like normally -- 13:13 19 MR. HEINLEIN: But you would recognize, 13:13 20 advertising is a big issue and that you're spending 27 13:13 21 million. That's kind of what I was wanting to focus 13:13 22 on. 13:13 23 MR. STEVENS: Well, the thing is, when 13:13 24 you started launching it, you have your advertising 13:13 25 and the campaign for a launch, and then you may be 13:13 0134 1 able to putter down a little bit, but your initial 13:13 2 launch or launching new games or launching any new 13:13 3 thing, you'll have a spike in your advertising 13:13 4 campaign. 13:13 5 MR. HEINLEIN: And what was the number 13:13 6 that you gave, I missed it, on the charitable benefit? 13:13 7 How much money went to charities? 13:13 8 MR. STEVENS: I'll read it out again. 13:13 9 It's -- the total gross sales over the period was 272 13:13 10 million, 130 million in prizes, 58 million for 13:14 11 charities in Ontario, 31 million for bingo halls. 13:14 12 MR. HEINLEIN: So 58 million went to 13:14 13 charities? Super. 13:14 14 MR. FENOGLIO: Hi. Steve Fenoglio. 13:14 15 Where did the rest of the money go? You've got -- 13:14 16 you've got 180 plus 30, and so you've got 40 million 13:14 17 left. 13:14 18 MR. TAWIL: System service provider. 13:14 19 MR. MILLER: I would imagine that that 13:14 20 was OLGC's part. 13:14 21 MR. FENOGLIO: All right. Thanks. 13:14 22 CHAIR BRACKETT: Steve, don't forget to 13:14 23 fill that out. 13:14 24 Are there any other comments or 13:14 25 questions? 13:14 0135 1 MR. WHITTINGTON: If you get it passed 13:15 2 through, progressive and satellite. It would be 13:15 3 great. 13:15 4 CHAIR BRACKETT: Thank you. This has 13:15 5 been a very -- 13:15 6 MR. STEVENS: Our pleasure. Thank you. 13:15 7 CHAIR BRACKETT: Are you available to 13:15 8 come back and bring your show back? 13:15 9 MR. STEVENS: Absolutely. 13:15 10 CHAIR BRACKETT: Thank you. And thank 13:15 11 you, Danny, for getting them here. 13:15 12 MR. MILLER: If I may, we have a laptop 13:15 13 demonstration where we can set it up on laptops and 13:15 14 actually show you the game administrator and how it 13:15 15 would be directed to the halls and take you through a 13:15 16 complete game. We could do that in this room, 13:15 17 actually printing paper here, and everybody could 13:15 18 play. 13:15 19 CHAIR BRACKETT: Oh, well, that would 13:15 20 be wonderful. 13:15 21 MR. STEVENS: I don't know if there 13:15 22 needs to be some legal changes for us to allow a game 13:15 23 in here, play a game in here. So we need an advisor 13:15 24 on that. We conceivably could do it. 13:16 25 MR. MILLER: As long as it's free -- 13:16 0136 1 CHAIR BRACKETT: We're playing free for 2 the thrill of it. 3 MR. ATKINS: Let's reread the Act. 13:16 4 CHAIR BRACKETT: If there are no 13:16 5 further questions, thank you, gentlemen. We 13:16 6 appreciate you coming. We appreciate the quality of 13:16 7 your presentation. 13:16 8 It's 1:20 now, so let's break for one 13:16 9 hour for lunch and then meet back here at 2:20. 13:16 10 (LUNCH RECESS) 14:08 11 CHAIR BRACKETT: All right. It's 2:20, 14:15 12 so we'll reconvene. And we're on agenda item number 14:15 13 five, report -- I mean, number six. I'm sorry. Which 14:15 14 is the second reading of 402.555. 14:15 15 MR. ATKINS: Madam Chair, members, 14:15 16 staff would request that the second reading today be 14:15 17 passed so that additional informal comment can be 14:15 18 received on this rule. One of the areas that we would 14:15 19 like to put open for discussion relates to a degree on 14:15 20 some of the conversation that occurred this morning, 14:16 21 specifically, on the 40 percent requirement in the 14:16 22 statute and addressing a possible way -- while that 14:16 23 can't be repealed, et cetera, maybe addressing through 14:16 24 this rules, language that could put in there that 14:16 25 would give organizations clear guidance on how to 14:16 0137 1 avoid violating that rule. 14:16 2 CHAIR BRACKETT: I'm looking for the 14:16 3 rule in my book here. Okay. This is the rule 14:16 4 regarding card-minding devices. Does anyone have any 14:16 5 objection to passing on this at this point? Okay. If 14:16 6 not, we'll move on to the next item, then. 14:16 7 Item number seven is consideration of 14:16 8 and possible discussion and/or action on number 14:17 9 402.567. 14:17 10 MR. MANIO: Excuse me. Could we 14:17 11 backtrack a little bit on 402.555? 14:17 12 CHAIR BRACKETT: Certainly. 14:17 13 MR. MANIO: I just want some 14:17 14 clarification on page nine of 11. And this pertains 14:17 15 to the pricing of card-minding devices. And there is 14:17 16 a phrase in here, saying that the prize per face of 14:17 17 electronic packages cannot be less than the price per 14:17 18 face of paper packages. And I just want some 14:17 19 clarification as to, what was the intention behind 14:17 20 this proposal to regulate the price of electronic 14:17 21 packages? 14:17 22 MR. ATKINS: I don't know if there was 14:17 23 a specific intent behind it. There was, in the past, 14:17 24 a lot of discussion, and there was even some today 14:17 25 about the cost of card-minding devices, and that was 14:18 0138 1 language that was put forward to attempt to stimulate 14:18 2 some of that conversation. You know, again, as of 14:18 3 yet, we haven't gotten any informal comment on it. 14:18 4 MR. MANIO: As I recall, one of the 14:18 5 gentlemen this morning mentioned about how expensive 14:18 6 it is to buy, let's say, a computer. And this is -- 14:18 7 well, I don't know how to put this, because without -- 14:18 8 without presenting my own personal opinion in here. 14:18 9 And if I may, I -- I do have some reservations about 14:18 10 the statement dealing with setting the price of any 14:18 11 product, including this one in here. And that is my 14:18 12 main reservation. 14:19 13 MR. ATKINS: And we're happy to receive 14:19 14 that comment. That way, you can call me and schedule 14:19 15 to come in to talk about this, you know, in more 14:19 16 detail. You can submit written comment. That is the 14:19 17 purpose of this period we're in now, to get as much 14:19 18 comment as we can. 14:19 19 MR. MANIO: Okay. 14:19 20 MR. ATKINS: So great. I appreciate 14:19 21 that. 14:19 22 MR. WHITTINGTON: Billy, didn't I send 14:19 23 you a memo about prices and why? Say, the price on 14:19 24 computers are different and why? I think I sent you a 14:19 25 memo back in July. 14:19 0139 1 MR. ATKINS: In July? 14:19 2 MR. WHITTINGTON: Because you asked me 14:19 3 to do that, about the prices and why -- and why it 14:19 4 should be a certain price at a certain time. 14:19 5 MR. ATKINS: I'm going to have to go 14:19 6 back and check, Larry. Is it an e-mail or a letter? 14:19 7 MR. WHITTINGTON: E-mail. 14:20 8 MR. ATKINS: Okay. Then I should have 14:20 9 that. 14:20 10 CHAIR BRACKETT: Any other comments 14:20 11 regarding this? 14:20 12 MR. BRESNEN: If y'all are going to 14:20 13 come back to this, I'll reserve my -- oh. Steve 14:20 14 Bresnen on behalf of the Bingo Interest Group. If 14:20 15 you're going to come back to this, I'll reserve my 14:20 16 substantive comments. But when this came up, just to 14:20 17 clarify. When this came up the first time, there was 14:20 18 comment about this section, and it came from me. And 14:20 19 you may recall that I asked why -- what the reason 14:20 20 was -- I think my -- I think there is something like 14:20 21 20 years of policy of not setting prices, and I 14:20 22 questioned why we would have this -- do this price 14:20 23 setting and why we were deviating from that policy. 14:20 24 And so I just want to be on record as there has been 14:20 25 comment. It is an issue that people are concerned 14:20 0140 1 about. And I want to be sure and preserve that for 14:20 2 future discussion. We're -- we're strongly opposed to 14:20 3 it. And I still -- and also, one more point of 14:21 4 clarification. The discussion earlier was about the 14:21 5 cost of card-minders that are -- that are charged to 14:21 6 the charities. This rule is -- would set the price of 14:21 7 card-minders that the charities charge to the 14:21 8 customer. So the discussion is this morning really 14:21 9 has nothing to do with this rule. And we look forward 14:21 10 to participating when the second reading actually 14:21 11 comes up. 14:21 12 MR. ATKINS: I -- for clarification, I 14:21 13 would not wait for the second reading. You know, if 14:21 14 you want to call up and schedule a meeting to discuss 14:21 15 this, much like we did on a lot of the Sunset issues, 14:21 16 I think now is the time for that to occur. And we can 14:21 17 include David and -- based on the comments he had, and 14:21 18 Mario, and anybody else that is interested. 14:22 19 MR. BRESNEN: Okay. We won't wait. 14:22 20 But is there going to be a second reading? 14:22 21 MR. ATKINS: Yeah. 14:22 22 MR. BRESNEN: So we follow the regular 14:22 23 process, there will be a second reading? Okay. 14:22 24 Thanks. 25 So we're going to pass this and do this 14:22 0141 1 at a second reading some other time. 14:22 2 CHAIR BRACKETT: All right. We'll move 14:22 3 on to item number seven, which is the second -- it's 14:22 4 not the second but -- yes, it's the second reading of 14:22 5 402.567. 14:22 6 MR. ATKINS: And we would propose this 14:22 7 for second reading. We have received no comment on it 14:22 8 during this period. 14:22 9 CHAIR BRACKETT: I would ask for 14:22 10 comment from anyone who is in the audience right now 14:22 11 on this. Is there any on 402.567? So is this 14:23 12 considered the second reading is finished? All right. 14:23 13 Item number eight, is the consideration 14:23 14 and action, the repeal of 402.558 and then the 14:23 15 replacement or new of 402.558. And go ahead, Billy. 14:23 16 MR. ATKINS: This was -- I believe at 14:23 17 the last meeting, the advisory committee just asked 14:23 18 for an update, and your agenda gives you that history 14:23 19 of the rule. It is scheduled for adoption at 14:23 20 tomorrow's Commission meeting. For consideration for 14:23 21 adoption at tomorrow's Commission meeting. 14:23 22 CHAIR BRACKETT: And that concludes 14:24 23 that report? All right. And so we have covered item 14:24 24 number nine. That puts us at item number ten and -- 14:24 25 MR. FENOGLIO: Madam Chair, I had filed 14:24 0142 1 a note to speak on this item. 14:24 2 CHAIR BRACKETT: All right. Go ahead. 14:24 3 MR. FENOGLIO: For the record, my name 14:24 4 is Stephen Fenoglio, and I represent over 950 14:24 5 charitable and business licensing organizations and 14:24 6 also represent the Bingo Interest Group on this issue. 14:24 7 CHAIR BRACKETT: Steve, just for 14:24 8 clarification, you're speaking on 402.567? 14:24 9 MR. FENOGLIO: No. 558. I thought 14:24 10 that's what you were on. 14:24 11 CHAIR BRACKETT: Yes, I've skipped 14:24 12 ahead. I'm sorry. 14:24 13 MR. FENOGLIO: That is the item that's 14:24 14 up? 14:24 15 CHAIR BRACKETT: Okay. I'm the 14:24 16 confused one. 14:24 17 MR. FENOGLIO: And I had filed some 14:24 18 written comments, and the first written comment I had 14:24 19 made has to do with subparagraph (D)(1) and today, 14:24 20 Billy, we saw a violation of the existing rule and the 14:25 21 proposed new rule when the people from Canada 14:25 22 distributed bingo paper. And it's -- that is clearly 14:25 23 a violation of this statute. I had asked that 14:25 24 question in a previous BAC meeting. I think you had 14:25 25 clarified that, yes, that would be a violation if 14:25 0143 1 someone distributes a bingo paper like was 14:25 2 distributed -- and I guess it's still here. 14:25 3 MR. TAWIL: It's blank paper. 14:25 4 MR. FENOGLIO: It is bingo paper. And 14:25 5 if you look at the definition of the bingo paper, that 14:25 6 is disposable paper. And that would be a licensing 14:25 7 sanction. And I don't think that is the intent. In a 14:25 8 previous bingo administration, if you will, when the 14:25 9 card-minding devices were being discussed after the 14:25 10 legislation had been approved to authorize 14:25 11 card-minding devices, a number of charitable 14:25 12 organizations, lessor organizations, wanted to see, 14:26 13 well, what is out there. And some of my clients, 14:26 14 distributors, came forward with product. And, again, 14:26 15 it wasn't on your watch, Billy, but the director had 14:26 16 taken the position that that's a violation to even 14:26 17 show a card-minding device. Not that you're going to 14:26 18 distribute it. The charities signed written waivers 14:26 19 stating they were aware the product wasn't available 14:26 20 for sale, purchase, lease. It was only going to be 14:26 21 displayed. And so I really think that language has to 14:26 22 be changed. Otherwise, what they did today -- and I 14:26 23 know they didn't intend to. But when they show, well, 14:26 24 this is the type of paper that we play on, this is 14:26 25 going -- how it's going to work in Canada, and this is 14:26 0144 1 how it could work in Texas, you obviously have to 14:26 2 change the law. The mere display of that violates the 14:26 3 rule and subjects a charity that receives that with a 14:27 4 licensing sanction. 14:27 5 And, again, I don't think that's the 14:27 6 intent, but I -- I would worry about someone getting 14:27 7 ahead of themselves and/or someone filing a complaint, 14:27 8 and your division, Billy, is duty bound to pursue all 14:27 9 complaints, and they do. And yet, so now you've got 14:27 10 an admission of a violation. But I don't think that's 14:27 11 the intent. 14:27 12 The other issue is, the rule is drafted 14:27 13 as such that if a distributor wants to distribute 14:27 14 paper to a -- on a federal facility, Fort Hood, Texas, 14:27 15 or an Air Force base in San Antonio, lottery doesn't 14:27 16 regulate that. But technically that is a violation of 14:27 17 the rule. And there ought to be a carving out, if you 14:27 18 will, of that. And I would be happy to answer any 14:27 19 questions on that, but that's just how I read it. And 14:27 20 I think, Billy, when I raised that issue about three 14:27 21 or four months ago, and I can remember Larry saying, 14:27 22 is that true, Mr. Whittington, you said, well, yeah, 14:27 23 that would be a violation. And I can't figure out why 14:28 24 we want to set the charities up, in particular, with 14:28 25 this type of a violation. If a charity says, hey, we 14:28 0145 1 understand there is a new paper game in Louisiana or 14:28 2 Oklahoma or Washington state, can we see that paper 14:28 3 game? Well, sure. Let me send it over to you. The 14:28 4 charity gets it. Whoever sent it to them is now in 14:28 5 violation and the charity is potentially in violation. 14:28 6 And I would like that we can carve that out in some 14:28 7 fashion. And I guess you don't have a response. 14:28 8 MR. ATKINS: Well, I don't -- no, I 14:28 9 don't really have anything -- I do know that you have 14:28 10 submitted written comment in compliance with the APA 14:28 11 and that that has been incorporated and addressed in 14:28 12 the preamble of the rule, which I don't have in front 14:28 13 of me, because I didn't know that this discussion was 14:29 14 going to take place, since it had been previously 14:29 15 discussed in this forum on -- in the manner that we 14:29 16 discussed earlier. And, you know, we've now moved to 14:29 17 the formal rulemaking process where Steve's comments 14:29 18 were submitted last week or the week before, I think. 14:29 19 MR. FENOGLIO: November 12th. 14:29 20 MR. ATKINS: November 12th. And 14:29 21 they're being -- they're now being addressed in that 14:29 22 forum. 14:29 23 MR. FENOGLIO: Has the language 14:29 24 changed? 14:29 25 MR. ATKINS: There has been some 14:29 0146 1 language change. I don't recall -- I don't recall 14:29 2 specifically what it was. 14:29 3 MR. FENOGLIO: Could I get a copy of 14:29 4 that? Because that might simplify my presentation 14:29 5 tomorrow to the Commission. 14:29 6 MR. ATKINS: As far as I know, you can. 14:29 7 MS. MORRIS: What status is it in? 14:29 8 MR. FENOGLIO: It's up for 14:29 9 consideration tomorrow at the Commissioners' meeting. 14:29 10 It's been posted for the requisite period of time for 14:30 11 consideration. 14:30 12 MS. MORRIS: I don't know. What do you 14:30 13 want a copy of? What are you asking? 14:30 14 MR. ATKINS: He wants a copy of the -- 14:30 15 what was in the Commissioners' notebook for their 14:30 16 consideration tomorrow. A copy of the rule -- 14:30 17 MS. MORRIS: Is it the proposed rule 14:30 18 for adoption? 14:30 19 MR. ATKINS: Yes. 14:30 20 MS. MORRIS: We've taken the position 14:30 21 that it -- I think it'll be on the table tomorrow 14:30 22 morning. I do not think we distribute it ahead of 14:30 23 time. It is still a draft. Although it's in their 14:30 24 notebook, it has not been distributed to the public, 14:30 25 and he can get it tomorrow morning. It should be out 14:30 0147 1 on the table. 14:30 2 MR. FENOGLIO: Well, as an example of 14:30 3 good government -- 14:30 4 MS. MORRIS: Isn't that when they would 14:30 5 usually get that? 14:30 6 Yes, that's true. 14:30 7 MR. FENOGLIO: Okay. 8 MR. TAWIL: How come we don't have a 14:30 9 copy of it in our notebooks? 14:30 10 MR. FENOGLIO: They don't give it to 14:30 11 you. 12 MR. ATKINS: I think Diane just 14:30 13 addressed that. 14:30 14 MR. TAWIL: We're not the public, 14:30 15 though. We're the BAC. 14:30 16 MR. PAVLOVSKY: I understand. 14:31 17 MS. TAYLOR: Is it because -- I know 14:31 18 that there was copies of the other draft rules on the 14:31 19 table. Is it because it's ready to be adopted that 14:31 20 you don't provide another draft copy of what they're 14:31 21 going to have tomorrow? 14:31 22 MS. MORRIS: Correct me if I'm wrong. 14:31 23 Are we talking about a rule that has been proposed in 14:31 24 the Texas Register, comment has been received or not, 14:31 25 but the period of time has elapsed, and tomorrow would 14:31 0148 1 be the day that the Lottery Commissioners will be 14:31 2 considering it for adoption? 14:31 3 MR. FENOGLIO: I don't think a decision 14:31 4 has been made about the time period elapsing for 14:31 5 comment. 14:31 6 MR. ATKINS: That is the -- that is the 14:31 7 proposal to the Commissioners tomorrow, to adopt the 14:31 8 rule. 14:32 9 MS. MORRIS: Is it -- tomorrow's action 14:32 10 by the Commissioners, would it be to propose it in the 14:32 11 Texas Register or to adopt the rule that has been 14:32 12 previously proposed and published in the Texas 14:32 13 Register? 14:32 14 MR. ATKINS: The rule was published in 14:32 15 the Texas Register on September 27th. A public 14:32 16 hearing was held here on October 10th. What is in the 14:32 17 Commission notebook for tomorrow is for them to 14:32 18 consider adoption of that proposed rule. 14:32 19 MS. MORRIS: Well, then, as I 14:32 20 understand it, it is the Commission's practice, and I 14:32 21 think you could probably engage with Commissioner 14:32 22 Clowe or the other Commissioners or Kimberly Kiplin, 14:32 23 the general counsel. The practice has been, on the 14:32 24 day that a rule is due to be adopted, what is in their 14:32 25 notebook is still draft, if you will. Whether they're 14:32 0149 1 changing it or not, based upon comments received, it's 14:32 2 a draft rule adoption. But as I understand it, the 14:32 3 practice is to lay that out on the table, and I don't 14:32 4 know -- I understand this is how it works -- the day 14:33 5 that it's going to be considered and so the public can 14:33 6 look at it and have comments at that time. So that is 14:33 7 why it's not in your notebook any more than I know, in 14:33 8 the past, when we've been asked, even under Open 14:33 9 Records, to provide these draft documents, until and 14:33 10 unless the Commissioners receive it and consider it, 14:33 11 it is a draft document and, no, it's not distributed. 14:33 12 MS. MATTHEWS: Why is it on our agenda 14:33 13 then? 14:33 14 MS. MORRIS: I don't know. 14:33 15 MR. ATKINS: You asked for it to be on 14:33 16 your agenda. 14:33 17 MS. TAYLOR: Can you tell us what the 14:33 18 changes have been? I mean, is there something that 14:33 19 you -- I mean, there is just a couple of items in 14:33 20 there that I was wondering if they were still in there 14:33 21 or not. 14:33 22 MR. ATKINS: And I don't -- 14:34 23 MS. TAYLOR: But you don't know 14:34 24 either -- 14:34 25 MR. ATKINS: I don't recall, Suzanne, 14:34 0150 1 the detail of every rule. Gosh, I'm sorry. But, you 14:34 2 know, I do recall there has been a change. I don't 14:34 3 recall what that change is. 14:34 4 MR. FENOGLIO: Do we know -- there 14:34 5 were -- changing gears, then. I'll leave that issue 14:34 6 on the display of product being a licensing problem. 14:34 7 Under subparagraph (3), there are some 14:34 8 new formalistic record keeping requirements for 14:34 9 licensees. And it has to do, Billy, with subparagraph 14:34 10 (a), maintaining a disposable bingo card paper sales 14:34 11 summary, showing certain information, and I think I 14:34 12 understand. The reality is, I think most charities 14:34 13 are already doing that. And my sense is, you were 14:34 14 trying to formalize what you all have seen as a 14:34 15 practice in auditing or in observing other charities 14:35 16 and the record keeping they're doing on paper. Is 14:35 17 that a safe statement about subparagraph (3), (a), (b) 14:35 18 and (c)? 14:35 19 MR. ATKINS: Without a copy of the rule 14:35 20 in front of me, Steve, I would be hesitant to comment. 14:35 21 And given the fact that this rule was first proposed 14:35 22 back in June, it came back before the advisory 14:35 23 committee in August, there was a public hearing in 14:35 24 October. Given the fact that there has been ample 14:35 25 time, in my opinion, for a discussion of the rule and 14:35 0151 1 what is in there, I don't know that now is the 14:35 2 appropriate time to engage in that. 14:35 3 MR. FENOGLIO: You're saying now is not 14:35 4 the appropriate time, then? 14:35 5 MR. ATKINS: I don't know that it is. 14:35 6 Let me ask you a question. You know, we have tried to 14:35 7 set up a process whereby people can have the greatest 14:35 8 amount of time to have comment on these and discuss 14:35 9 these, you know, and try and get them adopted in some 14:35 10 kind of timely fashion. We're going on now, I guess, 14:36 11 five months. 14:36 12 MR. FENOGLIO: In case you haven't 14:36 13 heard, we've been a little focused on the Sunset 14:36 14 issue, Billy, and I know you've been focused on it. 14:36 15 I've certainly spent over -- well over a hundred hours 14:36 16 on that issue, stemming from some comments that were 14:36 17 made in public meetings that the Commissioners 14:36 18 overturned, and we've been trying to repair all of 14:36 19 that. But -- and in the October 10 thing, I had a 14:36 20 trial setting. I didn't help -- no one asked me about 14:36 21 the date of the hearing and, you know, I couldn't have 14:36 22 made it anyhow. But I'm here today. I'm trying to 14:36 23 understand from the charity's perspective what is 14:36 24 intended. And I filed some comments, and I know it 14:36 25 wasn't on October 10 when the hearing date occurred. 14:36 0152 1 But I'm trying to understand what you're trying to 14:37 2 grasp in the record keeping for charities. And a lot 14:37 3 of the information is already provided to a 14:37 4 distributor, and we don't have a problem with that. I 14:37 5 mean, they provide the taxpayer number and all that 14:37 6 stuff. But there are some unique requirements for a 14:37 7 charity. And you know of the sorry state of affairs 14:37 8 of bingo, and what I'm trying to do, and the charities 14:37 9 have asked me, well, what type of -- for example, an 14:37 10 inventory, under paragraph (b) and (c), is that 14:37 11 something that we're going to have to do immediately 14:37 12 on the day of the session or can we provide that like 14:37 13 we've done in the past? Well, how do you do it in the 14:37 14 past? Well, we balance our books at the end of the 14:37 15 month. We certainly then true everything up at the 14:37 16 end of the quarter. We're keeping a daily sales 14:37 17 journal similar to what the -- is in the audit rule -- 14:37 18 the audit handbook. And y'all have done a good job of 14:37 19 giving the type of forms that charities ought to be 14:38 20 keeping. But do they truly balance it out, true it 14:38 21 up? I mean, for example, the word "perpetual." And 14:38 22 I'm sure you've read the comment I had about what is 14:38 23 meant by "perpetual" as never-ending. What I have 14:38 24 heard is that within the industry, they think that 14:38 25 means, not perpetual in the sense of forever, which is 14:38 0153 1 the dictionary definition of perpetual, but an 14:38 2 instantaneous, if you will, at the end of that 14:38 3 session. And I said, no, I've never seen that in an 14:38 4 audit, that any auditor has ever suggested that you 14:38 5 have to have that type of immediate truing up, 14:38 6 balancing of the inventory of paper or any other 14:38 7 product at that session, at the end of that session. 14:38 8 One particular charity hall, Billy, runs 40 to 60 14:38 9 bingo games a day. You know, 50-dollar prizes. So 14:38 10 they're running a lot quick. And to have to true up 14:38 11 all of that inventory at any one time, immediately, 14:39 12 would create a huge paperwork burden. They're 14:39 13 complying with subparagraph (d), when it says, you 14:39 14 can't destroy paper until it's licensed -- viewed by a 14:39 15 licensing person from the Lottery Commission. And 14:39 16 it's not like they're losing it, but do they 14:39 17 instantaneously capture that in an inventory -- and 14:39 18 their fear is, Billy, if that's where this rule is 14:39 19 headed, then they're going to be set up for failure 14:39 20 from the very beginning. And I don't think that's 14:39 21 what you intended. I think -- my perception of having 14:39 22 looked at this and talked to auditors, in both formal 14:39 23 cases and, you know, informal, y'all just want, when 14:39 24 you come in, to be able to say, okay, well, where is 14:39 25 your inventory? Let's make sure that, you know, you 14:39 0154 1 paid for 12 sets of paper, did you actually sell 12 14:39 2 sets of paper. And if you didn't, well, what 14:39 3 happened -- if you only sold 11, but you paid for 12, 14:39 4 what happened to that other set? 14:40 5 MR. ATKINS: And you did raise that 14:40 6 comment about perpetual inventory and I think that's 14:40 7 addressed. 14:40 8 MR. FENOGLIO: But as far as the 14:40 9 inventory -- I mean, the inventory itself, is that 14:40 10 something that if they don't true that up at the end 14:40 11 of that -- the rule is very -- in my view, very 14:40 12 ambiguous. When does it have to be -- that inventory 14:40 13 has to be -- under paragraph (d), must maintain a 14:40 14 perpetual inventory of all disposable bingo cards. 14:40 15 They must show the date on the occasion on which the 14:40 16 paper was sold. Beginning inventory along with the 14:40 17 number of. It doesn't say when. And, you know, 14:40 18 someone could take the interpretation, well, at the 14:40 19 end of that session, you have to do it. It doesn't 14:40 20 say. Or is it within the end of a particular 14:40 21 accounting period? And I guess y'all haven't gotten 14:40 22 that far. 14:41 23 MR. ATKINS: I don't know that it's -- 14:41 24 that we haven't gotten that far. It's that we've 14:41 25 gotten as far as we have, Steve. And I guess my 14:41 0155 1 frustration is that we have this conversation now. 14:41 2 And I appreciate about, you know, everybody being busy 14:41 3 earlier on with, you know, Sunset. I wish it was just 14:41 4 Sunset. You had another trial and we've have had some 14:41 5 other things going on, but you know, let me just say, 14:41 6 Steve, I am -- I am trying to get a process worked out 14:41 7 where these things can move along. And I don't think 14:41 8 that this is the first time that you've come forward, 14:41 9 you know, with questions and I've said, why are these 14:41 10 being raised now. 14:41 11 MR. FENOGLIO: And we've offered a 14:41 12 stakeholder process, Billy, and we've never had that 14:41 13 happen yet. 14:41 14 MR. ATKINS: Well -- 14:41 15 MR. FENOGLIO: And that's a frustration 14:42 16 that my clients and I have. 14:42 17 MR. ATKINS: So maybe we can address 14:42 18 some of this right now. You think it's incumbent upon 14:42 19 the agency to say, okay. Let's get together and talk 14:42 20 about this. As opposed to -- 14:42 21 MR. FENOGLIO: You're the one that -- 14:42 22 MR. ATKINS: -- like I mentioned to 14:42 23 Steve earlier, you know, you haven't appeared to be 14:42 24 very shy about picking up the phone and calling me and 14:42 25 saying, hey, let's get together and talk about this. 14:42 0156 1 MR. FENOGLIO: One of the reasons -- 14:42 2 and we've talked about the stakeholder, is not just 14:42 3 you and me sitting down, but other people who have -- 14:42 4 not that you could capture everyone in the industry, 14:42 5 and that not -- the intent of the stakeholder is not 14:42 6 to have every -- at least the stakeholder rulemakings 14:42 7 that I've participated in, but that you capture a 14:42 8 broad synopsis of it. And not just one-on-one, where 14:42 9 you hear from what I say, I don't hear from, for 14:42 10 example, Ms. Matthews, charity concerns, as opposed to 14:42 11 round table in a room, I think you can get a lot of 14:42 12 synergy of something that you haven't thought about or 14:43 13 I haven't thought about that maybe Mr. Whittington has 14:43 14 thought about or Ms. Brackett has thought about. And 14:43 15 that's why, I believe, the stakeholder meetings have 14:43 16 been successful at other agencies. And I think that's 14:43 17 something the agency has to do. I don't think I can 14:43 18 do it. We've asked for it repeatedly. We've said, 14:43 19 we're ready to do that. So that's what we would like 14:43 20 to have happen, as opposed to a one-on-one meeting, 14:43 21 where then we've got to -- I've got to filter back to 14:43 22 a bunch of other people, some of whom I may represent, 14:43 23 some of whom I don't, as opposed to having a room 14:43 24 of -- you know, it doesn't have to be a big 14:43 25 stakeholder group. It could be ten or less. Anyhow. 14:43 0157 1 MR. ATKINS: Yeah. And we might have 14:43 2 gotten off the -- off this specific agenda item. I'll 14:43 3 just -- you know, my position is, is I'm not prepared 14:43 4 to respond to any questions specific to this rule 14:44 5 today. My understanding of the reason for having it 14:44 6 on there is, you know, to advisory committee wanted to 14:44 7 know that it was moving along. And in my opinion, 14:44 8 it's moving along. 14:44 9 MR. FENOGLIO: Okay. My final comment, 14:44 10 then, is the language in subparagraph (b)(3) is vague 14:44 11 and arbitrary. The language, as stated, prohibits -- 14:44 12 or the Commission will not approve paper that, quote, 14:44 13 displays images or text that could be interpreted as 14:44 14 depicting alcoholic beverages, violent acts, weapons, 14:44 15 profane language, provocative, explicit or derogatory 14:44 16 terms or text. "Provocative" is defined in the 14:44 17 dictionary as likely or intending to provoke, quote 14:44 18 unquote, likely or intending to provoke. Synonyms for 14:44 19 "provoke" are arouse, excite, galvanize, impel, 14:45 20 incite, inflame, inspire, instigate, kindle, motivate, 14:45 21 move, rouse, spur or stimulate. 14:45 22 So if bingo paper encourages people to 14:45 23 take action to buy bingo paper, the faces, the way 14:45 24 it's demonstrated, then it would be rejected. And 14:45 25 that seems to be at cross purposes with what -- the 14:45 0158 1 discussion that's been going on in the last six months 14:45 2 about the need to get more exciting product into the 14:45 3 bingo hall. The same is true of the definition of 14:45 4 explicit. So those are the comments that I have on 14:45 5 behalf of my clients. And we're not quite sure why 14:45 6 someone would want to prohibit bingo paper that might 14:45 7 encourage people to buy the bingo paper, but that's 14:45 8 literally the language that's left there under 14:45 9 subparagraph (b)(3). I'll be happy to answer any 14:45 10 questions. 14:45 11 CHAIR BRACKETT: Are there any 14:45 12 questions? 14:45 13 MR. FENOGLIO: Thank you. 14:45 14 CHAIR BRACKETT: Okay. Thank you. 14:45 15 We'll move on to item number 11, consideration of and 14:46 16 possible discussion and/or action -- I'm sorry. Item 14:46 17 number ten. I had -- I'm going to pass on that. 14:46 18 MR. BRESNEN: Ms. Brackett, I'm sorry, 14:46 19 but I would like to speak on the item you were just 14:46 20 on, if you don't mind. 14:46 21 CHAIR BRACKETT: Back up? 14:46 22 MR. BRESNEN: If you don't mind, I 14:46 23 appreciate it. 14:46 24 CHAIR BRACKETT: Does anybody mind if 14:46 25 he... 14:46 0159 1 MR. BRESNEN: My name is Steve Bresnen 14:46 2 and I'm here on behalf of the Bingo Interest Group. 14:46 3 And I want to second the substantive comments that 14:46 4 Steve just made and review the history of this, if I 14:46 5 might. The particular paragraphs that he was focusing 14:46 6 on on the inventories, I -- when this -- it was either 14:46 7 at the first or second reading on this bill, on this 14:46 8 rule amendment, I specifically addressed those. You 14:46 9 may recall that Ms. Taylor and I had a dialogue about 14:46 10 whether these were additional in record keeping 14:46 11 requirements imposed on charities. And Suzanne, I 14:47 12 believe you said, you know, people keep inventories 14:47 13 already. And what I said was, well, I think this is 14:47 14 vague and I'm not sure that anybody is going to know 14:47 15 what is actually being required here. That was in 14:47 16 this formal process that y'all are going through. 14:47 17 Now, Steve subsequently submitted a 14:47 18 written comment within the formal comment period. And 14:47 19 my experience -- I wasn't here at the October 10th 14:47 20 meeting -- hearing. But it would seem to me that if a 14:47 21 member of the public, on behalf of people in the 14:47 22 industry, come down and make comments at -- as part of 14:47 23 this process, which is the -- the formal process is 14:47 24 detailed below the item on the agenda, that those 14:47 25 comments have been made, although not -- after the 14:47 0160 1 time that it was published in the Texas Register. So 14:47 2 I don't think these are new issues. I raised those 14:48 3 issues at the time. So it's not new. 14:48 4 My recollection of that time, and I 14:48 5 think it might be helpful for the process if we go 14:48 6 back and look at the transcript, and I pledge to get 14:48 7 it and come visit with you about that. But my 14:48 8 recollection is, is that on a number of items that I 14:48 9 asked, what is the problem, let's work on the 14:48 10 solution -- if we know what the problem is, we'll work 14:48 11 on the solution, that I was met with, I don't know. 14:48 12 Or I was met with, in the case of my dialogue with 14:48 13 Suzanne, people are already doing this. 14:48 14 On the card-minder rule that will come 14:48 15 later, there was, I don't know -- or that we talked 14:48 16 about earlier, I think, there was, I don't know. And 14:48 17 I don't know where this came from. Maybe we cut and 14:48 18 pasted it from somewhere else. In the previous public 14:48 19 hearings that I've attended, Ms. Kiplin has advised 14:48 20 you that you would not be answering questions about 14:49 21 the rule. That the purpose there -- there was for 14:49 22 people to talk about the rule and give their 14:49 23 observations about it rather than for the agency to 14:49 24 explain it. So if you come down here and you give 14:49 25 your comments, you go to a public -- and there is no 14:49 0161 1 answer, and then you go to a public hearing and you 14:49 2 ask for questions and you're told, that's not part of 14:49 3 the process, then it comes up on the BAC agenda again 14:49 4 and you're told -- you're given no answer, I don't see 14:49 5 that the fault is on this side of the table. And it 14:49 6 was in August of 2001 that I asked for a stakeholder 14:49 7 process. After a long delay on my part, I got you 14:49 8 some information from MHMR about how they had done 14:49 9 their work over there. They constituted that. Y'all 14:49 10 were concerned about how to -- how to constitute it 14:49 11 and it and get ample representation from various 14:49 12 viewpoints in it. And so the comments that have been 14:49 13 made about this rule today have been made over that 14:50 14 five-month period. And, you know, I for one am not 14:50 15 going to promise to be at every meeting and to repeat 14:50 16 myself at four or five meetings, and so to the extent 14:50 17 that I may, a person who has been pushing for the 14:50 18 stakeholder process and been accused in the past of 14:50 19 not having come forward and taking responsibility for 14:50 20 it, I just want it to be clear that my silence today 14:50 21 doesn't take responsibility for not having come 14:50 22 forward on this matter in the past. 14:50 23 CHAIR BRACKETT: Thank you, Steve. 14:50 24 Then I'll pass on number ten and that will put us at 14:50 25 item number 11, which is, consideration of and 14:50 0162 1 possible action on automating the charitable bingo 14:50 2 system. 14:50 3 MR. ATKINS: Madam Chairman, members, 14:50 4 the members of the advisory committee had, again, 14:50 5 asked for an update on the status of the charitable 14:50 6 bingo system. The company that we contracted with is 14:51 7 back on-site with a team -- project team together 14:51 8 working on the program. They've completed the module 14:51 9 specifications and have completed their initial 14:51 10 reviews of the project plan that they have sent on for 14:51 11 review by their upper management, and that they 14:51 12 anticipate having back to us shortly. Their plan at 14:51 13 this time is to spend the next several months writing 14:51 14 code and developing unit testing while the bingo staff 14:51 15 is at the same time developing scripts for user 14:51 16 acceptance, testing, and assisting them with the data 14:51 17 cleansing. 14:51 18 CHAIR BRACKETT: Any questions of Billy 14:51 19 on this? 14:51 20 MS. TAYLOR: Do they have any time 14:51 21 frame or anticipated time when you think that it will 14:51 22 be on line? 14:51 23 MR. ATKINS: We'll get that when we get 14:51 24 the project plan. 14:51 25 CHAIR BRACKETT: Any other questions? 14:51 0163 1 Okay. Thank you, Billy, for that. 14:51 2 Item 12 is discussion and action on the 14:52 3 third quarter 2002 bingo financial information. 14:52 4 MR. ATKINS: You have in your notebook, 14:52 5 members, the graph showing the third quarter 14:52 6 information. It's not much different from in the 14:52 7 past. Gross receipts are down almost five percent, 14:52 8 about 6.9 million dollars, from the previous quarter 14:52 9 of 2001. Prizes awarded for the third quarter of 2002 14:52 10 are down just over three percent, around three million 14:52 11 dollars. Distributions are down for this quarter over 14:52 12 the third quarter of 2001, about 8.5 percent, with 14:52 13 attendance declining -- attendance declining 14:52 14 approximately 3.4 percent. There is -- if you'll look 14:53 15 on the next to last graph, I guess -- well, the graph 14:53 16 on attendance that compares all of the quarters, 14:53 17 previous quarters, you'll see that there was a very 14:53 18 slight increase in the third quarter of 2002 over the 14:53 19 second quarter of 2002, by a whopping 12,000 people. 14:53 20 CHAIR BRACKETT: Does anybody have any 14:54 21 questions they would like to ask Billy or comments 14:54 22 they would like to make on this, or any light at the 14:54 23 end of the tunnel philosophy or anything? 14:54 24 MR. ATKINS: Again, I think we're very 14:54 25 interested in seeing what the fourth quarter figures 14:54 0164 1 look like, especially in relation to pull tabs, and 14:54 2 would be interested in the following agenda item and a 14:54 3 report from numbers on the status of those pull tabs. 14:54 4 This is the same report that I'm scheduled to give to 14:54 5 the Commissioners tomorrow and I know that they would 14:54 6 be receptive and eager to receive any ideas that the 14:54 7 committee may have on ways to address that. 14:54 8 MR. WHITTINGTON: As far as pull tabs, 14:55 9 I mean, they're going pretty good. They're helping a 14:55 10 lot. But still, there is only a certain amount of 14:55 11 pull tabs you can sell without attendance being up. 14:55 12 As long as attendance stays the same, pull tabs, you 14:55 13 can only get so much money from a customer, if you 14:55 14 don't have new customers coming in, or the customer 14:55 15 base don't increase. That's been our problem. It's 14:55 16 been the same -- we've been doing okay, but people 14:55 17 only have so much money to spend. 14:55 18 CHAIR BRACKETT: Larry, did you bring 14:55 19 any figures, any attendance and income figures on 14:55 20 that? If not, you can send them. Billy is really 14:55 21 wanting the hard facts and he needs it very badly. 14:55 22 MR. WHITTINGTON: Okay. I will. 23 CHAIR BRACKETT: And this will put us 14:55 24 on into item 13. 14:55 25 MR. MANIO: Madam Chairman, I do have 14:55 0165 1 some figures from my bingo hall and would like to -- 14:55 2 MR. ATKINS: On the pull tabs? 14:55 3 MR. MANIO: Pull tabs. 14:55 4 MR. ATKINS: Great. 14:55 5 CHAIR BRACKETT: Well, I did, too, but 14:56 6 I didn't do it up like that. I wrote it out in 14:56 7 English. 14:56 8 MR. MOORE: Hey, Virginia, I think 14:56 9 David Heinlein has probably got some numbers -- 14:56 10 CHAIR BRACKETT: Okay. We'll be 14:56 11 calling for those. Does anybody else up here have 12 something they want to hand in to Billy or read out 13 loud? 14 MR. ATKINS: I was going to try -- 14:56 15 maybe Mario could read into the record. Why don't you 14:56 16 just read it into the record. 14:56 17 MR. MANIO: Okay. What I have here is 14:56 18 a graph of pull tab sales and pull tab deposits 14:56 19 weekly. It's a weekly summary from the beginning of 14:56 20 the year up to the present time. And you cannot see 14:56 21 it from there, but right about this time in here, week 14:56 22 number 41, 42, is when we started selling the new pull 14:56 23 tabs, and the graph shows a dramatic increase, both in 14:56 24 deposits and in pull tab sales. And I do have the -- 14:57 25 well, I only have one copy in here and I'm going to 14:57 0166 1 present this to Billy. And this is just intended to 14:57 2 show the increase in revenue and deposits due to 14:57 3 the -- to the adoption of the new pull tabs. 14:57 4 MR. ATKINS: Thank you. 14:57 5 CHAIR BRACKETT: Anyone else up here 14:57 6 would like to say anything on that? 14:57 7 I would like -- I talked to bingo halls 14:57 8 that represent 23 charities in Lubbock. And the -- 14:57 9 it's fantastic, the increase in sales on the new pull 14:57 10 tabs. The first of November, we're netting an average 14:57 11 of 2,000 a night per bingo hall, and toward the end of 14:57 12 the month, it was maintained at a thousand to 1200 in 14:57 13 sales. And this is triple the normal amount. And 14:57 14 that's in looking at real records, not just going on 14:58 15 the memory of the pull tab sellers. But more than -- 14:58 16 I mean, the money is wonderful. But what has done, 14:58 17 too, is create a lot of excitement. And it's not only 14:58 18 created excitement in our customers, but also in our 14:58 19 employees. They're having a lot of fun selling those 14:58 20 things. And it's been a wonderful shot in the arm, 14:58 21 both financially and also making business exciting on 14:58 22 that. And I'm embarrassed to hand this to you, Billy, 14:58 23 but I will. I don't even know if my computer can do 14:58 24 stuff like that. 14:58 25 Would anyone like to -- anyone -- okay. 14:58 0167 1 MR. HEINLEIN: I'm David Heinlein with 14:59 2 Jetta Management. 14:59 3 Of course, it's real early on in 14:59 4 getting these new pull tabs. Everybody is excited 14:59 5 about getting them into their bingo halls. I always 14:59 6 reserve judgment, though, until I start seeing some 14:59 7 real numbers, and I put the pencil to the actual 14:59 8 numbers on each charity session, and then I -- what 14:59 9 I've done here is presented to you four different 14:59 10 halls' actual records what they've sold, the amount of 14:59 11 prizes paid out, and the net of amount of money left 14:59 12 to deposit to the bank. Because the only number that 14:59 13 means anything to me is the money that goes to the 14:59 14 bank. That's the one that I focus on. So what I did 14:59 15 to try to find out how we've done, since we have such 14:59 16 a limited focus time to look at it, if you ask the 14:59 17 pull tab person in your hall how we're doing, they 14:59 18 tell you, you know, that we're doubling our sales, 14:59 19 tripling our sales, and they're all excited about it. 14:59 20 But I don't know if that's having -- you know, what 15:00 21 the real impact is to the bottom line until I do the 15:00 22 number crunch. So that's what I've done here, because 15:00 23 as I always say, numbers don't lie. This is the real 15:00 24 fact. This is what has really happened at those 15:00 25 halls. So what I did si I backed up three months and 15:00 0168 1 looked at July, August and September. And it's 15:00 2 interesting to see the different halls there, it's -- 15:00 3 in some cases, we've seen a decline from July to 15:00 4 August to September in pull tab sales. It's kind of 15:00 5 consistent. A little bit less in August from July and 15:00 6 a little bit less in September. But then, boom, in 15:00 7 October, with the new products come out, the sales 15:00 8 went way up. But to have anything statistical to 15:00 9 really compare to, I think you have to be careful 15:00 10 about looking at a short period of time. So I took 15:00 11 the last three months and averaged them, and that's 15:00 12 every session played for three months in that bingo 15:00 13 hall, and then I took these two months of October and 15:00 14 November and every session that was played in that 15:01 15 bingo hall, and averaged them. So I think that 15:01 16 becomes a little more significant number to look at. 15:01 17 It's a little bit better, you know, to be the real 15:01 18 facts. It takes into account those nights when you 15:01 19 don't sell a lot and that Friday night when you've 15:01 20 sold 10,000 dollars worth of pull tabs. So it takes 15:01 21 the average, because that one big sale got everybody 15:01 22 excited and they think, man, we are really making the 15:01 23 money now. But wait a minute. You've got to look at 15:01 24 the whole picture. See what we did the whole week, 15:01 25 the whole month. 15:01 0169 1 So in our best situation, our actual 15:01 2 average net deposit to the bank was an increase of 15:01 3 87.75 percent. We deposited $264.73 average per 15:01 4 session more than we had the previous three months. 15:01 5 So what it suggests to me significantly is that we are 15:01 6 going to experience some growth in this area, and I am 15:01 7 anticipating over the next few months, this going up 15:02 8 much more, because we're just learning how to sell 15:02 9 them. 15:02 10 Now, that's the best hall. The next 15:02 11 hall was 177 dollars, and then the third hall was 168 15:02 12 dollars, and then the fourth hall is having a little 15:02 13 bit more trouble getting it off the ground, but 15:02 14 they've still had a 16 percent increase, $68.65, so we 15:02 15 find that everybody that's interested in using these 15:02 16 new products -- and not everybody is. Some people 15:02 17 don't want to hire any extra people or they don't want 15:02 18 to do anything to make the happen, so it's not 15:02 19 happening for them. We said that from the beginning, 15:02 20 that if they don't take it seriously and get after it 15:02 21 and try to do something with it, it's not going to 15:02 22 help their hall. But those that are, in every case 15:02 23 it's helping them. They are increasing their sales. 15:02 24 And I'm anticipating that this is going to help us 15:02 25 this fourth quarter improve what has become a disaster 15:02 0170 1 this whole year. It's going to help us level it out a 15:02 2 little bit. And I look forward to next year being 15:02 3 even more of an increase. 15:03 4 What I think it really highlights, too, 15:03 5 though is, we must have the ability to offer 15:03 6 differing, varying products as we go through this 15:03 7 industry in time. While this is great right now, I 15:03 8 don't know how long it'll last. Then we need to be 15:03 9 able to be prepared to have something to follow it up. 15:03 10 And look how long it's taken to get this. We need to 15:03 11 be working on something now to be subsequent to this. 15:03 12 So that when they get tired of this product, we have 15:03 13 something else to offer to them, so that we can 15:03 14 continue to keep the activity very spirited and 15:03 15 increasing these sales. Because every hall, if they 15:03 16 can increase their deposits two or 300 dollars a 15:03 17 session, they can maybe stay in business. Whereas, 15:03 18 we've got halls falling out of business right now that 15:03 19 continue. We lost another one last weekend. So we 15:03 20 know this. Bingo is still in death throes. And 15:03 21 unless we continue to increase this and get those 15:04 22 deposits up two or 300 and 400 dollars a session more, 15:04 23 you know, we're still at risk. But I'm very pleased 15:04 24 with the results that we're seeing so far in this new 15:04 25 pull tab program. 15:04 0171 1 MR. ATKINS: Let me thank you for your 15:04 2 help, David. Let me ask you some questions about 15:04 3 this. The percent increase -- 15:04 4 MR. HEINLEIN: Yes. 15:04 5 MR. ATKINS: -- what is that figure? 15:04 6 MR. HEINLEIN: That's the percentage of 15:04 7 increase in deposit. I'm only -- 15:04 8 MR. ATKINS: Is that an average? 15:04 9 MR. HEINLEIN: Average. 15:04 10 MR. ATKINS: Okay. 15:04 11 MR. HEINLEIN: That's average per 15:04 12 session. 15:04 13 MR. ATKINS: Per session. 15:04 14 MR. HEINLEIN: Our average per session 15:04 15 increase has been 87.75 percent in deposits. 15:04 16 MR. ATKINS: Per session? 15:04 17 MR. HEINLEIN: Per session. Now, 18 that's not the deposit for the whole hall. I'm 15:04 19 talking about just pull tab sales. 15:04 20 MR. ATKINS: Okay. 15:04 21 MR. HEINLEIN: As I said at the 15:04 22 beginning, the only amount that means anything to me 15:04 23 is the money that goes to the bank. And we increased 15:04 24 our bank deposit from the pull tab sales by 87.75 15:04 25 percent. 15:05 0172 1 MR. ATKINS: And that actual increase 15:05 2 in deposit per session, that's the same average 15:05 3 deposit that is an -- 15:05 4 MR. HEINLEIN: That's the same as the 15:05 5 264 dollars. 15:05 6 MR. ATKINS: -- for actual -- 15:05 7 MR. HEINLEIN: That 264 dollars is an 15:05 8 87 percent increase over the three oh one (phonetic). 15:05 9 Now, this does not take into account any increase in 15:05 10 cost. It's too early for me to give you those 15:05 11 numbers. And what I'm finding is that, so far, the -- 15:05 12 where they have hired any extra, they haven't hired 15:05 13 but one extra employee. So, you know, you may have 15:05 14 increased another -- we may have increased our cost 50 15:05 15 dollars there, that would be have to be deducted out 15:05 16 of that. The cost of the product itself is a little 15:05 17 bit more expensive than the normal pull tabs, so there 15:05 18 is going to be a little varying condition there, but 15:05 19 it'll be too early for me to know what those numbers 15:05 20 are. After this fourth quarter and we've totaled our 15:05 21 numbers, I'll probably have a little bit better 15:05 22 information on actual net increase after expenses. 15:06 23 MR. ATKINS: Have there been -- are you 15:06 24 aware, have there been any comments from players? 15:06 25 MR. HEINLEIN: Oh, yes. The players 15:06 0173 1 are very excited about it. As I said earlier in my 15:06 2 testimony, another phenomena that I'm reading into 15:06 3 this is that there is a reduction in electronic sales, 15:06 4 and it's not -- it's not a significant reduction and 15:06 5 it doesn't equate to the monies that are less, but I 15:06 6 just see that the trend over these last two months has 15:06 7 been, where they've been selling a certain amount of 15:06 8 electronics, it's gone down just a little bit. And I 15:06 9 like that trend because that gives us less cost of 15:06 10 goods sold. It increases profit to the bottom line. 15:06 11 It's more money to the bank. 15:06 12 MR. WHITTINGTON: Could I ask you a 15:06 13 question? 15:06 14 MR. HEINLEIN: Yes, sir. 15:06 15 MR. WHITTINGTON: Are your deposits 15:06 16 higher now -- 15:06 17 MR. HEINLEIN: Yes. 15:06 18 MR. WHITTINGTON: I mean, overall. 15:06 19 MR. HEINLEIN: Overall, yes. Yes, and 15:06 20 that's a good question, because it was a question that 15:07 21 Billy asked these Canadian people. Did that one 15:07 22 session that -- I mean, that one game they played, did 15:07 23 that it take away from the revenue that they would 15:07 24 have normally gotten. The only revenue I see that it 15:07 25 may have depleted a little bit was in the electronics. 15:07 0174 1 And I'm real happy to take the -- if I've got the same 15:07 2 sales dollars, and if I just transfer those sales 15:07 3 dollars from electronics to paper, I like that, 15:07 4 because I've reduced my cost. So I've increased my 15:07 5 actual net. But in this case, we've actually 15:07 6 increased actual sales. The sales have gone up and 15:07 7 the deposit has gone up the same. 15:07 8 MR. WHITTINGTON: So when you talk 15:07 9 about reduced costs as far as electronics, you're 15:07 10 talking about on -- based on the -- on a percentage 15:07 11 percent as far as bookkeeping, not as far as the money 15:07 12 coming from electronics. 15:07 13 MR. HEINLEIN: The money that we have 15:07 14 to pay the electronic supplier. 15:07 15 MR. WHITTINGTON: But you're also 15:08 16 getting some money back on electronic sales. 15:08 17 MR. HEINLEIN: Well, yes. We've got a 15:08 18 little bit less in sales in electronics. And our cost 15:08 19 is a little bit less -- you know, proportion-wise. 15:08 20 But when I -- if I sell ten dollars in electronics, 15:08 21 I've got a 20 percent cost factor. That's two 15:08 22 dollars. But if I sell ten dollars worth of pull 15:08 23 tabs, I've only got a 50 cent cost. I've saved a 15:08 24 dollar and a half. So even if my sales were the same, 15:08 25 I'm doing better. 15:08 0175 1 MR. WHITTINGTON: We do 25 dollars. I 15:08 2 don't say we're making 25 dollars. I say, we're 15:08 3 making 21. I don't even think about the other four. 15:08 4 I'm making 21 off of that sale, so that's what makes 15:08 5 it a little more profitable to us. 15:08 6 MR. HEINLEIN: But what I'm saying is, 15:08 7 if we transferred all of our sales dollars out of the 15:08 8 electronics into this new pull tab program, if we 15:08 9 didn't even increase sales, we would make more money. 15:08 10 But we are increasing sales. And we're actually 15:08 11 increasing money going to the bank. And I'm expecting 15:08 12 this to go up more. I'm really thinking that in a 15:09 13 couple of cases that we may start depositing 500 15:09 14 dollars a session, per session, more money to the 15:09 15 bank, within the next month. 15:09 16 MR. WHITTINGTON: Some days we've got a 15:09 17 big sale and some days we don't. You know, some days 15:09 18 people just don't buy them. And the next day, we 15:09 19 might have a bunch of people -- 15:09 20 MR. HEINLEIN: That's why you've got to 15:09 21 look at the average. You know, I really don't like to 15:09 22 look at any averages until I've got a full month of 15:09 23 each product. And we're only halfway through 15:09 24 November. I'll even -- I expect to see a little bit 15:09 25 of increase from this by the end of November. And 15:09 0176 1 then by this quarter's end, I'm hoping that these 15:09 2 quarterly reports that Billy starts looking at, he is 15:09 3 going to see some significant number changes. And 15:09 4 he'll see a greater increase in pull tab sales. Pull 15:09 5 tab sales have been declining. Am I right, Billy? 15:09 6 Over the last few years, pull tab sales have been 15:09 7 declining. And in this fourth quarter, I think we're 15:09 8 going to see a significant change go back up. 15:10 9 MR. ATKINS: I think we've seen the 15:10 10 biggest declines in pull tab sales. 15:10 11 MR. HEINLEIN: That's right. So the 15:10 12 electronics actually took away from the pull tab 15:10 13 sales, and now we might see that kind of shift back. 15:10 14 MR. ATKINS: Well, I don't know that it 15:10 15 was the electronics that took away from it, but there 15:10 16 has been a definite decline in pull tab sales, and 15:10 17 we'll be very interested to see the fourth quarter 15:10 18 figures. 15:10 19 MS. TAYLOR: I agree with you that it 15:10 20 has made a change in the hall. It's made a change in 15:10 21 the employees. And I think one of the biggest changes 15:10 22 is when you open a deal of tabs, you'd better get that 15:10 23 deal sold for that session. So where before we might 15:10 24 have had or six or 700 dollars gross sales, when we 15:10 25 open a box with 990 tabs, and those are dollar tabs, 15:10 0177 1 we're going to have those sold before that session is 15:10 2 over. And it gets people hustling, where they stopped 15:10 3 hustling. You know, as you watch the numbers go down, 15:10 4 everybody gets in a slump. I think everybody gets 15:10 5 really discouraged and they look out there and there 15:10 6 is not a big crowd, and you just see the enthusiasm go 15:11 7 out of not only the players, but the staff. And I 15:11 8 went to another hall one night, the first night they 15:11 9 introduced the tabs, because at our hall, and we do a 15:11 10 pretty big hoopla on the tabs, but I wanted to see 15:11 11 what was going on with another hall. The players 15:11 12 loved them. I mean, they could not -- as fast as they 15:11 13 were putting out -- Hot Balls that night is what they 15:11 14 had produced in their hall. As fast as they could put 15:11 15 those boxes out, they sold them. In 20 minutes, they 15:11 16 went through three boxes of Hot Balls. I mean, it was 15:11 17 just -- as fast as they could get them out, the 15:11 18 players lined up, the box was sold, and they would 15:11 19 start on the next box. And it went on like that right 15:11 20 until the session started. And the players were so 15:11 21 excited over it. They said, gosh, this is just so 15:11 22 much fun. And I haven't heard that in a bingo hall in 15:11 23 a long time. So I do think that it's increasing -- 15:11 24 MR. HEINLEIN: So there is a real 15:11 25 residual value to this new pull tab. 15:11 0178 1 MS. TAYLOR: And you've got to hustle. 15:11 2 So right off the bat, our sales go from 600 -- we know 15:11 3 we are going through that 990. 15:11 4 MR. WHITTINGTON: And people are still 15:11 5 saying the winning sticker. That's what's good about 15:12 6 it. I mean, they're saying, these people, I got the 7 winner. And we're hustling. That makes a big 15:12 8 difference. 15:12 9 MS. TAYLOR: I watched -- our sales 15:12 10 have gone up. We were averaging between 250 to 325 a 15:12 11 session. And I went and pulled the figures from the 15:12 12 last two Sundays since I had those with me, and we 15:12 13 were 648 a person, two Sundays ago, and 650 this last 15:12 14 Sunday. So I mean -- and I thought the first Sunday 15:12 15 was just because it was the first of the month, but 15:12 16 the second Sunday stayed on that same track that the 15:12 17 first Sunday did. So that's great. I mean, that's 15:12 18 awesome. And single sessions, I can see why some of 15:12 19 your halls might have more -- I bet you the ones with 15:12 20 the single sessions make more money than the double. 15:12 21 Because on our single session night, they're making 15:12 22 ten dollars a person off the tabs. 15:12 23 MR. HEINLEIN: We are seeing a 15:12 24 significant increase in gross per person. 15:12 25 CHAIR BRACKETT: That's what I was 15:12 0179 1 going to ask you, if you have gross per person 15:12 2 figures -- 3 MR. HEINLEIN: I don't have those with 4 me -- 15:12 5 CHAIR BRACKET: But you do know it's an 15:12 6 increase? 15:12 7 MR. HEINLEIN: Yes, it is. 15:12 8 CHAIR BRACKETT: And I agree with 15:12 9 Suzanne. The one bingo hall in Lubbock that I talked 15:12 10 to that represents two charities, they play single 15:13 11 sessions and they are -- their single sessions are way 15:13 12 up on the pull tabs. And they've always had good pull 15:13 13 tab business and now it's fantastic. So it's real 15:13 14 exciting. And it's exciting to visit the halls and 15:13 15 see people be excited. 15:13 16 MR. HEINLEIN: We've put a new 15:13 17 dimension -- 15:13 18 CHAIR BRACKETT: It's exciting to go to 15:13 19 the bank. 15:13 20 MR. WHITTINGTON: I remember, the first 15:13 21 day we got the little small box of Cash is King, which 15:13 22 is 280 tabs in it. I think 20 come in a case. And 15:13 23 the girls sold 12 boxes the first session. 12 of 15:13 24 those bags. That was great. 15:13 25 CHAIR BRACKETT: Are there any other 15:13 0180 1 comments? Thank you. 15:13 2 MR. ARNOLD: I'm Phil Arnold from 15:14 3 Houston, representing various charities in Houston, 15:14 4 particularly the Reunion Institute. And I want to -- 15:14 5 I wanted to be here today for sure, because I was here 15:14 6 so many times before, saying how much we were in need 15:14 7 of some new products. And so it's only fitting for me 15:14 8 to return here again and say thank you very, very 15:14 9 much, all -- Mr. Atkins and everyone else involved in 15:14 10 this whole process. It's been a long process. But 15:14 11 it's been a process that has brought very good 15:14 12 results, not just for our hall, but for -- what I'm 15:14 13 hearing today, many, many halls and charities 15:14 14 throughout Texas with the new event tickets. In fact, 15:14 15 the event tickets are working very, very well, and 15:14 16 they're working well because they involve pulling 15:14 17 bingo balls out of the hopper, and the players who 15:15 18 don't usually like to play pull tabs, they do enjoy 15:15 19 playing bingo. So when you pull the ball out of the 15:15 20 hopper to determine the winning pull tab, that 15:15 21 involves people that have not played pull tabs very 15:15 22 much up to that point. So instead of necessarily 15:15 23 getting more money from the original pull tab player, 15:15 24 we're now getting some money from people who never 15:15 25 spent money on pull tabs before. So the gross volume 15:15 0181 1 increases without necessarily emptying the pockets of 15:15 2 your original pull tab players. In other words, we've 15:15 3 opened up new markets without bringing new people in 15:15 4 the hall yet, but within our own hall, we've 15:15 5 discovered new markets. People who never wanted to 15:15 6 play pull tabs are now playing because it is a bingo 15:15 7 ball. So it is working for us. 15:16 8 The problem we're facing is that the 15:16 9 bingo numbers -- the crowd over the last two or three 15:16 10 years, as we all know, has dwindled. And there is not 15:16 11 much we can do about that right now. The crowd is 15:16 12 still low. We're hoping eventually more people will 15:16 13 come because we have these new exciting products, but 15:16 14 I don't really think it's going to increase the crowds 15:16 15 of any phenomenal number. We do have a problem, 15:16 16 though. We don't have enough people playing bingo. 15:16 17 And that's a problem we're wrestling with. I am happy 15:16 18 to report that we're not going to close, and I can 15:16 19 tell you, had we not had these new products, if the 15:16 20 wisdom and the will wasn't there to bring these things 15:16 21 to market, by what all of you have done for us, we 15:16 22 would probably be announcing closing today because of 15:16 23 the low numbers. But these products have increased 15:16 24 our profits. We're up over 80 percent. That is the 15:17 25 gross volume we sell in tabs now, is up about 15:17 0182 1 80-something percent. I think the figure is 87 or 85 15:17 2 percent, which is almost double. It's amazing. And, 15:17 3 of course, the profits are up. 15:17 4 Now, we're averaging, instead of maybe 15:17 5 ten dollars a person for the day, two sessions, we're 15:17 6 averaging 20 dollars a person. We were about 12 15:17 7 before, now we're up to about 20 a person for the two 15:17 8 sessions total. And we don't want to stop there. We 15:17 9 want to continue to bring that up, but in order to do 15:17 10 so, I know from my experience in this fund-raising 15:17 11 that eventually the people will grow a little tired of 15:17 12 the two or three products that they love right now. 15:17 13 And we picked out what we think for our group are the 15:17 14 three or four best products to sell. The other ones 15:17 15 we don't think are going to work as well with our 15:18 16 group. So when they get tired of these three or four, 15:18 17 we're going to have to turn, like in a couple of 15:18 18 months, to some other exciting products. So may I 15:18 19 just encourage us all to move forward on approving new 15:18 20 products. I'm looking for the wheels. I'm looking 15:18 21 for perforated pull tabs and bingo paper that you pick 15:18 22 them, that we've talked about before. We need this 15:18 23 kind of new dynamism and blood just to continue to 15:18 24 come in. So we can't take our foot off the pedal. We 15:18 25 have to keep it there and keep the engine revved up. 15:18 0183 1 Just to be helpful to other charities 15:18 2 that might be listening or other people can inform 15:18 3 them, I wanted to mention maybe four or maybe five 15:18 4 points. They're very simple and quick, that could 15:18 5 help in selling the product. First, you have to offer 15:18 6 the product, the new products. You have to offer 15:18 7 them. Educate people about them. You need more than 15:18 8 just one of them. You need two or three new products, 15:18 9 because there are different personality types that 15:19 10 will buy different things. You have to continue to 15:19 11 offer the original instant tabs that you've been 15:19 12 offering over the years. Don't give up on those. You 15:19 13 still need those, because some of your heavy hitters 15:19 14 really love those products. They may not like the new 15:19 15 ones so much. So you need all that going on. You 15:19 16 need to play games that require only one bingo ball to 15:19 17 win the event ticket between the regular games that 15:19 18 you're playing on your session. I do not advise, and 15:19 19 we learned the hard way, bringing a game in that 15:19 20 requires 20 bingo balls to win, and stick that game 15:19 21 between your regularly-scheduled games. Because not 15:19 22 everyone will be able to play that event ticket that 15:19 23 requires 20 or 25 balls because they don't have a 15:19 24 lucky card, so they just have to sit there. You have 15:19 25 a hundred people sitting there, they're going to go to 0184 1 another bingo hall eventually. So if you're selling 15:19 2 the product, I think you know what I'm trying to say 15:19 3 here. What you want to schedule during your bingo 15:20 4 session between the regular games are the little 15:20 5 instant games like an event ticket, for example, a Hot 15:20 6 Ball ticket, and you just pull out one number to 15:20 7 determine the winner. Someone wins instantly. It 15:20 8 just takes five seconds. Then you go to your regular 15:20 9 games. 15:20 10 And at the end of your regular games or 15:20 11 before your regular games start, it's okay then to 15:20 12 play one of these event tickets that require the 15:20 13 pulling of 20 balls, because then you don't have 15:20 14 everyone waiting. They either haven't got there yet 15:20 15 or it's the last game of the session. So your people 15:20 16 can leave and go home who would like to. So I do give 15:20 17 that caveat there. 15:20 18 Keep the players informed via your 15:20 19 microphone as to what games are being played and what 15:20 20 is coming up next. And all four workers should carry 15:20 21 tabs. All four workers should carry all tabs. I 15:20 22 think that formula will bring success to charities. 15:20 23 And as I say, we do need some more products. We 15:21 24 cannot let that go. But right now we're very pleased, 15:21 25 very happy, and we're thankful we're still in the 15:21 0185 1 charity fund-raising business and we can do some good 15:21 2 things. Thank you. 15:21 3 CHAIR BRACKETT: Thank you. Any 15:21 4 questions or comments on this? Thank you. 15:21 5 Anyone else who would like to make 15:21 6 comments on the pull tabs? Any consumers here who 15:21 7 would like to speak to the excitement of the new pull 15:21 8 tabs? Billy, is that enough for you? 15:21 9 MR. ATKINS: Yes, ma'am. I know that 15:21 10 the Commissioners will be happy to know that those 15:21 11 have had a positive impact, and I'm sure that they 15:21 12 will express their appreciation to all of you for your 15:21 13 assistance as we went through the development of this 15:21 14 rule. And I just, for the record, would again like to 15:21 15 point out that it was Phil Arnold that first brought 15:21 16 these tickets to our attention. Okay. 15:22 17 MR. MOORE: And, Billy, in reference to 15:22 18 the paddle wheels. Has any manufacturer approached 15:22 19 you guys about getting a license? No. 15:22 20 MR. ATKINS: Not that I'm aware of. 15:22 21 MR. MOORE: Okay. 15:22 22 CHAIR BRACKETT: We'll conclude that 15:22 23 item and go on to item number 14, which is 15:22 24 consideration of and possible discussion and/or action 15:22 25 on nominations to the Bingo Advisory Committee. 15:22 0186 1 We have one vacant seat and that is 15:22 2 a -- general public. I like to think of it as 15:22 3 community. It's a general public position. We've had 15:22 4 two nominations. Both -- they're in your notebook. 15:22 5 And does everyone have a copy of this letter from 15:22 6 Mr. Rowan of Waco? 15:23 7 Is the procedure on this, Billy, that 15:23 8 we will make recommendation to the Commissioners and 15:23 9 the Commissioners will take action at that point? 15:23 10 MR. ATKINS: Well, what I had raised to 15:23 11 the Commissioners at their last meeting was that this 15:23 12 vacancy existed. I discussed with them some of the 15:23 13 actions that we had taken to publicize it and to get 15:23 14 nominations. At the same time, we still only had the 15:23 15 two nominations, I think, that you have before you 15:23 16 today. My question to them was if they wanted to 15:23 17 proceed in the same manner as they did on filling the 15:23 18 last vacancies on the advisory committee, that is, the 15:23 19 individuals being contacted. I believe the last time 15:23 20 the BAC formed a subcommittee and they contacted the 15:23 21 individuals. Maybe look to a little more interaction 15:24 22 between that subcommittee and the staff and then 15:24 23 jointly bringing a proposal before them. 15:24 24 You and I discussed yesterday, Madam 15:24 25 Chair, if it may be the will of the committee at this 15:24 0187 1 time to recommend to the advisory committee that that 15:24 2 position remain open and we attempt to get some 15:24 3 additional nominations, although I'm not exactly sure 15:24 4 how we would. As I'm sure a lot of you know, one of 15:24 5 the Bingo Bugles ran a notice about the vacancy and 15:24 6 how to apply. It was posted on our website. And 15:24 7 actually, as a result of this, what we're going to do 15:24 8 is, we're just going to leave the nomination form on 15:24 9 the website permanently so that it'll always be up 15:24 10 there. 15:24 11 We did a mail out to locations asking 15:24 12 that they post it, hoping to get nominations that way, 15:24 13 and I think I sent an e-mail to all of you earlier, 15:25 14 you know, encouraging you, if you knew of anyone, to 15:25 15 submit that. So I'm not really sure what else we 15:25 16 could do in order to get additional nominations. I 15:25 17 just put that out there as a possibility. 15:25 18 CHAIR BRACKETT: When did the -- how 15:25 19 recently did the Bingo Bugle run that information? 15:25 20 MR. ATKINS: I believe it was their 15:25 21 October 2002. 15:25 22 CHAIR BRACKETT: So it's been plenty of 15:25 23 time for people to respond. 15:25 24 MR. ATKINS: Yes, ma'am. 15:25 25 CHAIR BRACKETT: And it was not all 15:25 0188 1 Bingo Bugles, or was it? 15:25 2 MR. ATKINS: I don't know if it was all 15:25 3 issues or not. The one that I saw was the central 15:25 4 Texas issue, which is Austin, San Antonio region. 15:25 5 MS. TAYLOR: Corpus, the one down south 15:25 6 ran it, too. 15:25 7 MR. ATKINS: Okay. 15:25 8 CHAIR BRACKETT: I would like to hear 15:25 9 what is the pleasure of the advisory committee on 15:25 10 this, at this point. 15:25 11 MS. TAYLOR: I think that there are two 15:26 12 individuals that have submitted that have said they're 15:26 13 interested in it up to this point, so I would 15:26 14 recommend that we go ahead and consider these two 15:26 15 individuals that have expressed an interest in the way 15:26 16 that Billy has suggested, instead of holding this open 15:26 17 and hoping that somebody else -- it's like we're 15:26 18 begging for somebody to come, when we have two people 15:26 19 that both seem to have some knowledge about bingo that 15:26 20 are interested. So I think we should just forge ahead 15:26 21 and bring them on in. 15:26 22 MR. PAVLOVSKY: I agree with that. 15:26 23 MS. MATTHEWS: I would like to say, I 15:26 24 spoke to Mr. Rowan by telephone and he -- I asked him 15:26 25 how he found out about this vacancy. And he does know 15:26 0189 1 Ricky Thurman, who is the person that has resigned who 15:26 2 is also a CPA in Waco, but he didn't find out about it 15:26 3 there. He said he just regularly applies and has 15:26 4 applied for years to be on this committee. He does a 15:26 5 lot of work for bingo organizations. He belongs to 15:26 6 charities that play bingo and he works for lessors and 15:27 7 charities, so he has a very good background, I think. 15:27 8 MR. ATKINS: Does he -- do you know, 15:27 9 Marilyn, if he is on the record of any organizations 15:27 10 like this -- licensed to conduct bingo? 15:27 11 MS. MATTHEWS: I believe he is a member 15:27 12 of organizations that play bingo. 15:27 13 MR. ATKINS: But he is not on their 15:27 14 record? That's -- well, not one of the individuals 15:27 15 listed on the supplement form. 15:27 16 MS. MATTHEWS: I don't know. 15:27 17 MR. ATKINS: Okay. And that would be 15:27 18 something that we would need to... 15:27 19 CHAIR BRACKETT: He doesn't list that 15:27 20 he has done that. But he does state that he has 15:27 21 worked directly with bingo activities for 20 years. 15:27 22 So it's rather hard to say. I hate to put this off, 15:27 23 but I think it's -- we have to know. Is he really a 15:28 24 truly public representative. 15:28 25 MR. ATKINS: Maybe if we could pass on 15:28 0190 1 this for a little while, we could do some checking and 15:28 2 come back. 15:28 3 MR. PAVLOVSKY: Mr. Dougherty has this 15:28 4 thing filled out. He said he is a member. 15:28 5 MR. ATKINS: If we can maybe take up a 15:28 6 couple of other items, we can check on that real 15:28 7 quick. 15:28 8 CHAIR BRACKETT: Well, he says he plays 15:28 9 six days a week, so he knows -- 15:28 10 MR. PAVLOVSKY: But he doesn't list the 15:28 11 name of the organization either, so apparently neither 15:28 12 one of them has completed the application. 15:28 13 MR. MOORE: Virginia, I need to take 15:29 14 off. 15:29 15 CHAIR BRACKETT: That's all you're 15:29 16 going to say? 15:29 17 MR. MOORE: That's it. Since you're 15:29 18 passing on this subject. 15:29 19 CHAIR BRACKETT: Well, we hate to see 15:29 20 you leave. Are you going home? 15:29 21 MR. ATKINS: Pete, I show him checking 15:29 22 no as a member. 15:29 23 MR. PAVLOVSKY: Absolutely. You're 15:29 24 right. 15:29 25 MR. ATKINS: We'll just double check 15:29 0191 1 that. Sometimes people make a mistake. 15:29 2 CHAIR BRACKETT: Danny, before you 15:29 3 leave, leave us or tell us right now your suggestions 15:29 4 for the next agenda. 15:29 5 MR. MOORE: Well, I think definitely, I 15:29 6 think we should have something on the agenda about 15:29 7 unit accounting. I don't know when we're going to 15:29 8 meet again. I'm hoping before January, which leaves 15:29 9 us a short leash here. 15:29 10 CHAIR BRACKETT: Do you have a 15:30 11 suggested date? 15:30 12 MR. MOORE: No, I don't. I'll be open. 15:30 13 Before the 21st of December. 15:30 14 CHAIRMAN CLOWE: I thought you said 15:30 15 something about December 10th. 15:30 16 MR. MOORE: No. I don't have a 15:30 17 calendar on me. 15:30 18 MR. TAWIL: I'm not sure we'll have 15:30 19 anything by then on the advertising. 15:30 20 CHAIR BRACKETT: You're worried about 15:30 21 meeting -- what would be the latest -- I mean, let's 15:30 22 just quickly do this. You were saying to avoid -- to 15:30 23 not meet too close to Christmas, so what would be too 15:30 24 close to Christmas? 15:30 25 MR. MOORE: I don't care. Before the 15:30 0192 1 18th. 15:30 2 CHAIR BRACKETT: How about the first 15:30 3 week of January? 15:30 4 MR. MOORE: Can we do it that late? 15:30 5 MR. TAWIL: Well, if we've going to 15:30 6 have anything proposed to get into the legislative 15:30 7 pipeline, we certainly can't do it through the agency. 15:30 8 We're going to have to have somebody that's willing to 15:30 9 go over there and do it. 15:30 10 MR. MOORE: And then the other thing, 15:31 11 we haven't really talked about the distribution 15:31 12 expenses, how they're going to be -- nobody has really 15:31 13 brought up what exactly constitutes a distribution 15:31 14 expense. I know we talked about that a little bit in 15:31 15 the rule, but I think there are still some people that 15:31 16 are curious about that. I've talked to a few people 15:31 17 in the room today and they would like us to talk about 15:31 18 that some more, so we can put that on the agenda. 15:31 19 And I know that we'll be prepared to 15:31 20 show Commissioner Clowe that we're ready for the next 15:31 21 meeting, on those two issues, so... 15:31 22 MR. ATKINS: Well, I do have a 15:31 23 question. And it gets back to the -- what we found in 15:31 24 the past, when it comes time to set the next agenda 15:31 25 and assign that agenda to someone and what it is we're 15:31 0193 1 going to discuss, all we have to go on is Danny Moore 15:32 2 saying, let's discuss unit accounting. So I would 15:32 3 like a little fuller development of the issue, so -- 15:32 4 MR. MOORE: To put in the binder and 15:32 5 everything? 15:32 6 MR. ATKINS: That's correct. So we can 15:32 7 say that those items that you've put forward, you're 15:32 8 going to be responsible for, then I know who to go to. 15:32 9 MR. MOORE: Well, all right. You know, 15:32 10 you had my one item in here and I brought two 15:32 11 gentlemen down. I did have them meet with you. I did 15:32 12 have the backup information. I don't know if that was 15:32 13 too late for you. You know, I'm still new to this, 15:32 14 too. I'm trying to do my best. So on these two 15:32 15 instances here, if they do get in the agenda, I'll do 15:32 16 my best to do that for you. 15:32 17 CHAIR BRACKETT: Okay. All right. 15:32 18 MR. TAWIL: When are you proposing a 15:32 19 meeting? 15:32 20 CHAIR BRACKETT: We're not talking 15:32 21 about a date at this point. But since you agreed to 15:32 22 do all that, you're excused. 15:32 23 MR. MOORE: I've been scolded twice 15:33 24 today now. 15:33 25 MR. ATKINS: You're doing good if it's 15:33 0194 1 just twice. 15:33 2 CHAIR BRACKETT: Thank you. 15:33 3 That's something I want to ask you. 15:33 4 Did we make a conclusion on 14? 15:33 5 MR. ATKINS: We're -- no. We're 15:33 6 awaiting further information. 15:33 7 CHAIR BRACKETT: He went to look at the 15:33 8 date book. Thank you. 15:33 9 We'll be happy to hear from you right 10 now on security. 15:33 11 MR. PITCOCK: On item number 15. My 12 name is Michael Pitcock. I'm commander of security 15:33 13 for the Texas Lottery Commission. I have provided you 15:33 14 information last meeting, and we're still in the same 15:33 15 quarter, so I'm not going to repeat the same 15:33 16 information. I'm merely here to answer any questions 15:33 17 that you might have relating to security at this time. 15:33 18 I know there has got to be some. 15:33 19 MS. TAYLOR: You know, I love seeing 15:34 20 you here every time, but I don't know that this is 15:34 21 such a big deal any more, that we need to keep it as 15:34 22 an going agenda item. 15:34 23 MR. PITCOCK: Me and Billy had that 15:34 24 same conversation. And it's one of those that -- you 15:34 25 know, the numbers that I provide you and the key 15:34 0195 1 complaints that come in, I think, tell you what is 15:34 2 going on in your industry. If that's of interest to 15:34 3 you, I'll keep -- and we do quarterly reports, and 15:34 4 right now you're in the middle a quarter. If I give 15:34 5 you a report at the first of the quarter, if I come 15:34 6 back again in the middle, I'm going to give you the 15:34 7 same numbers again. So it's one of those that, you 15:34 8 know, I try to be here as a resource. There is a lot 15:34 9 of issues that I would love to talk about, but I 15:34 10 can't. And there is a lot of issues that, you know, 15:34 11 we're doing out there in the field that I can't tell 15:34 12 you about either, but we're out there actively 15:34 13 working. 15:34 14 I heard you talking about 800 numbers. 15:34 15 I can talk about that a little bit as far our process, 15:34 16 just so you know, because I invited y'all to look. 15:34 17 But our intake investigator, I will tell you, that 15:34 18 process works well as far as I'm concerned. If 15:35 19 somebody in y'all's industry or a player, or whoever, 15:35 20 wants to complain, you know, they talk directly to an 15:35 21 investigator, and they talk to a person that's going 15:35 22 to sit there and listen to the issues, and a lot of 15:35 23 times they can resolve it in a phone call or direct 15:35 24 them in the right direction. And that process, to me, 15:35 25 is one of the stars as far as what we do. And if he 15:35 0196 1 sees that there is apparent rule or law violations or 15:35 2 if there is something we need to investigate, he then 15:35 3 dictates that into the computer and it's sent out for 15:35 4 an investigation. But I've seen Juan spend hours 15:35 5 sitting and talking to some of your players and 15:35 6 pacifying them because they may have had a hard night 15:35 7 of bingo, and it's not really related at all to what 15:35 8 we do. But he spends lots of time to keep your 15:35 9 players happy and make them go back and talk and work 15:35 10 things out at your halls. That is something that is 15:35 11 not couched in any numbers that we do. And our 15:35 12 investigators, when they're out there, we do as much 15:35 13 P.R. as we can in an area that it's difficult at 15:35 14 times. Because we're there on an official type visit, 15:35 15 it makes it difficult. But if we're there on an 15:36 16 inspection or there in your area, we're liable to come 15:36 17 by and see how you're doing and ask you if you're 15:36 18 having any problems. So our guys and the auditors, I 15:36 19 think, are great ambassadors, and I think we've done 15:36 20 well. I think the complaints show that this year is 15:36 21 another year where we're down to, I think, 167, if I 15:36 22 remember the numbers. Which when I started in 1994, 15:36 23 the numbers were like 700 complaints. So I know 15:36 24 business is down and you're saying there is not as 15:36 25 many people, and there are probably not as many 15:36 0197 1 complaints, which is probably relational, but I think 15:36 2 it's because a lot of the work that y'all do and a lot 15:36 3 of work that, you know, the investigators and auditors 15:36 4 have done out there educating you and answering your 15:36 5 questions out there in the field. And I'll be glad to 15:36 6 answer any questions. 15:36 7 MR. WHITTINGTON: I like -- I don't 15:36 8 know if this question relates to you or what. But if 15:36 9 the Lottery Commission comes on-site during a bingo 15:36 10 session, and the charity rep is not there and shuts 15:36 11 down the bingo session completely. They stop -- you 15:36 12 can't play bingo this session. The rep is not here, 15:37 13 you know. And that -- and that has been done. And I 15:37 14 think that's kind of hard, because we're trying to 15:37 15 make money for the charity and just because they don't 15:37 16 have a rep there, they basically say, you can't play 15:37 17 bingo. 15:37 18 MR. PITCOCK: I think I can answer that 15:37 19 one. I think on occasions where we've had occasions 15:37 20 of bingo that's being played outside of what we 15:37 21 call -- legalities. Let's say, for example, you're 15:37 22 not licensed. That's a -- a felony offense. And, 15:37 23 yeah, we're probably going to shut it down and take 15:37 24 the evidence and arrest people. If it's a licensed 15:37 25 time and there is something going on during that 15:37 0198 1 licensed time that we're investigating, no, we're not 15:37 2 going to shut it down. We're not going to shut it 15:37 3 down for -- we're going to gather information and make 15:37 4 a report and present it. We have not got the 15:37 5 authority at that point to shut down a bingo session. 15:37 6 You know, in a criminal type act where they're playing 15:37 7 illegally or something is going on, yes, we're going 15:37 8 to arrest people, so it's not logical to keep going. 15:37 9 And we have done that. We've gone -- because we 15:38 10 received complaints that there is illegal bingo going 15:38 11 on. I'll give you a for example. South Texas. We 15:38 12 had people coming up from Mexico playing high stakes 15:38 13 bingo at some location. We missed a couple of times, 15:38 14 but we finally got there and we were there when they 15:38 15 played. We shut that down. We took all their paper, 15:38 16 all of their cards, all of their money, and arrested 15:38 17 two or three people and took them to jail. Yeah, we 15:38 18 did that. 15:38 19 MR. TAWIL: Do you do that or does the 15:38 20 local law enforcement do that? 15:38 21 MR. PITCOCK: No. We did that. Local 22 law enforcement -- 15:38 23 MR. TAWIL: You arrested people? 24 MR. PITCOCK: Yes. Absolutely. 15:38 25 MS. TAYLOR: I have a question. What 15:38 0199 1 would you do in the case of a session that something 15:38 2 went wrong during the session? The electricity went 15:38 3 out, or whatever, and it actually went over their 15:38 4 licensed time. Would you tell them they have to stop 15:38 5 at 8:40 and they can't play the rest of the session? 15:38 6 What would you do if you were there at that time? 15:38 7 MR. PITCOCK: If we were there at that 15:38 8 time, we would get with whoever was in charge, and say 15:38 9 that -- you know, based on the circumstances, we're 15:38 10 going to write a report and this is what we're going 15:38 11 to say. It's not my decision and, no, we wouldn't 15:38 12 shut you down at that point. We would write the 15:38 13 report, bring it back to Austin, and then we would 15:38 14 present it, through legal, to Billy. And if there is 15:38 15 violations there, then they would make the decision 15:39 16 whether there is a violation or not. But our job is 15:39 17 to report it at that point. I mean, we're to gather 15:39 18 the facts and report the information. 15:39 19 MS. TAYLOR: So how much trouble would 15:39 20 the charity be in, Billy? 15:39 21 MR. ATKINS: I'm sorry? 15:39 22 MS. TAYLOR: If their electricity went 23 out during the session, so they finished their session 15:39 24 after their actual licensed time because their 15:39 25 licensed time expired while they were till trying to 15:39 0200 1 get through the session. 15:39 2 MR. ATKINS: I think that would 15:39 3 actually be a felony. 15:39 4 MR. PITCOCK: It's playing outside time 15:39 5 would be -- would be, but it's mitigating 15:39 6 circumstances and we would bring it back. And if 15:39 7 they -- you know, that wouldn't be one where we would 15:39 8 shut them down. We would wait -- if we had to go to 15:39 9 court, we would go get warrants and we would be back. 15:39 10 MR. ATKINS: I don't think a power 15:39 11 failure in and of itself is a violation. 15:39 12 MS. TAYLOR: No. But I mean -- I mean, 15:39 13 seriously, because I've been in a hall when that's 15:39 14 happened. And by the time they got the session up and 15:39 15 going again, I watched the clock and I know it went 15:39 16 outside of their licensed time. 15:39 17 MR. ATKINS: It would be -- 15:40 18 MS. TAYLOR: So if you had been 15:40 19 standing in the hall at the time, would you tell them, 15:40 20 you stop the session and you don't finish the session? 15:40 21 What would you tell them to do? What would be your 15:40 22 advice as the bingo director? 15:40 23 MR. ATKINS: My advice as the bingo 15:40 24 director is that if they played a game outside of 15:40 25 their licensed time, they could be violating the Bingo 15:40 0201 1 Enabling Act, and as such, we would complete our 15:40 2 investigation and, if necessary, take the appropriate 15:40 3 administrative action. And if it did constitute a 15:40 4 criminal offense, we would refer to it a local 15:40 5 prosecutor, also. 15:40 6 MR. PITCOCK: I want to go back to 15:40 7 Saleem's. We used local law enforcement to transport. 15:40 8 MR. TAWIL: I'm saying that this is 15:40 9 administrative law, this is not criminal law. 15:40 10 MR. PITCOCK: No, sir, you're not 15:40 11 correct. Everything in the Bingo Act is a Class B 15:40 12 misdemeanor, and then playing without a license is a 15:40 13 jail felony. It's all tied to criminal law. If you 15:40 14 read the act, you will see that at the end of the act. 15:40 15 And you can ask Billy if that's incorrect. 15:40 16 MR. TAWIL: It's a different code. The 15:40 17 criminal law is a different section of the code. It's 15:41 18 not 179. 15:41 19 MR. PITCOCK: It's all -- a criminal 15:41 20 offense is something that's punishable by jail time or 15:41 21 a fine, based on the criminal procedures act, and it's 15:41 22 actually in the Bingo Enabling Act. And it does have 15:41 23 attached to it all violations of the Bingo Enabling 15:41 24 Act is a Class B misdemeanor, except for one, and 15:41 25 that's playing without a license is a third-degree -- 15:41 0202 1 or a jail felony. I'm sorry. 15:41 2 MR. WHITTINGTON: So like if a charity 15:41 3 don't have a rep there, they can't play that session. 15:41 4 That's basically what I'm asking. 15:41 5 MR. PITCOCK: No, we wouldn't shut them 15:41 6 down. We would investigate it and note -- 15:41 7 MR. WHITTINGTON: Oh, they have. They 8 said, you can't play. Your rep is not here. You've 15:41 9 got to quit. 15:41 10 MR. PITCOCK: Well, that's true. We 15:41 11 would suggest -- if you asked us that your rep needed 15:41 12 to be there, yeah, that's a violation. I mean, 15:41 13 that's -- you know, I think it would be obvious to you 15:41 14 if you were there and your rep is not there, I would 15:41 15 say that they need to get there. I'll give you a 15:41 16 story in El Paso. It's kind of a funny one. The 15:41 17 rep -- or the agent was the lady that was like 85 15:41 18 years old and she was in the hospital with things in 15:41 19 her arm. I mean, she was the actual charity rep. 15:41 20 There is mitigating circumstances to everything. But 15:42 21 we're going to write you up and say that you're 15:42 22 playing a session without the representative being 15:42 23 there. And, again, we refer to the jurisdiction or 15:42 24 proper authorities and tell them that that's what 15:42 25 happened. Now, you have a right to tell us when we're 15:42 0203 1 out there, well, she's not here or he's not here 15:42 2 because they're sick or -- there is all kinds of 15:42 3 things we've heard, from A to Z that may be something 15:42 4 that he listens to. But ours is not to judge you at 15:42 5 that point. We're not going to judge you out there 15:42 6 and say, shut down that session. That's your choice. 15:42 7 You know a guy sitting there is fixing to write you up 15:42 8 for this. If you keep playing bingo, then, you know, 15:42 9 that's your choice also. But we're going to write it 15:42 10 up and send it -- 15:42 11 MR. WHITTINGTON: Well, I've actually 12 seen -- come in -- not involved, but I was at a friend 15:42 13 of mine's hall -- I won't call any names -- the rep 15:42 14 came and they didn't have the rep there and the lady 15:42 15 said, you cannot play, period. That's it. And they 15:42 16 had to wait and then wouldn't play the session at all 15:42 17 because they ran over time. That actually happened. 15:42 18 MR. PITCOCK: I haven't heard that. I 15:43 19 don't know that story. I'm not saying, Larry, it's 15:43 20 impossible that anything happened. It's just I have 15:43 21 not heard that story. 15:43 22 MR. ATKINS: I mean, it doesn't help 15:43 23 us, you know, look into it and determine, you know, 15:43 24 why it happened, and if it shouldn't have happened, 15:43 25 keep it from happening again if you can't tell us, you 15:43 0204 1 know, where, who or when, or any of that. 15:43 2 MR. WHITTINGTON: Well, it happened at 15:43 3 Ed's hall, Plano East. 15:43 4 MR. ATKINS: When? 15:43 5 MR. WHITTINGTON: About six or seven 15:43 6 months ago. He came in and he stopped the first 15:43 7 session because the rep was late getting there because 15:43 8 of some car accident or something. They wouldn't let 15:43 9 them play. 15:43 10 MR. ATKINS: Michael, look into that 15:43 11 and follow up. 15:43 12 MR. WHITTINGTON: And I was shocked 15:43 13 because I got to the Plano hall and said, hey, guys, 15:43 14 everybody got to be there. Okay? But usually we have 15:43 15 two or three. I said, we can't afford that. We make 15:43 16 sure that we have reps to cover our sessions because 15:43 17 they will shut you down. 15:43 18 MR. PITCOCK: We'll check your 19 employees, too. I think the longer you can have 15:43 20 employees working that you have to send them in 15:43 21 through your registration. 15:43 22 MR. WHITTINGTON: Oh, yeah. 23 MR. PITCOCK: And we checked all your 15:44 24 employees. 25 MR. ATKINS: Let me just compliment you 15:44 0205 1 on having multiple operators, because you would be 15:44 2 amazed how many organizations don't. And we tell them 15:44 3 time and time and time again, you know, if Virginia 15:44 4 gets sick, what are you going to do? So, yeah. I 15:44 5 mean, I think it seems relatively obviously to all of 15:44 6 us, but there are some organizations that don't do it. 15:44 7 MR. PITCOCK: And just for the record, 15:44 8 and I want you to understand. We do do undercover 15:44 9 work. We get complaints, a lot of times, we go sit in 15:44 10 the audience and we're there watching. And I don't 15:44 11 want anybody to be fooled that we don't do that. I 15:44 12 mean, it's one of those that if we get a complaint 15:44 13 that we need to substantiate and we need information, 15:44 14 we're going to be out there playing bingo and we're 15:44 15 going to have people watching and seeing what you are 15:44 16 doing. And I don't think there should be any ifs ands 15:44 17 or buts about that. We've done that lots of times, 15:44 18 especially if the caller -- we get the allegation the 15:44 19 caller is cheating or palming balls, or whatever, 15:44 20 we're going to be sitting as close as we can to see if 15:44 21 we can see that happening. I mean, you walk up to the 15:44 22 guy and say, are you palming balls. What is he going 15:44 23 to say? No, I'm not palming balls. I mean, who would 15:44 24 say that. But we're going to be out there watching. 15:45 25 Any other questions? 15:45 0206 1 CHAIR BRACKETT: Thank you. 15:45 2 All right. Let's go back to item 15:45 3 number 14. Billy has gotten some information that 15:45 4 will help us out here. 15:45 5 MR. ATKINS: Mr. Dougherty is not 15:45 6 listed on the record of any bingo organizations. 15:45 7 Mr. Rowan is listed on four organizations, including 15:45 8 being listed as the operator and director of one 15:45 9 organization. So as such, his membership in those 15:45 10 organizations would preclude him from serving in the 15:45 11 general public category. 15:45 12 CHAIR BRACKETT: So do you want to wait 15:45 13 for further nominations or do you want to take action 15:45 14 on this -- the one nomination that we have, the one 15:45 15 eligible person that we have? What do you suggest? 15:46 16 MR. WHITTINGTON: I think we should 17 take action. If we're going to fill this seat, we 15:46 18 need to go ahead and fill it. If we're not, we're 15:46 19 not. 20 CHAIR BRACKETT: So what is your 15:46 21 motion? 15:46 22 MR. WHITTINGTON: I motion that we take 15:46 23 the one nominee. 15:46 24 MS. TAYLOR: Second. 15:46 25 CHAIR BRACKETT: His name is -- would 15:46 0207 1 you repeat his name. 15:46 2 MR. ATKINS: John P. Dougherty. 15:46 3 CHAIR BRACKETT: Dougherty? 4 MR. ATKINS: D-o-u-g-h-e-r-t-y. John P 15:46 5 as in Paul. 15:46 6 CHAIR BRACKETT: And it's been moved 15:46 7 and seconded that we suggest to the Texas Lottery 15:46 8 Commission that he be elected to the Bingo Advisory 15:46 9 Committee. All those in favor, please say aye. 15:46 10 MR. ATKINS: Before? 11 CHAIR BRACKET: Okay. A discussion. I 15:46 12 always forget discussion. 15:46 13 MR. ATKINS: The only thing that I had 15:46 14 pointed out to Virginia and I will be compelled to 15:46 15 point out -- 15:46 16 CHAIR BRACKETT: I'm sorry. I failed 15:46 17 to mention that. He is from Austin. That would make 15:46 18 two representatives from Austin. 15:47 19 MR. ATKINS: I don't know that that 15:47 20 will be an issue for the Commission. 15:47 21 MR. WHITTINGTON: Well, at least the 15:47 22 State don't have to pay for transportation. Good 15:47 23 thing. 15:47 24 CHAIR BRACKETT: Well, what I was 15:47 25 saying, in a legislative year it might be really good 15:47 0208 1 to have two people down here. But how close to the 15:47 2 capitol does he live? 15:47 3 MR. PAVLOVSKY: And given the fact that 15:47 4 he's the only nominee that we got, really, or the only 15:47 5 one that we can consider -- 15:47 6 CHAIR BRACKETT: And it's been several 15:47 7 months that people have had the opportunity to respond 15:47 8 to the call for help. 15:47 9 MR. PAVLOVSKY: There may be some more 15:47 10 out in. 15:47 11 MR. WHITTINGTON: Just like Mario. He 15:47 12 is from Garland. I'm from Dallas. That's one mile 15:47 13 away. 15:47 14 MR. PAVLOVSKY: That's too close. Call 15:47 15 for the question. 15:47 16 CHAIR BRACKETT: Okay. Call for the 15:47 17 question. All those in favor of the question, please 15:47 18 say aye. All those opposed. So all those in favor of 15:47 19 electing Mr. Dougherty to the Bingo Advisory Committee 15:47 20 as the public representative, please say aye. All 15:47 21 right. Then he is elected. 15:48 22 And Billy, you will send him a letter 15:48 23 informing him of his new duties? 15:48 24 MR. ATKINS: Once the Commission 15:48 25 confirms it, I will, yes. 15:48 0209 1 CHAIR BRACKETT: Well, be sure you do 15:48 2 it at the right time. Okay. You can do that Monday 15:48 3 morning. How about that? 15:48 4 MR. ATKINS: Assuming he is -- yes. 15:48 5 CHAIR BRACKETT: All right. Let's rush 15:48 6 on to item number 16, which is the continuation of 15:48 7 discussion on proposal and amendments, including 15:48 8 402.545. Is there any discussion on that, Billy, 15:48 9 or -- 15:48 10 MR. ATKINS: And I was just -- you have 15:48 11 in your notebook, members, this is the first reading. 15:48 12 Again, that means this is the first time that it's 15:48 13 come to you. It is eligible for discussion and 15:48 14 comment by anyone. They can bring that forward to the 15:49 15 staff. I was just going to go through, briefly, the 15:49 16 proposed amendments to the rule and the -- there is 15:49 17 actually, under item 16, two rules. There are 15:49 18 proposed amendments to existing rule 402.545. Behind 15:49 19 that is a proposed new rule relating to bonds. So you 15:49 20 need to go through the first -- I think it's ten 15:49 21 pages, 454, and then you get to the proposed bond 15:49 22 rule. 15:49 23 What we have proposed to do, members, 15:49 24 is split out proposed -- or rule 402.545 as it exists 15:49 25 now addresses two different sections within the 15:49 0210 1 division, licensing and accounting services. We are 15:49 2 attempting to do two things. Split that language out 15:50 3 into separate rules so that they're more appropriately 15:50 4 and more thoroughly covered under the appropriate 15:50 5 section. The majority of the language in 545 is 15:50 6 proposed for deletion because it is either contained 15:50 7 in the proposed new bond rule or the proposed new 15:50 8 general licensing rule, which is the following item. 15:50 9 One key element that I will point out 15:50 10 to you, and that we do hope to receive comment on one 15:50 11 way or another, in 402.545, is the deletion of 15:50 12 (a)(3)(D), which if you look on the very first page of 15:50 13 402.545, that is struck-through language that says, an 15:50 14 organization must conduct regular bingo to be eligible 15:51 15 to sell pull tabs, instant tickets or break open 15:51 16 tickets. 15:51 17 And what we would envision is that the 15:51 18 deletion of that language would authorize an 15:51 19 organization, particularly an organization without an 15:51 20 annual license, to obtain a temporary and sell pull 15:51 21 tabs during that occasion. The most common example 15:51 22 that's been put forward to us is, say, a church that 15:51 23 holds a fall festival. They may get temporaries and 15:51 24 instead of conducting regular bingo games, they would 15:51 25 just like to, during that festival, be able to sell 15:51 0211 1 pull tabs. 15:51 2 MR. TAWIL: Billy, let me ask you a 15:51 3 question. It doesn't affect me directly, but I'm just 15:51 4 curious from the standpoint of charities in general. 15:51 5 Assume all this gets adopted. Does that mean that 15:51 6 charities can get a bingo license and just sell pull 15:51 7 tabs only if they want to? 15:51 8 MR. ATKINS: They could. 15:51 9 MR. TAWIL: They could. So you could 15:51 10 really go license all new locations and start just 15:51 11 doing just tabs. So that's another way -- okay. 15:51 12 MR. ATKINS: Yeah. The only -- and, 15:51 13 again, you know, the biggest problem we saw with that 15:52 14 is they would still be limited to that occasion. 15:52 15 Yeah. So I mean, it's conceivable, I guess, that you 15:52 16 could have a pull tab hall open up. And if -- 15:52 17 MR. TAWIL: Or for that matter, like a 15:52 18 Starbucks, just a sitting area -- I'm serious, 15:52 19 Virginia. 15:52 20 CHAIR BRACKETT: I think it's great. 15:52 21 MR. ATKINS: And I think, if that's the 15:52 22 will of the industry, I don't know that we know -- we 15:52 23 don't know why not to allow it. 15:52 24 CHAIR BRACKETT: Their overhead would 25 really -- 15:52 0212 1 MR. WHITTINGTON: I went to Colorado 15:52 2 and that's what I wanted to see, because we decided to 15:52 3 do a pull tab booth in Dallas. And I went to Colorado 15:52 4 and that's all they have was walk-in pull tab booths. 15:52 5 That's it. About 20 different kind of pull tabs. 15:52 6 People was in there just buying away. Blew my mind. 15:52 7 One charity. That's what they had. In Colorado they 15:52 8 had nothing but pull tab booths. You walk in, they 15:52 9 had 20 different kind of pull tabs. They said -- and 15:52 10 it was for two different charities. That's all they 15:53 11 played. 15:53 12 MR. ATKINS: They also had -- Saleem 15:53 13 and I were just talking. It's common in Ohio. And 15:53 14 Ohio has pull tab sales that -- I don't know how 15:53 15 greater they are than those in Texas, but they're 15:53 16 phenomenal. 15:53 17 There is new language proposed in rule 15:53 18 545. The first that I'm picking up is on page eight. 15:53 19 It addresses questions that we most commonly get from 15:53 20 organizations with -- that apply for a temporary 15:53 21 license, and for whatever reason that occasion is 15:53 22 not -- is not held. So it puts forth language to 15:53 23 advise them, you know, what to do in the event they 15:53 24 apply for or get a temporary license and that occasion 15:53 25 isn't held. 15:54 0213 1 On the next page, we have language 15:54 2 dealing -- again, addressing questions that we most 15:54 3 often get from organizations on -- relating to 15:54 4 amendments to their license. 15:54 5 MR. WHITTINGTON: Did y'all work on the 15:54 6 amount of times a charity could have a temporary 15:54 7 license? I think that's -- what? How many per 15:54 8 charity? 15:54 9 MR. ATKINS: Six. 15:54 10 MS. TAYLOR: Isn't that in statute, 15:54 11 though? 15:54 12 MR. ATKINS: Yes. 15:54 13 MR. WHITTINGTON: It's in statute? I 15:54 14 know you had brought that up. 15:54 15 MR. ATKINS: And then, again, following 15:54 16 that is the proposed new bond rule. And, 15:54 17 substantially, this rule takes the language from 545 15:54 18 out of that rule and puts it in a separate bond rule. 15:54 19 MS. TAYLOR: May I ask you a question 15:55 20 about that, that I wasn't real sure about? If a 15:55 21 charity or -- does not currently have a bond because 15:55 22 you -- I don't know if you still do it, but it used to 15:55 23 be, after two years, that you release the bond. Does 15:55 24 this say -- does this mean you have to go get a bond, 15:55 25 or that will continue just like it is now? 15:55 0214 1 MR. ATKINS: That would continue. What 15:55 2 this rule does state is that -- and I'm hoping I'm 15:55 3 going to speak correctly. If there is an organization 15:55 4 that has a liability become final that causes us to 15:55 5 collect on the bond, then we will require that 15:55 6 organization, in order to retain their license, to 15:55 7 obtain a new bond, and that new bond will not be 15:55 8 released. 15:55 9 MS. TAYLOR: Okay. 15:55 10 MR. ATKINS: But that -- again, that's 15:55 11 only for organizations that have a liability that 15:55 12 becomes final. That means that they have a liability 15:55 13 and we have to collect on that bond. 15:55 14 MS. TAYLOR: So it stays just like it 15:56 15 is now? 15:56 16 MR. ATKINS: Yes, ma'am. But if I 15:56 17 could ask Terry Shankle, the accounting services 15:56 18 manager, to come up and at least say whether or not I 15:56 19 said that correctly. And if not, correct me. 15:56 20 MS. SHANKLE: My name, again, is Terry, 15:56 21 T-e-r-r-y, Shankle, S-h-a-n-k-l-e. 15:56 22 The -- in order for an existing 15:56 23 organization to have to post a bond, a jeopardy 15:56 24 determination will have to become final. And then at 15:56 25 that time, we will request one. And as Billy was 15:56 0215 1 saying, if the organization -- if we have to forfeit a 15:56 2 bond, then we will require one and it will not be 15:56 3 released until the organization is no longer 15:56 4 conducting bingo. 15:56 5 MS. TAYLOR: That's fair. 15:56 6 CHAIR BRACKETT: Does that conclude -- 15:57 7 MR. ATKINS: Yes, ma'am. 15:57 8 CHAIR BRACKETT: Item 17 is the first 15:57 9 reading of a new rule relating to general -- 15:57 10 UNIDENTIFIED SPEAKER: I can't quite 15:57 11 keep up with where we're at. On rule 402.545 -- 15:57 12 MR. ATKINS: Chuck, would you come up 15:57 13 and identify yourself for the record. 15:57 14 MR. HUTCHINGS: Yes. Good afternoon. 15:57 15 My name is Chuck Hutchings. I'm down here today 15:57 16 representing Am Vets Post 52, Dallas, Texas. 15:57 17 The line that Billy pointed out earlier 15:57 18 about an organization must conduct bingo, they are 15:57 19 striking that. Which as stated here means that 15:57 20 someone could actually just open a hall, with a 15:57 21 license, play eight hours a day, and play nothing but 15:57 22 pull tabs. You know, there is no -- without some kind 15:57 23 of, what? Limits on where this could be, this could 15:58 24 be any bar, this could be anyone that would take their 15:58 25 nonprofit organization into a small spot somewhere, 15:58 0216 1 find enough small charities, they could set up in some 15:58 2 bar somewhere, which I don't know of anything within 15:58 3 the law that says they couldn't do so, and run an 15:58 4 actual bingo operation or pull tab operation out of 15:58 5 that bar. Well, that's not going -- that's not going 15:58 6 to do well for the operations out here now that are 15:58 7 trying to make money for charities as -- on the -- on 15:58 8 the side of bingo. That's not going to help the bingo 15:58 9 in the least. 15:58 10 CHAIR BRACKETT: Let me ask a question. 15:58 11 To get the license, would it be the same license that 15:58 12 you have to -- you would have to meet the same 15:59 13 requirements as you do for a bingo license? 15:59 14 MR. ATKINS: Yes, ma'am. 15:59 15 CHAIR BRACKETT: Which does -- if I 15:59 16 remember right, it does eliminate some liquor sales. 15:59 17 Is that correct? Or it did back in the olden days or 15:59 18 am I just mixed up? 15:59 19 MR. TAWIL: Chuck is right. 15:59 20 MR. HUTCHINGS: This is a horrible 15:59 21 deal. 15:59 22 CHAIR BRACKETT: But you do have to 15:59 23 have a license from TABC to sell liquor? 15:59 24 MR. HUTCHINGS: That would be the bar. 15:59 25 MR. TAWIL: You just go make a deal 15:59 0217 1 with Chili's. Do it statewide. 15:59 2 MR. HUTCHINGS: This is -- for the 15:59 3 bingo operations in Texas, this is a horrible law. I 15:59 4 mean, this is a horrible thing to strike out. Without 15:59 5 that in there, then you are just a proliferation of 15:59 6 tabs. The only people this is going to do anything 15:59 7 for is manufacturers and distributors. It's not going 15:59 8 to do anything for you, you, you, you, not a thing. 15:59 9 Me. This is -- Billy, this is not a good deal. We 15:59 10 need to put something back in to regulate this in a 15:59 11 way as to where they cannot just open up some small 16:00 12 corner -- I can go down here with this, set up a -- 16:00 13 what is it? Eight-liner deal, basically, with pull 16:00 14 tabs. Just some little old building on the corner, I 16:00 15 can buy it over at Morgan Buildings, put it on the 16:00 16 corner, give it an address, find some charities, set 16:00 17 this up and run right next to your hall. Okay? 16:00 18 That's what this allows. 16:00 19 Now, if that's what you want, you can 16:00 20 go down that road. But, you know, that's not exactly 16:00 21 how I see the -- that's not very good business for the 16:00 22 bingo industry at all. No way, shape, form or 16:00 23 fashion. 16:00 24 MR. ATKINS: Let me ask you, Chuck. 16:00 25 What if it turned out that that would be more 16:00 0218 1 profitable for your organization than what you're 16:00 2 doing now? And you decided to do that. 16:00 3 MR. HUTCHINGS: Well, I could. 16:01 4 MR. ATKINS: And -- 16:01 5 MR. HUTCHINGS: But that would destroy 16:01 6 bingo as an industry. 16:01 7 MR. ATKINS: How would it destroy 16:01 8 bingo -- 16:01 9 MR. HUTCHINGS: Because every dollar 16:01 10 you pull out of here, just like when the lottery came 16:01 11 in, when they opened the casinos in Louisiana, when 16:01 12 they opened -- that's just like this thing that we had 16:01 13 in here today about the bingo -- whatever. From 16:01 14 Canada. If you noticed at the end of that, when they 16:01 15 got all the percentages down, they were cutting about 16:01 16 15 percent for themselves. That's another slice of 16:01 17 the pie leaving this state. You keep slicing up the 16:01 18 pie, you keep slicing up the pie, the slices get 16:01 19 smaller and smaller and smaller. And we're facing it 16:01 20 today. And a lot of that comes from the -- from the 16:01 21 electronics. We try to track whether we lose paper 16:01 22 players or electronic players. And it appears that we 16:01 23 lose paper players, and that is the ones that we're 16:01 24 losing now is the reason bingo is going down the 16:01 25 tubes. I mean that's -- you know, there is a lot of 16:01 0219 1 things go into it. You can't keep slicing it up, 16:02 2 folks. You've got -- you've got to draw the line in 16:02 3 the sand. You're going to have to try to keep your 16:02 4 bingo halls. And you know, I'm here representing 16:02 5 Am Vets Post 52, which don't want their tab money 16:02 6 going down the street somewhere. But also, I'm a 16:02 7 commercial lessor, and I certainly don't want my 16:02 8 charities defunct. You know, it's -- it's -- the 16:02 9 industry is in a real strain. It's in a real strain. 16:02 10 We're having problems on every front that I know of, 16:02 11 in every city. We can't keep letting the slice of the 16:02 12 pie go away. We can't keep bringing in things that's 16:02 13 going to do that. And by striking this out of the 16:02 14 rule, the only people I know who are going to benefit 16:02 15 from this that's in the bingo industry at this time 16:02 16 are the manufacturers and distributors. And that will 16:02 17 be simply on the number of tabs that are sold within 16:02 18 the state. 16:03 19 This was tried to run through a little 16:03 20 differently through three or four years ago, when they 16:03 21 wanted to do like they basically do in South Dakota 16:03 22 and places like that, where they let the bars and 16:03 23 stuff sell pull tabs. This rule was discussed, to let 16:03 24 this happen. Here they merely -- I don't know whether 16:03 25 this came from staff or where this came from or who 16:03 0220 1 suggested it, but here it's the same thing. It just 16:03 2 does it through the back door. 16:03 3 MR. ATKINS: Well, can I ask you how 16:03 4 you would explain the fact that bingo exists in those 16:03 5 other states that you mentioned where the pull tabs 16:03 6 are allowed to be sold? 16:03 7 MR. HUTCHINGS: In South Dakota, bingo 16:03 8 doesn't do too well, and that's what the people from 16:03 9 South Dakota tell me, from our district and our 16:03 10 veterans organization. It's very sparsely populated 16:03 11 up there. There is not a bingo hall. The towns up 16:03 12 there, most of them are not big enough to have, you 16:03 13 know, a real bingo hall. What we would call a bingo 16:03 14 hall here in Texas. They play over at the church. A 16:03 15 lot of Colorado is that way. I played bingo in little 16:03 16 40-people churches up in Colorado. You know, it's a 16:04 17 variety of reasons why things are different. It's 16:04 18 just a different -- it's a different atmosphere. I 16:04 19 heard something about Minnesota today, Canada. God, 16:04 20 have you ever been there in the winter? You know, 16:04 21 there is nothing else to do. They have basically a 16:04 22 captured audience. I mean, it's an entirely different 16:04 23 situation. We have our problems. We need to deal 16:04 24 with them. And, you know, these -- the striking in 16:04 25 this here (D) -- yeah, (D), in this 545, is not going 16:04 0221 1 to assist us in any way at all. 16:04 2 MR. ATKINS: Okay. Let me ask you, 16:04 3 what about the scenario I laid out, organizations 16:04 4 without an annual license? What about, say, the 16:04 5 church that's having their fall festival and they just 16:05 6 want to sell pull tabs, they don't want to play bingo. 16:05 7 What about, would limiting that to temporary licenses 16:05 8 only, would that -- what would that effect be? 16:05 9 MR. HUTCHINGS: Well, who are you going 16:05 10 to give the temporary license to, the way I -- you're 16:05 11 saying that anyone can -- when you say a temporary 16:05 12 license, how many would you limit them to a year? 16:05 13 Would it be six like everyone else? Could every 16:05 14 nonprofit get six? 16:05 15 MR. ATKINS: That's all there is, 16:05 16 Chuck. I mean, it's in statute. You can't say -- 16:05 17 MR. HUTCHINGS: That's what I say. You 18 know, if you're going to give them an opportunity to 19 have six a year, well, then I'm not that much for it. 16:05 20 I mean, we fought for that to help the -- the 16:05 21 charities that already hold a bingo license in the 16:05 22 state. 16:05 23 MR. ATKINS: You're losing me. You 16:05 24 understand -- you understand -- let me finish 16:05 25 something. 16:05 0222 1 MR. HUTCHINGS: Okay. 16:05 2 MR. ATKINS: You understand that an 16:05 3 organization can get a temporary license now to 16:05 4 conduct a one-time bingo occasion. 16:06 5 MR. HUTCHINGS: Yes. 16:06 6 MR. ATKINS: Okay. So you would have 16:06 7 the same objection to that organization getting a 16:06 8 one-time license to just sell pull tabs. 16:06 9 MR. HUTCHINGS: You're talking about a 16:06 10 one time. 16:06 11 MR. ATKINS: That's what -- 16:06 12 MR. HUTCHINGS: That's what I'm talking 13 about, you said it could be the same as bingo, you can 16:06 14 get six. 16:06 15 MR. ATKINS: Well, any organization, 16:06 16 whether they hold an annual license or not, can get up 16:06 17 to six. 16:06 18 MR. HUTCHINGS: Okay. But how much 16:06 19 that goes on? And I might not be in favor of it. I 16:06 20 don't know. 16:06 21 MR. ATKINS: Of what goes on? 16:06 22 MR. HUTCHINGS: How many licenses do 16:06 23 you think the division gets for temporary licenses 16:06 24 from organizations that do not hold an annual bingo 16:06 25 license in the State of Texas? 16:06 0223 1 MR. ATKINS: Oh, gosh. 16:06 2 MR. SANDERSON: About three -- 16:06 3 MR. ATKINS: You need to go come up and 16:06 4 go on the record. 16:06 5 MR. SANDERSON: Phil Sanderson, 16:06 6 assistant director of charitable bingo. 16:06 7 There are currently about -- I think 16:07 8 about 600 organizations that do not conduct bingo 16:07 9 annually that get temporaries. And some of those get 16:07 10 anywhere from one to six licenses a year. 16:07 11 MR. HUTCHINGS: Well, to that I have to 16:07 12 say, I didn't know there was that many doing it. If 16:07 13 they're already doing it, well, then, you know, I 16:07 14 don't have a lot of problem with it. It hasn't seemed 16:07 15 to abate us that much. But once again, we're going 16:07 16 down the road of, you know, splitting that pie. And I 16:07 17 really don't have a problem with an organization 16:07 18 making money. And if that's what is going on, then I 16:07 19 back off and say, let it go. But at the same time, 16:07 20 you know, I still think we need this back in the rule 16:07 21 to prevent the organizations from just getting a bingo 16:07 22 license if they need it, or whatever, and conducting 16:08 23 just pull tabs in some small location somewhere. 16:08 24 MS. TAYLOR: Could I ask one question. 16:08 25 Let's say an organization wants to play in the bar, 16:08 0224 1 which is what you're talking about. If they play one 16:08 2 game of bingo, then have they met the requirement of 16:08 3 playing regular bingo? So right now, they could go in 16:08 4 there and play one game of regular bingo, four numbers 16:08 5 with hard cards and little -- those little things that 16:08 6 go on them, the beads or whatever, and then they could 16:08 7 sell pull tabs. Right? So, I mean, they could 16:08 8 already get around this. 16:08 9 MR. ATKINS: Yeah. I hadn't thought 16:08 10 about that but, yeah, you could if you wanted to. 16:08 11 MS. TAYLOR: So I really think, if 16:08 12 somebody wanted to do it that way, they could -- 16:08 13 MR. HUTCHINGS: You're right. You 16:08 14 could do that. But there is not that many people who 16:08 15 think about that. I mean, it's been discussed before. 16:09 16 I've been where it was discussed as to what 16:09 17 constituted a bingo hall. I think -- and what -- are 16:09 18 there certain requirements for a bingo hall? 16:09 19 MR. ATKINS: No, not really. 16:09 20 MR. HUTCHINGS: When you guys come out 16:09 21 to make your inspections, you know, and I really don't 16:09 22 know exactly where all that leads to, because, you 16:09 23 know, the people who I deal with, you know, the halls 16:09 24 are fairly good size. Is there -- do they have a 16:09 25 license for 40 seats, 60 seats? Is there -- no 16:09 0225 1 qualification for that? 16:09 2 MR. ATKINS: No, sir. 16:09 3 MR. HUTCHINGS: Well, okay. 16:09 4 CHAIR BRACKETT: One thing that 16:09 5 controls that, though, I think, is local laws, the 16:09 6 fire laws, the fire codes. Maybe not necessarily on 16:09 7 the numbers, but the numbers are -- if you don't have 16:09 8 enough seats, you're not going to make any money. 16:09 9 That's going to control it. But as far as other 16:09 10 features, isn't it up to local laws? 16:09 11 MR. ATKINS: Yes. 16:09 12 CHAIR BRACKETT: Zoning and fire codes 16:10 13 and such. 16:10 14 MR. ATKINS: I mean, the one 16:10 15 restriction that comes to my mind, Chuck, is the -- 16:10 16 you can only have a certain number of halls under, you 16:10 17 know, a single roof or a single foundation. You 16:10 18 remember that in the act? 16:10 19 MR. HUTCHINGS: Yes. 20 MR. ATKINS: So that's one of the 16:10 21 things they look for. 16:10 22 MR. HUTCHINGS: Well, yes. Well, like 16:10 23 I say, it just -- you know, I think that is just 16:10 24 leaving it open for anyone to do whatever they wish 16:10 25 with pull tabs. And I'm -- even with all the 16:10 0226 1 discussion, and I could be way off base. I've been 16:10 2 there before. You know, it just doesn't look -- 16:10 3 MR. ATKINS: Nobody ever gets off base 16:10 4 with bingo. 16:10 5 MR. HUTCHINGS: Now, Billy, don't be 16:10 6 telling me that. I heard you say this morning, I 16:10 7 cannot comment on that because I have not seen it 16:10 8 until this morning and I've not had time to look at 16:10 9 it. A couple of the rules out here today was sprung 16:10 10 on us today. We have not had time to look at it, but 16:10 11 yet we're expected to comment on it. 16:11 12 MR. ATKINS: And I appreciate you 16:11 13 commenting, and let me say again for the umpteenth 16:11 14 time. This is the very beginning. I hope you comment 16:11 15 a whole lot more. Take that home, read it, reread it, 16:11 16 read it again, and give me a call. 16:11 17 MR. HUTCHINGS: I will. 16:11 18 MR. ATKINS: All right. 16:11 19 MR. HUTCHINGS: Were we into this 16:11 20 general provisions thing? Did y'all get into that? 16:11 21 MR. TAWIL: That's next. 16:11 22 MR. ATKINS: I think we were trying to. 16:11 23 Yeah. 16:11 24 MR. HUTCHINGS: Thank you. 16:11 25 MR. WHITTINGTON: So basically, what he 16:11 0227 1 said, that temporary licenses should only be mentioned 16:11 2 in this case, 445? Is that basically what he is -- 16:11 3 MR. ATKINS: I think that was kind of 16:11 4 the compromise we were working towards, maybe just 16:11 5 making that eligible to a temporary? 16:11 6 MR. HUTCHINGS: That's good. 16:11 7 MR. WHITTINGTON: Because as far as I'm 16:11 8 concerned, when somebody gets a temporary license, 16:11 9 which I think they might have to work pretty hard to 16:11 10 get people to play, if they want to play anything 16:12 11 these days. Not only bingo, just pull tabs alone, 16:12 12 they have to really do some work. And I don't think 16:12 13 that many people have that much time to put in to 16:12 14 organize people to play pull tabs for a temporary. So 16:12 15 temporaries should be good, is basically what I'm 16:12 16 saying. 16:12 17 CHAIR BRACKETT: All right. Are we 16:12 18 ready to move on to item number 17, the first reading 16:12 19 of the new rule relating to general licensing? Or is 16:12 20 that what we were doing? That's not what we were 16:12 21 doing. 16:12 22 MR. ATKINS: No. That's what we 16:12 23 discussed, the amendments to 454 and the bond rules, 16:12 24 and I think the general licensing rule was next. 16:12 25 CHAIR BRACKETT: It's the general 16:12 0228 1 licensing rule. 16:12 2 MR. ATKINS: Yes, it's the general 16:12 3 licensing provisions. And members, this requires a 16:12 4 lot -- this includes a lot of the information that 16:12 5 previously was contained in 545. We have moved it 16:12 6 into a general licensing provision rule. 16:12 7 Additionally, it does contain in here some time lines 16:12 8 that I do want to point out to you. It states that 16:13 9 the Commission will, within 14 days of receiving an 16:13 10 application, take action on that application. Either 16:13 11 issue the license, request additional information, or 16:13 12 deny the license. It also puts time requirements on 16:13 13 the organization. That if we put to them a request 16:13 14 for additional information, that they will supply that 16:13 15 information within 15 days. If we don't receive the 16:13 16 requested information from the organization within 45 16:13 17 days, that would be grounds for denial. Because we do 16:13 18 have a number of organizations that submit an 16:13 19 application, the information is incomplete, we go back 16:13 20 with requests for additional information, and we'll 16:13 21 send one letter, two letters, three letters. We never 16:13 22 hear from the organization. So we're putting folks on 16:13 23 notice that failure to respond to us will be grounds 16:13 24 for denial. 16:13 25 MR. TAWIL: I'm sorry. In the very 16:14 0229 1 first paragraph, what do you mean by, any person that 16:14 2 intends to conduct bingo -- I get kind of confused 16:14 3 when you say, related activities. I mean, like what 16:14 4 does that encompass? 16:14 5 MR. ATKINS: That encompasses anyone 16:14 6 that intends to either conduct bingo, lease bingo 16:14 7 premises, manufacture bingo products, distribute 16:14 8 bingo -- 16:14 9 MR. TAWIL: All licenses. 16:14 10 MR. ATKINS: These provisions would 16:14 11 apply to all licenses, yes, sir. 16:14 12 MR. TAWIL: This is -- you mean this to 16:14 13 mean that somebody is conducting a game. 16:14 14 MR. ATKINS: Okay. I see what you're 16:14 15 saying. Yeah. 16:14 16 MS. TAYLOR: I wanted to tell you about 16:14 17 the time line deal. When I read this, it's awesome. 16:14 18 It's truly awesome that now an organization knows. 16:14 19 It's not going to be -- now when people say, how long 16:14 20 will it take to get a license? You're like, oh, 16:14 21 probably about three months. If you get 16:14 22 information -- if everything goes smoothly. And this 16:14 23 is really great that there is a time line that both 16:14 24 parties have to respond to. 16:14 25 MR. TAWIL: (Inaudible) any person that 16:15 0230 1 applies for a license? 16:15 2 MR. ATKINS: I think you're right. I 16:15 3 think that might read better. 16:15 4 CHAIR BRACKETT: Are you wanting to 16:15 5 speak? 16:15 6 MS. IVES: I just thought I would sneak 16:15 7 up here while y'all were finishing up. 16:15 8 CHAIR BRACKET: Did you submit a 16:15 9 Witness Affirmation Form? 16:15 10 MS. IVES: Yes, ma'am, I did. 16:15 11 CHAIR BRACKETT: Go ahead. 12 MS. IVES: My name is Sharon Ives, and 16:15 13 that's I-v-e-s, with Fort Worth Bookkeeping, in Fort 16:15 14 Worth. And I was wanting to comment on this general 16:15 15 licensing provision. Page three of four. Letter 16:15 16 zero, 0, regarding the fingerprint. When I first read 16:16 17 this, I was shocked. 16:16 18 Billy, is this already in a rule or a 16:16 19 law somewhere else? I heard you say just a minute ago 16:16 20 that certain things, the contexts were taken out and 16:16 21 put into this rule. 16:16 22 MR. ATKINS: The -- the first part is. 16:16 23 The being listed on the application and subject to a 16:16 24 background check is. The requirement for submission 16:16 25 of fingerprint cards is limited to out of state 16:16 0231 1 individuals, which is an essentially manufacturers and 16:16 2 distributors. Or actually -- 16:16 3 MS. IVES: That's how it reads now? Is 16:16 4 that what you're telling me? 16:16 5 MR. ATKINS: Yes. 16:16 6 MS. IVES: So that part was taken off 16:16 7 for this draft. 16:16 8 MR. ATKINS: No. This is, I don't 16:16 9 believe, in rule now. 16:16 10 MS. IVES: What I'm reading here is 16:17 11 each person required to be named in an application for 16:17 12 a license under the Bingo Enabling Act, right now the 16:17 13 only people that get fingerprinted are the 16:17 14 distributors and manufacturers. 16:17 15 MR. ATKINS: Well, and Saleem said he 16:17 16 was fingerprinted. BAC members. 16:17 17 MS. IVES: Right. That's correct. 16:17 18 MR. PAVLOVSKY: That has nothing to do 16:17 19 with this, Saleem. 16:17 20 MR. ATKINS: Well, I think what Sharon 16:17 21 is saying is that -- 16:17 22 MS. IVES: So now it's going to be 16:17 23 lessors, conductors. What I'm afraid of -- I know -- 16:17 24 I'm getting there. What I'm afraid of is, I just -- 16:17 25 off the top of my head, trying to get an average, if 16:17 0232 1 there is such a thing, on how many people are actually 16:17 2 listed on a conductor's application. Suzanne, I don't 16:17 3 know about you, but there is like a minimum 20 16:17 4 employees -- 16:17 5 MS. TAYLOR: 25 on each -- 16:17 6 MS. IVES: Exactly. Then you have -- 16:17 7 MR. ATKINS: Sharon. We have some that 16:17 8 have hundreds. 16:17 9 MS. IVES: I heard that. I heard that 16:18 10 earlier. Well, I don't know how many of y'all have 16:18 11 been by the police department lately. I was just 16:18 12 there. I can't imagine all these organizations, all 16:18 13 these people listed waiting in line at the police 16:18 14 department to get fingerprinted. How much is it going 16:18 15 to be and who is going to pay for it? That is -- 16:18 16 MR. TAWIL: It's 20 dollars and you go 16:18 17 to DPS to get it. 16:18 18 MS. IVES: But 20 dollars times how 16:18 19 many people, times how many applications? That's what 16:18 20 I want to comment on. I know right now you have to 16:18 21 submit your information to be submitted to the DMV. 16:18 22 MR. ATKINS: Instead of just -- do you 16:18 23 have some proposed language? 16:18 24 MS. IVES: I say take it out. Just -- 16:18 25 MR. ATKINS: That's not going to happen 16:18 0233 1 because there are going to be licensees that get 16:18 2 fingerprinted, I think. 16:18 3 MS. IVES: Through -- 16:18 4 MR. ATKINS: Our intent is not to 16:18 5 include conductors, lessors and such. 16:18 6 MS. IVES: If you just put the language 16:19 7 that it is now in lieu of this paragraph. See, before 16:19 8 it says, it's subject to a criminal -- that's DMV. 16:19 9 Correct? At state and/or national level. I never 16:19 10 remember national level being on anything. And then, 16:19 11 which may include the requirement for submission of 16:19 12 fingerprint cards. 16:19 13 MR. PAVLOVSKY: Ma'am, as far as the 16:19 14 national level, the only way you can find out anything 16:19 15 about anyone out of the state of Texas is go national 16:19 16 level. Everything you do on a -- on the state 16:19 17 fingerprint card is going to -- do a background check 16:19 18 on them for that person in the state of Texas. If you 16:19 19 want to know whether he committed a crime in Oklahoma 16:19 20 or Louisiana, you've got to go to the federal level. 16:19 21 I agree with Billy, though. Put it in writing and 16:19 22 send it to him. 16:19 23 MR. ATKINS: Great. 16:19 24 MR. PAVLOVSKY: This is only the first 16:19 25 hearing. This is what it's for. Put it in writing 16:19 0234 1 and send it to him. 16:20 2 MS. IVES: Okay. Well, thank you. 16:20 3 CHAIR BRACKETT: And the border states, 16:20 4 too, have problems as being real close to New Mexico. 16:20 5 And sometimes you get nothing from Texas, but there is 16:20 6 a whole lot of stuff going in New Mexico with that 16:20 7 person. 16:20 8 MS. IVES: Well, I was just concerned, 16:20 9 with 1800 or 1500 licensed organizations times how 16:20 10 many people. That's a whole lot of fingerprinting 16:20 11 going on. Thank you. 16:20 12 CHAIR BRACKETT: Are there other 16:20 13 comments on this? All right. Then, we are ready to 16:20 14 move on, then, to -- is there any further public 16:20 15 comment on anything that we have heard here today? 16:20 16 MR. MANIO: Just one question, 16:20 17 Virginia. Pertaining to the new issues submitted in 16:20 18 the Sunset, there are 45 items in here. And the 16:20 19 Commission only adopted item number 26. Now, some of 16:20 20 these items have merits. Some can be scratched off 16:21 21 immediately. Some will need changes in the law. Some 16:21 22 will need changes in the rules. What do we as a 16:21 23 committee have to do to move some of these things 16:21 24 forward? 16:21 25 CHAIR BRACKETT: Well, we as a 16:21 0235 1 committee have to act as individuals and talk to 16:21 2 elected officials and get the changes made that we 16:21 3 feel like need to be made and get the things passed 16:21 4 that we feel like need to be passed. 16:21 5 MR. MANIO: So this is out of our hands 16:21 6 now? It's in the hands of -- 16:21 7 CHAIR BRACKETT: No. It's in your hand 16:21 8 as an individual, and -- 9 MR. MANIO: Yes. 10 CHAIR BRACKET: Yeah. And you get 16:21 11 everybody you know to be writing letters and doing 16:21 12 what they need to do. 16:21 13 Now, am I correct on this? 16:21 14 MR. ATKINS: Well, I think you're 16:21 15 correct to agree. I think it's still within the 16:21 16 committee's prerogative, if they want to discuss and 16:21 17 develop further any one of those items, they can do 16:21 18 that and then take that specific recommendation 16:22 19 forward to the Commission. 16:22 20 CHAIR BRACKETT: All right. So we can 16:22 21 take action -- can advise the Commission? 16:22 22 MR. ATKINS: Sure. Yeah. 16:22 23 CHAIR BRACKETT: So when do you want to 16:22 24 do this, Mario? Which -- which Commission meeting? 16:22 25 This might -- we can discuss about when we want to 16:22 0236 1 meet. If we want to meet in December and work on 16:22 2 something to -- 16:22 3 MR. MANIO: Yeah. I just need a little 16:22 4 bit more time to go over some of this, and sometime in 16:22 5 the next two weeks I will forward a list to you of 16:22 6 some of the items that I think might be worthwhile for 16:22 7 us to pursue. 16:22 8 MR. ATKINS: Just remember, you brought 16:22 9 it up. You're responsible for it. I have your phone 16:22 10 number. 16:22 11 CHAIR BRACKETT: And he will be good 16:22 12 with it. Thank you, Mario, for volunteering for that 16:22 13 duty. 16:22 14 MS. TAYLOR: You might talk to David 16:22 15 Heinlein because he has done a lot of research and 16:23 16 work on these particular items. He might be a good 16:23 17 resource for you. 16:23 18 MR. MANIO: You've got his number? 16:23 19 Thank you. 16:23 20 MS. TAYLOR: Saleem just made a 16:23 21 suggestion that sounds like a pretty awesome 16:23 22 suggestion, so I'll verbalize it. He was saying that 16:23 23 the items that the committee decides are those that 16:23 24 they would like to see move forward, that maybe 16:23 25 subcommittees could be put together for those 16:23 0237 1 particular items to try and push them forward, to get 16:23 2 a little bit more information on them so that Mario 16:23 3 doesn't have to do it. 16:23 4 CHAIR BRACKETT: Right. And that was 16:23 5 really what I was thinking. If you can come next 16:23 6 meeting with a plan, then we could accept assignments 16:23 7 that we will be -- you know, the number one pusher and 16:23 8 organizer of getting the word to the -- any elected 16:23 9 official that we know. I mean, anyone in the 16:23 10 legislature. 16:23 11 MS. TAYLOR: One suggestion that -- 16:23 12 talking about how to go forward with the items, Mario. 16:23 13 I was at a hall recently where they had Senator 16:23 14 Armbrister. We invited him there, we had a meeting, 16:24 15 they told him things that they felt could help -- they 16:24 16 introduced to the bingo players during the bingo 16:24 17 session so that everybody could see who he was and 16:24 18 meet him. And it was a really good meeting. It 16:24 19 was -- it made a lot of sense because he met the bingo 16:24 20 customers, the bingo customers met him, and it was 16:24 21 much more personable than sending a letter or e-mails 16:24 22 to their office. And it's something that we're 16:24 23 working on in Nueces County right now, also. 16:24 24 CHAIR BRACKETT: It also helps to see 16:24 25 what you're doing with that bingo dollar and why it's 16:24 0238 1 important. 16:24 2 MR. TAWIL: Actually, I've found that 16:24 3 giving them money helps a lot. Contributing to their 16:24 4 campaigns. That's legal. 16:24 5 CHAIR BRACKETT: We'll have a garage 16:24 6 sale and give them all some money. 16:24 7 Are there any other items that need to 16:24 8 come up before we get down to the consideration of the 16:25 9 next meeting? 16:25 10 COMMISSIONER COX: Virginia? 16:25 11 CHAIR BRACKETT: Yes. 16:25 12 COMMISSIONER COX: I'm sorry that I had 16:25 13 to be out for much of the meeting. We've got a couple 16:25 14 of things that I had to work with, but I wondered if 16:25 15 there were any things that came up during the 16:25 16 meeting -- 17 MR. ATKINS: Mr. Cox, could you 16:25 18 identify yourself for the record. 16:25 19 COMMISSIONER COX: I'm Jim Cox, Lottery 16:25 20 Commissioner. Excuse me, Billy. 16:25 21 Are there any things that I can help 16:25 22 y'all with or y'all wanted to talk to me about while 16:25 23 you were here? 16:25 24 MS. TAYLOR: Well, as a matter of fact, 16:25 25 can we talk to you about the rule that you're going to 16:25 0239 1 be considering tomorrow or is this a bad time? 16:25 2 COMMISSIONER COX: Well, sure. I would 16:25 3 love to have any input that you have on it, Suzanne. 16:25 4 MS. TAYLOR: I just had one question 16:25 5 that I really never got to ask earlier. If this is 16:25 6 the time when they adopt the rule tomorrow during the 16:25 7 reading, is this the meeting at which the rule would 16:25 8 be adopted? And if so, can they receive public 16:25 9 comment? I thought they couldn't if they're going to 16:26 10 adopt the rule. 16:26 11 MS. MORRIS: No, sir. 16:26 12 COMMISSIONER COX: Okay. Thank you, 16:26 13 Diane. 16:26 14 MS. MORRIS: No, sir. However, I'm 16:26 15 going to have to ask Billy to help me be clear on what 16:26 16 is on the agenda for tomorrow for the bingo rules. I 16:26 17 stepped out of the room to make sure I understood what 16:26 18 was the question when the -- Mr. Fenoglio wanted a 16:26 19 copy of whatever was in the notebook, and I confirmed 16:26 20 that it is our practice that we do not hand out drafts 16:26 21 of the rule adoption prior to rule adoption because it 16:26 22 is not for public distribution until and unless 16:26 23 they've looked at it. But I have to defer back to 16:26 24 Billy and say that I want to clear what we're talking 16:26 25 about. And did I -- 16:26 0240 1 MR. ATKINS: The rule that is on the 16:26 2 Commission agenda tomorrow for adoption is 402.558, 16:26 3 relating to bingo cards. The rule that was being 16:26 4 discussed when you came in was 402.544, which has been 16:27 5 adopted by the Commission. 16:27 6 MS. MORRIS: And I would say to 16:27 7 Commissioner Cox right now that this is not the 16:27 8 appropriate place for him to take public comment on a 16:27 9 rule that is going to be on the agenda tomorrow. 16:27 10 MS. TAYLOR: So if it is a rule for 16:27 11 adoption, does that mean they do or don't take public 16:27 12 comment? 16:27 13 MS. MORRIS: I believe the Commission's 16:27 14 practice, and Billy can also correct me on this, is 16:27 15 that on the day that it is due to be adopted, I'm not 16:27 16 thinking that they usually take public comment. 16:27 17 MS. TAYLOR: That's what I thought. 16:27 18 That's what I remember from the past, but today you 16:27 19 guys had me confused. 16:27 20 MS. MORRIS: Let's be real open with 16:27 21 everybody. Your time -- it was published, everybody 16:27 22 in the world had time to do it, and it's, 16:27 23 unfortunately, a process that has to respect how fast 16:27 24 the normal ones of us can type on written word. We 16:27 25 have to incorporate comments and the Commissioners 16:28 0241 1 have to have in front of them a document. And we 16:28 2 cannot continue to take comment one minute before 16:28 3 they're ready to vote. So the practice has been, 16:28 4 unfortunately, like it or not, the practice has been 16:28 5 on the day a rule is about to be adopted, you are 16:28 6 literally too late, which then at that moment calling 16:28 7 for public comment and have any hope of it being 16:28 8 meaningful, because it's too late to work into what is 16:28 9 called the preamble of the rule and for them to really 16:28 10 have the opportunity to think on it and to give it the 16:28 11 justice that you would want them to give it. 16:28 12 MS. TAYLOR: But now -- and I'm not 16:28 13 arguing with the whole procedure. Because today 16:28 14 when -- 16:28 15 MS. MORRIS: We need to have that -- 16:28 16 MS. TAYLOR: -- public comment, I was 16:28 17 confused on how you could do that, because I knew that 16:28 18 you had never done that before, so -- 16:28 19 MS. MORRIS: No. And that's my fault. 16:28 20 MS. TAYLOR: But in fairness to the 16:28 21 people that -- and I was one of the people that have 16:29 22 commented at the meeting about the rule. Not knowing 16:29 23 what is in y'all's minds makes it difficult because 16:29 24 support or not support the rule, tomorrow is too late. 16:29 25 So because we don't know what changes have been made 16:29 0242 1 to the draft, which I would like -- I mean, I know 16:29 2 that it's not past practice to let us know what the 16:29 3 proposed changes to the original rule are, it would be 16:29 4 nice if we knew what was in everybody's minds so we 16:29 5 would have that opportunity to say -- 16:29 6 MS. MORRIS: And here I just -- I can't 16:29 7 wait to tell you what the answer is, in a sense. And 16:29 8 it's not a good answer, but it is the answer. What 16:29 9 you are saying, probably everybody says who -- if and 16:29 10 when they have ever bothered to engage in the process. 16:29 11 Now, you're in it every day, but in the public process 16:29 12 of filing comments to a rule and following an agency, 16:29 13 whatever agency it is, there is that maddening moment 16:29 14 where you feel like you're in the dark. You have 16:29 15 offered comments, and you have no idea whether that 16:29 16 agency is going to take your comments, reject them, 16:29 17 agree with them. You know what is in the Texas 16:30 18 Register as proposed. You have no idea what the other 16:30 19 comments are, and you have no idea if they might think 16:30 20 your comments were perfect, and what they're going to 16:30 21 do is going to mirror every one of your comments. You 16:30 22 don't know that. And nor do any of the other 16:30 23 commenters. And it is a frustrating process. But the 16:30 24 rulemaking process does not have a forum, unless they 16:30 25 want to -- they can re-publish a rule, they can have 16:30 0243 1 it on the agenda, they could talk about, no, we want 16:30 2 to add all these different changes, and we're going to 16:30 3 still wait until next month to adopt it. But what 16:30 4 you're saying, you are not alone. That is how it 16:30 5 works, though. That is how it works. 16:30 6 MR. ATKINS: And let me try and follow 16:30 7 up on that. You know, Diane referenced, Suzanne, that 16:30 8 you're familiar with the rulemaking process. And that 16:30 9 may be fine, but I think there are probably -- well, 16:31 10 obviously, there are some elements that, you know, 16:31 11 you're not an attorney. You may not know -- 16:31 12 MS. TAYLOR: Absolutely. 16:31 13 MR. ATKINS: -- by rote. And I know 16:31 14 that it's very confusing for a lot of the members of 16:31 15 the public and frustrating for them. If there is any 16:31 16 consolation to that, it's the fact that it's also 16:31 17 sometimes confusing and frustrating to us, also. And 16:31 18 I recognize all that. And to that end, I have been 16:31 19 having discussions with the agency's general counsel, 16:31 20 Kimberly Kiplin, on the process that agency uses to 16:31 21 propose rules, to solicit commence, to adopt rules, et 16:31 22 cetera, and hope to at some point in time be able 16:31 23 to -- and I'm going to speak now in very -- for the 16:31 24 benefit of Commissioner Cox, I'm going to speak in 16:31 25 very broad terms, hope to be able to and at some point 16:32 0244 1 in time take to the Commission, recommendations that 16:32 2 will put everything out in the open for everybody to 16:32 3 know. 16:32 4 Now, let me tell you the downside of 16:32 5 that. The downside of that, people still have to know 16:32 6 that that exists, they still have to look at it, and 16:32 7 they have still have to abide by it. 16:32 8 MS. TAYLOR: And being that I should 16:32 9 have known, I missed the meeting on November 10th -- 16:32 10 or October 10th, because I -- the date came away and I 16:32 11 wasn't aware of the meeting. And I mean, I feel awful 16:32 12 that I didn't come to the rulemaking meeting because 16:32 13 it meant a lot. I mean, this is an important rule for 16:32 14 us. I mean, it's darn near as important as the tab 16:32 15 rule. And it went by unnoticed. And if I -- I could 16:32 16 whip myself up that I didn't keep that on my calendar. 16:32 17 MR. ATKINS: I was going to say, don't 16:32 18 feel bad because apparently only one person remembered 16:32 19 it, and they didn't even make comment, so -- 16:33 20 MS. TAYLOR: I think that's terrible 16:33 21 that we had come and go and we missed that boat, or I 16:33 22 missed it -- 16:33 23 MS. MORRIS: I'll follow up in respect 16:33 24 to Commissioner Cox and cutting him off. But you -- 16:33 25 you heard earlier when Tom Clowe was saying, with 16:33 0245 1 three of them, they can't even talk to each other. 16:33 2 And in fairness to even him, he could be reading 16:33 3 something, he doesn't even know what is happening 16:33 4 tomorrow until he gets to sit and the three of them 16:33 5 talk amongst each other, and then they finally figure 16:33 6 out what the rule is going to say. It is a maddening 16:33 7 process. Certainly, the backing it up and the first 16:33 8 reading and the second reading and the work that y'all 16:33 9 are trying to get to the front end, that's where it 16:33 10 needs to happen. That's where it has to happen. 16:33 11 Because it can't be meaningful at the last minute. 16:33 12 MS. TAYLOR: But when we don't know 13 what's happening, and I would love that idea of a 16:34 14 more -- a chance to see the evolving rules. 16:34 15 MS. MORRIS: Well, I don't want to be 16:34 16 ugly, but it was published, wasn't it, in the Texas 16:34 17 Register? So I'm not going to sit here and say 16:34 18 everybody, it's a big secret. As I understand it -- 16:34 19 MS. TAYLOR: -- that with those to 16:34 20 the -- 16:34 21 MS. MORRIS: It's on our website, it's 16:34 22 published in the Texas Register, it's on the Internet, 16:34 23 it's on the TexasOnline. 16:34 24 MR. TAWIL: I think in all fairness to 16:34 25 what she is saying -- well, what was in the Texas 16:34 0246 1 Register was before the public hearing? And Billy had 16:34 2 already said, there has been changes since the public 16:34 3 hearing. We're not aware of any of this information. 16:34 4 MS. MORRIS: That's correct. And the 16:34 5 fact that -- 16:34 6 MR. TAWIL: -- (Inaudible) we're not 16:34 7 aware of. We have no knowledge of. 16:34 8 MS. MORRIS: And you, like every other 16:34 9 person who would have filed comments to a proposed 16:34 10 rule, Billy, in fairness to y'all, is being very 16:34 11 honest in saying, he is thinking there is changes to 16:34 12 it. It's at this point a recommendation to the 16:34 13 Commissioners. They have not voted on it. Every 16:34 14 person who cared to comment has no idea how that rule 16:34 15 might be changed. You are not alone, but that is how 16:35 16 the process works in rulemaking. 16:35 17 MR. ATKINS: And I guess my frustration 16:35 18 is, you know, the emphasis on the rule now. And the 16:35 19 fact that there hadn't been a lot of comment 16:35 20 beforehand. 16:35 21 MS. TAYLOR: The comments I would have 16:35 22 made at that meeting were the same comments I made the 16:35 23 day we came to the BAC meeting. But I certainly would 16:35 24 have come and shown my interest if I would have gotten 16:35 25 that on my calendar. And that was my fault. I'm 16:35 0247 1 taking the blame for that. 16:35 2 MS. MORRIS: And Suzanne, your comments 16:35 3 are no less valuable if you don't come to a public 16:35 4 hearing but make a written comment. The comments are 16:35 5 no less valuable. 16:35 6 MS. TAYLOR: It sure makes it seem, 16:35 7 though, to the Lottery Commission, that the subject is 16:35 8 more important when you have people here addressing 16:35 9 it. 16:35 10 MS. MORRIS: Well, and you come -- 16:35 11 MR. ATKINS: I will disagree with that 16:35 12 comment. 16:35 13 MS. MORRIS: Yeah, I disagree with you. 16:35 14 I disagree with you. Some of our lottery rules, we 16:36 15 hold public hearings on. You would think the place 16:36 16 would be packed. And it's not. But that is not a 16:36 17 reflection of the desires of the public. And, you 16:36 18 know, the Commissioners have to make their best 16:36 19 judgments. 16:36 20 MR. PAVLOVSKY: Are we talking about 16:36 21 item 13? 16:36 22 MS. MORRIS: Well, he was, but I would 16:36 23 like to get him off that agenda item. 16:36 24 COMMISSIONER COX: I can't. 16:36 25 MR. ATKINS: No, no, no. Stop. Stop. 16:36 0248 1 Stop. He can talk about item 13. 16:36 2 MS. MORRIS: Okay. I'm sorry. 16:36 3 MR. ATKINS: I think what Suzanne was 16:36 4 asking about was item eight. 16:36 5 COMMISSIONER COX: Pull tabs pursuant 16:36 6 to a new rule? 16:36 7 MS. MORRIS: Pull tab sales. 16:36 8 COMMISSIONER COX: So Pete, did you 16:36 9 have a question on that? 16:36 10 MR. PAVLOVSKY: No, sir. 16:36 11 MS. TAYLOR: I do. Were you here 16:36 12 during that? I wish you had been here during that. 16:37 13 COMMISSIONER COX: And that's why I 16:37 14 came up here, so if there was something y'all 16:37 15 particularly wanted to tell me or wanted to ask me -- 16:37 16 MS. TAYLOR: Thank you. Thank you. 16:37 17 Thank you. 16:37 18 CHAIR BRACKETT: Tomorrow, would it 16:37 19 appropriate, like could Suzanne speak to that or, 16:37 20 Larry, are you going to be here? Anyway, we all -- 16:37 21 the increase in sales is the most exciting thing 16:37 22 that's happened in -- since the beginning of bingo, I 16:37 23 think. I'm not real sure. Oh, and it's as good as 16:37 24 the increase in the jackpots. But -- so can Suzanne 16:37 25 speak to that tomorrow at the Lottery Commission 16:37 0249 1 meeting, just how good this has been and how we 16:37 2 appreciate it? We've got some great cold facts. 16:37 3 We're not dealing with just, things are better. 16:37 4 MS. MORRIS: I think there is a variety 16:37 5 of options, isn't there, Billy? Is there a BAC report 16:37 6 tomorrow? 16:37 7 MR. ATKINS: There is a report by the 8 BAC chair, and either the chair can give the report or 16:37 9 she can defer to Suzanne -- you can defer to me. You 16:37 10 can defer to whoever you want to in order to 16:38 11 discuss -- Commissioner Cox -- 16:38 12 CHAIR BRACKETT: Actually, we have a 16:38 13 cheerleading team that's going to get up and give a 16:38 14 report on that. No. We will certainly have a report 16:38 15 tomorrow. 16:38 16 MS. MORRIS: Will that accomplish what 16:38 17 you want them to know -- 16:38 18 MS. TAYLOR: Oh, definitely. 16:38 19 MS. MORRIS: So they're at least 16:38 20 getting the message, no matter who gives it? 16:38 21 MS. TAYLOR: Definitely. 16:38 22 MS. MORRIS: Well, Commissioner Cox 16:38 23 wasn't here, but when Chairman Clowe was here, we were 16:38 24 back on the Sunset report and it -- I don't know if 16:38 25 there was -- if y'all had any desire to have an 16:38 0250 1 exchange with him on that item, as far as just the 16:38 2 effectiveness of the committee and how y'all can best 16:38 3 exchange with the Commission or not. That was one of 16:38 4 the items that they discussed a little bit with 16:38 5 Chairman Clowe. 16:38 6 COMMISSIONER COX: I bet Tom will 16:38 7 report that to us tomorrow. But I'll be happy to 16:38 8 listen if you have something you want to tell me. 16:38 9 Okay. Well, Virginia, I'm sorry for 16:39 10 interrupting. I know you were getting ready to set 16:39 11 your next meeting, but -- 16:39 12 CHAIR BRACKETT: You did not interrupt. 16:39 13 We were glad to hear your questions and glad to know 16:39 14 you want to hear from us. 16:39 15 COMMISSIONER COX: Thank you for what 16:39 16 y'all do. 16:39 17 CHAIR BRACKETT: Thank you. 16:39 18 What we're doing right now is going 16:39 19 through our notes to see what it is we need to 16:39 20 report -- I'm sorry. Did you want to speak? 16:39 21 MS. IVES: I always sneak up here. I'm 16:39 22 not sure if this would be under 18 or 19, for the 16:39 23 items for future agenda. Can I recommend placing on 16:39 24 that charitable purpose and unit accounting to be 16:40 25 brought up the next meeting for discussion. 16:40 0251 1 MR. ATKINS: What about -- first of 16:40 2 all, Danny already suggested unit accounting and has 16:40 3 assumed responsibility for that. 16:40 4 MS. IVES: Earlier? I'm sorry. Okay. 16:40 5 MR. ATKINS: So I think in order -- in 16:40 6 line with what we've talked about today, it would be 16:40 7 beneficial -- and I'm sure you can get someone to -- 16:40 8 to carry that for you on charitable purpose, to be 16:40 9 responsible for that. A member of the committee. 16:40 10 MS. IVES: All right. 16:40 11 CHAIR BRACKETT: What do you mean by 16:40 12 charitable -- you want a definition of charitable 16:40 13 purpose? 16:40 14 MS. IVES: Correct. 16:40 15 CHAIR BRACKETT: For licensing 16:40 16 purposes? Is that what you -- 16:40 17 MS. IVES: Right. And also, I noticed 16:40 18 here it says, the future BAC meeting dates, places. 16:40 19 Were y'all thinking about perhaps holding one of your 16:41 20 meetings somewhere else? 16:41 21 CHAIR BRACKETT: We have been given 16:41 22 permission to have one meeting outside of Austin and, 16:41 23 yes, we're working on that, and Suzanne is chairman of 16:41 24 that. And next month, she's going to have a really 16:41 25 good report for us that's going to include the city 16:41 0252 1 and the location of the city and the date and the 16:41 2 time. 16:41 3 MS. IVES: All right. Because, you 4 know, usually I bring -- 16:41 5 CHAIR BRACKETT: And we'll have lots of 16:41 6 bells and whistles at the meeting. 16:41 7 MS. IVES: Okay. You know, usually I 16:41 8 bring a lot of people down with me, but we were just 16:41 9 here at the capitol for the SAC vote, and it's hard 16:41 10 for a lot of the organizations, people to take off 16:41 11 work, and it can get quite expensive, especially if 16:41 12 they're staying overnight, renting a van, things like 16:41 13 that. So I just wanted to kind of let y'all know 16:41 14 that. So I appreciate it. Thank you. 16:41 15 CHAIR BRACKETT: Do you have anything 16:41 16 else? Any other suggestions? 16:42 17 MS. IVES: No, ma'am. 16:42 18 CHAIR BRACKETT: Okay. Now, in 16:42 19 looking -- 16:42 20 MR. ATKINS: I'm sorry. Is there 16:42 21 someone that's going to present the charitable purpose 16:42 22 item? Who are we going to assign that to? 16:42 23 CHAIR BRACKETT: For the next meeting? 16:42 24 MS. TAYLOR: Well, Danny is gone, so... 16:42 25 CHAIR BRACKETT: Is that something 16:42 0253 1 staff should present? 16:42 2 MR. ATKINS: What -- I don't know if I 16:42 3 know enough about the -- 16:42 4 MS. TAYLOR: May I ask a question? The 16:42 5 definition of charitable purpose, was that not one of 16:42 6 the things that was going to be -- that the Sunset had 16:42 7 talked about that the Lottery Commission was going to 16:42 8 be expanding the definition or making -- 16:42 9 MR. ATKINS: So can -- so more 16:42 10 accurately, I guess, the item would be issue 4.2? 16:42 11 MS. TAYLOR: I believe that that's what 16:42 12 is being asked for. 16:42 13 MR. ATKINS: Okay. And what is it that 16:42 14 the committee would be looking for? 16:43 15 MS. TAYLOR: I believe, the direction 16:43 16 that staff is going with that, or where you are on 16:43 17 that, probably. From different things I've heard. 16:43 18 MR. ATKINS: Well -- 16:43 19 CHAIR BRACKETT: I would need to look 16:43 20 at the Bingo Enabling Act and see what it says. Does 16:43 21 it say everyone has to be a 501(c)(3) or are -- well, 16:43 22 does it say you have to be an organized church or -- 16:43 23 MR. TAWIL: You have to be organized as 16:43 24 a -- be a charitable organization (inaudible). 16:43 25 MS. TAYLOR: But the definition of 16:43 0254 1 charitable purpose was -- Sharon, correct me if I'm 16:43 2 wrong. Are you talking about the definition of 16:43 3 charitable purpose in connection with distribution of 16:43 4 funds? 16:43 5 MS. IVES: Correct. 16:43 6 CHAIR BRACKETT: Oh, okay. What 16:43 7 constitutes a charitable purpose -- 16:43 8 MR. ATKINS: Let me read into the 16:43 9 record what issue 4.2 is. The title of it is the 16:43 10 Commission should clarify the definition of charitable 16:43 11 purpose and authorized expense. That's the title of 16:44 12 it. Now, the -- the description of it is, the 16:44 13 charitable distribution regulation is confusing, not 16:44 14 only because of the current complexity of the formula, 16:44 15 but also because of the confusion about how charities 16:44 16 can spend bingo proceeds. Accordingly, this 16:44 17 recommendation would direct the Commission to use its 16:44 18 existing authority to pass rules clarifying and 16:44 19 providing examples of what are acceptable 16:44 20 distributions and expenses within the scope of the 16:44 21 statute. 16:44 22 So what you're asking for is the staff 16:44 23 to have a draft rule? 16:44 24 MS. TAYLOR: I didn't ask for it. 16:44 25 COMMISSIONER COX: Billy, wasn't -- I'm 16:44 0255 1 trying to recall -- 16:44 2 MR. ATKINS: Your mike is not on, 16:44 3 Mr. Cox. 16:44 4 COMMISSIONER COX: Thank you. 5 I'm trying to recall the discussion we 16:44 6 had of this at the last board meeting, but wasn't this 16:44 7 the issue for which we asked the legislature to 16:44 8 provide us with information about what was intended 16:44 9 with the present law? We had -- one of the issues 16:45 10 came out that way, and I'm thinking it was this one. 16:45 11 MR. ATKINS: We had an agency 16:45 12 modification. The modification was to clarify the 16:45 13 intent of the Bingo Enabling Act by providing the 16:45 14 agency with guidelines regarding the use of proceeds 16:45 15 for charitable purposes, and what is considered 16:45 16 funds -- what is considered as funds, quote, spent in 16:45 17 Texas. And the Sunset Commission did not adopt that 16:45 18 modification. 16:45 19 COMMISSIONER COX: But it think it 16:45 20 states where we are, and that is that we are hoping 16:45 21 that someone will provide us with information that we 16:45 22 can use rather than our developing a proposal to take 16:45 23 to somebody else. We recognize that there is 16:45 24 confusion on that issue and we would like guidance 16:45 25 from the Hill on that. 16:45 0256 1 MR. ATKINS: Would -- or it could be 16:45 2 that the Advisory Committee could seek information 16:45 3 from the industry on that and bring that to the 16:46 4 Commission. 16:46 5 COMMISSIONER COX: I don't know where 16:46 6 the buck ultimately stops, but certainly I'm -- it was 16:46 7 clear that we didn't believe that we had enough 16:46 8 information to make the interpretations in cases that 16:46 9 some of you folks were talking about. 16:46 10 MR. ATKINS: And I think my reading of 16:46 11 their decision document, plus the discussion that took 16:46 12 place at the Committee meeting is that -- and this is 16:46 13 going to sound like I'm putting words in their mouth, 16:46 14 but I think their impression was, we had pretty much 16:46 15 all the intent we were going to get. 16:46 16 COMMISSIONER COX: And that could be 16:46 17 the case. At the same time, our request is still in 16:46 18 the record, even though it was not adopted as an 16:46 19 amendment by the Sunset Commission, and so it's still 16:46 20 going to go to the legislature. 16:46 21 MR. ATKINS: And it's still in the 16:46 22 record, and I don't think, Commissioner Cox, that 16:46 23 there is anything, again, that would preclude the 16:46 24 Commission from directing the Advisory Committee to 16:46 25 research that. To gather that information for them 16:47 0257 1 and make that recommendation to them. 16:47 2 MR. HUTCHINGS: Chuck Hutchings, 16:47 3 Am Vets Post 62. 16:47 4 I know in the 20-point plan that we -- 16:47 5 in the 20-point plan that we tried to -- what? 16:47 6 Introduce or get brought before the committees in 16:47 7 various ways, the distribution of funds for charitable 16:47 8 purpose, the suggestion was that we use the guidelines 16:47 9 that are laid down by the IRS. In other words, the 16:47 10 IRS in booklet -- what is that? 557, I believe it 16:47 11 comes off their publication forms page, it lays down 16:47 12 what each of the 501(c)s can use their funds as far as 16:47 13 their charitable purposes, so everyone has a -- every 16:48 14 nonprofit organization -- or I suppose every one -- 16:48 15 has a 501(c)-something, and that pamphlet actually 16:48 16 tells you what they can be used for. Well, all the 16:48 17 whole -- the federal -- 16:48 18 MR. ATKINS: Well, I was just going to 16:48 19 say, not every organization has a 501(c) -- 16:48 20 MR. HUTCHINGS: Well, that's what I 21 say. I'm not sure whether everyone does or not. But 16:48 22 as far as the ones that hold a 501(c) anything under 16:48 23 the IRS, there is a publication, and it's 557, that 16:48 24 tells what each one of those numbers -- and it's 16:48 25 always 501(c) dash something -- can use their funds 16:48 0258 1 for. It's in black and white as far as the IRS is 16:48 2 concerned. 16:48 3 CHAIR BRACKETT: So if we are to 16:48 4 suppose to make a suggestion on that, would our 16:48 5 suggestion be that we follow IRS guidelines from 16:49 6 publication 557 -- 16:49 7 MS. TAYLOR: Perhaps we could have it 16:49 8 at the next meeting so we could all read the 16:49 9 publication -- 16:49 10 MR. WHITTINGTON: Because I think we 16:49 11 should definitely read -- 16:49 12 CHAIR BRACKETT: No. I think they're 16:49 13 wanting something tomorrow. 16:49 14 COMMISSIONER COX: Well, there is 16:49 15 another issue about it, correct me if I'm wrong -- 16:49 16 MR. ATKINS: Excuse me, Commissioner 16:49 17 Cox. I don't think the commissioners are seeking 16:49 18 tomorrow. 16:49 19 COMMISSIONER COX: No. 16:49 20 CHAIR BRACKETT: All right. 16:49 21 COMMISSIONER COX: The issue, if I 16:49 22 remember right, is not so simple as what is the 16:49 23 charitable purpose, but the further requirement that 16:49 24 the money be spent in Texas. Is that correct? 16:49 25 MR. ATKINS: That is part of it, yes, 16:49 0259 1 sir. 16:49 2 COMMISSIONER COX: So it's at least a 16:49 3 two-pronged issue. 16:49 4 MR. ATKINS: Let me make this 16:49 5 suggestion. We could contact the Internal Revenue 16:49 6 Service and see if we could get them to have 16:49 7 something -- come make a presentation. 16:49 8 CHAIR BRACKETT: At the BAC next 16:49 9 meeting? 16:49 10 MR. ATKINS: Yes, ma'am. 16:49 11 COMMISSIONER COX: One of the issues 16:50 12 that I remember being brought before the last 16:50 13 Commission meeting was a gentleman from the VFW who 16:50 14 talked about making a trip to Arlington Cemetery. And 16:50 15 I guess there are arguments you could make that if you 16:50 16 bought your tickets and everything in Texas, that 16:50 17 maybe the money was spent in Texas. But it would be 16:50 18 pretty hard, if you stayed in a hotel, to say that 16:50 19 that money was spent in Texas and did bingo money go 16:50 20 for that. So I think that's part of the issue. That 16:50 21 would clearly be within the charitable purpose, but 16:50 22 doesn't seem to be in conformity with at least an 16:50 23 interpretation of either the Bingo Enabling Act or the 16:50 24 Constitution. I don't remember which. 16:50 25 MR. ATKINS: The Constitution requires 16:50 0260 1 the funds be spent in Texas. 16:50 2 MR. PAVLOVSKY: The other thing that 16:50 3 I'm thinking is that you've got 501(c), (1), (2), (3), 16:50 4 (4), (5), whatever. If all of those have their own 16:50 5 little different wrinkle, then they're going to be 16:50 6 different. And if you belong to a 501(c)(2), and I 16:51 7 belong to a 501(c)(8), then you and I have different 16:51 8 rules to play by. That's not going to work because 16:51 9 we're operating under the Texas -- under the bingo 16:51 10 laws. So you've got to put something together for 16:51 11 bingo, you know, not for the IRS. 16:51 12 CHAIR BRACKETT: You're correct. 16:51 13 MR. WHITTINGTON: Discuss it next 16:51 14 meeting. 16:51 15 MR. ATKINS: Yeah. Maybe we can start 16:51 16 the process by seeing if we can get a speaker from 16:51 17 the -- a representative from the Internal Revenue 16:51 18 Service. We have a pretty good relationship with 16:51 19 them, I think. They -- they go with us when we make 16:51 20 presentations. They attend a lot of our training 16:51 21 programs, so we might be able to get someone. 16:51 22 CHAIR BRACKETT: All right. Now we're 16:51 23 back to the -- what are we going to report tomorrow. 16:51 24 Is that correct? Is that back to where we are? 16:51 25 MR. ATKINS: Well, I don't know that 16:51 0261 1 that's an actual agenda item. What you're -- I 16:52 2 believe that's your -- 16:52 3 CHAIR BRACKETT: That's my report. I'm 16:52 4 asking for suggestions. 16:52 5 MS. TAYLOR: Obviously, we need you to 16:52 6 report how wonderful the pull tabs are doing. 16:52 7 CHAIR BRACKETT: Right. And make the 16:52 8 suggestion for the member of the Bingo Advisory 16:52 9 Committee. 16:52 10 MS. MORRIS: And what Billy is saying 16:52 11 is, you don't have an agenda item here that helps you 16:52 12 figure out your report. You're going to do that and 16:52 13 you're going to have a report tomorrow, but what Billy 16:52 14 was suggesting to you is -- 16:52 15 CHAIR BRACKETT: Okay. Well, why don't 16:52 16 we finish our agenda and adjourn, and then y'all tell 16:52 17 me what we need to report tomorrow. 16:52 18 MS. MORRIS: No. We're not going -- 16:52 19 CHAIR BRACKETT: I just don't want to 16:52 20 go in and waste time by talking about things I don't 16:52 21 need to talk about, or making my own decisions on 16:52 22 things that I feel should be group decisions. But -- 16:52 23 MS. MORRIS: Then, I'm going to stop 16:52 24 you and say that you don't have the option of having a 16:52 25 group after this meeting. 16:52 0262 1 CHAIR BRACKETT: That's fine. Did you 16:52 2 have a comment? Did you have your hand up? 16:53 3 MR. HUTCHINGS: No, ma'am. 16:53 4 CHAIR BRACKETT: All right. Let's 16:53 5 discuss our next meeting. The date of December 10th 16:53 6 has been suggested. 16:53 7 MS. TAYLOR: Can I ask a question? The 16:53 8 public comment period, what can be talked about under 16:53 9 that particular agenda item? 16:53 10 MS. MORRIS: Under the Open Meetings 16:53 11 Act, anybody can come and say literally anything to 16:53 12 you which -- that is under your jurisdiction, if you 16:53 13 will. And you are not supposed to truly talk around 16:53 14 each other and back and forth. You're supposed to ask 16:53 15 questions of the speaker to try to understand. And if 16:53 16 the public is asking you questions, you can answer it. 16:53 17 Your deliberation is supposed to be confined to either 16:53 18 finding it somewhere else on your agenda and talking 16:53 19 about it, which is what just occurred, or if it's not 16:53 20 even on your agenda otherwise, are you confined to, 16:53 21 let's put it on next months's agenda or something. 16:53 22 But to then deliberate on a subject that is not 16:53 23 anywhere on your agenda and is coming out of the blue, 16:54 24 and I'm going to say it again, deprives all those 16:54 25 people behind me the opportunity to hear what you 16:54 0263 1 would say on this very agenda item. You know, we 16:54 2 didn't write the Open Meetings law, but we're going to 16:54 3 follow it. It's not a question of whether we like it 16:54 4 or not. It's a question of, we're going to follow it. 16:54 5 So anybody can say anything to you 16:54 6 under that comment. 16:54 7 MS. TAYLOR: So anybody can say 16:54 8 anything in the public comments? 16:54 9 MS. MORRIS: Pretty much so -- 16:54 10 MS. TAYLOR: Like I -- this is the time 16:54 11 it's free to say, I sure hope the Commissioners know 16:54 12 tomorrow how much we appreciate them approving the tab 16:54 13 pull? Is that under public comment? 16:54 14 MR. TAWIL: No. She's saying, it's 16:54 15 somebody sitting where she is. 16:54 16 MR. ATKINS: Yeah. Public comment 16:54 17 doesn't -- you could say how much you appreciate the 16:54 18 pull tab rule under number 13. 16:54 19 MS. TAYLOR: Well, I sure appreciate 16:54 20 that pull tab rule, Virginia. 16:54 21 CHAIR BRACKETT: I know. You've told 16:54 22 me that. Okay. 16:55 23 MR. ATKINS: Now, could -- 16:55 24 MS. MORRIS: Why don't you build in an 16:55 25 item? Why don't we build in an item, and she's 16:55 0264 1 concerned that she's going to be -- her judgment will 16:55 2 be questioned -- 16:55 3 MR. ATKINS: Diane. 16:55 4 CHAIR BRACKETT: No, I'm not saying my 16:55 5 judgment will be questioned. I'm saying, I will 16:55 6 question my judgment and that I won't cover things 16:55 7 that the other people consider important that need to 16:55 8 be said. 16:55 9 MS. MORRIS: We are learning as we go 16:55 10 along. So Billy wants to interrupt me. 16:55 11 MR. ATKINS: Would it be appropriate 16:55 12 for Suzanne to say, under item 13, which deals with 16:55 13 402.554 relating to pull tab bingo that she believes 16:55 14 it appropriate for Virginia to comment on item 13, 16:55 15 402.554 relating to pull tab bingo and the positive 16:55 16 impact which was discussed in this meeting? 16:55 17 MS. MORRIS: I think so. 16:55 18 MR. ATKINS: Okay. 16:55 19 MS. TAYLOR: Consider it said. 16:55 20 MR. PAVLOVSKY: Thank you, Suzanne. 16:55 21 MS. MORRIS: But I think what Virginia 16:55 22 was also saying, as we grow smarter and better, is 16:55 23 that she might want another item like a standing item 16:56 24 on this agenda to be kind of the catchall. 16:56 25 MR. ATKINS: She could want another 16:56 0265 1 item on the agenda, or there could be members of the 16:56 2 committee now that may want to reference specific 16:56 3 items that have already been on the agenda. 16:56 4 MS. MORRIS: That's right. 16:56 5 MR. ATKINS: So, for instance, someone 16:56 6 may want to suggest to Virginia the discussion that 16:56 7 took place on the BAC nomination. I don't know if 16:56 8 anybody wants to do that or not. 16:56 9 MS. TAYLOR: I think that BAC 16:56 10 nomination, and I think that we should reference the 16:56 11 subcommittee being put together to come up with some 16:56 12 concrete suggestions on advertising. 16:56 13 MR. ATKINS: Under item four. 16:56 14 MS. TAYLOR: Under item four. 16:56 15 MR. ATKINS: Okay. 16:56 16 MS. MORRIS: It's actually a very 16:56 17 workable law. 16:56 18 MR. WHITTINGTON: And under the item 16:56 19 that this young fellow right here, Danny Moore was 16:56 20 talking about, we need to talk about selling 16:56 21 progressive bingo. 16:57 22 MR. ATKINS: Item five. 16:57 23 MS. MORRIS: Linked and satellite. 16:57 24 Yeah. 16:57 25 MR. WHITTINGTON: It don't have to be 16:57 0266 1 Canadian either. 16:57 2 CHAIR BRACKETT: All right. Is 16:57 3 Tuesday, December 10th, a good time for our next 16:57 4 meeting? 16:57 5 MR. WHITTINGTON: What about Thursday, 16:57 6 December 12th? 16:57 7 CHAIR BRACKETT: Thursday, December 16:57 8 12th. 16:57 9 MR. TAWIL: Are we going to have time 16:57 10 to get the -- to get the information together for 16:57 11 advertising (inaudible). 16:57 12 CHAIR BRACKETT: We will at least have 16:57 13 some. 16:57 14 MS. TAYLOR: Are there any meetings or 16:57 15 any public hearings or anything that are coming up in 16:57 16 December that you know of any particular dates of 16:57 17 anything? I was just thinking, so that we could try 16:57 18 and put this meeting close to it so that it takes one 16:57 19 trip to Austin instead of two. 16:57 20 MR. ATKINS: You know, Suzanne, I -- 16:58 21 MS. TAYLOR: Like the next 22 Commissioners' meeting or -- 16:58 23 MR. ATKINS: Oh, no. They won't set 16:58 24 that until tomorrow. No. But I don't -- and I don't 16:58 25 know now, you know, if we were going to move forward 16:58 0267 1 to have any kind of workshop on any of the rules, I 16:58 2 wouldn't know -- I wouldn't know that. 16:58 3 MS. TAYLOR: Could it just be a 16:58 4 tentative set for a meeting and possibly we could 16:58 5 change it if there was something coming up that 16:58 6 would -- you know? 16:58 7 MR. ATKINS: Well, let me put it to you 16:58 8 this way. We normally -- if the meeting were for the 16:58 9 12th, we would normally not file until the 4th. 16:58 10 MS. TAYLOR: So there is time. 16:58 11 MR. ATKINS: So if anything came up and 16:58 12 the chair decided to -- you know, to move that 16:58 13 meeting, there is up to December 4th to make that 16:58 14 decision. 16:58 15 MR. SANDERSON: To move it past the 16:58 16 12th. You couldn't move it before that. Well, before 16:58 17 December 4th, you could. 16:58 18 MS. TAYLOR: Any of those dates would 16:59 19 work with me. 16:59 20 MR. WHITTINGTON: Tomorrow you can tell 16:59 21 the Commission to put theirs on the 13th. 16:59 22 MR. ATKINS: The 19th, the staff will 16:59 23 not be available. 16:59 24 MS. TAYLOR: Did you mark that down, 16:59 25 Virginia? 16:59 0268 1 CHAIR BRACKETT: So I'm sorry. I was 16:59 2 doing something else and not listening. So the 16:59 3 board -- are we going to be meeting on the -- we set 16:59 4 our meeting for the 12th of December? 16:59 5 MR. ATKINS: That was the last date 16:59 6 discussed. 16:59 7 CHAIR BRACKETT: Okay. It is awful 16:59 8 soon, but it's better than meeting in January when 16:59 9 it's awfully hard to -- we'll see. We'll see what 17:00 10 attendance is and see if it's a flop to meeting in 17:00 11 December or not. 17:00 12 Anything else that we -- or have we 17:00 13 covered our agenda? I believe that we have. Any 17:00 14 items for coming up at the next meeting, besides the 17:00 15 report on the meeting to be held outside of Austin. 17:00 16 And there -- 17:00 17 MR. WHITTINGTON: The advertising. 17:00 18 CHAIR BRACKETT: The advertisement. 17:00 19 Uh-huh. Now, this is for our meeting in December. 17:00 20 Correct? 17:00 21 MR. WHITTINGTON: Yes. Progressive 17:00 22 and... 17:00 23 MR. TAWIL: Charitable purpose 17:00 24 information. 17:00 25 CHAIR BRACKETT: Charitable purpose 17:00 0269 1 information. 17:00 2 MR. ATKINS: The accounting. 17:00 3 CHAIR BRACKETT: The accounting and -- 17:00 4 the accounting and the charitable purpose, yeah. 17:00 5 Okay. All right. Then thank you for sticking it out 17:01 6 and participating all day long. It's been very 17:01 7 important. And I appreciate the staff, the bingo 17:01 8 staff and the Lottery Commission staff and the 17:01 9 Commissioners for being here, too. Thank you. 17:01 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0270 1 REPORTER'S CERTIFICATION 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, BRENDA J. WRIGHT, Certified Shorthand 7 Reporter for the State of Texas, do hereby certify 8 that the above-captioned matter came on for hearing 9 before the TEXAS LOTTERY COMMISSION CHARITABLE BINGO 10 DIVISION as hereinafter set out, that I did, in 11 shorthand, report said proceedings, and that the above 12 and foregoing typewritten pages contain a full, true, 13 and correct computer-aided transcription of my 14 shorthand notes taken on said occasion. 15 Witness my hand on this the 4TH day of 16 DECEMBER, 2002. 17 18 19 20 BRENDA J. WRIGHT, RPR, 21 Texas CSR No. 1780 Expiration Date: 12-31-04 22 1609 Shoal Creek Boulevard, Suite 202 Austin, Texas 78701 23 (512) 474-4363 24 JOB NO. 021121BJW 25