1 1 2 3 4 * * * * * * * * * * * * * * * * * 5 6 BINGO ADVISORY COMMITTEE 7 MEETING 8 9 MARCH 20, 2002 10 11 * * * * * * * * * * * * * * * * * 12 13 14 15 16 17 18 BE IT REMEMBERED that the BINGO ADVISORY 19 COMMITTEE meeting was held on the 20TH of MARCH, 2002, 20 from 10:00 a.m. to 4:15 p.m., before Marguerite S. 21 MacInnes, CSR in and for the State of Texas, reported 22 by machine shorthand, at the Offices of the Texas 23 Housing & Commercial Development, 507 Sabine, 4th 24 Floor, Board Meeting Room, Austin, Texas, whereupon 25 the following proceedings were had: WRIGHT WATSON STEN-TEL (512) 474-4363 2 1 APPEARANCES 2 3 Chairman: Mr. William Neinast - Burton, Texas 4 5 Vice-Chairman: Ms. Virginia Brackett - Lubbock, Texas 6 7 Committee Members: Ms. Suzanne Taylor - Corpus Christi, Texas 8 Mr. Lexford Speed - Plano, Texas Mr. Saleem Tawil - Austin, Texas 9 Mr. David Castillo - Kingsville, Texas Mr. Robert Rinehart - Amarillo, Texas 10 11 Charitable Bingo Operations Director: Mr. Billy Atkins 12 Mr. Phil Sanderson 13 14 15 16 17 18 19 20 21 22 23 24 25 WRIGHT WATSON STEN-TEL (512) 474-4363 3 1 INDEX 2 3 Appearances...................................... 2 4 AGENDA ITEMS 5 Item Number 1.................................... 4 6 Item Number 2.................................... N/A Item Number 3.................................... 7 7 Item Number 4.................................... 15 Item Number 5.................................... 23 8 Item Number 6.................................... 144 Item Number 7.................................... 92 9 Item Number 8.................................... 194 Item Number 9.................................... 195 10 Item Number 10................................... 197 11 Reporter's Certificate........................... 205 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 4 1 March 20, 2002 2 Bingo Advisory Committee Meeting 3 CHAIR NEINAST: I'd like to call the 4 meeting of the Bingo Advisory Committee to order. We 5 do have a quorum present. I'd like to welcome each of 6 you here today, invite you to participate in any of 7 the discussions we have. Can you hear me? Is this 8 on? 9 COMMITTEE MEMBERS: Yes. 10 CHAIR NEINAST: If you would like to 11 address the committee on any issue, if you would fill 12 out one of the witness affirmation forms and drop it 13 in the box here over here in front of the reporter, 14 we'd appreciate it. 15 Our court reporter today is Marti MacInnes. 16 Again I'd ask the committee members and those in the 17 audience if you participate that this is being 18 transcribed verbatim, so we need to have only one 19 person talking, and let's make it easy for Marti. 20 If you will note the members are present, 21 Marti, and we'll proceed to the first item on the 22 agenda which is a consideration of and possible action 23 including approval on the minutes of the February 13th 24 Bingo Advisory Committee meeting. 25 I was not present at that, I've not seen WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 5 1 the minutes, I cannot comment on them, but you have in 2 your report form one page on which there was a 3 question. I understand that's been clarified now, 4 Billy? 5 MR. ATKINS: Yes, sir. And for the record, 6 if I could, it is on page 6 of the transcript of the 7 February 13th meeting, page 6, starting on line 22, 8 the statement is attributed to Mr. Sanderson. The 9 statement should be attributed to Mr. Rinehart. 10 And just for clarification purposes, 11 Mr. Chairman, members, you will notice on the Web site 12 that we place on the Web site two items under the 13 Bingo Advisory Committee. Until you adopt the 14 transcript we have it listed just as that, transcript 15 of the February 13th meeting. Once you adopt it, that 16 will be changed to the minutes of the February 13th 17 meeting. So the first thing the people will see is 18 the transcript, and it won't become the official 19 minutes until the BAC adopts it. 20 CHAIR NEINAST: All right. On that item, 21 by the way, as each of us up here begins to speak, if 22 for the record and to make it easy on Marti to just 23 identify yourself, and that will make it easy to get 24 it on the record. 25 That statement that is from the minutes is WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 6 1 correct, Bob, to a certain extent. This was the first 2 time around. We considered it twice. I took that 3 recommendation to the commission the first time and 4 they denied it. We reconsidered and got more data in 5 support of that motion, and when I took it back to 6 them the second time, they did approve changing the 7 rules to allow the committee to have some meetings 8 outside of Austin. So that's right as to the first 9 action, but there was a subsequent action that is not 10 reflected in your statement, so we do have authority 11 now or approval from the commission to move ahead with 12 the change to the rules to allow meetings outside of 13 Austin. 14 Are there any other changes -- 15 MR. TALWIN: I got a comment -- 16 CHAIR NEINAST: -- for the purpose -- 17 MR. TAWIL: Being aware that you were 18 absent, Mr. Chairman, we voted, unanimously passed the 19 approval of a letter to be written to the Sunset 20 Commission by this advisory committee that was part of 21 those minutes. 22 CHAIR NEINAST: Like I say, I was not -- 23 MR. TAWIL: My concern is that before the 24 minutes are approved, those activities, do they just 25 fall through or does somebody pick up the action? WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 7 1 CHAIR NEINAST: That would not affect the 2 approval of the minutes. We'll just have to follow up 3 and see if that was done. I mean, we don't wait and 4 see that the action that's been taken -- that is 5 recommended here is taken to approve the minutes. We 6 follow up on that as a separate action, but it will 7 not affect the approval of the minutes. 8 Any other additions, deletions or 9 amendments to the minutes or to the transcript? 10 The chair will entertain a motion to 11 approve the transcript with the amendment suggested by 12 Billy that the -- Mr. Sanderson be changed to 13 Mr. Rinehart on line 22 of page 6. Is there a motion? 14 MR. SPEED: Made. 15 MR. RINEHART: Second. 16 CHAIR NEINAST: The motion has been made 17 and seconded to approve the transcript as the minutes 18 of the February 13th meeting. All in favor, aye? 19 COMMITTEE MEMBERS: Aye. 20 CHAIR NEINAST: The minutes are approved. 21 Number 3 on the agenda is status report, 22 possible discussion and/or action on the security 23 divisions activities. As we've handled these in the 24 past, members of the committee have a report from the 25 security division, the number of complaints received, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 8 1 the actions taken to resolve them, the top complaints 2 received and other information. Mike Pitcock, the 3 head of the security division, is here. Are there any 4 questions of Mike on that -- 5 MR. PITCOCK: You have two quarters. You 6 have the first sheet and if you flip over to the back, 7 you have the second quarter for the fiscal year 2002. 8 I didn't speak at the last meeting so this is an 9 accumulation of both. I'll be glad to answer any 10 questions or go over it if you have any questions 11 about it. 12 CHAIR NEINAST: Any questions of 13 Mr. Pitcock? 14 If none, thank you. -- I'm sorry, there 15 was one, Steve Bresnen, who wanted to address that 16 item. Steve? 17 MR. BRESNEN: Yes, sir. Thank you. My 18 name is Steve Bresnen. I'm here on behalf of the 19 Bingo Interest Group and several charities out of the 20 Odessa area. 21 I can't go into any detail because I don't 22 have any to look at, and because there was no 23 discussion of the details of the report, it's hard to 24 comment on this item, and really what I want to do is 25 make a little bit of a point that if there was some WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 9 1 discussion of what the details were and what the 2 security division is doing, it would be easier for 3 people out here to have some comment or question about 4 it. I do have some questions that I would like y'all 5 to ask given the appropriate time. Given the length 6 of your agenda today I won't -- I don't think you 7 ought to get bogged down in that today personally, but 8 here's one thing, there is a question on my mind, is 9 how much money does the agency spend on security for 10 bingo? And I think this is going to be -- this issue 11 is going to come up a little later on when we talk 12 about the structure of the agency and whether it ought 13 to be here or elsewhere. 14 A lot of people have complained to me over 15 the years that we use licensed peace officers for the 16 security division, and we really don't get any 17 information about the performance of the security 18 division or how much the bingo taxes and fees that are 19 paid for this agency contribute to the activities of 20 the security division, so at some point I'd appreciate 21 it if you would go into some further detail about that 22 and work through that a little bit so we could know a 23 little bit more about it out here in the public. 24 Thank you. 25 CHAIR NEINAST: The report we get and the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 10 1 report that Mr. Pitcock makes to us is basically the 2 number of complaints that have been received during 3 the quarter by region, the number of those complaints 4 that have been resolved by region as to whether they 5 have been referred, and we don't get names or 6 anything. We just get raw numbers. 7 MR. BRESNEN: Right. 8 CHAIR NEINAST: The number of complaints 9 that have resulted and some type of action, if it's 10 been referred to a district attorney or a defending 11 attorney or to the audit office. Often the audit 12 office comes into play on this, too, because they have 13 play in the enforcement deal, and then a list of the 14 typical or the largest number of complaints, what area 15 they fall in. For example, for the first quarter of 16 the fiscal year there were nine complaints of a 17 failure to pay prize to the winner, four complaints 18 of -- that there was gambling going on at the time of 19 bingo, three complaints of someone allowed to play 20 without charge, two complaints that the winner was 21 improperly verified, two complaints that bingo workers 22 were playing bingo and two that workers were not 23 listed on applications. 24 MR. BRESNEN: That's for a quarter? 25 CHAIR NEINAST: That's for a quarter. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 11 1 MR. BRESNEN: And would the other quarter 2 be similar numbers? 3 CHAIR NEINAST: Second quarter, roughly 4 similar, fewer complaints on failure to pay prize 5 winner, but the others are close, within one or two. 6 MR. BRESNEN: Okay. It would seem to me if 7 when the Bingo Advisory Committee met that if you all 8 were to talk about those numbers some where everybody 9 else out here got them without us having to file an 10 Open Records request to get that information and there 11 was some discussion, it might help us to participate 12 in these meetings, and that's the only point that I'm 13 really here to make about this. But now that you've 14 read me the numbers, I would like to make one 15 observation. 16 There is a budget number that's attached. 17 People in bingo pay fees and taxes to support this 18 agency. There is a budget number that's attached to 19 how much we pay for the security division here in the 20 agency. Those numbers, if those are reflecting the 21 activities of the security division, then we might be 22 able to compare how much we spend to what those 23 activities are and be able to draw conclusions about 24 whether that's worth it or not. Those numbers don't 25 look, just at first blush, just standing out here, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 12 1 they don't look like much. It doesn't look to me like 2 there is a great deal of complaint activity just from 3 what you are telling me, and I don't know if those are 4 representative quarters or not. 5 CHAIR NEINAST: Well, let me clarify. 6 MR. BRESNEN: Yes, sir. 7 CHAIR NEINAST: These are just the top 8 complaints, but, for example, the numbers I read off, 9 the total complaints received, we have them listed by 10 region, 40 -- 11 MR. TAWIL: At the top it's 53. 12 CHAIR NEINAST: 53 total complaints 13 received, and this is just of those 53 the ones that 14 occur most frequently. So they had 53 complaints 15 during that quarter. 16 MR. BRESNEN: Okay. I just want to return 17 to this -- I'm not here to parse the numbers with you 18 and draw conclusions. What I'm asking you to do is to 19 go through the numbers in a public meeting and then 20 ask those kinds of questions. I'll come back to that 21 when we get down to the part about -- 22 MR. TAWIL: Would it be better if these 23 were posted on the Web site? 24 MR. BRESNEN: Well, there is a whole room 25 full of people here that it could be -- WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 13 1 MR. TAWIL: I think it's just an oversight. 2 I never thought about the idea that this would be 3 important for people to have. 4 MR. BRESNEN: Right. I really don't want 5 to get bogged down at this point. There are going to 6 be some issues that I'm going to discuss later that 7 have to do with the security division, not the 8 individuals, not the personalities, but the structure 9 of this agency, and I wanted to make this point while 10 you are going through those numbers that in my opinion 11 you all should be looking at those numbers and be 12 thinking about, you know, what do they mean, what do 13 they mean for how we spend the money within the 14 agency. 15 Bingo is stagnant at best, and bingo 16 contributes a lot of money to this state, and it 17 contributes I think it's about five or six times, 18 correct me if I'm wrong, but I believe five or six 19 times what we spend to regulate bingo. At the same 20 time, these numbers are going down and my clients tell 21 me that charities are having a hard time making it, 22 lessors are having a hard time making it, and if 23 that's the case, we should be looking at every dollar 24 that we're taking out of bingo for state activities, 25 and this is one of them. We use peace officers for a WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 14 1 function -- I didn't hear a single thing in there that 2 equates to rape or murder and yet we're using licensed 3 peace officers, if I'm understanding, y'all correct me 4 if I'm wrong, I'm really trying to have a dialogue 5 with you about what we're doing and how we're doing it 6 and get you to focus on those things. Is it more 7 expensive to use peace officers to police those kinds 8 of complaints than it would be to use some other kind 9 of personnel that don't have to pass the (inaudible) 10 exams and maintain their licenses and carry weapons 11 and other equipment and that sort of stuff? I'm 12 asking you to go into those kinds of questions and 13 think a little bit more about the sort of wiring of 14 this agency because I think it matters, and I think 15 you are going to have to have that hands-on attention 16 to it if we're going to make some progress about these 17 kinds of issues that I'm talking about today. But 18 I'll come back to some of these later on when we have 19 a wider ranging discussion on how you do your work. 20 CHAIR NEINAST: Okay. Appreciate it, 21 Steve. 22 MR. BRESNEN: Thank you. 23 CHAIR NEINAST: No further comment on that 24 status report, we'll pass to Number 4 on the agenda, 25 consideration of and possible discussion and/or action WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 15 1 on nominations to the Bingo Advisory Committee. This 2 is a first time for the Bingo Advisory Committee. I 3 have discussed it with the Lottery Commission, and 4 they would like to have input from this committee on 5 the makeup of the committee in the form of 6 appointments to the committee. You have in front of 7 you, the members of the committee, those nomination 8 forms that have been received. There was some 9 confusion on the part of sitting members, and I had 10 the same confusion sometime back, on whether sitting 11 members had to be renominated. We had asked for it in 12 the past, but some -- we did not get the word out and 13 Virginia Brackett and Lexford Speed, who are current 14 members of the committee, would like to be considered 15 for renomination, and I see no restriction or no harm 16 in considering them for membership to be appointed for 17 the next time around. 18 We currently have, considering Virginia and 19 Lexford as nominees, we have nominations from existing 20 board members for Robert Rinehart, Suzanne Taylor and 21 Saleem Tawil, and I think it's very important that we 22 have some continuity on this committee from year to 23 year and from years past to carry on, having knowledge 24 of what's been done in the past. 25 So we've not done this before. I would WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 16 1 like to take these, if you would look at the areas 2 from which we have to get members on the board, the 3 general public, I represent that. I am not up for 4 renomination. We've got one, two, three, four, five, 5 six, seven nominees. I think it's also important to 6 consider in looking at these, you have to look kind of 7 down the list to have not only a breakout of the 8 various activities in bingo represented, but I think 9 it's important to try to have a geographical 10 representation, that we have as much of the state 11 represented in one form or another than just looking 12 at whether the nominees to represent the general 13 public or the commercial lessor or conductor or what 14 have you. 15 So I think we need to take these one by one 16 to fill the positions. We will consider now the one 17 for general public. The chair would entertain a 18 motion as to -- from anyone as to -- of those seven 19 nominees who they think would make a good member. I 20 notice that the last two listed, for whatever it's 21 worth, they both have the same last name and they are 22 both from Poteet. I don't know what their 23 relationship is. 24 Any comment or any suggestion or 25 recommendation from any member of the committee as to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 17 1 an appointment to represent the general public? 2 MS. BRACKETT: How many are we needing for 3 that? 4 CHAIR NEINAST: Just one. 5 MS. BRACKETT: Just one. 6 MS. TAYLOR: I'm not familiar with any of 7 these people on here, but if any of them are present 8 today, it might be nice if they could talk to us so we 9 could know who they are. 10 CHAIR NEINAST: Good idea. The nominees 11 are Angela Grummet, William Holden, James Overstreet, 12 Gilberto Torres, Ricky Turman, Carolyn Vasquez and 13 Sheila Vasquez. Are any of those present? 14 Apparently not. 15 MR. TAWIL: There is one on here that says 16 she knows all there is to know. 17 MR. SPEED: That's who we're looking for. 18 CHAIR NEINAST: Of those nominees, the 19 nominees, one is from Galveston, one is from 20 Clarendon, one is from Garland, one is from Uvalde, 21 one from Waco, and the two Vasquezes from Poteet. 22 Apparently none of the members know any of 23 these. Would there be a motion to appoint or to 24 recommend the appointment of one of those? 25 MR. SPEED: I don't know any either, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 18 1 Mr. Chairman. 2 CHAIR NEINAST: I don't know any that is on 3 the nominating committee. Their information and -- 4 MR. TAWIL: Billy, did any of these people 5 provide backup data or anything? 6 MR. ATKINS: No, I think some of them did, 7 might have included a letter or resume, but nothing 8 more than that. 9 MR. TAWIL: What's the deadline on us 10 acting on this? 11 CHAIR NEINAST: It should go to the 12 commission, their next meeting is April the 26th. I 13 think we want to take the recommendations to them 14 then. 15 MR. ATKINS: But there is no -- there is no 16 requirement that the commission act by then. 17 CHAIR NEINAST: You mean on the 18 appointments? 19 MR. ATKINS: That's correct. 20 MR. TAWIL: I think if we're going to do 21 this right, we ought to have a subcommittee or 22 somebody look into all of this instead of just 23 blanketly recommending somebody we don't know anything 24 about. It's a waste of time. 25 CHAIR NEINAST: Yes, sir. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 19 1 MR. KITTELL: James Kittell, from San 2 Antonio. How do you go from an applicant to a 3 nominee? 4 MR. ATKINS: Same thing. 5 MR. TAWIL: You can self-nominate. 6 MR. KITTELL: Well, I had been an 7 applicant, but I don't hear myself as a nominee. 8 MR. TAWIL: What's your name, sir? 9 MR. KITTELL: Kittell. 10 MR. SPEED: You are on here. 11 MR. ATKINS: They are talking about the 12 individuals in the public category. You applied as a 13 conductor or lessor. 14 MR. KITTELL: I see. I misunderstood. 15 MR. ATKINS: Applicant, nominating, it's 16 all the the same thing. 17 MR. KITTELL: As far as -- 18 MR. ATKINS: Mr. Kittell, would you mind 19 filling out a form for us? 20 MR. PITCOCK: Just to kind of clarify, as 21 far as the general public, we don't do background, but 22 if they are part of a licensed organization, 23 conductor, we do criminal background investigations on 24 all those people so backgrounds have been done except 25 for that general public nominee. Those are people WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 20 1 that we have not or have not been affiliated with a 2 licensed organization so there has been a background 3 investigation on those that are affiliated or tied to 4 the other license type. 5 MR. ATKINS: Well, I'm not sure I 6 understand your comment, Mike. Isn't there a separate 7 background process that's done for members of the 8 advisory committee? 9 MR. PITCOCK: Yes, but that's what I'm 10 saying. There has been some done. Saleem was saying 11 nothing has been done, yes, it has been done on some 12 of those that are nominated that are tied to a 13 license. For example, you, if you are nominated for a 14 position, you know, you have a license and we've done 15 background investigation on you prior to getting your 16 license, and the ones that are general public have not 17 been. Billy is correct we do it after their 18 appointment, also. 19 CHAIR NEINAST: After the appointment all 20 you do is a background check on all of them; is that 21 correct? 22 MR. PITCOCK: Right, we reestablish the 23 information that we've got. If each of the individual 24 members, I think if you remember, each of you filled 25 out a packet before you started, and we run through WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 21 1 that packet and based on that information we do an 2 investigation, but prior to that basically we already 3 know that some of you have already been done. 4 MR. TAWIL: Mr. Chairman, I think we ought 5 to appoint a subcommittee to study this in a little 6 bit more detail because most of these people none of 7 the committee has much information on to make an 8 intelligent recommendation. 9 CHAIR NEINAST: I think that's an excellent 10 suggestion. Did you make a motion? 11 MR. TAWIL: I make a motion that we appoint 12 a subcommittee to study all of these and bring back 13 all the facts to the full committee's next meeting and 14 then we all vote on the individual positions that are 15 up. 16 CHAIR NEINAST: Is there a second to the 17 motion? 18 MS. BRACKETT: I second the motion. 19 CHAIR NEINAST: Motion has been made and 20 seconded to appoint a subcommittee to review the 21 nominations and bring a report back to the next 22 meeting of the Bingo Advisory Committee. All in 23 favor, aye? 24 COMMITTEE MEMBERS: Aye. 25 CHAIR NEINAST: In connection with that WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 22 1 motion, the motion carries. I will then appoint 2 Saleem as chairman. 3 Virginia, would you serve on that? 4 MS. BRACKETT: Yes, I'd be glad to. 5 CHAIR NEINAST: And Suzanne. 6 MR. TAWIL: Any expenses with that? 7 CHAIR NEINAST: We'll meet right here in 8 Austin or possibly by teleconference. 9 MS. TAYLOR: Can I make one suggestion 10 before we pass? 11 CHAIR NEINAST: Yes, ma'am. 12 MS. TAYLOR: I would like to see the list 13 of who is nominated posted for the general public so 14 everybody can see who is nominated. If you have any 15 information on these individuals, if you can let the 16 subcommittee know so that we've got some additional 17 information that we're going to be making a 18 recommendation to the full committee, that would be 19 very helpful. So if there is a way that we could get 20 this list out to these people that are here today, 21 that would be awesome. 22 CHAIR NEINAST: Can we post that on the Web 23 site? 24 MR. ATKINS: Yes. 25 CHAIR NEINAST: Okay. Number 5 on the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 23 1 agenda is consideration of and possible discussion 2 and/or action on the effectiveness of the Bingo 3 Advisory Committee, including the process used by the 4 Bingo Advisory Committee to consider, discuss and/or 5 take action on issues before the Bingo Advisory 6 Committee. 7 We have a number of individuals who 8 indicated they would like to address that issue. I'll 9 just call them as they come up on the desk here. 10 Billy, what did you have? 11 MR. ATKINS: Just as real quick background 12 information to the members, I sent out and I hope I 13 sent to Steve a copy of -- this is a partial 14 transcript from the March 6th meeting of the Texas 15 Lottery Commission, and it's in an exchange that took 16 place between Mr. Steve Bresnen, the chairman of the 17 Texas Lottery Commission, Tom Clowe, and very briefly 18 myself, and just to kind of lay out very briefly for 19 the advisory committee and the public here today, 20 there were some questions raised as to how the 21 effectiveness of the advisory committee could be 22 improved. I think the two issues that Mr. Bresnen 23 raised were questions about how the deliberative 24 process could be improved, that is, the exchange of 25 information and the submission of information on WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 24 1 relevant topics to members of the advisory committee, 2 and also on ways to bring more of the issues that come 3 before the advisory committee to fruition, and 4 Chairman Clowe, again I'm just paraphrasing real 5 quickly this exchange, he was appreciative of 6 Mr. Bresnen's comments and he was also very 7 appreciative and very sensitive to the volunteer time 8 that members of the public commit by serving on this 9 advisory committee. So he also wanted part of the 10 discussion to center around how it can be made more 11 efficient so that the best use of your time is made, 12 and the one thing I guess that I added is that the 13 staff had expressed a concern on the interest in the 14 Advisory Committee. You know, we've just talked about 15 the nominations. Out of 14,000 forms that we sent 16 out, we got 37 in response. So I think everybody's 17 intent from this item is, again in a nutshell, to 18 identify is ways that we can increase the 19 effectiveness and the efficiency of the advisory 20 committee, and that's something that the staff has 21 been thinking about and I'll be happy to comment on at 22 the appropriate time, Mr. Chairman. 23 CHAIR NEINAST: Thank you, Billy, and I 24 might add to that, I was not aware of that -- I did 25 not attend that meeting, but this action we discussed WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 25 1 earlier of getting permission from the commission to 2 hold some of our meetings outside of Austin is aimed 3 at that also, to get out in the areas that are some 4 distance from Austin where a person working for a 5 charity who is not being paid anything might attend 6 the meeting and give us some valuable input whereas he 7 would not want to pay the expenses of coming from 8 Texarkana or Lubbock or somewhere else to appear 9 before us, so that's one action I think that will be 10 taken in the future. We hope we'll get more input 11 from the public, which is something we really are 12 looking for and have looked for and we want, and I'm 13 just very pleased at the number of you who are here 14 today. We've never had a turnout like this, and I 15 wish we would have something like this at every one of 16 our meetings. This is what we need, and this is the 17 only way we can get the information that we need to be 18 an effective sounding board for the Lottery 19 Commission. 20 Having said that, we have just quite a few 21 individuals who want to address that item. I'll just 22 go down as they appear here on the desk. The first 23 one is Steve Bresnen. He had a few comments before, 24 and welcome back, Steve. 25 MR. BRESNEN: Thank you, Mr. Chairman. I'm WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 26 1 Steve Bresnen, and I represent the Bingo Interest 2 Group and several charities out of the Odessa area. 3 I hope you will take the opportunity when 4 you get a minute to read the discussion. I think 5 Billy did a really good, fair and balanced job of 6 detailing that discussion that I had with Chairman 7 Clowe at the Lottery Commission meeting. I have a 8 tendency sometimes to come off as being critical of 9 individuals, and it's not my intention to do that and 10 it's not what's in my heart. But I do think that it's 11 fair to say that organizationally the Bingo Advisory 12 Committee has not been doing as well as it could do, 13 and I take some personal responsibility for that 14 primarily because the chairman told me to in a private 15 meeting I had with him. He asked me to become more 16 consistently involved. My face is familiar to you, 17 but I've sort of come and gone depending on whether 18 there was anything in a particular crisis on your 19 agenda, and I pledge to you to be here more 20 consistently. I can't say I'll be here every time 21 because that wouldn't be fair and it would be wrong, 22 but I will be here a lot, and I'm going to do 23 everything I can to turn out everyday people in bingo 24 to come to your meetings. So I'm going to do my part. 25 I'm going to make some suggestions about specific WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 27 1 things that I think that could be done that would make 2 you all's job easier and more effective. 3 At the same time, I'd ask you not to ruin 4 what some people are starting here today. We came to 5 a meeting, and it's one of the horror stories that's 6 in that dialogue, in that transcript, but we came to a 7 Bingo Advisory Committee meeting, which a number of 8 items were posted and there was some significant 9 interest, and I did go to get some people there. We 10 had a pretty good attendance at that meeting. There 11 were a couple of items that were to discuss proposed 12 rules, and yet there were no proposed rules, there was 13 nothing there to discuss, and so people who may have 14 come with an interest in talking about those rules or 15 finding out about them came for nothing. There were a 16 couple of items that you all had voted on before, or 17 that you all had asked the staff to look into before. 18 Suzanne, you had a transcript, I think, from a meeting 19 that had occurred a year-and-a-half -- I think it was 20 a year-and-a-half or a year before. On the transcript 21 at that time the staff was looking at it, and that day 22 the staff was looking at it. And people who -- my 23 point is not to criticize the staff. My point is to 24 say people came from a distance to participate in 25 discussion about those things. They were important to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 28 1 them. 2 I get paid to be here so I don't have a 3 real good excuse unless I've got a conflict, but those 4 folks, just like y'all, didn't get paid to be here, so 5 they come in and they sit down and they see these 6 things and then they think, heck, I can't afford to 7 take my time if I'm not going to get my two cents in. 8 Undoubtedly, those items are going to come back up on 9 your agenda again, and when that agenda is published 10 and the people look at it, they don't have any 11 assurance that that business is going to be taken care 12 of that day. 13 So my number one suggestion is, if it's on 14 the agenda, have something meaty and ready to talk 15 about and ready to go. Or have some way -- I realize 16 there is always going to be potential for a slip at 17 the last minute because that's just the way the world 18 works, so we need to at least have some way of 19 informing people, maybe on the Web site again, that 20 there is a slip there and maybe what they are 21 interested in is not going to occur that day. It 22 seems to me that y'all as board members have to insist 23 that that sort of process take place; that there is a 24 match between what you are coming to talk to and that 25 there is a product ready to go on it. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 29 1 I think another thing that you all have to 2 do, whoever serves here, you have to ask more 3 questions. You have to get to the bottom of what it 4 means. This format, I've testified to legislative 5 committees for a long time, and this format is much 6 like a legislative committee. We talk, and y'all sit 7 there. Now, I'm pushy and so we've had some pretty 8 good discussion, I think, but people are -- I think 9 maybe there might be a different format or a way to 10 get some more discussion going where we're not in such 11 a formalistic type of approach here. Every time I 12 meet with any of the people who are involved in bingo 13 day-to-day I learn something new, and if I pose a 14 problem, inevitably they come up with a solution 15 that's something that I haven't thought about. So 16 somehow we've got to get more of what's in the brains 17 out here into the brains in the discussion up here. 18 You guys got to draw more out of them. 19 Also, I think you have to draw more out of 20 the staff. I stood up on the first item because I do 21 think it's important to have the security division 22 functions. My focus is on the cost of it and how we 23 pay for things here. I think we've got to start an 24 approach, we've got to start focusing on that. Is it 25 more expensive to use peace officers? Am I under a WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 30 1 misimpression that peace officers are more involved 2 with that than not? I'm hoping that someone on 3 this -- on this Bingo Advisory Committee now or in the 4 future will take more of an interest in the sort of 5 details, the guts of what we're doing on a day-to-day 6 basis and get yourselves fully informed on that. 7 I suspect that there is a gap between what 8 the public understands about it and what actually goes 9 on, and I think some disappointment, some bad 10 feelings, some lack of appreciation for what the staff 11 does with its limited resources grows out of that gap, 12 and I'm asking you all to help fill that gap by asking 13 more questions, getting more information from the 14 staff. You know, in a way, I'm asking you to grill 15 them a little bit, not for the purpose of criticizing 16 anybody but to get this information elevated to a 17 level of discourse where some people can understand 18 better. That's all. 19 Finally, for the moment, I'd like to say 20 that I don't think you are -- y'all get information 21 far enough in advance, and I don't think when we 22 attend these meetings everybody out here gets the 23 information so we're sort of in a fog. There has got 24 to be a way to get some of that information out. 25 Maybe the Web site is the universeal answer to that. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 31 1 It may be that when Mike came up, if there were extra 2 copies of the report of the security division, that 3 people could have a copy of it. That would be 4 helpful, and we might be able to participate or we 5 might look at it and say, well, that's interesting. 6 What I would probably do is, because these reports -- 7 you all get these reports frequently, I'd probably 8 hold on to those and compile them over time and look 9 to try to see if I could divine any conclusions from 10 them. 11 So I would ask that you, number one, if 12 it's on the agenda, that there be substance there to 13 deal with; number two, that you ask good questions and 14 get good information on the agenda; and, number three, 15 that you share it with the folks out here; and, I 16 guess, number four, if there is a way we could get a 17 different kind of format where we're not in this 18 formalistic approach and there is more discourse 19 between people that maybe that would help. 20 Suzanne, you and I know each other a little 21 bit better than some of the other folks. I'd like to 22 pick on you for just a second. Your testimony at the 23 hearing on the public rules the other day and one of 24 your colleagues, since he's not here to defend himself 25 I won't mention him by name, you all made some real WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 32 1 good points, they were in great detail, they were, I 2 think, worthy of taking note, and I think the rules 3 ought to be changed to reflect those. My recollection 4 is not -- is that we didn't have that level of 5 discussion when those rules came before the Bingo 6 Advisory Committee, and you all voted to go ahead and 7 post those up. My guess is you probably didn't have 8 much advance notice and the chance to go through them 9 because I didn't at that meeting. You may have gotten 10 a better notice on that. But that's the kind of 11 information that I think ought to be shared in these 12 kinds of meetings, and a little more roll up the shirt 13 sleeves and dig into it. 14 I hope I haven't come across as being 15 critical personally of anybody, but I'm going to do 16 what I said I would do, and I would hope that the 17 Bingo Advisory Committee will make it worth 18 everybody's worthwhile to do that. 19 If there is any questions, I'll be glad to 20 answer them; otherwise, I'll sit down and quit hogging 21 the podium. 22 CHAIR NEINAST: I have a couple, Steve. 23 MR. BRESNEN: Yes, sir. 24 CHAIR NEINAST: The Enabling Act just 25 requires the committee to meet at least quarterly. Do WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 33 1 you think a quarterly meeting is sufficient or should 2 there be more meetings? 3 MR. BRESNEN: I'd have two answers to that. 4 I think, first of all, it depends on the quality of 5 the meeting; and, two, I think it depends on the 6 extent to which you will use -- well, let me give 7 three answers. It depends on the quality of the 8 meeting. If we get real meaty on those rules right 9 there, what it might have done was given the staff 10 some direction. I'm harking back to this meeting that 11 I'm talking about earlier. Then before those rules 12 got proposed, the staff might have gone back and made 13 changes to them before they went to the commission 14 that would then not have necessitated the public 15 hearing that was held the other day. I'm just saying 16 maybe. I'm speculating. It's not clear. And so that 17 would have cut out one job that they have had to 18 attend to and do. So the quality of that meeting 19 would have affected other events and how much time we 20 spent. 21 Number two, I really like the idea, and you 22 all have done this a couple of times now and I 23 strongly urge you to continue doing it, is to use a 24 subcommittee sometimes to get better information in 25 advance of the meeting to where they can come in and WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 34 1 they can brief you other members because nobody can 2 attend to this all the time. You have all got other 3 things to do, and I understand you are not getting 4 paid to do it. So I think that might be a way of not 5 necessarily having a whole lot more meetings, by using 6 a subcommittee from time to time on really important 7 issues. 8 And, thirdly, I think that how you conduct 9 the meetings about -- how you get issues on your 10 agenda and where you conduct them is really important. 11 Taking this around the state here I think is extremely 12 important. People will become more attuned, I think, 13 if you go out and expose it to them some in Lubbock, 14 Texas, and Brownsville, Texas, and El Paso and 15 Texarkana and whatever. I think that's going to kind 16 of dictate as a practical matter what you need to do 17 to get more people involved and have more meetings. I 18 hope I have been responsive to your question. 19 CHAIR NEINAST: You have, and another 20 question I would have of Billy, would it be feasible 21 for the members to each get the notebook at least a 22 week in advance with some backup material? Would it 23 be feasible, Billy, to post all of that material on 24 the Web site at the time it's mailed out to members of 25 the committee? WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 35 1 MR. ATKINS: I would guess it would, 2 Mr. Chairman. That's something that I would like to 3 consider a little further, and that's one of the 4 things I wanted to follow up with Steve on. I'm not 5 aware of other types of bodies where all of the 6 information that's being provided to the body, 7 either -- you referenced a legislative committee, the 8 advisory committee, the Lottery Commission, for that 9 matter, is provided to everyone for discussion, and I 10 would -- I mean, it would represent again additional 11 work on the staff's behalf to, you know, even put it 12 up on the Web, but I'm sure we could in some format do 13 that. 14 MR. TAWIL: The rules are already up there, 15 aren't they, Billy? 16 MR. ATKINS: Yes. 17 MR. TAWIL: The security division is the 18 only one that I thought, until he talked about it 19 today, might be something for you to look at, and it 20 seemed like it's always a single page. It could 21 easily be posted. 22 MR. BRESNEN: Well, I think you have to 23 make some judgments. I'm not trying to get you all to 24 adopt hard and fast rules about anything. I'm just 25 trying to make it better, and I do think -- Billy, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 36 1 I've been to a bunch of legislative hearings where 2 they are up there talking about something and you 3 don't have the slightest idea what they are talking 4 about. I've also been to a bunch of them where there 5 are a couple boxes sitting in the back and everybody 6 is back there clawing and if I'm first, I get one and 7 if I'm not, I don't. So it might be that a standard 8 practice is to have 20 or 25 copies and, hey, if you 9 are late, share with your neighbor. I mean we're 10 going to have to be practical about this. It drives 11 up the cost. I'm concerned about cost. The more 12 copies you make, the more cost. So it may be a 13 balance between getting things on the Web site, having 14 25 copies or just making a decision, hey, this didn't 15 look like this was real important for everybody to 16 have, if you are interested in a copy, come up 17 afterwards and I'll get it. 18 MR. TAWIL: Let me ask a question. I know 19 you have said this to me before and that is when 20 someone tries to interact with the Lottery Commission 21 staff, whether it's security or audit or accounting or 22 whatever, they generally have a standoffish attitude, 23 and I have had several people complain to me about 24 that. Even my own personal experience has been that 25 they are very standoffish. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 37 1 MR. BRESNEN: That's not been my 2 experience. 3 MR. TAWIL: Okay. Well, you have to go 4 through -- you have to file an Open Records Act. 5 MR. BRESNEN: If you want any information, 6 you have to file an Open Records request. 7 MR. TAWIL: With regards to any information 8 about the status of something that may relate to you, 9 they generally are fairly standoffish about that. I'm 10 wondering if this committee could serve as a tool, 11 like an ombudsman, a subcommittee of whatever 12 individuals, members of the advisory committee could 13 be an avenue for people to bring their frustration and 14 complaints to and then allows the committee to follow 15 up and recommend. 16 MR. BRESNEN: Well, I think people should 17 be doing that. I think people should be approaching 18 you and informing you. That's our duty. You know, 19 that's our duty. I don't think you necessarily -- I 20 don't think it's incumbent upon you to do that. I 21 think all of y'all, and I mean all of y'all, everybody 22 behind me, needs to know who you all are, what your 23 involvement is, and they need to be involved. That's 24 their duty. 25 I want to make something real clear. I've WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 38 1 said this publicly and I've said it privately. My 2 complaints don't have to do with my day-to-day 3 interaction with the staff. If I call Billy or Mike 4 or Phil or any of those folks, now, Mr. Chairman, I 5 believe I've said this to you in private, I think on a 6 case-by-case basis the staff is very responsive, and I 7 get what I need. It's at this policy level that I'm 8 trying to focus. I'm trying to get you all to do and 9 this committee to function better, not to deal 10 necessarily with individual cases but to be working on 11 these policy issues. And there is a tendency to 12 personalize things or to get upset about an individual 13 case, and I'm not. I'm using individual cases as 14 examples for how things might be better on a policy 15 level, and I want to be real clear about that. I find 16 the staff -- I think my personal rapport with the 17 staff is really good except when I write rude letters, 18 and I don't blame them for that. So I want to be real 19 clear about that. 20 I also want to be real clear, though, that 21 people out here, your constituency, ought to be able 22 to approach you and say I'm having this kind of 23 problem, and I think you all have to have some 24 interaction with the staff, not necessarily as an 25 effort to resolve the individual case because they WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 39 1 have certain formal duties that they have to be 2 responsible for and processes that they have to go 3 through, but so you will know and they will know and 4 there is a feedback mechanism where you can make 5 policy changes going forward. 6 CHAIR NEINAST: Let me make two comments, 7 if I may. We have an informal procedure here, Steve, 8 that works sometimes, most of the time it doesn't, but 9 what is supposed to happen, if there is going to be an 10 agenda item, the person responsible for that agenda is 11 supposed to submit a form that will be submitted to 12 the rest of the committee, which includes among other 13 things, if it is an item that's going to require 14 action, to have the motion set out that is going to be 15 presented and then backup material. And that applies 16 to -- I get calls from some members of the community 17 who want to do that, I say okay, here's the procedure, 18 send it in in writing that this is what you want to 19 consider, this is what you are going to propose as a 20 motion and backup material. Our response from, at 21 least those that I have talked with, have been nil 22 when we asked for that. We want them to come prepared 23 also, so I want to address this to y'all, as you did. 24 If you want something on the agenda, give us more 25 background to start with other than just let's talk WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 40 1 about what color the bingo cards are going to be, for 2 example. And so that procedure is in effect, and -- 3 MR. BRESNEN: I think that's fair enough, 4 and I think that would be something that would lend 5 itself to put out on the Web site. Now, everybody 6 back here has got to start looking at that Web site, 7 and I know the Internet is a wonderful thing but it's 8 not for everybody. Somehow people need to know that. 9 I've never really -- you know, like I said, I'm pushy 10 so I call you up or I'll call Billy or one of you all 11 up and say let's get this on the agenda, and I've been 12 able to do that. But I'm not sure everybody back 13 there knows what they ought to do to do that. 14 CHAIR NEINAST: Okay. And the second item 15 is rather than post all of this on the Web because 16 sometimes these books can get kind of thick. 17 MR. BRESNEN: Yes, sir. 18 CHAIR NEINAST: If when you see the agenda 19 or when anyone sees the agenda and say I've got an 20 interest in item number seven or whatever, if you 21 could call the division and say would you send me the 22 backup material on that. You know, could we send out 23 the -- it's not a part of the record then. Just send 24 out the backup material that we have in-house at the 25 time on that particular item so you would have it in WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 41 1 hand before you got here. 2 MR. ATKINS: I would think we could. I 3 don't know if we would have to charge or not. I don't 4 see why we couldn't. 5 MR. BRESNEN: Okay. The expense is no 6 problem in my case. In some other cases it may be, 7 but there definitely has to be some more informal ways 8 of doing this. But we don't have to solve this whole 9 problem today, but I did want to get it -- did want to 10 start talking about some solutions out there. 11 MR. TAWIL: Steve, what about having, you 12 know, when the committee convenes to start a new 13 committee, obviously when we go through these 14 nominations, and I'm not sure if our chairman is going 15 to be with us in the next cycle, I didn't see your 16 name listed on renewal, but we would convene and 17 introduce the new members. I've gone through there 18 several times, we never have put out an analyzed 19 vision of what we hope to accomplish and list those 20 items that would occur over a span of, say, twelve 21 months, have that posted where everybody knows what's 22 going to occur, have subcommittees created to follow 23 these items, and then we can evaluate ourselves at the 24 end of the year and see how much of it was done and 25 how much of it was accomplished and how much of it WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 42 1 went forward. 2 MR. BRESNEN: I think that's spoken exactly 3 like a true engineer. 4 MR. TAWIL: What's wrong with that? 5 MR. BRESNEN: There's not a thing wrong 6 with it. I think it's a great idea. I think you have 7 to have a blueprint. 8 MR. TAWIL: Okay. I think we're operating 9 in two dimensions. You know, we get a call, they say, 10 okay, what agenda items have you fielded from the 11 field people in the industry that are concerned. Of 12 course, I'll get a call to get an item on the agenda 13 because someone wanted it there or someone calls and 14 says, okay, we've got this much time until the next 15 meeting, what's -- so we're operating in two 16 dimensions whereas we don't look out far enough to -- 17 MR. BRESNEN: I think that's a real good 18 idea to have a blueprint as long as you leave yourself 19 enough flexibility to deal with these issues that may 20 come up from the public. 21 MR. TAWIL: Would that have a negative 22 impact on the division, on the staff? Mr. Chairman, 23 do you understand where I'm trying to go with this in 24 terms of giving us a vision and a work plan? It would 25 be more effective. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 43 1 CHAIR NEINAST: Well, let's defer that 2 until the item that we're talking about whether this 3 should be -- I've had the same idea, particularly with 4 a new -- when you have newly organized or new members. 5 It definitely has to be some type of briefing, maybe 6 you walk through the division and bring everyone up to 7 speed which we've never done. 8 MR. BRESNEN: I would suggest when you 9 develop that work plan that you give folks out here an 10 opportunity to say things that they would like to see 11 on it. We've been talking with the staff, and I think 12 I've spoken on this issue with y'all before on 13 the definitions in the statute that we think are 14 causing -- the vagueness in the statutes causing some 15 problems. We'd like to see some rules there. So if 16 we're starting from a blank slate here, I'd like the 17 opportunity to come before you and say we have the 18 following three items that we think would be good for 19 rule-making and then ask you guys to maybe do some 20 informal work with some people to kind of push it 21 along a little bit and work that way. So it's a 22 little bit more starting in the field and coming 23 forward as you start that planning process. 24 I like the idea, though, of having some way 25 of sort of setting an agenda that goes out a little WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 44 1 further, yes, sir. 2 CHAIR NEINAST: Any other questions or 3 comments? Thank you. 4 MR. BRESNEN: I appreciate your time. 5 MR. ATKINS: I just wanted, Steve, to 6 comment on a couple of things. You and I have had 7 some discussions on this, and I appreciate you 8 bringing it forward and raising the issue. 9 One thing that you touched on and you 10 identified and I just want to reiterate is the fact 11 that there have been times when there have been items 12 on the agenda that either the staff wasn't prepared at 13 the time or for whatever reason the committee, their 14 pleasure was to pass on that item, and you mentioned 15 this but I just wanted to make sure that everybody was 16 clear on it, that it has been our practice in the past 17 and I think may continue to be in an overabundance of 18 caution, if we think something is going to come up to 19 go ahead and put it out there so that people will have 20 the benefit of knowing that. 21 MR. BRESNEN: Sure. 22 MR. ATKINS: I was going to hold off on 23 these but I would like to get some input from you and 24 the other speakers as to some methods that we think 25 may help improve this process, if that's okay, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 45 1 Mr. Chairman. 2 CHAIR NEINAST: Yes. 3 MR. ATKINS: And the first one, and it kind 4 of goes back to what Saleem was talking about with 5 subcommittees, one of the things that the staff 6 envisioned that we would get from the Bingo Advisory 7 Committee is individuals who would be able to bring a 8 broad range of input from specifically, say, the 9 organizations that they were a member of that 10 conducted, so, I'll pick on David since he's here, as 11 a member of the Knights of Columbus, he would have the 12 ability to gather a lot of input from other K of C 13 organizations around the state that conduct bingo and 14 bring that to this table. 15 One of the things that we've thought about 16 is, there is nothing to prevent members of the 17 advisory committee, as long as they don't have a 18 quorum, of holding smaller, for lack of a better word, 19 town hall meetings in a certain area, and that would 20 be something where the staff again through the Web 21 site, through mail notification, could notify 22 organizations in a specific area that, you know, these 23 two or three Advisory Committee members were going to 24 be at this location on this day and, you know, feel 25 free to come talk about whatever you want to, and WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 46 1 then, you know, hold them throughout the state and use 2 that as a means to bubble information up to the 3 advisory committee level. 4 MR. BRESNEN: I really like that idea, and 5 if it's going to be in an area where one of my clients 6 is located, I'll be glad to get on the phone and do a 7 phone bank to try to turn some people out to 8 participate in those. 9 MR. ATKINS: Okay. And another thing we 10 thought about in relation to the rules and the ability 11 to get the broadest input on the rules possible is to 12 do something similar to what they do down at the 13 Capitol and have different readings, and so we would 14 say at one committee meeting we would, you know, first 15 propose the rule, maybe give, you know, a brief 16 description of what it is, et cetera, and distribute 17 copies of that rule and then at the following meeting 18 try and have what I think you called the meeting 19 discussion so that folks have had a chance to look at 20 it, talk to one another about it, but have us sit down 21 then and talk about the substance of the rule. It 22 would probably require a little more frequent, you 23 know, meetings than on a quarterly basis, but, still, 24 I think that would give us the opportunity to get that 25 information out there and get a lot of that feedback WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 47 1 back. 2 MR. BRESNEN: I think that's a great idea, 3 too. If you are going to do that, I would suggest 4 that at that first meeting there be a real focus on 5 what the problem is that the rule is responding to. I 6 think that's the missing link in a lot of the 7 discussion. I will come back to that a little later 8 on, but I like that. Multiple bites added, the 9 opportunity, sometimes you can't turn it out until 10 shortly before the meeting, people get a chance to 11 give their off-the-cuff impressions, you get to hear 12 what the problem is about and you guys get the 13 opportunity to sell, if you will, explain what the -- 14 why you are doing what you are doing and then people 15 get to go off and get some feedback maybe through 16 those town hall type things and then come back for a 17 second reading. I think that's a great idea. 18 MR. ATKINS: Well, you're exactly right. 19 I'm reading the transcript now from the last public 20 hearing, and I haven't got to a lot of substantive 21 discussion yet, but I agree when folks have a chance 22 to look at it and really consider it, they do have an 23 opportunity to bring forth information that we just 24 overlook. So I just want to put those out now for the 25 other speakers that are coming up to consider also and WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 48 1 get their input on what they think about that. 2 MR. BRESNEN: Great. Thank you. I 3 appreciate that. 4 CHAIR NEINAST: Billy, you stole just a 5 little bit of my thunder. I was going to make a 6 recommendation that was a little bit different from 7 yours, but both of them can be done, I think. One is 8 to, in effect, informally constitute this committee as 9 you might say a speaker's bureau and put out on the 10 Web page and in the newsletter that any of the members 11 are available to come out and talk to any organization 12 about what the committee does, and use that as a way 13 to get input from groups that they talk to. Just a 14 little variation from what you were proposing, but I 15 think that if -- we'd have to limit it, of course. We 16 wouldn't want our vice-chairman going from Lubbock to 17 Galveston to make that talk. 18 MR. ATKINS: She may want to. 19 CHAIR NEINAST: We'll send Virginia. But 20 that's the type of thing that might get a little more 21 input from the field if we make ourselves available 22 for that, and we'll have to see which of the members 23 of the committee would be willing to do that. 24 Thank you, Steve. 25 MR. RINEHART: Why couldn't we do that in WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 49 1 the educational classes where we go out on the 2 education? We've got all the halls in that area -- we 3 have all the halls and the representatives and 4 everyone at these educational seminars that we have 5 each year. Why couldn't we do that or do some of it 6 along with that? 7 MR. ATKINS: We could. That's a great 8 idea. 9 CHAIR NEINAST: Okay. Fred Miccio would 10 like to address this. 11 MR. MICCIO: Fred Miccio, representing the 12 Knights of Columbus. 13 He just made some good points. I'd just 14 like to make a couple of comments on it. Number one, 15 I want to commend you people for the job you've been 16 doing, but it's pretty hard to make people happy when 17 you can't get people to participate. If you look 18 around and see the audience today, that should answer 19 some of our questions. The question is, we need to 20 get this out to the general public and get it out in 21 time so we can respond to it. Electronics by itself 22 is just not getting to everybody. We got this stuff 23 out maybe in the form of a bulletin, a bingo bulletin, 24 but whatever time it takes, whenever we are going to 25 have this stuff going on and then give us sufficient WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 50 1 time to respond on it, I'm sure we'll get turnouts 2 like we did today. 3 That's all I have. 4 CHAIR NEINAST: Questions? 5 MS. TAYLOR: Fred, what you are asking is 6 that the agenda gets mailed out prior to each BAC 7 meeting? 8 MR. MICCIO: Send out like the bingo 9 bulletin, then we're sure charities are going to get 10 it, halls are going to get it. There is no chance 11 that somebody might get an e-mail and drop it on the 12 desk and nobody will get it, whatever. But I got it 13 right away. I got the mail, I seen it right away, I 14 knew I had to come up here. Thank you. 15 CHAIR NEINAST: Thank you, Fred. 16 Mr. Hutchings, Mr. Charles Hutchings. 17 MR. HUTCHINGS: Good morning. My name is 18 Charles Hutchings. I represent Geodesics, that's a 19 commercial lessor. I'm also a member of organizations 20 that play bingo. 21 On this here, I echo what Steve has 22 basically said. The only thing else I'd like to 23 comment on, and, Mr. Chairman, please don't take this 24 as a personal attack or anything like that, it's not 25 meant to be, I believe this is a Bingo Advisory WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 51 1 Committee, that the chairman and vice-chairman or 2 however it is set up or arranged should actually be 3 from within the bingo industry so that when we 4 approach this dais to speak about the problems we have 5 that the person sitting up there inherently just 6 knows, you know, what the discussion is, what it's 7 about and understands the process. That's all I have 8 to add. 9 CHAIR NEINAST: I appreciate your comment, 10 Mr. Hutchings, but do you realize that the makeup of 11 this committee is set by statute? 12 MR. HUTCHINGS: Yes, sir. I have no 13 problem with the general public being on the board. 14 What I'm saying is the chairman and the vice-chairman 15 should be from within the bingo industry so when 16 people like myself walk up here to talk about bingo, 17 we're -- you, like I say, you do an excellent job 18 sitting up here. I've been to several of the meetings 19 and you do an excellent job, but at the same time I've 20 seen when we get into the specifics of bingo and what 21 goes on in bingo that you just don't -- what am I 22 trying to say? You are just not in the industry and 23 that it just doesn't resonate with you like it would 24 some of these other people up here. That's all I'm 25 saying. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 52 1 MS. BRACKETT: What do you mean by bingo 2 industry? 3 MR. HUTCHINGS: The charities -- what all 4 is represented up here? We have the charities, we 5 have the -- 6 MS. BRACKETT: But like a conductor is 7 okay? 8 MR. HUTCHINGS: The conductors -- 9 MR. ATKINS: A licensee. 10 MR. HUTCHINGS: Even the lessors understand 11 bingo. Even down to -- well, we do. We have to. 12 Even down -- 13 MR. TAWIL: Floor sales. 14 MR. HUTCHINGS: The manufacturers, at least 15 they know the products and what goes on with them. 16 The distributors certainly understand it, they deal 17 with the people who buy their products every day. 18 They understand what's going on out there with bingo, 19 and, like I say, it's not a personal attack on you, 20 sir. It's just my opinion that that's the way, you 21 know, how it should be done. Thank you. 22 CHAIR NEINAST: Okay. Thank you. Janice 23 Woods. 24 MS. WOODS: I'd like to speak on Item 6. 25 But I'll respond if you want me to. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 53 1 CHAIR NEINAST: Those are the only forms I 2 have of anyone interested in commenting on Number 5. 3 Is there anyone who would like to comment on that 4 item? 5 Okay. Then let's turn to a discussion -- 6 MR. TAWIL: Mr. Chairman, are we going to 7 take any action on that item? 8 CHAIR NEINAST: Well, no. Now we're 9 going to turn to discussion. 10 MS. TAYLOR: One second. There is one 11 thing that I think would really help the BAC is that 12 anytime we bring a motion to the table, I think we 13 need to put a time line on that individual motion of 14 what we hope to accomplish and when we think it will 15 be accomplished. If we may can pass a motion on 16 something that we agree on that is a good thing and we 17 pass our motion that, for whatever rule or topic we're 18 discussing, I believe that we need to at that time put 19 a time line with that of when we think that this item 20 is going to be accomplished. 21 MR. TAWIL: And the person who made the 22 motion ought to be the one that follows it. 23 MS. TAYLOR: I think that way maybe we 24 won't have the same items coming back over and over 25 again and we can move forward on them. If we WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 54 1 establish our goals, then maybe we can accomplish 2 them. 3 CHAIR NEINAST: I think it's an excellent 4 idea, and I think Steve touched on that in his 5 address. We do have another person who would like to 6 address the issue, and that's Scott Ingerman. 7 MR. INGERMAN: Scott Ingerman, San Antonio, 8 commercial lessor. 9 Mainly just to respond to the things that 10 Steve said. A couple things. The first thing, Billy 11 said there was 14,000 letters sent out for board 12 appointees, only 37 people responded. I don't think a 13 lot of people know about this process, and some of the 14 people that do know about this process are 15 disenchanted about the process. Whether they are 16 correct or not, they feel like nothing really -- 17 nothing really happens here. We all get to talk about 18 our views, but at the end of the day things that are 19 discussed are either not followed through with or just 20 cast aside, forgotten about, which was mentioned when 21 Steve was talking. 22 The process in getting things on the agenda 23 here was also mentioned. You know, you want us to 24 send in what we want put on the agenda, you want us to 25 send you backup information so we're prepared, also. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 55 1 Steve said it several times, and I agree with them. I 2 think the big problem here is the information. We 3 don't get the information that we need on our problems 4 to give -- to come up with the backup information. 5 Something as simple as the list of the nominees, which 6 I don't think is top secret information, I don't have 7 a list, it wasn't on the Web site, I don't know if 8 anyone else has a list or if there was any available 9 to anybody else, but I can't comment on it because I 10 never saw a list of the people, the 37 people that did 11 want to be nominated to this. That is a perfect 12 example of the lack of information that comes to us as 13 operators or charities or just the general public that 14 we need so we can give you positive feedback. 15 The third thing is, you know, that hit me 16 pretty hard is Suzanne saying time line. A lot of 17 time we talk about issues, everybody agrees it's a 18 good idea, we even have a unanimous yes, that's 19 fantastic, but there is no date, we're going to do 20 this in the next six months, we're going to do this in 21 the next legislative session, we're going to do this 22 in the next meeting, I mean there is no set time line, 23 and sometimes, again I've been to several meetings 24 last year, we'll bring it up next meeting, and then 25 the next meeting I come it's not on the agenda, so WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 56 1 sometimes when there is a time line, again it's 2 dropped. Again I don't know the reason why either. 3 I'm not in the loop so I don't know why that issue is 4 dropped, but if something is decided that it's not a 5 good idea, I think that people should be informed of 6 that, also, so when they come expecting to see it 7 because it was told by the committee that it was going 8 to be addressed next meeting, you know, they don't 9 show up or at least they can understand why. So these 10 are my comments on Number 5. 11 CHAIR NEINAST: Well, thank you, Scott, and 12 I want to say thank you for those -- y'all out there, 13 as Steve Bresnen referred to you, Scott is one of the 14 regular attendees, and he comes and really 15 participates in our discussions. I wish we had more 16 like you, Scott. You brought some good ideas today 17 and previously. 18 A couple of observations, as I mentioned 19 when we considered the nominations, this is the first 20 time this has been done. This is a change I think for 21 the better that the committee gets into the nomination 22 process. Previously it just went directly to the 23 Lottery Commission and they made their decisions from 24 the list or possibly, I don't know, based on 25 recommendations from the division, so this is a change WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 57 1 and I think it's going to be a change for the better 2 as we work out the problems that might be inherent, 3 like we developed one today. Saleem brought up today 4 we ought to have a subcommittee to go into this in 5 more detail, an excellent idea. 6 The other item that you certainly are aware 7 of and it impacts to a certain extent on what Suzanne 8 suggested, I think that's an excellent suggestion 9 also, but, as you know, we're an advisory committee 10 only. We cannot require any action by either the 11 division or the Lottery Commission. The only thing we 12 can do is when we see a problem, recommend it to the 13 Lottery Commission, and they can do what they want 14 with it and set a time limit or not. Excellent 15 suggestion, but I just want you to be aware that, I 16 think you are aware, but some in the audience may not 17 be aware of the fact that we cannot just sit here and 18 say this will be done. 19 MR. INGERMAN: Again, I understand the 20 committee's position exactly, but if we vote 21 unanimously to advise the Lottery Commission on 22 something, if nothing is done about it, do we have the 23 right to at least know why? Did we unanimously vote 24 that we have a panel of educated people that are in 25 the industry that vote that this is a good idea and WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 58 1 then again you are only advising, but still the powers 2 that be decide that this is not a good idea, can we 3 get some kind of explanation on, you know, where we 4 are misguided? Maybe we can approach it at a 5 different angle if we got that information. 6 CHAIR NEINAST: And that's the way it 7 works, that I make any report or whoever is sitting as 8 chairman does make a report to the next meeting of the 9 Lottery Commission in which one of the things that is 10 recommended are those actions where a motion was made 11 to take certain action, and that is presented to the 12 commission. At the next meeting of the advisory 13 committee, then whoever made that presentation to the 14 Lottery Commission reports what action they took. I 15 mentioned one today. We went up to the Lottery 16 Commission with the recommendation that we be allowed 17 to hold meetings outside the Austin area. It was 18 denied the first time, I reported back to the 19 commission, through the committee, we discussed it 20 again, and I went back to them with more information 21 and they approved it. So there is feedback. It's 22 kind of hard to follow because you don't necessarily 23 get a copy of the agenda for the Lottery Commission 24 and to be there when the presentation is made, and you 25 may not be aware of the fact that it's going to be WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 59 1 reported back to the committee. That's something we 2 have to look into as to how we get this information 3 out to the bingo community because there is this 4 byplay between the committee and the commission that 5 may not be getting out to the -- 6 MR. INGERMAN: Exactly. Yeah, that stuff 7 is intertwined. If something I feel strongly about is 8 going to be at the commission meeting, I would like to 9 know about it so I could attend that, also. And help 10 follow through with, you know, maybe give an 11 explanation. 12 CHAIR NEINAST: Well, normally for 13 information, what we do here, sometimes -- there have 14 been one or two cases where the Lottery Commission met 15 the day after and we may not have made that, but it's 16 normally the Bingo Advisory Committee report is an 17 agenda item on the Lottery Commission at the next 18 meeting, so the next one we know of right now is April 19 the 26th, and I'll make a report that will be much 20 more detailed and longer than the ones I usually make. 21 Is there a change to that, Billy? Still 22 April 26th? 23 MR. ATKINS: Still April 26th, but that's 24 still also tentative. And just also, Scott, real 25 quickly to follow up on what Bill was saying, not only WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 60 1 does Bill provide a report on the committee's 2 activities, whether it's written or oral or a 3 combination of both, not only that, but I think it's 4 important for everybody to know that the chair of the 5 Lottery Commission, who is the designated bingo 6 representative, has been to most if not all of the 7 advisory committee meetings, so he's able to, you 8 know, even to a degree supplement some of that 9 information that Bill or whoever gives at the 10 commission meeting. 11 MR. INGERMAN: Thank you. 12 CHAIR NEINAST: Any questions or comments 13 on Scott's position? 14 Thank you, Scott. 15 Now the committee goes back to that item 16 for our own consideration and discussion and any 17 action that we want to take in the form of a motion or 18 report to the committee. The floor is now open for 19 comments from any one of the committee members. 20 Saleem, do you have something to add? 21 MR. TAWIL: Yes, sir, I think to be more 22 effective we need to be an independent body and that 23 is we need to be thinking more about what the industry 24 needs and does and the problems that they have and 25 work with those issues and directly report those to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 61 1 the commission and not be concerned about how it 2 impacts the staff or how much work it puts on them or 3 whatever. We need to be more active in our regions 4 anyway. I'm willing to take any kind of information, 5 make my time available to anybody in the region, take 6 whatever complaints or any issues that relate to bingo 7 and try to work with those through the committee and 8 see that they are carried forward. 9 We need to have a plan. I don't know of 10 any business that operates in two dimensions, none of 11 them that succeed. They all fail if you operate in 12 two dimensions. We need to operate in a capacity 13 where we recognize we have goals to achieve and get 14 them accomplished. We need to follow up on issues, so 15 the party is over really. For this committee to be 16 effective, we need to be proactive. We need to really 17 work and be of value to the commissioner. 18 Commissioner Clowe has a lot of responsibility in 19 running the Lottery Commission in addition to being 20 our contact with the commission himself. 21 So the more we do that's of a positive 22 nature, I think a lot -- see, the situation -- I'm 23 involved in a different industry aside from this where 24 people do have the ability to spend on lawyers and 25 lobbyists and so on. This industry doesn't. There is WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 62 1 very few lawyers that can help a lot of these people. 2 There are very few lobbyists. The reason is a lot of 3 these people that are involved with charitable 4 organizations, they don't have any money, so their 5 case cannot be carried forward very easily, and I 6 would believe the advisory committee can fill a huge 7 gap there. When somebody comes up against the Lottery 8 Commission through the staff and division, you know, 9 if they get no action, they got nowhere to turn, 10 especially if they can't afford a lawyer, if they 11 can't afford a lobbyist, they got nowhere to go. 12 Nowhere to go. And all those people out there are 13 aware that this committee can carry action forward for 14 them, typically those that just have nowhere to turn, 15 and they are on the brink of collapse because they are 16 unable to make the process work for them. 17 So that's how we can be effective as a 18 committee, have an annual plan, have a vision to be 19 followed through and carried, be accessible and 20 available and promote the idea that we're open door. 21 I'm open door to anybody in the industry. I don't 22 care what your role is. I'm willing to take the time 23 and go and carry that forward. 24 CHAIR NEINAST: Well, in what way have we 25 not been doing that? WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 63 1 MR. TAWIL: We've been operating in two 2 dimensions. I get a book here and then two or three 3 weeks or a week -- I get the book about three or four 4 days, maybe -- at the most that I've gotten it early 5 would be a week before the meeting, and that's only 6 because somebody put it in the mail on a Friday for 7 the following week, but other than that, there is no 8 interaction or activity of this committee until we 9 meet and then -- a good example is today. There is 10 about -- I don't know how many forms here for 11 nominations, I didn't count them individually, but we 12 cannot come in here and sit down and say, okay, let's 13 act on these. That's the silliest thing I've ever 14 heard. I can't even imagine anybody even thinking to 15 do that. So that's the kind of thing I'm talking 16 about we need to do away with. 17 I'm willing to put my time in. It doesn't 18 matter. I want to be positive and effective. I know 19 these people out there, they are not stupid. They 20 understand. They are frustrated, they are tired of 21 it. They just go on from time to time and just do the 22 best they can. They don't have a lot of money. They 23 are not walking around like Sprint PCS or AT&T. They 24 are not those kinds of organizations. I deal in that 25 industry. I know. I've got several lawyers working WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 64 1 on my behalf in communications, but these people can't 2 do that. Our structure is that way. This is a body 3 of law and rules, which is great, we abide by them, 4 but in this industry, those people cannot move up the 5 line. So we have to be the instrument. That's what 6 the Advisory Committee is for. If we capture that 7 vision and move forward, we would make a big change 8 and impact, a positive impact. So that's my say on 9 all this. And whatever it takes to do that, I think 10 we ought to devote the time to it. 11 CHAIR NEINAST: If I understand what you 12 are saying is that we have not made ourselves 13 available of the industry, and that surprises me. I 14 know of nobody on this committee who has refused to 15 talk with anyone, and we've invited -- 16 MR. TAWIL: Regardless of the fact -- 17 CHAIR NEINAST: -- we've invited people to 18 come -- 19 MR. TAWIL: This has been ineffective. 20 Like this here, we sit up here, we do a motion, we 21 pass it and that's the last you hear about it. It 22 goes in Davey Jones' locker. A year-and-a-half later 23 somebody says, look, here it is in the transcript, we 24 didn't do nothing about it. That's right, we didn't. 25 You know? Or somebody -- we took two meetings to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 65 1 discuss some issue last year that had to do with the 2 staff and the staff had the audacity to say, you know 3 what, I don't like your recommendations. They say, 4 you don't recommend the way I wanted, I'm going to go 5 around you anyway. 6 CHAIR NEINAST: What issue was that? 7 Recent issue. 8 MR. TAWIL: I don't remember. 9 CHAIR NEINAST: Well, I think if you're 10 going to make an allegation like that against the 11 committee -- 12 MS. TAYLOR: Summary suspension. 13 MR. TAWIL: Summary suspension, there you 14 go right there. 15 MR. ATKINS: One at a time. 16 MR. TAWIL: Summary suspension is a good 17 example. I was really appalled. It had nothing to do 18 with me individually. It had really no bearing 19 positive or negative on me, but I'm sitting here being 20 part of the process, trying to operate intelligently 21 and deal with issues in a proper way, so we go through 22 the process, we have a subcommittee hearing, we meet, 23 we do all of this, it's presented, we make a 24 recommendation that the division doesn't like. The 25 division says, you know what, it doesn't matter, I'm WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 66 1 going to go around you anyway. That is not right. 2 MR. ATKINS: Saleem, I'm going to disagree 3 with your representation. The record will show -- 4 MR. TAWIL: The record speaks for itself. 5 MR. ATKINS: May I finish? The record will 6 show that there was a recommendation made to the 7 Lottery Commission by the Bingo Advisory Committee 8 that they did not support the staff's proposal for 9 summary suspension authority. And the staff made 10 their recommendation, they did, and the commission 11 chose to side with the staff. 12 MR. TAWIL: You shouldn't be part of this 13 process interacting with it, helping to promote it, 14 and then go separately and do something differently. 15 That's what I'm complaining about. 16 MR. ATKINS: Well, and if the support 17 services that the staff provides the committee feels 18 isn't necessary, that's the committee's decision. 19 MR. TAWIL: Well, I think we ought to be 20 acting on it. We ought to be an independent body 21 that's of value to the commission, that we need to be 22 able -- when Chairman Clowe looks at something there, 23 he knows that it's coming from this group and it's 24 fielded from the people out there and this is what the 25 industry is trying to -- we're a feedback system for WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 67 1 his ear and his eyes so he can understand and make his 2 decisions in the best way he feels like he needs to. 3 CHAIR NEINAST: And that's exactly what he 4 did in that particular case. He got the input from 5 the committee because I gave it to him. It was within 6 their realm to decide what they want to do because we 7 are just an advisory committee. They took that 8 advice, they listened to the position of the division, 9 and we do not control the division. We have 10 absolutely no legal authority to control the division 11 to tell them what to do. They are perfectly free to 12 go with the committee, which they did, and the 13 committee for whatever its reasons or within its 14 prerogative -- 15 MR. TAWIL: Well, since Billy is going to 16 participate, I think what should have happened is he 17 should have told us here's my position on this, here's 18 the backup information, let me see if I can persuade 19 you all to see my point of view, and then we go from 20 there as opposed to being told at the end of the 21 process, you know what, I don't like your decision, 22 I'm going to go around you. 23 CHAIR NEINAST: Well, that's not to be -- 24 we're saying the same thing over and over. That's not 25 the function of our -- WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 68 1 MR. TAWIL: Well, we're talking about 2 effectiveness in this committee. 3 CHAIR NEINAST: And we cannot -- that would 4 be giving us absolute control over the division -- 5 MR. TAWIL: What's wrong with that? What's 6 wrong with that? 7 CHAIR NEINAST: We don't have it. We don't 8 have -- 9 MR. TAWIL: I'm not asking for control. 10 I'm asking for input that's open and forthright to 11 begin with. 12 CHAIR NEINAST: And -- 13 MR. TAWIL: The other thing is, is that if 14 you want to talk about -- we're talking about 15 effectiveness, Mr. Chairman. I'm just letting you 16 know honestly and openly the effective -- the symptom 17 here, we've been hearing the symptom for a year from 18 these people. I've been sitting on this committee for 19 more than a year and finally distilled after a while 20 what the problem is. We're not going to the core of 21 the problem. The symptom is what we see. This 22 industry is stagnant. These people are losing money. 23 They are -- they don't need regulation. Just let them 24 sit here for a while and they are going to collapse 25 inward totally. The industry is decaying. Look at WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 69 1 it. In every report, the last one we got, the last 2 advisory committee meeting, they are down an 3 additional 5 percent. I've watched us go from eight 4 to 900 million to five or six. When are people going 5 to wake up? I've run businesses for 30 years. You've 6 got to understand that when things like that happen, 7 you have to turn them around. You can't continue 8 talking about them. And we're not effective. We've 9 got to do something that's effective. 10 CHAIR NEINAST: Your last comments were 11 completely off of the subject we were discussing, and 12 that is the authority and the ability of this 13 committee as opposed to the authority and ability of 14 the Lottery Commission. As long as the law is written 15 as it is, what was done in that particular case was 16 perfectly proper and legal. There is nothing we can 17 do to change that. The division has absolute 18 authority to go to directly to the commission if they 19 disagree with that, and that's what they did. So 20 you're unhappy with it and -- 21 MR. TAWIL: No, I'm just -- 22 CHAIR NEINAST: Let me finish. You are 23 unhappy with some of the decisions we've made, but the 24 decisions are made and they were made properly and 25 legally, so let's don't go back and rehash those. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 70 1 MR. TAWIL: Yes, sir. 2 CHAIR NEINAST: We're going to deal with 3 that in the next item as to whether this agency should 4 be a separate agency. That's where the comments you 5 have are appropriate. But right now, we have to 6 remember that we are nothing but a -- we are a filter, 7 in effect, for the Lottery Commission, and what they 8 do with the information we give them is strictly up to 9 those three. They can decide to follow our 10 recommendation, as they have in most cases, and they 11 can decide not to follow it in others, and that's just 12 the way it is and we can't change that, and discussing 13 it here any further would serve no additional purpose 14 at this time. 15 Do you have any comments on this item, 16 Number 5? 17 MR. SPEED: I have none. 18 CHAIR NEINAST: Virginia? 19 MS. BRACKETT: No. 20 MS. TAYLOR: I think that one of the 21 suggestions that Scott made is viable to help in the 22 industry and it is whatever we decide at the meetings, 23 if we make a motion, we approve something, we've come 24 to an agreement and that's something that you are 25 going to be talking to the commissioners and you are WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 71 1 taking a report, if we could post on the Web site what 2 actions the BAC has taken, instead of, you know, 200 3 pages of minutes. If the actions, the actual action 4 items, if we could post that so that the people out 5 there could know in a quicker time frame what actually 6 actions were taken and then they would know, like 7 Scott would ask, what's going to be discussed at the 8 commissioner's meeting, and then maybe the general 9 public can come to the commissioner's meeting and say 10 we support the BAC, this isn't just nine people 11 sitting up here making decisions, we're supporting the 12 decision they've made on this or we don't support the 13 decision they have made on this, but they would know 14 which items were going to be addressed to the 15 commissioners at those meetings. So I don't know -- 16 it doesn't seem like it would be very hard. Just post 17 the actions. 18 MR. ATKINS: Instead of the transcript? 19 MS. TAYLOR: Well, the transcript is great, 20 but have any of you read the transcript? One person. 21 It's hundreds of pages long every meeting. You're 22 doing a great job. It's a lot of reading, I mean it's 23 a lot of reading. I stayed up and read one until 3:00 24 in the morning. 25 MR. ATKINS: In addition to? WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 72 1 MS. TAYLOR: Yeah. 2 MR. ATKINS: Okay. That's all I need. 3 MS. TAYLOR: Instead of waiting for the 4 transcript, and I don't know if one of those -- I'll 5 be glad to volunteer to do that, to get the motion 6 down and get the vote down so we know what the BAC had 7 agreed and just have those posted individually. The 8 discussion is great in the transcript, but it would be 9 nice to be able to get to the meat of it without 10 having to read through two or 300 pages. Reading on 11 the Net isn't my thing to do. It's hard to read that, 12 but none of us want to print it out because it's too 13 long to print the damn thing. 14 CHAIR NEINAST: I prepare for the 15 commission what I call an executive summary, and I 16 generally try to keep it to one page and that's 17 condensing it a lot. And that goes to them and is put 18 in their book before they come and then I use that as 19 my discussion, and I see no reason why as soon as I 20 get that in that that cannot be posted. 21 MS. TAYLOR: Perfect. 22 CHAIR NEINAST: You may disagree with the 23 way I report something, because I try to boil down, 24 like you say, 350 pages down to one page or sometimes 25 I think I've gone as long as two pages on a couple, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 73 1 but it gives the commission an idea of what I'm going 2 to be talking about. And sometimes it's no more than 3 what I've already told them in writing, but sometimes 4 I have to elaborate on some of it. 5 MS. TAYLOR: Perfect. 6 CHAIR NEINAST: Any other? Robert? Any 7 comments? David? 8 MR. CASTILLO: Well, I think we have 9 frustration in that a lot of mutualistas or K of Cs 10 have given up bingo and it's going down and it's part 11 of the problem that we need to address, you know, get 12 the people to come and talk to us, this is what's 13 happening to us. Some are trying to reestablish. 14 They let their license go and now they want to get 15 their license back, starting the new procedure, and 16 they let the license go because they thought, well, 17 hey, we're not making money, you know, and somehow or 18 another they are looking to us to sound as a sounding 19 board to let the Lottery Commission know we're losing 20 money, our sales are going down, revenues are going 21 down. 22 CHAIR NEINAST: Well, I think that's what 23 we're here for. We are a sounding board, and our 24 problem that we've addressed several times is getting 25 the people to come and use us as a sounding board. I WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 74 1 just wish we had this type of audience at every one of 2 our meetings. But the problem everyone faces is how 3 do we get those people to come, and maybe going out to 4 the other areas I hope will assist that because it's 5 hard to get someone that has a problem to come down 6 from Lubbock or anyplace more than a hundred or so 7 miles from Austin to bring their concerns here. 8 Back to the item on the agenda. I don't 9 see where there is any type of motion that can be 10 considered or that is necessary to cover this item. 11 What I propose to do is I've made a short list here of 12 the items that have been discussed, and I will report 13 those to the commission on the 26th of April or 14 whenever they have their meeting. I do not see any 15 need or any way that we can have a formal action taken 16 on this item. I think we've discussed it and need to 17 go no further on that one. 18 MR. CLOWE: Bill, could I make a comment? 19 CHAIR NEINAST: Yes, please, Chairman 20 Clowe. Someone said you were there, and I couldn't 21 pick you out. 22 MR. CLOWE: Mr. Chairman, my name is Tom 23 Clowe, and I'm asking to address you this morning in 24 my role as chairman of the Texas Lottery Commission 25 and also the designated bingo commissioner for the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 75 1 Texas Lottery Commission, and I appreciate the 2 opportunity to hear this discussion this morning, and 3 I think it's been a wonderful thing. It's been a very 4 healthy and positive discussion of the concerns of the 5 constituents and the members of the bingo industry in 6 the state. It was my intention not to make any 7 remarks, but I think, having heard the excellent 8 discussions, it would not be the right thing for me to 9 sit and listen and not help these deliberations by 10 giving some reactions that I have. 11 First of all, I'd like to say that these 12 are my informal and personal opinions that I'd like to 13 give you, and there are three commissioners on the 14 Lottery Commission. So I'm one of three and not in a 15 position to give you any policy or formal responses to 16 some of the things that you've talked about. But 17 since I have been on the commission and since I was 18 designated the bingo commissioner when Commissioner 19 Anthony Sadberry resigned from the commission and 20 that's when I assumed my additional responsibilities I 21 field to the bingo industry, I have tried to come to 22 as many of your meetings as possible, and I have spent 23 as much time as possible with Billy and other members 24 of the staff so that I could learn the industry and 25 understand what we're dealing with in the bingo WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 76 1 industry. 2 First of all, I want to say that I think 3 the bingo commission -- the Lottery Commission is very 4 sensitive to the bingo industry, and I certainly can 5 assure you as far as I'm concerned that I am very 6 sensitive to the problems that you have discussed here 7 this morning. 8 In regard to the economy of the industry, 9 it's clear that there is a downturn in the revenues 10 and the monies produced by the bingo operation in this 11 state. It may be attributable to a number of forces 12 ranging from outside sources such as Internet 13 gambling, perhaps other types of gambling that is 14 legal in states bordering Texas. I've wondered 15 myself. It may be the age of the players doesn't have 16 something to do with the fact that in the bingo visits 17 that I've made there seem to be more people my age 18 playing bingo than younger people. There have been 19 attempts on behalf of the industry to make bingo 20 playing more attractive, the card tending devices, 21 progressive games and that sort of thing. Those 22 issues must be dealt with in the legislature. They 23 are clearly not under the control of the Lottery 24 Commission. But the Lottery Commission has been 25 supportive, I think, to the Bingo Division, Charitable WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 77 1 Bingo Division, in attempts to publicize and to inform 2 the public that we have a bingo industry in this state 3 that is healthy and is attractive and do what we can 4 within the statutes to help this industry maintain its 5 interest by the playing public. 6 As one commissioner, I can assure you that 7 it's my intention to continue in that effort. I think 8 bingo is a healthy and a positive activity, and in the 9 halls that I've visited I see good things. There are 10 those influences that are out there, eight-liners come 11 to mind, and that seems to be something that may be 12 affecting the bingo industry. 13 Giving you a comment about the economy of 14 the industry, I want to come back to the spirited 15 discussion, which I again say is positive, about where 16 the industry and the Bingo Advisory Committee and the 17 commission and the staff all fit together in my mind. 18 I have been on this side of the table as a 19 member of the industry or the public in my business 20 career more often than I've been on your side. I come 21 from the trucking industry, which was highly regulated 22 from its inception until just a few years ago. So I 23 understand the folks on this side of the table's 24 problem about being a small operator, not having the 25 funding, the difficulty in coming to Austin and being WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 78 1 aware on an ongoing basis about what's being 2 deliberated by this group as well as the commission 3 and the cost of representation. There are not a great 4 many attorneys or lobbyists that I'm aware of that 5 come to these meetings, there are a few, but in the 6 trucking industry, we either designated a person in 7 our company who stayed up with what we called 8 governmental affairs or governmental relations or we 9 hired a lobbyist, we just had to, and I see that in 10 the bingo industry as a different situation. 11 Now, I spoke with Steve at a commission 12 meeting about the effectiveness of the Bingo Advisory 13 Committee, and I think Billy did an excellent job of 14 representing those remarks. I want this committee to 15 be more effective. 16 As one commissioner, I want to continue to 17 point out that I'm not speaking for the commission, 18 I'm speaking just for myself. 19 And I think that you have touched on some 20 very important things here this morning that should be 21 looked at in depth to make this group more effective, 22 and I think Steve Bresnen made a good remark in that I 23 said to Steve, now, Steve, you've met with me and you 24 said you want some things and I'm going to tell you 25 what I want, and that is I want you to be more active WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 79 1 and I want you to be more consistent in your 2 representation with the staff and with the commission. 3 You can't buzz in here once every six months and say I 4 want this and I want that and go out. 5 Steve, is that a fair representation of 6 what I said to you? 7 MR. BRESNEN: Yes, sir, it is. 8 MR. CLOWE: And Steve made a promise, as he 9 said to you that he would, and I would ask that all of 10 you in the audience, this is a great turnout for this 11 meeting. I'm sorry we haven't heard from more people 12 on Item Number 5, I hope we'll hear some more before 13 the day is out, but this is an avenue for the public 14 and for those in the industry to be involved, to make 15 their voices known to the Lottery Commission, and I 16 think it's incumbent on all of you when you accept the 17 position on the Bingo Advisory Committee to hold 18 yourself out in a way that, regardless of the pay, 19 will be a time and effort commitment on your part and 20 be as good a representative as you can. 21 Now, Bill has come to the meetings and 22 reported for the Bingo Advisory Committee, and I think 23 he's done an incredible job of trying to represent 24 your views. Again, he's talking to three 25 commissioners and they have different viewpoints, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 80 1 that's the way the legislature intended it, and in 2 some cases, the staff has a different viewpoint as 3 well. I don't think it's an unhealthy thing that in 4 some cases maybe the BAC has a position and the staff 5 has another position. The commissioners, I think, can 6 handle that and will make up their minds how they want 7 to vote and make a decision. 8 That's one of the reasons I like to come to 9 these meetings because I like to hear what people have 10 to say outside of the staff. I respect Billy and the 11 other members of that division and I rely on them, but 12 I also like to be among the people in the industry and 13 hear what everyone else has to say. That's the way I 14 get some of my best information. I think, Bill, the 15 point has been made here effectively this morning that 16 it would be a good idea if you could come back to the 17 committee and make as chairman a fuller report, 18 perhaps, on why decisions were made and help people 19 understand, such as the changing of the commission's 20 position on having meetings outside of Austin. I was 21 one of the commissioners who initially was very 22 outspoken about that, and I took a second look at it 23 and I changed my position, and I voted this last time 24 for more flexibility because I'm convinced now that it 25 may end up creating more interest by moving the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 81 1 meetings around the state. 2 And I would ask each of you when an issue 3 comes up, and that's everybody who is a member of the 4 public here that can, you spoke about coming to the 5 commission, Scott, I think you mentioned coming to 6 commission meetings. The commission welcomes that. I 7 always ask, because it's my task to conduct the 8 meetings, if there is anyone else who wants to speak 9 on any other issues, and you can come to those 10 meetings and appear, fill out a form and make 11 comments. We have a period in the commission agenda 12 for public comments. And it is somewhat a formalized 13 procedure. It is a public meeting, we have a 14 recorder, you have to follow the Administrative 15 Procedures Act. You cannot just sit around the table 16 and have a general discussion, but within the format 17 that the commission has, we try to make it as open and 18 responsive and informal as possible, and we welcome 19 your comments, and I can assure you on my own behalf, 20 and I think I can say on behalf of the other 21 commissioners, we'll listen very carefully to what you 22 have to say. 23 Now, I get calls from the public in my 24 office in Waco. There are some members here in the 25 industry who are here this morning who have called. I WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 82 1 see a gentleman here from San Antonio who has called 2 me and spoken to me, and the commissioners are open to 3 that. That's what they accept as a responsibility 4 when they accept the appointment and are sworn in as 5 commissioners, and you can come directly to the 6 commissioners anytime you like on any issue. 7 What we're talking about really is an 8 industry that I think needs the help that this 9 division and this commission can give it within the 10 statute, and I think from the efforts I've seen of 11 Billy and his staff, for example, in promoting the 12 20th anniversary of bingo and other issues, he's 13 trying to give the publicity of the industry. I think 14 the commission is supportive of that, but I don't 15 think the legislature, as we currently are enacted by 16 the statute, is going to allow the commission to go 17 out and actively promote bingo. I think that's going 18 to be up to the industry working with the legislature 19 and with the leadership. I know all of you are 20 concerned about your businesses and you want to see 21 bingo grow and you want to see it be a viable 22 contributor to charities in the state, and again I 23 harken back to my days as a truck operator. Sometimes 24 you wonder what the regulators are doing and if they 25 are trying to put you out of business, and yet I've WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 83 1 seen it from the regulatory side. I have been the 2 executive director of the Railroad Commission. They 3 said the fox got in the hen house, but I see the tough 4 job that the regulators have, and, you know, they have 5 to follow the law, and when they find something, and 6 Mike Pitcock will tell you that, that the law in his 7 mind, and his investigators are very clear, when they 8 find something that's not right, they know what they 9 have to do. 10 But the bottom line on what I want to say 11 to you here this morning is that communications will 12 make it all better, and communications doesn't happen 13 by itself. You got to come to wherever the meeting 14 is, you got to get up here and stand at this podium 15 like I am, and you got to say what you got on your 16 mind, and then you folks have taken on the 17 responsibility of listening, asking questions, 18 reacting, making decisions, and then you got to take 19 it to the Lottery Commission and let those three 20 commissioners deal with it to the best of their 21 abilities. And I will continue to come to these 22 meetings, and I'll promise you as long as I can, I'll 23 see to it that your problems are dealt with by the 24 commission as best we can. That's the best I can do, 25 and I do promise that. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 84 1 Now, if any of you have a question for me 2 or you want to tell me something as an individual 3 commissioner, I'd be happy to try to answer your 4 question or take your comments, and that applies not 5 only to you folks but to you folks as well. 6 MS. TAYLOR: Yes, sir, I have a question. 7 MR. CLOWE: Yes, ma'am. 8 MS. TAYLOR: Is there any way we can get 9 bingo further up on the Lottery Commission meeting 10 instead of at the tail end? 11 MR. CLOWE: Sure, sure. When you say at 12 the tail end, are you talking about Billy's report as 13 the director of the Charitable Division because it 14 comes right at the end with Linda Cloud's report, or 15 are you talking about about the Bingo Advisory 16 Committee report? 17 MS. TAYLOR: All. 18 MR. CLOWE: All of it? Let me tell you 19 this: I'll ask the person that puts the agenda 20 together to put the BAC report up further to the top, 21 and we try to call on the folks that come in to Austin 22 and make presentations first as a courtesy, and we'll 23 do that as far as Bill or whoever is the chairperson's 24 report. I would like to keep Billy's report and 25 Linda's report more towards the end of the meeting, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 85 1 but if it is something that we see we've got a turnout 2 of people who want to comment at Billy's report, I'll 3 move that up as well. Okay? 4 MS. TAYLOR: Thank you. Great. 5 MR. CLOWE: And so my answer to you is 6 really it depends on generally how many people want to 7 come and talk about Billy's report or Bill's report as 8 chairman and how much proactive interest there is, and 9 that's within the policy of the commission. When 10 people come in from out of town, I usually move their 11 item ahead on the agenda so we don't tie them up all 12 day. 13 CHAIR NEINAST: If I may comment on that, 14 first of all, he has moved me up to the first item 15 many times, but I think it's important, Chairman 16 Clowe, and I think I've discussed this with you 17 before, to have, even though you said you like to keep 18 the Bingo Division report next to Linda's, because of 19 time constraints of whoever is representing the Bingo 20 Advisory Committee, I think it's important for that 21 person to be there and get the advisory -- I mean get 22 the divisional report, also. If you can keep those 23 together, it may create a problem for you of 24 separating Linda and Billy, but I think if you got the 25 two together where Billy could be there and the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 86 1 chairman of the committee, whoever is making the 2 report would be there and could hear what each 3 other -- Billy always hears what the committee report 4 is, but the committee might not hear what his report 5 is. 6 MR. CLOWE: That's a good point, and I'll 7 try to do that. I sure will. Anyone else? Anybody 8 out there that would like to give me any direction? 9 I think it's wonderful. Yes, sir. Come on 10 up here so you can get on the record, please. 11 MR. KELLER: My name is Kevin Keller. I'm 12 a commercial lessor in San Antonio. I just had the 13 pleasure of meeting Commissioner Clowe on the elevator 14 for the first time. My brother has met him and spoken 15 with him before, but I can tell immediately he is a 16 fair and just man. 17 MR. CLOWE: I'm going to tell my wife you 18 said that. 19 MR. KELLER: I'll bow to your knowledge and 20 superior wisdom right off the bat, but I have to say 21 there is a few things that have come through my ears 22 at this meeting thus far. One of them is 14,000 23 ballots were sent out and 37 came back. I'm with 24 Scott. I mean, something is wrong, guys. You talk 25 about voter apathy. This is the first I've heard of WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 87 1 the commission voting for a person, and, Saleem, you 2 are not alone. Just a lack of communication again. I 3 had no idea that the ballots that would be sent in 4 would be voted upon by you folks. But I'm curious and 5 stunned as to how we can be regulated by people who 6 have never walked in our shoes. We have three people 7 on the commission, we have people working right across 8 the street, and I'm wondering how many have ever 9 worked in a bingo hall? Probably none. 10 MR. TAWIL: Let me just make a comment in 11 defense of the chairman. Regulations are pretty 12 much -- there is a common denominator in the 13 regulatory process whether state or Federal, and I 14 have all the confidence in the world of the fact that 15 Chairman Clowe has had some years' experience with the 16 Railroad Commission and that it has nothing to do with 17 bingo hall issues. Now, he may be addressing that to 18 the staff but I know that Billy goes out a lot, but 19 from a regulatory standpoint at the commission level I 20 don't think we can do any better. We are lucky to 21 have someone that came out of a regulated industry 22 such as the trucking industry. 23 MR. KELLER: And another point that I would 24 like to make is, if there is roughly 5.5 times revenue 25 coming in from bingo that's spent out on bingo, why is WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 88 1 it that the best commercial that I've seen, and 2 probably you folks, too, has been from the Goodyear 3 Tire Company? Is that true? 4 THE AUDIENCE: Right (in unison). 5 MR. KELLER: We need to get the word out 6 because bingo is sinking. I don't have the answer but 7 I've got plenty of questions, and I know there is more 8 than 37 people in this room that have an opinion. We 9 have to communicate, absolutely, but we have to get 10 the word out. Bingo has been around for eons, and I 11 don't think it's going to go away, but we do need an 12 injection of something. And the only way to get that 13 is to get out here and pick these people's brains, the 14 people who are in the trenches. That's all I have to 15 say. Thank you. 16 CHAIR NEINAST: Thank you, Mr. Keller. 17 MR. CLOWE: I think those are good 18 comments, and, you know, when the governor asked me to 19 become a lottery commissioner, I said I don't know 20 anything about the gaming industry, I'm a businessman. 21 And he said, well, Tom, that's what we want. We want 22 somebody who is a business person who understands that 23 aspect of the Lottery Commission's work. He said 24 you'll learn the gaming industry, and I am learning 25 the gaming industry, and what I've done and what I've WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 89 1 urged the other commissioners to do is to go to a 2 bingo hall, and I've been, and I've attended some of 3 the organizational meetings with Billy and his staff, 4 and really I'm looking for problems. I'm trying to 5 learn what it is that the commission can do within the 6 statute to help this industry. 7 And one of the things that comes to my 8 mind, and this is just a personal remark, I'm not 9 saying this as a commissioner, I think we ran into it 10 in the lottery business, the playing public wants to 11 see something that's new, it wants to see something 12 that's a little different, something that's 13 innovative, and that's where, as you get older folks 14 like me who are regular bingo players, I think the 15 industry may be losing some segment of its market to 16 younger people who want to do something that's 17 different and maybe gambling on the Internet or gaming 18 on the Internet, whatever the proper word is, or maybe 19 doing some other kind of gaming, and I'm not sure that 20 the commission is the right venue to talk about 21 changing bingo operations. I think maybe the 22 legislature is the correct venue for that. Because 23 all the Lottery Commission and the Charitable Division 24 can do is follow the rules. And Saleem is right, I 25 think we've got the knowledge in the division and in WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 90 1 the commission. Many of them haven't been bingo 2 operators or lessors or charities, but they understand 3 the rules and know what it is that they have to do. 4 So I think part of the answer is to focus 5 on what is the market asking. That's what I always 6 did in my business, what does the market want to come 7 in and be involved? And just to give you an example, 8 at Texas Lotto, we found the market wanted bigger 9 jackpots. The $4 million jackpot was not as 10 attractive as the $25 million jackpot. So we voted 11 the second time to change the matrix from 50 to 54 12 balls, and except for the fact that everybody is 13 hitting it on $4 million, the players really like that 14 higher jackpot. 15 And so in my simplistic way I think, how 16 can we apply that to the bingo operation, how can we 17 make it more attractive, and I think that's where you 18 folks have to talk to the legislature, not to the 19 Lottery Commission because that's not our authority. 20 I appreciate those comments and, you know, 21 anytime that you have got something that you want to 22 say or you've got a comment, you can talk to any of 23 us, and we do care, we do want to hear from you, but 24 you've got to come to these meetings like you have 25 today and you've got to put the pressure on these WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 91 1 folks. These are your direct representatives, and 2 then they have got to convey to the commissioners and 3 to the staff what your message is, and then they have 4 got to bring it back to you. That's the way when I 5 was a business person in the motor transportation 6 industry I got the best treatment out of the Railroad 7 Commission. And I would go to Austin and sit down 8 with the commissioners from time to time and just tell 9 them that, you know, I didn't like the way things were 10 going, and then I also told them when I did. 11 Anyone else? I'm open to being fussed at. 12 CHAIR NEINAST: Well, Commissioner Clowe, 13 if we may, we're way past time for a break. We will 14 continue this after the break, but before I announce 15 how long that break is going to be I need to confer 16 with Billy because of a timing problem. Just a 17 moment. 18 (Discussion off the record.) 19 CHAIR NEINAST: Okay. It is 12:00 noon. 20 Let's take a lunch break, it looks like there is going 21 to be a lot more to cover, rather than take a 22 ten-minute break and then very shortly after that take 23 a lunch break, so let's adjourn until 1:15. 24 (Lunch recess from 12:04 p.m. until 1:19 25 p.m.) WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 92 1 CHAIR NEINAST: I know that there were 2 several of the people in the audience who wanted to 3 comment after Commissioner Clowe made his remarks, but 4 I'd like to postpone those because both Commissioner 5 Clowe and Billy have to be at a meeting that requires 6 them to leave here at 1:45 so we're going to go out of 7 order for just a little bit but I do want to -- I'll 8 presume to comment on the commissioner's comment where 9 he was talking about the high pay we get up here. 10 We're like the Lottery Commission. We serve you as a 11 public servants. We are reimbursed for expenses only, 12 so it is not that high paying job that Commissioner 13 Clowe may have indicated it was. 14 I do want to drop down now to Item Number 15 7, which is a consideration of and possible discussion 16 and/or action on pending proposed charitable bingo 17 rules and/or contemplated bingo rulemaking. Billy has 18 that and wants to carry that one. 19 MR. ATKINS: Thank you, Mr. Chairman, 20 members, I appreciate you taking me out of order. We 21 do have to leave. I hope that that meeting won't take 22 more than a couple hours so I should be back. 23 Mr. Sanderson will be sitting in in my place. 24 As a lot of you know, the Charitable Bingo 25 Division has made considerable effort over the past WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 93 1 several years to strengthen our internal processes. 2 This has included among other things the development 3 and implementation of some comprehensive internal 4 procedures and the training of division staff. The 5 division now has a staff that I believe consists of 6 skilled and dedicated individuals that are 7 knowledgeable about their specific job functions, and 8 we think that now the time is appropriate to focus 9 that energy that was committed to the improvement of 10 our internal processes on the development of a 11 comprehensive set of administrative rules. 12 Last August, I first discussed this with 13 the Bingo Advisory Committee and the intent of the 14 division to develop these comprehensive administrative 15 rules, and at that time members of the industry 16 suggested that the division engage in some sort of 17 stakeholder meeting or negotiated rulemaking process, 18 and the division was and always has been receptive to 19 this process, but due to some delay, delays on 20 everyone's behalf, ourselves included, it got off to a 21 slow start, and since then we've had the opportunity 22 to discuss this process with persons who have had 23 actual hands-on experience with it, and we feel a lot 24 more confident about how to proceed. 25 The benefit of undergoing this type of WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 94 1 process is, I think, at least twofold: First of all, 2 it gives us the chance to format the rules as they are 3 being developed by subject matter. Just as the 4 recodification of the Bingo Enabling Act several years 5 ago greatly improved the readability of the act even 6 if it didn't improve the functionality, we hope to be 7 able to create a logical flow to the order that the 8 rules are placed in to better facilitate the location 9 of a certain rule by a licensee or a member of the 10 public. For example, our plan is to group all of the 11 rules, say, relating to licensing into a subchapter of 12 Chapter 402. Therefore, if a licensee or a member of 13 the public was looking for a specific rule relating to 14 licensing, they would be able to go to that licensing 15 subchapter and have a fairly high degree of confidence 16 in finding the rule that they needed. 17 As it stands now, the rules are in 18 essentially the same format that they have been in 19 since bingo was regulated by the comptroller's office, 20 and we don't think there is any real logic to the way 21 the charitable bingo rules are organized. Also in the 22 past it appears that agencies regulating bingo have 23 had the tendency to propose and adopt rules only in 24 response to the pressing issues of the day, and we 25 think that this process will enable the industry to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 95 1 have input as the entire regulatory structure of bingo 2 is being analyzed. 3 Secondly, and probably what I think is most 4 important, these rules will help address some of the 5 most common questions that we get from licensees. How 6 do we do this, how do I do that, what should I file 7 for this, et cetera. These are questions that we're 8 routinely asked by licensees and members of the 9 general public and have been for at least as long as 10 bingo has been here, and we hope that the development 11 of these rules will benefit not only our licensees who 12 are seeking to operate their games in compliance with 13 the act and the rules, about also potential applicants 14 who seek further clarification on their 15 responsibilities. 16 Just so everyone knows, we've started 17 talking to representatives from the State Office of 18 Administrative Hearings, or you may hear me refer it 19 to as SOAH. They are an independent agency that's 20 responsible for hearing administrative or contested 21 cases that state agencies may bring. We've had 22 discussions with them about assisting us with a 23 negotiated rulemaking process. In this process one of 24 the first actions that would be undertaken would be to 25 identify the broadest possible audience to take part WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 96 1 in this process. 2 I've said it before and I think it bears 3 repeating, the division is well aware of the fact that 4 there are individuals and representatives of 5 organizations that are very knowledgeable about the 6 bingo industry, and I think there was some discussion 7 earlier this morning about those organizations who are 8 able to retain their own lobbyists or lawyers. As a 9 matter of fact, at one time I think we had anywhere 10 from four to five of those in this audience. And 11 while those individuals are certainly welcome at the 12 table and we look forward to their participation and 13 their comment, we are also going to spend a 14 considerable amount of time and effort to ensure that 15 those folks without that type of representation have 16 the opportunity to be heard and take part in the 17 process. 18 So to help facilitate this process and help 19 to get it kind of rolling, and in order to be as open 20 as we can and to start the process of receiving as 21 much meaningful input as possible, the staff has 22 developed the spreadsheet that was included in your 23 notebook, and there are copies of it over here at this 24 table, and that spreadsheet contains the rules that 25 the staff has been able to identify at this time on WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 97 1 needing to be developed. And, you know, it's probably 2 not really fair right now to refer to them as rules 3 but to refer to them more as subject areas. 4 This list is just a starting point, and 5 that's something that I really want to emphasize, and 6 I can't stress that fact enough. What we hope doesn't 7 happen is that somewhere in the future as we're going 8 through this process someone will come up and say, 9 hey, what are you doing, you know, you can't propose a 10 rule on that because it's not on this list, et cetera, 11 et cetera. This is going to be a pretty fluid 12 process. As a matter of fact, we've already been 13 receiving suggestions from folks about other subject 14 areas that should be on there. For example, someone 15 suggested that we develop a rule that lays out a 16 schedule of administrative penalties. 17 So our understanding of the process is that 18 we again would have identified those interested 19 individuals and begin to hold a series of meetings to 20 review those subject areas that we've identified plus 21 any other areas that people in the industry may want 22 to bring forward and go through all of those subject 23 matters and then identify the ones that appear to be 24 best suited to the negotiated rulemaking process. 25 This is not a quick process, and this requires, you WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 98 1 know, something else we've talked about today, the 2 continual participation of a lot of folks and the 3 people that commit to it. But again the goal is to 4 identify those subject matters that would be best 5 suited to this type of process. 6 I don't think it would be the best use of 7 our time for every conceivable rule to go through that 8 process. They would probably be better suited to, you 9 know, something more along the lines of what we talked 10 about this morning, maybe having, you know, several 11 readings over a period of time before the advisory 12 committee, but everybody that we've talked to both in 13 the bingo industry who has had experience with this 14 type of process as well as other people in the state 15 government who have had experience with this type of 16 process have all spoken very highly of it and then 17 been very positive about it, and what we're hoping 18 that we will wind up with in the end is a set of, 19 again, administrative rules that are not only useful 20 and beneficial to the agency but most importantly to 21 the industry and those organizations conducting bingo 22 or who want to conduct bingo. 23 And again, Mr. Chairman, that is my 24 introduction. I know that you have some speakers. 25 Again, I'm going to have to cut out, but Mr. Sanderson WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 99 1 is here. He has -- Phil up to this point probably 2 hasn't been as involved in this process, but I did see 3 that Kim Kiplin, the general counsel, came in, and if 4 there are some maybe technical type questions, she may 5 be able to assist in answering those if she can hang 6 around a while. 7 MR. TAWIL: Bill, I just have a question. 8 MR. ATKINS: Yes? 9 MR. TAWIL: How do you define negotiated 10 rulemaking process? 11 MR. ATKINS: How do I -- 12 MR. TAWIL: I mean, to better understand 13 it, negotiated rulemaking process. 14 MR. ATKINS: Well, in the broadest terms, 15 Saleem, of what I understand it to be, is once we've 16 identified those individuals with interest in the 17 various subjects, you know, I'm going to -- I'm just 18 going to pull one out -- on amendment to a license, 19 what that body will do, what those individuals would 20 do and over a period of -- I've usually heard it 21 referred to as a period of months, they would talk 22 about those elements that they think should be 23 included in that rule. It doesn't necessarily always 24 involve the actual wordsmithing of the rule, but it 25 involves more the broader concepts. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 100 1 MR. TAWIL: Are the licensees involved? 2 MR. ATKINS: The purpose of this process is 3 to bring representatives of the industry, and they, 4 yes, we are hoping that they are licensees. 5 MR. TAWIL: Two-way, right? 6 MR. ATKINS: Yes, yes. And the purpose 7 again is to get that input before the language of the 8 rule is ever drafted so that that information is 9 available. 10 MR. TAWIL: And then on amendments, 11 amending existing rules, the same thing? 12 MR. ATKINS: Same thing. 13 CHAIR NEINAST: Thank you, Billy. As he's 14 indicated, this is not an action today that we're 15 going to act on, take action on, any amendment to a 16 rule. It's just a briefing on the process that we 17 hope to follow, and I think it addresss some of the 18 concerns that were brought up by some of the members 19 of the audience before of getting more input from the 20 community, and this is one way that the division will 21 be doing it. So we're not commenting today on any 22 particular rule or change to any rule. I do have a 23 number of individuals who have indicated that they 24 would like to be heard on this particular agenda item, 25 and I'll call on those now, just go down the list as I WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 101 1 have them here randomly selected. This item might be 2 different from what you considered when you came. 3 Having seen the agenda item, you may not desire to 4 speak on it. 5 But Charles Hutchings, do you desire to 6 speak on this? Do you have some more, Mr. Hutchings? 7 MR. HUTCHINGS: I'm sorry, Mr. Chairman, I 8 was out of the room when it started. Are we speaking 9 of -- 10 CHAIR NEINAST: Number 7, which is, as I 11 mentioned, we're not considering any specific rule but 12 if you were here when Mr. Atkins was giving his 13 presentation, it's just introducing you to a new 14 procedure or process that the division is going to use 15 in developing rules by having interested parties from 16 the various elements of the bingo community come in 17 and sit down with the drafters of the regulations 18 before they draft them, and hopefully we'll identify 19 and iron out a lot of problems before they get written 20 down in the proposed rule and have to go back and 21 change them. 22 MR. HUTCHINGS: For the record, my name is 23 Charles Hutchings. I represent Geodesics and AmVets 24 52 out of Dallas. 25 Well, that would be -- that's really good WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 102 1 that we get some input into the rulemaking process 2 before the rule is actually, what, printed or adopted 3 in any way or fashion. Whatever we can come up with, 4 that's wonderful, but please expand on it. We need 5 all the input we can get to, what, to make it more 6 friendly to the bingo industry. The rules don't -- 7 the rules are fine. None of us have any problem with 8 the rules. Everything has to have rules, there is 9 regulations to go by, but let's make them -- let's 10 make them friendly enough to the industry to where, 11 you know, these small charities and stuff doesn't have 12 to hire a bookkeeper, an outside bookkeeper, you know, 13 get in some little bind with the Bingo Division down 14 here, have to hire a lawyer because they just did not 15 understand what the rules said to start with. Make 16 them extremely simple, to the point, you know, keep 17 all the -- keep it down to as little as possible, and 18 that will work fine for the entire industry out here, 19 and at the same time it would give the Bingo Division 20 what it needs to do their audit and enforce the rules 21 and regulations of bingo. That's all I have to say on 22 that. 23 CHAIR NEINAST: Thank you. I need to 24 state, I think that this will not change the actual 25 rulemaking procedure. The rules will still have to be WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 103 1 drafted, go before the Lottery Commission and then be 2 put out for public comment before it can be adopted by 3 the commission. This is just the preliminary work 4 hopefully to get a more user-friendly set of 5 regulations, if I can use that term. Thank you, 6 Mr. Hutchings. 7 Ms. Velma Markham? 8 MS. MARKHAM: Mr. Chairman, I go along with 9 Mr. Hutchings on that. 10 CHAIR NEINAST: Okay. Thank you. 11 J.D. Pruitt? 12 MR. PRUITT: I don't have a lot of comment 13 on this other than Billy stated the wordsmithing 14 wouldn't go in early, but if we're going to do this, 15 then from the staff, we'd like to know what you are 16 proposing as a specific rule. The rules are for what 17 you need to do or you feel that you need to do, and we 18 can't comment on it if we don't know what it is you 19 are wanting to do. So we'd like to see something in 20 a -- you know, what you have proposed or your definite 21 thoughts on it prior to us making input. Because I've 22 been to these things before and we're supposed to talk 23 with no input back to us as to what your thoughts are 24 to start with, so if we don't know what it is we're 25 commenting on, it's hard to comment on. But that's WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 104 1 the big thing, we'd like to know what the thought is 2 that we're working on before we try to do our input on 3 it. 4 CHAIR NEINAST: I can't comment on that 5 specifically, but I envision it as a two-stage 6 process, and Phil, you may correct me on this, but I 7 think they would do first, they want to talk to you 8 and see what you have in mind on a particular issue, 9 take those from you and anyone else that may be called 10 on, then put them down in a rule and then ask you 11 again to look at the rule to see if that accomplishes 12 what was talked about. 13 Is that basically what you had in mind, 14 Phil? 15 MR. SANDERSON: I haven't ever gone through 16 the stakeholder's process, and Mr. Bresnen can correct 17 me, my thought process would be that we would draft up 18 something of what we're anticipating in putting in a 19 rule, and at that point the stakeholders would come in 20 and we would discuss the pros and cons of this, adding 21 to it, removing something out of it, adding something 22 different, and that would be the process that I think 23 it's probably going to go through. 24 MR. TAWIL: It would seem to me it would be 25 more fair if you have a dialogue and exchange of WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 105 1 thoughts before you go craft a rule as a draft because 2 that tends to sway the direction you want to go in 3 advance of getting all the information before you 4 start creating something. So there ought to be a 5 dialogue and an understanding of what the commission 6 wants and what the stakeholders want before you draft 7 anything, instead of drafting something and say, here, 8 you like this? 9 MR. SANDERSON: I don't think it would be a 10 completely drafted rule. I think it would be the 11 points of what we want to put in the rule and cover 12 and I guess our reasonings behind that, and then 13 receive the input from the -- 14 MR. PRUITT: That would be my thought, 15 because if you just come ask me what I want in a rule, 16 I don't even want a rule. I'm not going to ask for a 17 rule. But then tell me what you want, and then let's 18 see if we can find a middle ground somewhere. 19 CHAIR NEINAST: Well, I tend to agree with 20 what Saleem said, and I think this spreadsheet that 21 has been passed out is kind of a starting point. It's 22 not the wordsmithing of the rule, but it does have -- 23 the idea is to get started talking on it, but that's 24 something that's going to have to be worked out 25 between the division and those who want some input, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 106 1 but I think that some contact between the division and 2 those that are going to be affected by the rule before 3 the pen is put to the rule the first time would have 4 some benefit, but that's going to be up to working out 5 the details. 6 MR. TAWIL: You mean talking points, right, 7 Phil? And reasons for them? 8 MR. SANDERSON: Yes. 9 CHAIR NEINAST: Scott Ingerman? 10 MR. INGERMAN: Most of everything has 11 already been said. I'm just trying to maybe clarify, 12 I may be speaking out loud in my mind, but the reasons 13 behind the rule. That's what everybody wants to know, 14 I mean, what is the intent of this rule, why are we 15 amending a rule or why are we coming up with a new 16 rule, so we can better speak about it. We can all 17 read, we see these one lines, you know, change this, 18 but why are we proposing this rule and what are you 19 trying to fix, what are you trying to make better out 20 of this rule? And then we could discuss it deeper and 21 further if we have a more detailed explanation of what 22 the purpose of the new rule is. 23 And the only other thing I have to say is 24 that we're in the bingo industry, and when we make 25 rules, we should think of the industry that we're in. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 107 1 We're in the bingo industry, and if we do rules that 2 pertain to other parts of the industry, I think we 3 should always remember where we started off, where our 4 grass roots are, and that's the bingo part of it. 5 Whether we do other forms of games that make our 6 fundraising stronger, I think that we should always 7 remember that it's the Bingo Enabling Act and, you 8 know, bingo is what this is all about, and add that to 9 any rule changes that we're going to make that are 10 going to make the industry stronger. 11 CHAIR NEINAST: Thank you, Scott. Any 12 questions of Scott? 13 Thank you. 14 CHAIR NEINAST: Ms. Jane Thompson? 15 MS. THOMPSON: Hi, I'm Jane Thompson, with 16 Thompson All-State Bingo Supply. I kind of fall into 17 both categories for Item Number 7, the item we're 18 talking about, but if I should be in public comment, 19 be sure and let me know because I kind of fall both 20 places. 21 November the 18th, 2000, I did some 22 research yesterday and looked back, and that's when I 23 first noticed that we as the bingo industry started 24 asking about expanding a rule on the definition of 25 pull tabs, and so at that time it was discussed, and WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 108 1 then in February of 2001 you went to the -- the 2 chairman went to the commission and reported that we 3 wanted to see an expansion of the definition of that 4 rule about the pull tabs, and at that point, at that 5 commission meeting, you reported to them, but no 6 action was taken. 7 A year and a month have passed since then, 8 and we're still at the same point as far as no changes 9 have been made to that rule. We have asked every 10 meeting, and we've brought the subject up, and we keep 11 getting told that we're working on the rule. We need 12 that rule to be worked on. It needs to be put to the 13 top of the list as far as my own personal opinion and 14 I think a number of others that are here. Mary 15 Magnuson in the last meeting indicated that she was 16 going to offer a proposed rule on instant bingo and 17 expanding that definition of the pull tabs and instant 18 bingo, and as you know, she's ill and not able to be 19 here today. She e-mailed me her proposal, so I wanted 20 to present it to you all today on her behalf. 21 I want to say that collectively this is not 22 anything that a group of distributors or organizations 23 or anybody has supported. I'm just simply bringing it 24 to you on Mary's behalf. I don't know how far along 25 the staff is on the rule regarding instant bingo. I WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 109 1 have no idea what that status is. I'm just hoping 2 that this will be a starting point maybe to assist in 3 that rule change, and I just wanted to -- we would 4 love to see them get started on the instant bingo. 5 This allows for a change in the definition so that 6 event tickets and seal cards, different types of pull 7 tabs can be played at the halls and try to allow 8 increased interest in the games. So we're just real, 9 real anxious to get something started, and I think 10 after all the discussion that we've had earlier today 11 this will be a good way to get a good start on things 12 is to start working on this in my opinion. 13 CHAIR NEINAST: Well, if you noticed in the 14 handout you have, that's one of the specific items 15 covered. It's specified as expanding the definition 16 of the pull tab or instant bingo, so that is 17 definitely one of the items that will be looked at, 18 but I appreciate you bringing that for Mary and we, of 19 course, can take no action on it. It will be passed 20 on to the division for use in this further discussion. 21 MS. THOMPSON: Okay. 22 MS. TAYLOR: Excuse me on that. What this 23 actually says is discussion and/or action on pending 24 proposed charitable bingo rules or contemplated 25 charitable bingo rulemaking. I feel that this does WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 110 1 fall underneath that agenda item. It does say and/or 2 action, and this is an action we've already discussed 3 over many times, as has been alluded to, so I mean I 4 would like to see us consider this further than to 5 brush it off today because it is covered in this 6 agenda item. 7 CHAIR NEINAST: Well, I'll do what the 8 committee wants, but I think that would be 9 ill-advised to receive it for the first time, look at 10 it and -- I think this really fits into this 11 negotiated rulemaking. I have no idea what Mary has 12 proposed. It might be good, we may have a lot of 13 questions, so -- 14 MS. TAYLOR: I mean I'd like to consider it 15 instead of right off the table say we're not going to 16 consider any of this today. I think we need to 17 consider this, it's on the agenda, and I think there 18 are a lot of folks out here that are at this meeting 19 because they want to talk about this item, the tab 20 item. 21 CHAIR NEINAST: What is your motion? Are 22 you making a motion that we adopt this without having 23 seen it? 24 MS. TAYLOR: No, I would like to continue 25 the discussion on this item to allow for a motion at WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 111 1 the end of this discussion, yes. 2 MS. THOMPSON: May I ask a question? 3 CHAIR NEINAST: Yes, ma'am. 4 MS. THOMPSON: Do you feel or does anybody 5 here know if there is any kind of a status report on 6 that particular rule of instant bingo? In meetings 7 past, Billy has indicated that that rule is in the 8 works, they have been working on it. Is there any 9 status report that you can give me at all? 10 MR. SANDERSON: The only thing that I -- I 11 know that it's been that we've had several people 12 working on the rule, it has been e-mailed out to other 13 staff members for review and comment. We were 14 awaiting Mary's input, which I just now got, I don't 15 know if Billy got it earlier or not. And to the best 16 of my recollection, I was thinking that there was a 17 motion at the last meeting that had requested -- that 18 we have something by April the 20th or 15th or 19th, 19 something like that. 20 MS. THOMPSON: Well, I can't remember 21 exactly, but I do know that's one reason that -- I was 22 very diligent in getting notice out to my customers 23 about today's meeting because I was so in hopes that 24 this rule was going to be discussed, so I think 25 it's -- I think it's very important that we talk about WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 112 1 it further today and, like Suzanne recommended, make 2 some kind of a motion, set some kind of a timetable 3 and make us feel better that action is being taken on 4 it. 5 CHAIR NEINAST: Well, I think that the 6 action of this committee is well documented that we 7 want, we favor and are looking for an expansion of the 8 definition, and my only problem is that I personally 9 would just feel completely incapable of commenting on 10 this specific proposal. I want to have the time to 11 look at it and -- but, hey, I -- and I can't do that. 12 Suzanne, I'll defer to your -- but I'm not going to 13 say that I'm for or against this just having -- it's 14 too important an issue in going right in the middle of 15 the rulemaking process to say that this is the 16 definition that we want. 17 MS. TAYLOR: Oh, I'm not saying this is the 18 definition. What I'm saying is, I don't want to close 19 off the discussion on this particular topic. I want 20 to hear the rest of the discussion on the tab issue 21 that the people are here to talk about. 22 MS. THOMPSON: And in light of what Billy 23 said about the rulemaking process and the input, just 24 know that there are many of us that are willing to be 25 involved in this process, and we'll help however we WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 113 1 can. 2 CHAIR NEINAST: Well, again, I agree 3 with -- I appreciate what you are saying and I agree 4 with it, but my point is that we're on record we want 5 the rule changed. And we have a proposal here, but I 6 don't think it's being presented in a form that we can 7 act on that proposal. I'll be willing to sit here all 8 evening and listen to you tell us that we need to 9 expand the definition of pull tabs, but we've gone 10 over it and over it and over it. We're for it. We 11 want to do it. We want to change the rule. So we 12 would be beating a dead horse to talk about it needs 13 to be changed. It should have been done and it will 14 be done, but -- so I don't want to cut off the 15 discussion on that, but I just want everyone to 16 realize that this committee has spoken repeatedly that 17 we need and we want the definition expanded. We've 18 had a number of presentations by Mary's organization 19 of various types of instant bingo or pull tabs that 20 could be used and sold and probably increase the 21 income of the charities, but they cannot be done 22 currently under the definition as currently written, 23 so again I don't want anyone to say, hey, I'm cutting 24 off comment on this, because we're with you. We know 25 there is a need for it, we want it and we want to see WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 114 1 it done, but my comment is I just -- do you want to go 2 any further than that, Suzanne? 3 MS. TAYLOR: I don't know, because I don't 4 know what she's holding in her hand. 5 MS. THOMPSON: That's all that I have to 6 say. I'm just -- and hopefully if there is others 7 that want to speak, maybe they will have some 8 suggestions. Just put me down as requesting they put 9 the instant pull tab right up at the top of the rules 10 to start working on, please. Thank you. 11 CHAIR NEINAST: Does anyone else want to 12 address that specific issue? 13 MR. FENOGLIO: I do. 14 CHAIR NEINAST: Okay. 15 MR. FENOGLIO: Good afternoon. My name is 16 Stephen Fenoglio. I'm an attorney in Austin, and I'm 17 here today representing over 494 licensed charities. 18 In addition to that, I put one out and I understand it 19 didn't make it in. Here's one list of who I 20 represent. I also represent the State VFW 21 Organization which has 95,000 members, 460 VFW posts, 22 and I believe they are down now to about 160 licensed 23 charities not included on that list. 24 I don't know how to respond other than you 25 all have said repeatedly let's expand the definition WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 115 1 of pull tabs, and it gets lost. And it gets lost. 2 This is no disrespect to the staff, but Phil knows it, 3 bingo is dying. It's down -- charitable distributions 4 are down 20 percent in the last three years, 12 5 million dollars. Other states have created pull tabs, 6 other states have seal cards, other states have event 7 cards, other states have progressive pull tabs, and 8 Texas languishes. Why? We can't continue to study 9 it, with all due respect, Mr. Chairman. We need 10 action now. We needed it last week, we needed it last 11 month. 12 I came today, not knowing what Ms. Thompson 13 was going to say, with a list of revenue enhancements. 14 It doesn't require legislation, it only requires a 15 rule, and I brought nine copies. Take one and pass it 16 down. The first one was the elimination of the seal 17 on a pull tab. On February 13, 2002, the Bingo 18 Advisory Committee by unanimous vote voted to 19 eliminate it. It's in the minutes. 20 MR. SANDERSON: Recommended to them. 21 MR. FENOGLIO: Recommended. Well, they 22 voted to eliminate it. And I think everyone 23 understands the Bingo Advisory Committee doesn't 24 control what the Lottery Commission does. You are an 25 advisory committee. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 116 1 But this is an issue that can be done in 2 a -- if someone wanted to get it done, it could be 3 done in 45 days, it's done, if there is the will to do 4 it. By the same token in my Item 2, expand the 5 definition of pull tabs, which I gather is the rule 6 that Ms. Thompson just handed out. I don't know, 7 Mr. Chairman, that you need to decide the language on 8 the rule or the committee. My hope is that the 9 committee votes unanimously to the commission. We 10 want these things done ASAP, and in order to expedite 11 that, Mr. Chairman, what you could do is appoint a 12 subcommittee of three members, whatever, meet in two 13 weeks, have staff come back with recommendations. 14 You've now got at least a document that you can 15 comment on, and I know Mr. Sanderson's office has 16 other priorities than just this. I respect that. But 17 this is a dynamic tool that could change and improve 18 dramatically the bottom line of charities. And you 19 have got some people here today, I'm a lawyer, I'm an 20 advocate, I also happen to be very close to one 21 particular bingo hall, I've been the board chair of 22 that charity, I serve on their bingo management team, 23 but you have got some people out here where the rubber 24 meets the road who could tell you what dynamic 25 changing pull tabs could do, and you have heard some WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 117 1 of this testimony before how certain halls, and Phil 2 was here, how they can -- they have created a new 3 dynamic in their hall by the aggressive sale of pull 4 tabs. But you need new product, and one of the 5 problems, which we discussed last Bingo Advisory 6 Committee meeting, is Texas is shut out of a lot of -- 7 CHAIR NEINAST: I'm sorry, what was that? 8 MR. FENOGLIO: Texas is shut out of a lot 9 of products, and the reason is because of the seal. 10 And Mary Magnuson laid that out for you all in a very 11 compelling argument. I believe there are only three 12 states that have a seal out of 30 some-odd, and God 13 bless Texas and New Hampshire who have held the line 14 on a seal. The rest of the states, apparently that's 15 not a problem for them. But the point of that is that 16 that costs money for a manufacturer, and I don't 17 represent a manufacturer of pull tabs by the way, yet 18 at least. But it costs, every time you put a 19 regulatory requirement, it costs, and I make my money 20 on regulatory requirements by the way, but for 21 charities to be dynamic and aggressive, you all could 22 take action today to get the ball started today and 23 not as it has been in the past. It gets lost 24 somewhere along the way. What happened in the past 25 forget about. Let's move forward today together. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 118 1 My third item is to streamline the approval 2 process of pull tabs in Texas and then streamline the 3 approval process for electronic cardminding devices. 4 I do represent a manufacturer of a cardminding device. 5 They submitted an upgrade in July 2001. As of this 6 date, they don't have the approval, and they wrote a 7 pretty direct letter on the 28th of February, and they 8 still don't have a written response to their concern. 9 Why can't we get it approved? Again, I'm not here to 10 throw stones. I just -- move the process and expedite 11 the process or else -- I don't know, Phil, five years 12 ago you had 2,000 licensed charities roughly. You're 13 down, active charities down to 1600, 1500. 14 MR. SANDERSON: Something like that, yes. 15 MR. FENOGLIO: I mean, it's come down. The 16 charitable distributions have come down dramatically, 17 and I don't think bingo is at a point where it can 18 stand much more than that. 19 If the lottery side had those type of 20 numbers, I can assure you that heads would be rolling 21 elsewhere, and I don't want to get into a debate of 22 the lottery side versus the bingo side, but the 23 charities are hurting. They need immediate life 24 support, not another we'll take it up the next time. 25 So my proposal that you have is very simple. You are WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 119 1 not commenting on any specific language. I would like 2 for this committee before you leave today to vote to 3 recommend those four steps that can be taken to the 4 commissioners on April 26th. 5 As a part of that, I would also like to 6 suggest that their subcommittee be created with a very 7 short time frame where staff would respond to 8 Ms. Magnuson's comments and there might be a rule 9 proposed or at least available for commissioner 10 consideration at the April 26th meeting. It seems to 11 me that's doable, and I wouldn't suggest, 12 Mr. Chairman, that you vote on Ms. Magnuson's proposed 13 rule today. I think it needs some deliberation, and I 14 don't know that even if Phil wanted to he could get 15 his staff together to do a 30-minute or a quick and 16 dirty analysis and say are there problems or not. 17 Some of the issues that she has in her rule which I've 18 reviewed briefly are contained within my concept 19 paper. 20 So I'll be happy to respond to any 21 questions you have. One other issue, though, before I 22 do that and that has to do with this rulemaking 23 proposal, the three page. Those are 34 rule or rule 24 amendments that staff is talking about. I think 25 that's too many. I think you've got now substantively WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 120 1 for bingo nine rules, maybe it's eight. And again 2 some of these rule are to amend your existing rule, 3 but you are talking about 34 separate rulemaking 4 provisions. If you want to look at the lottery side, 5 there are not 34 substantive rules on lottery 6 retailers. Why do you want that kind of rulemaking, 7 bureaucratic documentation on the bingo side? There 8 are -- importantly, there are rules that need to be 9 had. I'm not suggesting that 34 is the right number. 10 But before I would suggest that you go any further is 11 to even begin to suggest that this is a good idea that 12 someone put a one-paragraph demonstrated need for that 13 particular rule. In a couple of the language in here, 14 there is a hint at what the demonstrated rule is. But 15 if the Bingo Advisory Committee is to be asked to 16 comment on the anticipated rule making, the 34 items, 17 I would think, Mr. Chairman, that you would be 18 derelict, if you don't want to vote on Ms. Magnuson's 19 rule, that you wouldn't also want to vote to give your 20 imprimatur to this document until you have got some 21 sort of substantive indication of what's the need and 22 what's the remedy before you go forward. And maybe I 23 misunderstood what the purpose of the 34 items on this 24 three-page document was. 25 CHAIR NEINAST: Well, I do not read it the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 121 1 way you do, Steve. Those are talking points, and in 2 the talking points they may knock out all of them, 3 they may consolidate some. This is the thing that one 4 of the earlier members or from the audience asked 5 about is to have some input from them, and it might 6 wind up with a lot less, we might wind up with a lot 7 more. We don't know at this point. This is a 8 starting point. 9 MR. FENOGLIO: So you all don't anticipate 10 then voting to support the 34 items? 11 CHAIR NEINAST: No, that's not -- this was 12 more of an informational plan. 13 MR. FENOGLIO: Fair enough. 14 CHAIR NEINAST: On the other items I really 15 think we're fighting windmills. I need to reiterate. 16 This committee has no authority to direct the Bingo 17 Division to do anything. The only thing we exist for 18 is to gather information, be a filter for and report 19 it to the Lottery Commission who has the 20 responsibility to tell the -- and the authority to 21 tell the division what to do, so, I hope that's 22 understood. We cannot call Phil or Billy and say we 23 want you to have -- you will have this drafted by the 24 15th of April or you are losing your job. We can ask 25 them. We can recommend to them, which we have done WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 122 1 repeatedly, and at least two of your items on your 2 recommendations have already been -- action has been 3 taken and taken positively in your view on those 4 items. That's been done by the committee. It's now 5 up to either the Bingo Division or the Lottery 6 Commission to take the final action. 7 MR. FENOGLIO: Mr. Chairman, it wouldn't 8 hurt to vote again. 9 CHAIR NEINAST: I disagree, I disagree with 10 you. 11 MS. TAYLOR: Are you looking for a motion? 12 I'd like to make a motion. I'd like to make a motion 13 the BAC recommends the four revenue enhancements to 14 the commissioners at the next commission meeting. 15 It's the same thing we've agreed on before, but if 16 this will help make an impact at the meeting, then I 17 think another vote isn't going to hurt us to do. 18 So my motion, the BAC recommends the four 19 revenue enhancements to the commissioners at the next 20 commission meeting. 21 CHAIR NEINAST: Is there a second? Motion 22 dies for lack of second -- 23 MS. BRACKETT: Second. 24 CHAIR NEINAST: Okay. Further discussion? 25 Question? WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 123 1 All in favor of the motion to recommend 2 these four revenue enhancements to the Lottery 3 Commission, aye? 4 THE COMMITTEE: Aye. 5 CHAIR NEINAST: Those opposed? 6 Motion carried. 7 MR. FENOGLIO: Thank you. 8 MS. TAYLOR: There is one other item on 9 this bill. I think that Steve had a good idea about 10 setting up a subcommittee to work. We keep trying to 11 work at this at the meetings, but we don't get any 12 further from meeting to meeting on trying to look at 13 what kind of rule are we looking at, what is out 14 there, and to have a subcommittee to look at this 15 might not be a bad idea. 16 CHAIR NEINAST: We have had a -- 17 MS. TAYLOR: I mean I think it's a great 18 idea. 19 CHAIR NEINAST: We've had in effect a 20 subcommittee of one for more than a year on this. 21 Mary's predecessor, I cannot recall his name right 22 now, I asked to come in with a rule; he did not. I 23 asked Mary back in December or January to come in with 24 a proposed rule, and we're just getting that today 25 so -- WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 124 1 MS. TAYLOR: So can we have a subcommittee 2 look at Mary's proposed rule so we can maybe speed 3 this along somewhat? 4 CHAIR NEINAST: Okay. We can, or we can 5 take it up, I plan to call another meeting in just a 6 couple of weeks where we all have time to look at it 7 by then and consider it then. Again I haven't seen 8 it. I don't have any idea what the proposal is or 9 how -- I know what the proposal is. 10 MS. TAYLOR: Would it be possible also to 11 post the proposal on the Internet or to give copies to 12 the other people that are here so that maybe they can 13 make comment back to us and we can have more input 14 before the next meeting? 15 CHAIR NEINAST: I don't see any reason why 16 we can't. 17 How many copies do you have, Worlanda? 18 MS. NEAL: Of what? 19 CHAIR NEINAST: Of this proposal that was 20 just handed to us that Mary faxed to us or e-mailed to 21 us. 22 MS. NEAL: The ones that I handed out to 23 you plus an additional two. 24 MS. TAYLOR: I don't have one. 25 CHAIR NEINAST: Oh, maybe this is it. Is WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 125 1 this the only one we have? 2 MS. TAYLOR: I tell you what, if it's not 3 possible to make the copies today -- are you able to 4 or not? I'll be glad to make copies, if you'll leave 5 me your name and address, I will mail everybody that 6 wants copies a copy of this rule. 7 CHAIR NEINAST: Mr. Fenogus? Stephen 8 F-e-n-o-g -- 9 MR. FENOGLIO: That's how Fenoglio is 10 spelled. I've already had my turn in the barrels. 11 CHAIR NEINAST: I'm sorry. That L looks 12 like a G. 13 Ms. Dianne London? 14 MS. LONDON: That's London, sir. Actually, 15 I don't think I could add anything to what 16 Mr. Fenoglio has said. I'm for that 100 percent. I'd 17 like to have my chance on Number 6, if we're going to 18 comment on Number 6. 19 CHAIR NEINAST: Okay. 20 MS. LONDON: Thank you. 21 CHAIR NEINAST: David Heinlein? 22 UNIDENTIFIED SPEAKER: He just stepped out. 23 CHAIR NEINAST: Fred Miccio? 24 MR. MICCIO: My name is Fred Miccio. I 25 represent American Legions Department of Texas. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 126 1 These rules we're talking about, we keep 2 calling them rules, rules, rules. Once we call them a 3 rule, they become a law. The Bingo Enabling Act, 4 that's full of rules. They are law. So my advice is 5 let's be careful when we say we're going to make a 6 rule because once we make a rule, it has become law. 7 We have to live by it. Now, I understand we've got to 8 live by rules and that's the way of life. We've got 9 to get used to it. 10 What I'm objecting to is when a committee 11 turns around and interprets the laws that are already 12 on the books, it goes way back and says in order to be 13 a charity, you can take your money, you can do this, 14 you can do that, you can do this with it. I'm 15 speaking for myself and the American Legion, Veterans 16 of Foreign Wars, our main focus in life right now is 17 to take care of our veterans. One of the ways we do 18 that is we got to have a post home. A post home is 19 essential for us to operate. It's essential for us to 20 send people to these conventions. I don't know if 21 you've ever been to a VFW convention where you see a 22 World War II veteran like myself that was walking down 23 the street like this here, and all of a sudden he 24 straightens up again and he's walking straight because 25 he's walking down the aisle there with a bunch of WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 127 1 veterans all there for the same purpose, trying to 2 help one another. All of a sudden you are trying to 3 take this right away from him. This is our right. We 4 lived with this war from day one, we can take our 5 money, this is what we can do with it. Now we want to 6 change it. Why? Why are we interpreting the rule the 7 way the legislature set it up? Now, we want to make 8 new rules, I go along with making new rules. Today is 9 a good start. Discuss it with everybody, if it's 10 something we can all live with, we'll make the rule, 11 but let's not tear up rules that are already in there 12 that are doing us good. That's all I have to say. 13 Thank you. 14 CHAIR NEINAST: Okay. Questions or 15 comments? Thank you, Fred. 16 Steve Bresnen. 17 MR. BRESNEN: Thank you, Mr. Chairman. I'm 18 Steve Bresnen. I represent the Bingo Interest Group. 19 I appreciate what you did for us. I'm a 20 little emotional today because I lost my father who 21 was a World War II veteran about ten days ago, and 22 what Fred said really, really struck me, and I'm 23 surprised and I apologize. I never thought I'd be up 24 here crying about rulemaking at the Texas Lottery 25 Commission. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 128 1 It is -- well, let me back up a minute and 2 talk about something dry, and let me first explain a 3 little bit about this negotiated rulemaking, if I 4 might. I want to take some personal responsibility 5 for getting that part of this effort started. Billy 6 announced last year that there was a fair amount of 7 rulemaking coming down the pike, and I suggested last 8 August that we get some of the people, in 9 governmentspeak they are called stakeholders, involved 10 in this process, and I think that he and the chairman 11 are making a good faith effort to do that. 12 I'd like for everybody in bingo to take a 13 big, deep breath about this process because it can be 14 as informal as a handful of people sitting around a 15 table or it can be more formal in an actual 16 negotiation with a mediator and the agencies trying to 17 feel its way through that. It can be as informal as 18 you all saying in two weeks we're going to have a 19 meeting about this rule and we're going to take input 20 on it and we're going to communicate it to the staff 21 and asking the staff to participate in that in two 22 weeks and give their comments back and then moving 23 this subject forward. Because it's ridiculous. It's 24 ridiculous that we're sitting here talking about seal 25 cards today. It ain't that complicated, ladies and WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 129 1 gentlemen, and what we'd like for you all to do is to 2 goose the process along. 3 I don't blame you, Bill, I don't think we 4 ought to be voting on this specific rule today, I 5 don't think you ought to do that, you haven't seen it. 6 I just came down here earlier and said please don't 7 spring stuff on us. But this process has been long 8 started. This staff has had ample opportunity to get 9 their minds wrapped around this issue, and now 10 somebody has gone to a lot of work. I'm a lawyer, 11 this didn't come easy. Somebody spent a lot of work 12 and time putting this together, and they had the 13 benefit of some 30-odd other states, and so it seems 14 to me we ought to get on with it. 15 Now, the chairman was here earlier and I 16 don't know if he's still with us, but he asked for 17 some specific ideas and he suggested that some of 18 these things need to go over to the legislature, and I 19 agree with that, some of them do, but this ain't one 20 of them. 21 I think we have a commitment from the 22 chairman, and I think we have a commitment from Billy 23 to move forward and to have a new day for the Bingo 24 Advisory Committee to be more effective, and so I 25 think you need to make a request in no uncertain terms WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 130 1 that this be moved forward expeditiously and that a 2 proposed rule be on the agenda for the August 26th -- 3 April 26th meeting, because when they do it, they are 4 going to put it in the "Texas Register" and the entire 5 State of Texas can come back and comment about it and 6 we can make changes at that point in time, but 7 somebody has put their money where their mouth is here 8 and gone forward. A lot of people came here today and 9 have come here repeatedly about this, and if y'all 10 don't do something tangible to advance the ball on 11 this, it's going to be that message I was asking you 12 not to send earlier that you come down here and 13 participate and nothing comes of it. So I would ask 14 you to make a strong statement about that. 15 On the negotiated rulemaking front, the 16 important thing, and Kim and I were talking about this 17 earlier, is to get people involved who know a little 18 something about it and enough people where you have 19 got a good input, fair representation, but not try to 20 include the whole world, because you can't get 21 anything done in that sort of process. Then come to 22 you all and maybe go through that reading process that 23 Billy was talking about earlier, be more methodical 24 about it. 25 Now, I'd like to say something quickly WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 131 1 about where the starting point is. When you were 2 talking earlier about putting bingo higher on the 3 lottery commissioners' agenda, I was joking with Nelda 4 in the back that we ought to start chanting in the 5 back put bingo first, put bingo first, and little did 6 I know or little did I think we'd be talking about 7 this subject of rulemaking in this life. The things 8 that people in bingo need and want, put those first. 9 In this list here, I'm sure there are some important 10 things that may need to be done here, but put the 11 things that bingo people want up first. This is one 12 of them, so put it on the very top line. 13 I've asked that some things be put on this 14 list, and just for purposes of the record I'd like to 15 say what they are and then I'll come back with a 16 further written deal, but one of them is define what a 17 charitable purpose is. The statute is very vague. 18 The Constitution gives no guidance about it. This 19 agency can do it, and it's ridiculous that Fred Miccio 20 can't have his expenses paid for his post, especially 21 in this day and time when we got people fighting and 22 dying in another part of the world for patriotic 23 values, and that's clearly within the statute, that we 24 can't just say you may use your bingo money for people 25 to attend necessary business conventions of these WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 132 1 organizations. That's ridiculous. We can do that. 2 It ain't rocket science. If there is something you 3 don't want people to be able to do, put it in a rule 4 and then they will know it. We'll fight about the 5 rule, but when it's done, everybody will know it. 6 There won't be any second guessing on it. 7 I think the other thing that needs to 8 happen, Phil, in addition to putting what people in 9 bingo need from you all to help their operations, this 10 chart needs an extra column, and the first column 11 needs to be what the problem is. I think you guys 12 have some problems that are legitimate problems, but 13 you know them. I don't know them, and they don't know 14 them, and my guess is that there would be sort of a 15 triage process that would happen if you did that. 16 Some things, if you had to articulate the problem, 17 you'd all look around -- I've done this before, I 18 know exactly how it works, you'd all look around and 19 say who put this in here, and somebody, either you 20 won't -- either nobody will identify themselves 21 because it won't seem so significant or they will 22 identify themselves, you will talk your way through it 23 and you will say, do we really need to put that on 24 there and if we do, we'll put it way down at the 25 bottom and we'll get to it, you know, when it freezes WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 133 1 over. Some of those things you are going to say this 2 is a really bad problem. We got crooks down the 3 street that are competing unfairly with bingo halls 4 and we need this to be able to put them out of 5 business once and for all, and everybody in here who 6 is a legitimate bingo operator will say absolutely, 7 get that up to the top, once they know what the 8 problem is. And then there is going to be a middle 9 ground group there I think where people will say, 10 well, we understand the problem, and you will be 11 talking about how you want to go about it, and they 12 may say, well, this will solve that, and the light may 13 go on. I think that as a practical matter that's what 14 will happen if you go through that process, but I 15 think that you guys are going to be slugging through 16 mud between now and it does freeze over on this 17 34-item list unless you have a definition of what the 18 problem is out here and people can know it. It will 19 help them to be invested in the solution or to 20 determine that there is no problem. 21 Real quickly, another thing that this 22 agency can do through its rules that doesn't require 23 legislative change is to be thinking about getting 24 these costs down. It costs too much to comply with 25 the rules of bingo. To the extent that this list will WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 134 1 increase costs, bad idea. Bad idea. The only thing 2 that you can do when you are in business and you are 3 on the margin is increase your revenues or cut your 4 expenses. You guys have the ability to help cut 5 expenses here, and I think focusing -- I'm going to 6 give just a little bit back to one of the earlier 7 items here, focusing on how we spend our money for 8 security, whether that's the wisest expenditure of our 9 money and looking at every one of these rules and the 10 existing rules and the enforcement of them to see 11 whether is that the wisest expenditure of our dollars, 12 is it the wisest way to make these folks go about 13 doing their business out here? That's got to be a 14 primary focus. In this process that you go through, 15 the negotiated rulemaking, somebody ought to be the 16 designated asker of the question every time how much 17 does it cost, how much does it cost, how much does it 18 cost, and is it worth it? So I would suggest that 19 that be part of the process. 20 Overall, I think the problem with the 21 current process is you've got a bunch of rules out 22 there right now that are all about the audit process, 23 but the hole is missing from the donut here and -- I 24 guess that's what makes it a donut -- but what's in 25 that hole there is what you can do and can't do, and I WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 135 1 think that's the part that's left out. I really think 2 that that should be established first. That's what 3 bingo people need, that kind of clarity. There are 4 going to be some disagreements about what you all 5 think you can and can't do and we'll win some and 6 we'll lose some on that, but don't expand your power 7 to audit, increase the cost of that process, and then 8 have a trap in there in the middle where people keep 9 running afoul of the power and they keep running into 10 the traps and the barriers and the costs that are 11 entailed with the exercise of that power. And I do 12 appreciate it. 13 Fred Miccio, I do appreciate what you did 14 for us. Thanks. 15 CHAIR NEINAST: Thank you, Steve. Anyone 16 have any questions for Steve? 17 Steve, I appreciate your comments, and I 18 made some notes on them. I like all your 19 recommendations, but I particularly like that last one 20 that I'll emphasize of it's kind of like the Congress 21 has adopted now, they don't follow it very much, but 22 anytime they have a proposal they are supposed to come 23 in with the budgetary implications of it, and I 24 understand what you are saying and I think it's an 25 excellent suggestion. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 136 1 I think I have called on everyone who has 2 indicated they wanted to address this problem. If I 3 have missed someone, I apologize. If you have not put 4 in a witness affirmation form and would like to speak 5 to this, we'd be glad to hear from you. 6 MR. YOUNG: Thank you. I'm Robert Young, 7 AmVets Post 77. I'm not going to duplicate what some 8 of the other gentlemen and ladies have said, but I'm 9 in total agreement with what I've heard here this 10 evening. 11 One of the things that was very interesting 12 that I heard that was, I guess, uplifting is the word 13 negotiate. Negotiations can be done different ways, 14 who is going to be in the negotiations, who will be 15 the representative and how they are selected, and then 16 also the rules and whether you are going to negotiate 17 all rules, some rules, is it going to be unilaterally 18 decided, by who and what rules you do negotiate, if 19 it's all rules, is it all existing rules? So I think 20 these are some of the questions that's going to need 21 to be answered. 22 Also, they should be clear and defined 23 rules. I think that's what we're running into now, 24 that's one of our concerns. Auditors are out there 25 interpreting rules one way and another auditor WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 137 1 interprets another. In other words, they are very 2 subjective rules, depending on the auditor, and also 3 it seems like we've, you know, changed the rules right 4 in the middle of trying to do a business, and that's 5 what we're in, a business to help charities. 6 I agree with the gentleman a while ago, you 7 know, we're an aging group. I'm a Vietnam veteran 8 myself, but the majority of our members are Korean and 9 World War II veterans, and their needs are many as 10 they increase in age. 11 Sometimes I feel like, you know, from what 12 I understand it's like playing cards with Sergeant 13 Bilko: You know, he changes the rules as the game 14 goes along, and then when he does change them, you 15 can't understand what he's saying. So I just want it 16 to be done fairly, fair representation, and come up 17 with some rules that a simple ol' boy like me can 18 understand so we don't have to go out here and use all 19 these lawyers and spend some of our money on them. 20 There is nothing wrong with lawyers, I guess they are 21 a necessity, but that's money that in my organization 22 that the veterans could be using, but yet we have to 23 spend it on attorneys to help represent us on stuff 24 that we don't understand. 25 I appreciate your time. Thank you. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 138 1 CHAIR NEINAST: Thank you. Have you filled 2 out one of these forms? 3 MR. YOUNG: Yeah, I got it there somewhere. 4 CHAIR NEINAST: Okay. Thank you, 5 Mr. Young. In response to your one comment, and, 6 Phil, I don't know whether you know the answer to 7 this, but it's my understanding that the division now 8 intends to use this negotiated process on all rules 9 and changes to rules. 10 MR. YOUNG: Well, I'm glad to hear that, 11 and I didn't understand that earlier. 12 CHAIR NEINAST: Is that right, Phil? 13 MR. SANDERSON: I believe it's for the most 14 part. I mean, there may be some simple -- if there is 15 such a thing as a simple rule, that they may not go 16 through that whole process. It may be quicker to go 17 ahead and post the rule and take the public comment on 18 it. 19 MR. YOUNG: Are we speaking of new rules or 20 existing rules? 21 MR. SANDERSON: Both. 22 MR. YOUNG: Both. Okay. Thank you. 23 MS. TAYLOR: If I could interrupt you. 24 Earlier I asked Billy if he had copies of the proposed 25 rules that are going to be discussed tomorrow so that WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 139 1 everybody could get a copy of those if you haven't see 2 them on the Internet, and Worlanda has been busy 3 making copies and they are available up at the table, 4 all the rules tomorrow. Also the proposed bingo rules 5 is on the table, if anybody would like to get a copy 6 of that. 7 CHAIR NEINAST: I'd like the record to 8 reflect that David Castillo has had to leave and left 9 the committee meeting. We used to have a quorum. 10 Suzanne, what's this meeting tomorrow? We 11 have a meeting tomorrow? 12 MS. TAYLOR: If all of you received the 13 notice of the meeting today in the agenda, on the back 14 of the page, not on your agenda, Bill, but on the one 15 that came in the mail to people, it explained that 16 there is going to be another rulemaking -- what is it 17 called? 18 MR. SANDERSON: It's called a public 19 comment hearing. 20 MS. TAYLOR: Okay. On the proposed audit 21 rules. 22 CHAIR NEINAST: I did not get that. 23 MS. TAYLOR: Tomorrow morning. It's 24 supposed to be held here at 10:00; is that correct? 25 10:00 here. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 140 1 MR. SANDERSON: This room here; right? 2 MS. TAYLOR: And all of those rules are 3 available on the table if anybody would like to read 4 them and have any comment. 5 CHAIR NEINAST: I didn't get that notice. 6 That's a surprise to me. Let's take a five-minute 7 recess to give our court reporter a break. 8 (Recess was had from 2:27 p.m. to 2:36 9 p.m.) 10 CHAIR NEINAST: It is now 2:36. I'd like 11 to call the Bingo Advisory Committee back in session. 12 If you would please take your seats. 13 The husband is always the last to know. 14 Sometimes the chairman is always the last to know. I 15 was caught unawares that there will be a meeting on 16 some proposed rules tomorrow, but I have now been 17 furnished and I have just had a chance to glance at 18 them. 19 Interestingly enough, I'd like to make this 20 comment. Steve, I think you were the one that made 21 the suggestion that every rule have a statement of its 22 financial impact on the charity? Were you the one 23 that made -- was that one of your recommendations or 24 suggestions? 25 MR. BRESNEN: Yes, sir. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 141 1 CHAIR NEINAST: Interestingly, looking at 2 these draft regulations it says that Mark Sanchez, 3 financial administration director, has determined for 4 each year of the first five years the sections in 5 effect there will be no additional fiscal implications 6 for state or local government as a result of enforcing 7 or administering the rule. There is no anticipated 8 impact on small businesses, micro businesses or local 9 or state employment as a result of implementing the 10 section, and charities are not mentioned. I think 11 right there it jumps out at you, they consider the 12 implication of -- financial implications on everything 13 except the people who are being -- and I think that 14 you have a suggestion that has to be looked at, and 15 I'm going to recommend that that statement, if 16 possible, be amended to include there has to be a 17 study of the financial implication sticking in there 18 in some form or fashion the industry that's being 19 regulated. That's the only one that's not mentioned 20 as to what the impact would have. 21 MR. BRESNEN: Thank you, Mr. Chairman. 22 Steve Bresnen again. 23 Yeah. I probably should just leave it at 24 that, but, you know, we can look back at the statute 25 and see what the Administrative Procedures Act, see WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 142 1 what the definition of small businesses, what that is. 2 MR. TAWIL: Small business by the Federal 3 Government is defined as $40 million or less. 4 MR. BRESNEN: We're a real small business. 5 On behalf of the commercial lessors that I represent, 6 on behalf of the charities that I represent, I don't 7 see that there is no fiscal impact in those bills, in 8 those amendments to the rules, and I appreciate you 9 making my point for me. 10 CHAIR NEINAST: I mean it should be on 11 every rule, not just these six, but I mean that should 12 be a standard part of that, in my opinion. 13 MR. BRESNEN: To be fair, the staff is 14 complying with the Administrative Procedures Act that 15 complies with those statements. You tend to get 16 boilerplate sorts of language in those things. You 17 can look through the "Texas Register" and there is not 18 too many rules that the State Government has foisted 19 on people that have any fiscal impact, according to 20 those statements, but you know it's different in the 21 real world, as do I. Thanks. 22 CHAIR NEINAST: We can look to see if there 23 is a matter of form we can't put it in for at least 24 internal consumption. 25 MR. BRESNEN: Thanks. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 143 1 CHAIR NEINAST: Back on Item Number 7, we 2 have heard everyone, I think, who wanted to comment on 3 that item. I realize now that the way it is stated as 4 an agenda item was poorly worded, and I'll take 5 responsibility for that because I approved it before 6 it went out, as we had not anticipated or -- had 7 anticipated taking any formal action on any item, but 8 we've gotten off into the one. Again based on what 9 was intended to be presented, I know of nothing that 10 would require a motion other than the two I think -- 11 one or two that have been made. 12 Does anyone else see any need for formal 13 action on that item other than those already taken? 14 Suzanne? 15 MS. TAYLOR: No, sir. 16 CHAIR NEINAST: Being no, we will move back 17 up to Item Number 5. That was the item that we were 18 discussing when we took the lunch break. I know that 19 there were one or two who wanted to comment further on 20 it or to respond to Chairman Clowe. Chairman Clowe 21 has had to leave for another meeting. 22 Is there anyone else in the audience who 23 would like to comment on Item Number 5 which is the 24 consideration of and possible discussion and/or action 25 on the effectiveness of the Bingo Advisory Committee, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 144 1 including the process used by the Bingo Advisory 2 Committee to consider, discuss and/or take action on 3 issues before the Bingo Advisory Committee? Would 4 anyone else like to comment on that item since we -- I 5 know there were some who indicated they wanted to 6 speak after Chairman Clowe. 7 If there is no one, let's pass to number -- 8 Item Number 6, report by the Bingo Advisory 9 Committee's subcommittee of possible discussion and/or 10 action on whether the Charitable Bingo Operations 11 Division should be a separate state agency. 12 Virginia Brackett, our vice chair, is 13 chairman of that subcommittee, and I would ask for 14 your report. 15 MS. BRACKETT: Okay. Our report is that we 16 recommended the Charitable Bingo Operations Division 17 of the Texas Lottery Commission become the Texas Bingo 18 Commission with regulatory authority of the bingo 19 industry and a separate entity from the Texas Lottery 20 Commission. 21 CHAIR NEINAST: Would you like to discuss 22 that further or any comments on the reasoning behind 23 the recommendation? 24 MS. BRACKETT: The reasoning behind the 25 recommendation is all of the reports and the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 145 1 information and the comments that our group heard. 2 The committee is Suzanne Taylor and Bud Speed and Dave 3 Castillo, he had to leave, and myself. And we have 4 wrestled with this for a while, and we felt like the 5 way to take action was to get a proposal on the floor, 6 an action item, and take it from there, see where we 7 go from that point; that we felt like that most of the 8 people we talked to felt like that that was the action 9 that needed to be taken in order to solve some of the 10 problems that we've been faced with and that we've 11 been hearing today; that we become separate from the 12 Lottery Commission. It seems that most people were 13 feeling like it would expedite things, that we would 14 not be getting tied up on some of these things we've 15 discussed on the slow process of pull tabs being 16 approved, anything new that comes along being 17 approved. 18 Bud, do you want to make a comment on that? 19 MR. SPEED: No, but I just second what you 20 have just said. I don't have anything additional. As 21 we discussed in the last meeting, I think we probably 22 need some more facts and figures before we can make a 23 real good decision, and I don't think we have those at 24 this point, do we? As far as whether we could support 25 our sales, et cetera, et cetera. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 146 1 MS. BRACKETT: Right, but we felt like that 2 we had to get some action going before we could come 3 up with a complete study, and probably it really 4 wasn't for our little group to make a complete study, 5 and of course it would be a legislative item, too, so 6 we had to move on it because it's not too long before 7 the legislature would be back in session, and this is 8 something that would have to come before the 9 legislature and it would be a law that would include 10 how it's set up, how it's funded and everything else. 11 So I think that we're really wanting the Bingo 12 Division to take it from this point and do the 13 homework and the legwork for us. 14 Suzanne, what were your -- 15 MS. TAYLOR: As for the cost of regulating 16 the bingo industry, we know from the many times we've 17 heard it that it costs approximately $3 million to 18 regulate bingo, and they collect $22 million, so 19 obviously bingo pulls in five times more than it costs 20 to regulate it. So whether it can pay for itself or 21 not I don't think is really the issue because the fact 22 is it can. We know it can. We've heard the numbers 23 over and over again, but I think there is an awful lot 24 of people here today that are here to make public 25 comment on how they feel -- how they feel about this WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 147 1 particular item so I think before we take any further 2 action we should hear the public comment that is here 3 today. 4 CHAIR NEINAST: Before we call for that 5 public comment, I'd like to make several comments. 6 First of all, just reviewing the history of bingo, all 7 of you know this, I'm sure, it is older than lottery, 8 it was approved first, and Billy does not like this 9 term and I use it and I hope you understand, that 10 we've been the stepchild. First we were under the 11 comptroller, then we were under the bureau of 12 alcohol -- whatever it's called. 13 THE AUDIENCE: TABC. 14 CHAIR NEINAST: And now under the Lottery 15 Commission. I have to say this for the Lottery 16 Commission, I think they have been most responsive, 17 particularly now with Chairman Clowe. He does attend 18 nearly all of our meetings. They have been most 19 receptive to our recommendations. I mentioned that 20 one time we took a recommendation to them and they 21 disapproved it, and we went back and regrouped and 22 went back to them and they changed their minds. They 23 are very, very responsive, but they have -- what I 24 look at is the community that they are set up to 25 regulate is completely different from the community of WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 148 1 the bingo community. I think that bingo players 2 generally, and this is a generalization, don't play 3 the lotto and lotto players don't play bingo. 4 THE AUDIENCE: No, no, no (in unison). 5 CHAIR NEINAST: Okay. But I do think there 6 are two different communities that are represented, 7 and I think the way it's approached does affect the 8 way that the commission, whatever it is, is set up to 9 regulate that industry, so I think that they are two 10 separate animals. They are both classified as 11 gambling, but there are just so many different issues 12 that I think it would be a lot better to have a 13 separate agency regulating and be directly responsible 14 to the division or the division be directly 15 responsible to them. We've seen some of the problems, 16 we've discussed those today, of having to go -- don't 17 have to go, but the general procedure is to go first 18 through this committee and then to the commission, 19 with a lot of water under both bridges, so I think a 20 lot of time could be saved. I think there would be a 21 lot more or at least faster and better response to the 22 needs of the bingo community than we are getting now, 23 and again I have nothing but the greatest admiration 24 for the job that Chairman Clowe and the commission are 25 doing, but I think that there is just an unnecessary WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 149 1 step in there of having the committee, the Advisory 2 Committee, and then going to the commission, and as 3 much business as the commission has, I'm not sure that 4 they can handle all of this -- and I can't speak for 5 them, but there is a lot of filtering that we do, and 6 if you have ever been to one of these commission 7 meetings, they are the law and they cover a lot, a lot 8 of material with a lot of more complicated problems 9 than we are facing here today, so just getting them to 10 stop and look at what we consider to be our problems 11 is just one of the many problems they face at many of 12 their meetings. So those are my views. 13 I would think the bingo community would be 14 much better served by having a separate agency. You 15 have got the Horse Racing Commission, you've got the 16 Lottery Commission. Bingo is older than both of 17 those. It goes way back before it was legalized. As 18 you all know, we were playing bingo a hundred years 19 ago when it wasn't legal. If the charities were doing 20 it, the local law enforcement just overlooked it. So 21 it's been around longer at least -- well, we've been 22 playing it longer than the lottery because there is 23 the lottery and horse racing, too, but as far as the 24 legal entity, we're the oldest legal gambling entity 25 in the state, I think. So those are my comments, and WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 150 1 now I'll call on those who have indicated a desire to 2 speak on this issue. 3 Mr. Bishop, Gerald Bishop? 4 UNIDENTIFIED SPEAKER: He had to leave, 5 Mr. Chairman. 6 MR. SANDERSON: Mr. Chairman, may I before 7 anybody offers public comment? 8 CHAIR NEINAST: Sure. 9 MR. SANDERSON: Just as a reminder, that 10 the Texas Lottery Commission and the Charitable Bingo 11 Division are both going through what is currently the 12 Sunset process, the Sunset Review. This is a process 13 where they review the structure and the activities of 14 the particular programs. Every state agency has to go 15 through the Sunset process, I think it's every seven 16 or twelve years, and it's our time for the Sunset 17 process for the Texas Lottery and the Charitable Bingo 18 Division. They are scheduled to start with some 19 meetings I believe in the latter part of March or 20 April. There will be ample notifications for public 21 comment when the Sunset Committees hold meetings and 22 they receive public comment, so if there is any strong 23 feelings one way or the other or any other issues 24 about the Lottery Commission or Bingo Division, then 25 you can use that process to express your concerns or WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 151 1 feelings. 2 CHAIR NEINAST: Okay. Thank you, Phil. 3 Mr. Pruitt, J.D. Pruitt? 4 MR. PRUITT: I don't like to be first. 5 CHAIR NEINAST: You came out at the top of 6 the shuffle on this one. 7 MR. PRUITT: Well, I, like I think most 8 people involved in bingo at the operation level, would 9 like to see it divided. We feel like we're regulated 10 by our biggest competitor, and human nature is if it 11 benefits bingo, it's got to hurt lottery, because 12 there is only so many gambling dollars and they are 13 all the same gambling dollars, so if it benefits 14 bingo, it's going to hurt lottery. Human nature is if 15 we're regulated by Lottery, Lottery is going to try to 16 keep bingo from improving or increasing their income. 17 Like I say, maybe these hearings this year 18 will help, but like I say, we feel that we should have 19 our own division where everyone that's in it is, you 20 know, more attuned to bingo and headed in the same 21 direction, and I will say it's been a lot nicer 22 working with Lottery than it was TABC or the 23 comptroller, and I put up with Phil in TABC and 24 Lottery. He was in our region. But the staff 25 themselves I haven't had a real problem with, but I do WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 152 1 feel that overall we would be way ahead if we could 2 have our own commission. Thank you. 3 CHAIR NEINAST: Thank you, Mr. Pruitt. 4 Anyone have a question? Any member, do you 5 have a question of any of these individuals that come 6 up and address us, please feel free to ask. 7 Ms. Velma Markham? 8 MS. MARKHAM: I'm Velma Markham with AmVets 9 Auxiliary Post 52 in Dallas, and I feel like that we 10 do need a separate agency for our Charitable Bingo. 11 For one reason, it seems like it's taking too much 12 time now to change the rules and to get information. 13 Our rules are changing so much here lately, and I feel 14 like we need to have a separate division for bingo. 15 And I think that just about covers it because I think 16 everybody feels the same way. Thank you. 17 CHAIR NEINAST: Thank you, Ms. Markham. 18 Mr. Hutchings, Charles Hutchings? 19 MR. HUTCHINGS: Charles Hutchings, 20 Geodesics and AmVets 52 out of Dallas. 21 I also would like to see it changed. It's 22 my understanding that the security division is not 23 reportable to the bingo director; that the lawyers 24 that come up with this stuff or that this stuff goes 25 through is not reportable to the director. They all WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 153 1 report to the Lottery. We need our own guys, we need 2 people who is going to be directly responsible to, if 3 it's Billy Atkins, Billy Atkins, you know, a 4 straight-through deal. We ask, through our lobbyists 5 normally, we ask for a clarification of something, 6 sometimes it's months when we get it, and then, you 7 know, it basically says we can't answer that question. 8 We need to get a shift, we need a get a 9 move, let's get it out there where it will be 10 responsive to the bingo industry. Thank you. 11 I'm sorry, let me also add that in moving 12 it, when the commissioners are set up for this, it 13 would be extremely nice if as an industry we pushed to 14 have, you know, at least part of those commissioners 15 out of the bingo industry. Thank you very much. 16 CHAIR NEINAST: I think Mr. Heinlein, did 17 he leave? Oh, he's back. 18 MR. HEINLEIN: I'm David Heinlein with 19 Jetta Management Corporation. I do the accounting for 20 42 different charities in the State of Texas, so I 21 hear a lot of information concerning the status of 22 bingo, and we've heard that today and I can confirm 23 it. 24 I even want to give you a little bit, it 25 seems like every time that I've spoken to you I've WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 154 1 given you something to look at, and I'm going to do 2 that same thing again today. Not that it's something 3 that you don't already know about, but I think it 4 helps to have it in front of you in a graphic form for 5 to you look at. 6 All of the issues that have been discussed 7 here today certainly are needing to be discussed 8 because we do have an industry that is in dire 9 straits. As I've listened to many of the other 10 comments, one of the things that was talked about was 11 Billy was wanting to find a way to move this meeting, 12 I think, it's looked at as moving into different areas 13 and getting input from people that might not be able 14 to come to Austin, and I wanted to share with you that 15 we've begun having meetings in Houston on a monthly 16 basis because many of our charity halls there are 17 looking for some very immediate changes or they are 18 going to have to close their doors. 19 We are being -- exploring ideas of things 20 that they can do prior to us being able to getting any 21 legislative help. We attempted it at the last 22 legislative session, as you know, to get a lot of 23 bingo rules changed, a lot of House bills were 24 proposed, Senate bills, we only got one passed which 25 has already been mentioned today, the progressive WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 155 1 bingo, which was vetoed by our governor. We really 2 need those bills, and they didn't happen. So we've 3 got to look for other options, and the things that 4 we've been looking at in Houston in these last couple 5 of months that we've come up with is different 6 products, we need different products in our bingo 7 games. And some of the halls, as they have looked at 8 some of the data that I have been presenting, have 9 learned that they themselves are missing out on 10 something that is already available to them today and 11 that is pull tabs. Believe it or not, some halls 12 don't even sell pull tabs. So they are going broke, 13 and in one hall that we work with, in just one month's 14 time we looked at their average daily deposits in the 15 month of February and so far in March, just by making 16 a change in the whole approach to pull tabs, they have 17 increased their deposit by $300 a session. That's 18 very significant. That can change them from having to 19 go out of business to actually saving that hall. So 20 we would invite the staff and anyone or even have this 21 Advisory Committee meeting in Houston, if you would 22 like, our next meeting will be in April, I believe -- 23 I'm not sure of the date, but we're trying to do that 24 every month to get as many people from the bingo halls 25 that are suffering to come and talk and let's explore WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 156 1 ideas that you might be able to change what you are 2 doing. 3 Another place that Billy mentioned was the 4 operator training that is another place to gather 5 information, and I appreciate the fact that he's done 6 that. I haven't been to any of those operator 7 training meetings, but the fact that you are doing it, 8 he is reaching out to the charities trying to get 9 information and feedback from them -- 10 CHAIR NEINAST: Pardon me -- pardon me. It 11 sounds to me like we're getting into another item that 12 will be later on the -- the item we're discussing now 13 is should the Bingo Advisory Committee be separated 14 and become an independent agency. 15 MR. HEINLEIN: Well, let me focus 16 specifically on that. I'm sorry, I had a lot I wanted 17 to talk about, and I thought I could include it all in 18 that one thing and I guess I'll wait and do that in 19 public comment. 20 In looking at the Sunset Review that 21 Mr. Sanderson has just mentioned, I gleaned a lot of 22 information about its own rapport as to how it views 23 as being able to function, and one of the things 24 that's said in the Sunset Review is that they have 25 noticed that there is a conflict of interest. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 157 1 The self-evaluation report that was 2 produced in August of 2001, on page one states, 3 "Unique among the State's revenue generating agencies, 4 the commission through both its lottery operations and 5 charitable bingo, must compete for discretionary 6 entertainment dollars." 7 And I get the sense that in that report 8 is they -- the findings that they themselves are 9 coming forth, is that there is some difficulty in 10 administering and helping bingo, and I think that the 11 problem is a basic philosophy. They have been given a 12 mission statement to promote and oversee the Texas 13 lottery, and they have been given a mission statement 14 to regulate bingo. Two different things. And in the 15 findings of the Sunset Review we see that that's 16 carried out all the way through that, and I sense that 17 there is a recognition by their own determination of 18 this self-evaluation that there is a change that needs 19 to come about, and I believe that I heard that even 20 from Commissioner Clowe today, that he sees that as a 21 possibility. So we think in the bingo industry, in 22 the meetings that we've been having, that we would be 23 much better served if we could move to a situation 24 where we had our own bingo entity. 25 Now, we've watched it come from the state WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 158 1 comptroller's office, to the TABC, to the TLC, and 2 there is no question in everybody's mind that we've 3 been in a better position since we've been with the 4 TLC because we've been with an agency that started up 5 from scratch doing all of the paperwork and making it 6 work for this particular operation, and it's done very 7 well. We have some very good administrative rules and 8 administrative paperwork trails that are very nice. 9 For us, as accountants, we love the things that we are 10 able to do, so we don't want to see that structure 11 destroyed. We'd like to see an agency that can move 12 from where it is to a stand-alone agency that could be 13 regulated, that can be overseen by its own staff; that 14 is, a commissioner's court that would function as the 15 one does right now, and maybe one like Tom Clowe would 16 move over to that one since he understands bingo and 17 has been suggested by the bingo industry to be able to 18 serve on that so that we can look at this industry in 19 a new light with a whole new basic philosophy. We're 20 not here to just be regulating bingo, but finding a 21 way to make it work. 22 If you will look at the numbers that I've 23 given you, it's not working. We have seen it peak in 24 1991 at 50-something-million dollars' worth of 25 revenue, and I spoke to you a year ago when we were WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 159 1 looking for some legislative help and it was at 37 2 million, and we didn't get the help and it's gotten 3 worse. This last year we only had 34 million. So we 4 have to do something, and so I think the something 5 that we need to do immediately is change the basic 6 philosophy, and that means we need to create an agency 7 whose goal is not to just regulate but to cause things 8 to happen within that agency that will promote bingo 9 and make it a productive, viable and profitable 10 industry so that charities such as many of us are 11 associated with who do tremendous good work in the 12 State of Texas, I have a testimony here from a boxing 13 association where there is a man who is taking funds 14 from bingo that he didn't have before and he has been 15 able to take care of children in way that is just 16 incredible, but he's not going to be able to do that 17 if he can't get these monies, and he's got to be able 18 to have an industry that is working in order for him 19 to continue. 20 So we recommend strongly that we have an 21 agency that is changed in its basic philosophy to one 22 that can be more flexible, that can have new products 23 brought to its table real quickly and we can be 24 changing. Just like the Lottery does, they look at 25 all these new products and they are able to change WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 160 1 because that's their philosophy, they have been 2 mandated to do it that way. The Charitable Bingo 3 Division has not been mandated in the same way. It's 4 only mandated to regulate. We need more than that. 5 We need more than just regulation, we need help, and 6 we need a partner in charitable bingo to make it work 7 for Texas so that those distributions will not be 8 what -- your strategy plan in the Texas Lottery has 9 been for the next five years, your strategy plan says 10 that you hope to distribute $40 million a year. It 11 ought to be $50 million a year or $100 million a year, 12 and it could be if we have an agency whose focus and 13 basic philosophy is grounded in not just regulation 14 but in promoting and being a business partner with the 15 community to cause this charitable bingo to be 16 profitable in the State of Texas, and we believe that 17 can happen. Thank you. 18 CHAIR NEINAST: Thank you, Mr. Heinlein. 19 Very good comments. 20 Ms. Ives, Sharon Ives. 21 MR. BRESNEN: Ms. Ives had to leave to get 22 back to her children, but she asked that her form be 23 entered as part of the record. 24 CHAIR NEINAST: Okay. And is she for or 25 against? WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 161 1 MR. BRESNEN: I believe she checked that 2 item. 3 CHAIR NEINAST: Okay. I didn't see it. 4 MR. BRESNEN: There were four people from 5 Fort Worth that came with Sharon, and they had to 6 return. 7 CHAIR NEINAST: Item 6, they are for it. 8 MS. TAYLOR: Okay. 9 CHAIR NEINAST: Mr. Williams, Charles 10 Williams, Jr.? 11 Not here. He indicated he was for the 12 proposal, also. 13 Ms. Sampson, Sharon Light Sampson. 14 Not here. She indicated she was for the 15 proposal, also. 16 Ms. Hoard, Renee Hoard? 17 Not here, indicated she was for the 18 proposal, also. 19 Mr. Bresnen, that's a familiar name. 20 MR. BRESNEN: Thank you, Mr. Chairman. 21 Steve Bresnen, representing the Bingo Interest Group. 22 I'm just going to take a second because I've done this 23 in writing and I'm just going to distribute to you 24 all. 25 Our position is generally that there have WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 162 1 to be some major structural changes in bingo to 2 address a lot of the problems that you have heard 3 about today. We've detailed a number of those. I'd 4 like to reiterate what Mr. Hutchings said. We think 5 that it's important that the legal services, the 6 security, everybody be under a single director so 7 there is direct accountability up and down the line. 8 You know about a number of the rule issues 9 that we've talked about earlier that need to be 10 addressed expeditiously, and we think all of that 11 requires a major structural change. We'd like to, as 12 the year goes on, we'd like to work with you all, 13 maybe flesh out how this new agency might be 14 structured. We'd like to be able to work with you to 15 answer the questions really that are on page three, 16 what are the options for how that agency might be set 17 up, how would our money be spent. You have heard me 18 talk about that several times today. How would the 19 board members be selected, an item Mr. Hutchings 20 addressed, and the costs and also at the same time 21 getting some of these problems, both structural and 22 rules, and some clarifications on the vague 23 terminology in the statute, so I will just leave with 24 you that position paper if I might, and I've hogged 25 the podium a little bit today so I think I'll just let WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 163 1 other people speak. 2 CHAIR NEINAST: I appreciate your input, 3 Steve, but are you in favor of a separate agency or 4 you don't know yet? 5 MR. BRESNEN: I think -- no, I would say 6 that we are strongly leaning in favor of a different 7 arrangement for regulating bingo. Whether that's a 8 separate agency or an agency within an agency, there 9 are some models for that out there where you have your 10 own board and staff. Some of your administrative 11 costs can be handled by being housed within another 12 agency, for example, there are some models for that. 13 So what I would like to say is we think it's necessary 14 to have our own board, we think we need to have this 15 line structure. I think that's consistent with the 16 recommendation of the subcommittee so if the 17 subcommittee adopts that, we would certainly salute 18 it, would not be opposed to it, I just don't want to 19 sign off on a single model today until we have 20 explored those options completely. Thank you. 21 CHAIR NEINAST: Thank you. Ms. Woods, 22 Janice Woods. 23 MS. WOODS: My name is Janice Woods, and I 24 am representing River City Bingo Association, which is 25 comprised of five charities, the ARC of the Capital WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 164 1 Area, Family ElderCare, Texas LL Foundation, North 2 Austin Foundation, Project Normalization. I'm also 3 the chair of the dormant Bingo Is Good for Nonprofit 4 Organizations, or BIGNO. 5 CHAIR NEINAST: And a former member of this 6 committee. 7 MS. WOODS: And a former member of the 8 Bingo Advisory Committee, and I want anyone to hear 9 what I have to say is not intended as a slam or as a 10 criticism, but Mr. Clowe asked me my opinion, you 11 know, don't ask me my opinion if you don't want to 12 hear it, and he also said I think it's time that we 13 say what we've been thinking. And I haven't been 14 saying that a lot lately, and it's kind of built up. 15 Without further notice, I want to say that 16 for about fifteen years now that I've been involved in 17 bingo now and in almost every legislative session that 18 I have been involved in Representative Ron Wilson has 19 introduced legislation that said, you know, that would 20 create a separate bingo agency, entity or whatever, 21 and every time that bill has come up I have been -- or 22 my group has been 100 percent behind such a deal. It 23 ain't never happened. So we are still behind that. 24 And the other thing, when it comes down to 25 where we've been, and I'm like you, I do believe bingo WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 165 1 is a stepchild, and I don't care where we've been, 2 that's the way we feel because that's the way we've 3 been treated, so that's the way it is. One of the 4 things that happened, and God rest his soul, 5 Mr. Bullock, he asked me and a former colleague of 6 mine, Debbie Tucker, one time if she and I would help 7 him to move the bingo division out of the 8 comptroller's office. This was when he was the 9 comptroller, and we said yes, and he said, well, I'll 10 buy you dinner. Mr. Bullock still owes us dinner. 11 But anyway, that's neither here nor there. 12 We strongly believe that there is a 13 conflict between bingo and lottery. I think the 14 honeymoon is over with the lottery. It's time -- it's 15 over. I was very encouraged in the beginning. I 16 thought that, well, we had found a home. Obviously 17 this is -- it is not working, and if it's not working, 18 then obviously it has to be fixed. 19 I, like others that have already testified, 20 I have a lot of ideas that would be very helpful I 21 think in setting up a bingo commission, a separate 22 entity or whatever. One is is that having to do with 23 the commission itself and the governing body. Three 24 might not be enough. I think maybe probably five 25 members, two at minimum of which would come from the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 166 1 bingo industry, you know, that know something about 2 bingo, whether it's a charity person, a distributor or 3 someone that knows what's going on. And the reason 4 why I say that is, you know, this group and having 5 served on this group, there is no power involved. You 6 know, you can recommend until you are blue in the 7 face, but nothing happens because you don't have the 8 power to enact anything, so if a commission, a bingo 9 commission were in place, then -- and you have 10 representatives from our industry that have some kind 11 of power to get something done. You know, it's been a 12 long day, folks, and it's been this way for a long 13 time because nothing is happening. Nothing is 14 happening. And that's the problem that we have today, 15 nothing is happening. You all can't do it. You all 16 can't do it. I couldn't do it when I was a member, 17 you know, and the staff obviously can't do it because 18 of whatever reasons. 19 One of the things that occurred to me at 20 the public hearings a couple weeks ago about the audit 21 rules was also several years ago legislative speaking, 22 if you all want to get mad, get mad at me and my 23 former colleague, Debbie Tucker, about the bingo 24 operator training. That was our idea. And we had a 25 good idea at the time, and it kind of got away from WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 167 1 us. One of the things that that means that every 2 charity has to be also, you know, trained to be an 3 operator. Well, I'd like to turn that around. And 4 this is not a criticism of the current bingo staff 5 because I know some of those bingo people. I know 6 that they work hard. But you could quote this book 7 all day long and you can, you know, know the chapter 8 and verse, and I know that some of them have come and 9 visited bingo halls, but I would like for them to come 10 and get down in the trenches with us and see what 11 happens from the grass roots up at a bingo hall, and 12 I'm not talking about visiting, I'm talking about 13 literally doing and observing and see just what we do 14 as operators and what we do as a distributor or what 15 we do if you are a commercial lessor. Again that is 16 not meant as a criticism, but if everybody is on the 17 same page, then you can have a better organization, 18 you can have more money for your charities, and 19 everybody would be working together. And that's what 20 this deal is all about, and it has not been happening 21 of late. 22 You know, when I mentioned this at the 23 public hearings recently that when halls such as mine, 24 which is a big commercial hall here in Austin, are 25 suffering, and I know I'm getting off the subject, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 168 1 then you got a problem, and I think it has been the 2 direct result of the conflict that's happening in the 3 State of Texas between lottery and bingo, and whether 4 you want to admit it or not, we have been the 5 stepchild. I've been concerned about attitude. I was 6 concerned that -- for whatever reason and, Billy, 7 please hear what I'm saying that Billy or Phil were 8 not in attendance in the last public hearing 9 concerning audit rules that are very important to us, 10 so that concerned me a lot. 11 Again, I don't know all of the answers. If 12 I did, then I would be, you know, maybe the governor, 13 but I'm not. But I do know that it takes an 14 emergency, it takes something like what's been going 15 on in our industry in the past year, maybe 16 year-and-a-half to get response, you know, from the 17 industry. So I think it's time that these people get 18 heard. These people -- these people is this people, 19 myself, and if that means that we combine together and 20 come forth like we are today and maybe get some of our 21 ideas and another organization, whether it's 22 resurrecting BIGNO or whatever and go before the 23 Sunset Commission and make sure that those people -- 24 and I love it, sitting back here you can see that 25 building because I know that's where it's all got to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 169 1 go, but at the same time we have got to start 2 somewhere publicly speaking and saying this is what we 3 need. So, any questions? 4 Thank you for all your work. 5 CHAIR NEINAST: Thank you. Mr. Fogleman, 6 E.T. Fogleman? 7 MR. FOGLEMAN: I'm E.T. Fogleman from 8 Dallas, representing AmVets Post 83, and I think it 9 should go under a separate deal because you may be in 10 here yesterday representing somebody, then you are in 11 here today representing me thinking about what went on 12 yesterday. I think you keep in mind all on the same 13 thing. Thank you. 14 CHAIR NEINAST: Thank you. Ms. Fogleman, 15 Marguerite Fogleman? 16 MRS. FOGLEMAN: I'm Marguerite Fogleman, 17 and I'm a member of the AmVets Ladies Auxiliary Post 18 52, and I have heard a lot of comments today that I 19 certainly agree with, and I think that the Charitable 20 Bingo Operations Division should become separate from 21 the Lottery Commission. I believe, Mr. Chair, you 22 used the word stepchild. I think that expresses my 23 opinion. I also would like to go on record as saying 24 I agree with what Mr. Hutchings said and also 25 basically what I've heard today, and I would like to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 170 1 see a separation of the Charitable Bingo Division from 2 the Lottery Commission. I think it would be great if 3 you would be the Texas Bingo Commission. Commission 4 denotes more than division, and it looks like that it 5 would, you know, carry a little more weight and 6 authority, and I would just like to say I'm for the 7 separation. Thank you. 8 CHAIR NEINAST: Thank you. Jerry Stobaugh? 9 He indicated he was going to speak for the separation. 10 Mr. Caldwell, Dr. Caldwell? 11 DR. CALDWELL: I'm Dr. Jerry Caldwell. I'm 12 post commander of 74 in Dallas. 74 is a new post, and 13 we've just qualified for playing bingo and will be 14 playing very quickly, so I figure it's about time I 15 got down here and learned a little bit more about 16 bingo, and I'm aware of a lot of the problems in the 17 bingo area and I heard an example this morning of why 18 the bingo should be separated from the Lottery 19 Commission. The lottery commissioner said that you 20 could make -- probably make more money if you had 21 higher payoffs, but you don't need to talk to us, you 22 need to go talk to these other people over here, and 23 the -- and he's telling the truth. The problem is 24 that he didn't say, look, we've got the pie where 25 we've got the political pull, go with us, we'll go WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 171 1 over there and talk to them and you will get the -- a 2 chance to pay higher payoffs. 3 Also, the Lottery Commission has been 4 paying out millions of dollars on advertisements. Why 5 have they not included the bingo commission? Now 6 there may be rules against this, but if everybody 7 combined their political power, then some things could 8 be changed so that we could advertise, and I don't see 9 any of that happening, I don't see the support from 10 the Lottery Commission. I think we should be 11 separate, and that's all I have to say. Thank you. 12 CHAIR NEINAST: Thank you. 13 DR. CALDWELL: Do you have anything of me? 14 CHAIR NEINAST: I just might add that that 15 subject of advertising has been the subject many times 16 before this meeting. We recognize the problem as 17 you've stated it, that a need for some way of 18 advertising bingo other than just the individual 19 charity. 20 DR. CALDWELL: Any organization needs 21 advertisement, you know, regardless of who you are or 22 what you do. So thank you. 23 CHAIR NEINAST: Thank you. Mr. Young, 24 Robert Young? 25 DR. CALDWELL: Sir, before he comes up, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 172 1 could I take up one thing that I told some other 2 people I would bring up? We don't have any coffee or 3 water in here. I would be willing to donate $5 if we 4 could get some water or some coffee back in the back 5 of the room for tomorrow. It just helps to get people 6 out, your throat gets dry, you know, you cough too 7 much, all kinds of things, and I would be willing to 8 take up a collection if we needed to so that we could 9 have some coffee and water tomorrow. 10 CHAIR NEINAST: This is not our normal 11 meeting room, and in our regular meeting room we do 12 have it. Are we here tomorrow? 13 MR. ATKINS: Yes. I'll also just let you 14 know, Mr. Caldwell, there is a fountain down the hall, 15 a water fountain down the hall. 16 MR. CALDWELL: No cups. 17 MR. ATKINS: No, I don't usually think they 18 do have cups for a water fountain. 19 CHAIR NEINAST: Mr. Young? 20 MR. YOUNG: Robert Young with AmVet 77. 21 I don't think there is too much more I can 22 say that hasn't already been said. I think with the 23 Lottery Commission lottery is number one, and I think 24 that it's time that we have our own commission where 25 charitable bingo could be number one. Thank you. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 173 1 CHAIR NEINAST: Thank you. Mr. Hunter? 2 MR. HUNTER: My name is Ronnie Hunter. I'm 3 representing American Legion Temple Post 133. I'm a 4 past BAC board member. 5 And one of my esteemed colleagues earlier, 6 I think she used the wrong phrase, I don't think the 7 honeymoon is over, I think we need a divorce. Since 8 lotto took us over, our first six months we've dropped 9 35 percent bingo revenue; in a year, 55 percent. We 10 asked for computers, the lotto wouldn't give them to 11 us. We had to turn around and assess ourselves and 12 pay for our computer. I don't think that's right. 13 And everything in general, I think we need a lawyer, I 14 think it's called spousal abuse, and we need to get 15 away from them. Thank you. 16 CHAIR NEINAST: Okay. I'll pronounce it 17 correctly this time. Steve Fenoglio, is he still 18 here? 19 MR. FENOGLIO: I brought my water. 20 CHAIR NEINAST: Is it going to be that 21 long? 22 MR. ATKINS: Did you bring enough for 23 everybody, Mr. Fenoglio? 24 MR. FENOGLIO: I will tomorrow, Mr. Atkins. 25 And I am an attorney, but I'm sorry, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 174 1 Ronnie, I don't do divorce work. 2 I've already produced one record of who I 3 represent, and I got retained by some more. This is 4 the only copy that I have. Some of those are 5 duplications, Mr. Chairman, of some charities but I 6 think I'm now over 500 charities that I produced 7 earlier as well as the State VFW Organization which 8 includes 95,000 veterans, 460 posts and of which about 9 160 conduct bingo. 10 I don't know if it's honeymoon or divorce, 11 but I think the regulation of bingo needs to be 12 changed, and we support Ms. Brackett's recommendation 13 wholeheartedly and enthusiastically. It is no 14 reflection on staff. I have had good relationships 15 with the staff, and I'm proud to say that, Mr. Atkins. 16 But there is an appearance of a conflict if not a 17 conflict between the regulation of lottery and its 18 billion-two dollars a year, whatever it is, and the 19 revenue of bingo, which is -- used to be about 20 three-quarters of a billion dollars, and I think it is 21 now down to 550 or 540 million and even below, less 22 than 500 million. There is only one entertainment 23 dollar, if you will, and the lottery has done a very 24 aggressive and successful job of getting their share 25 of that entertainment dollar and part of that has come WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 175 1 at the expense of charity bingo, and you all know 2 that. 3 I think it's time now to stand up and be 4 counted and pitch it to the commissioners as well as 5 to the Sunset Commission process and see what the 6 legislation -- ultimately, this is a legislative 7 solution. There is nothing that the commissioners can 8 do one way or the other. When I've come to the 9 commission meetings, I think Chairman Clowe and the 10 other two commissioners have been sympathetic to 11 bingo, but their time is limited and if you are in 12 charge of a roughly billion-dollar net revenue to the 13 state and roughly 24 million net revenue to the state, 14 you know where you would put your focus. Mr. Tawil 15 has talked a lot about business, and if you are a 16 businessman, you know where you are going to focus 17 your effort and it's first and foremost with the 18 lottery, and it's unfortunate, but bingo has been put 19 on the back burner, so we enthusiastically support the 20 recommendation. 21 We'll do whatever we can at the commission 22 and at the legislature to see that that is done. 23 Where bingo goes and its current staff, you know, we 24 don't know and I don't think you have to know that, 25 Mr. Speed, in order to take a vote today. I think WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 176 1 that can be fleshed out later and certainly would be 2 if it's seriously received at the legislature, would 3 be fleshed out there. But this is an advisory 4 committee, and I don't think you have to fill in all 5 the details. There have been many proposals about 6 where it goes, and I don't think you need to decide 7 that today, and I would also say that there needs to 8 be independent commissioners that are separate and 9 apart from any lottery or racing commission or anyone 10 else. That would be bingo commissioners. I'll be 11 happy to answer any questions. 12 MR. TAWIL: How many members do you have? 13 MR. FENOGLIO: Over 500 licensed charities. 14 MR. TAWIL: Okay. 20 percent of the 15 industry? There is 1700 licensees; right? Can each 16 one of them write a letter? 17 MR. FENOGLIO: I'm sure they can. 18 MR. TAWIL: Okay. I'll tell you later why. 19 MR. FENOGLIO: Okay. 20 MR. TAWIL: To their legislators. 21 CHAIR NEINAST: Any other questions? Thank 22 you. Let's take another five-minute break. 23 (Recess was had from 3:29 p.m. to 3:40 24 p.m.) 25 CHAIR NEINAST: I call the Bingo Advisory WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 177 1 Committee back into session, it is now 3:36, and we're 2 still on the Item Number 6 of the agenda of whether 3 the Bingo Division, Bingo Advisory Committee should be 4 set up as a separate state agency. 5 Mr. Arnold, Phillip Arnold? 6 MR. ARNOLD: Thank you very much, I'm Phil 7 Arnold, from Houston, Texas, representing several 8 charities there in that area. 9 We are better off now than we have ever 10 been before in regards to the particular agency that 11 we are under. Of course, I was there in those years 12 with the comptroller and then later with the TABC. 13 And, however, we are in difficult times now. Just 14 this last week a hall cut its schedule in half, I 15 believe, putting three charities out of business. As 16 I've told you, those of you to whom I address my 17 comments a month ago that there would be charities 18 that would be out of business if we didn't get some 19 changes in the event cards and seal cards. I know at 20 least three that are no longer playing in the last 30 21 days. This is going to get worse and worse because of 22 the economy, because of the difficulties and the 23 various problems we do have with bingo. 24 What this means and the reason I reiterate 25 that is I think it would help us a lot to be able to WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 178 1 have our own entity. I don't know if it needs to be 2 an agency or not, but some entity with the same staff 3 and personnel would be fine, but I think we need an 4 entity for bingo that would have its own mission 5 statement to develop, promote, encourage bingo in 6 Texas. I would suggest that it would be very, very 7 good for bingo to have its own entity that would help 8 us in that way because the mission statement would be 9 clear, and I think the image we want is that of a 10 laser-like focus in this time of crises, a laser-like 11 focus on bingo, so when members of that particular 12 group awaken in the morning and their feet hit the 13 floor, the first thing they think is bingo for Texas, 14 bingo for Texas charities. Thank you. 15 CHAIR NEINAST: Thank you. Fred Miccio? 16 MR. MICCIO: I'm Fred Miccio with the 17 American Legion. 18 Yes, I would like to see bingo as a 19 separate division. To me I've always felt like we've 20 kind of had the fox caught in the hen house over here 21 with the Lottery Commission over bingo. What I would 22 like to see is something that we have right here right 23 now, an advisory committee and possibly an 24 organization, possibly even the people we have right 25 now, Billy and the group that he has, because there is WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 179 1 no training school for this. Bingo has got to do 2 this, people have got to come through the ranks, know 3 what they are doing. We've got a pretty good nucleus 4 in the Lottery Commission of what we have. I would 5 like to see them come out from under the Lottery 6 Commission and come into either a separate 7 organization or be part of another organization that 8 we as bingo people could have a say in how this thing 9 is going to be run. Give us the chance to go out 10 there and operate like business people without all 11 these restrictions. I've been in the bingo business 12 over 35 years. I made money at it. Why? Because I 13 had no restrictions. If I had an idea of going out 14 and making some money, how to do it, I did it. I 15 didn't have to worry about it, I can't do it this way 16 I can't do it that way. I went out and I made it. 17 We can do the same thing now. A couple of 18 years ago Billy got involved in it. We were going to 19 do some advertising, lottery committee was going to 20 come up with some money for advertising. They never 21 did. Billy had some surplus money that we had, 22 correct me if I'm wrong, Billy, we put up some bingo 23 signs around the state, and that was the end of it. 24 But I'd like to see them signs. You know what I'd 25 like to see on it? We've got 1600 charities WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 180 1 approximately right now playing bingo, 1600 charities. 2 Every night of the week they are playing two sessions 3 a night, giving away $5,000 a night. What is 1600 4 times 5,000 a night? What is 1600 times seven days a 5 week? What is it times 30 days a month? Put that up 6 on the big signs on the street where people can see 7 it. They will wake up. They will know what we are 8 doing with bingo. Let's figure out a way between 9 ourselves how to come up with a way to get the money 10 to do this. We've got to do it. We can't do it by 11 ourselves. In those halls where they post up the 12 bingo paper, it gets around, it goes to the same 13 people. The people that get that paper are the people 14 who come to the bingo hall every day. We are not 15 attracting new players. We've got to get out there 16 and do some advertising. Thank you. 17 CHAIR NEINAST: Thank you, Mr. Miccio. 18 Ms. London, Dianne London? 19 MS. LONDON: Thank you, Mr. Chairman. My 20 name is Diane London. I represent the charities 21 conducting bingo at Palace Bingo in Victoria, Texas. 22 I also am in favor of a separate entity 23 governing charitable bingo in the State of Texas. I 24 believe that there is an inherent conflict of interest 25 at this point in time. And this by no means, WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 181 1 Mr. Atkins, reflects on the staff. I mean, they have 2 done an absolute incredible job. As someone said 3 earlier, you all started from scratch and look where 4 we are now. The problem is, first of all, we want the 5 lottery to continue to do well, to continue bringing 6 in dollars for the State of Texas, but we also want 7 bingo to do the same thing. We want them to bring in 8 dollars for the State of Texas, for the charities, the 9 communities the charities filter their money 10 throughout, and for the players. Therefore, I do 11 believe we need a separate agency that can devote 12 meaningful time and effort to favorably regulating 13 bingo. I can't help but believe that it's going to 14 take a great, great effort on this entity or agency to 15 do what needs to be done because bingo is in a very 16 dismal downhill trend right now. 17 Just as a little point of interest, my 18 friend and I were driving up here last night, and we 19 stopped at a convenience store. I seldom ever buy 20 scratch-offs, I might buy three or four a year. Stood 21 there and my friend counted the scratch-offs. There 22 were 22 scratch-offs there. And my thought since then 23 has been if we had different regulations over pull 24 tabs, I know that in my hall, for example, in our 25 hall, when we expanded from selling three tabs per WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 182 1 session to four, our net profit on pull tabs alone 2 went up. And pull tabs pretty much is your gravy. 3 It's going to make you or break you. Then we expanded 4 to five on some of our sessions, and it got even 5 better. Wow, can you imagine if regulations over pull 6 tabs and how you have to handle your pull tabs were a 7 little more favorable in our favor what we could do, 8 what the charities could realize out of that? I think 9 it would be incredible. And we all know that every 10 dollar counts. 11 That's pretty much all I have to say except 12 for just one point of interest. Looking back as far 13 as 1996, it looks as though charitable bingo in the 14 State of Texas is still facing the same issues and the 15 same problems that they were then, and I really think 16 to say the least that this is a concern. Thank you 17 very much. 18 CHAIR NEINAST: Thank you. Ms. Sherri 19 Giesy. 20 MR. FENOGLIO: She had to leave. 21 CHAIR NEINAST: Keith Fogle? 22 MR. FOGLE: Mr. Chairman, committee 23 members, my name is Keith Fogle. I'm representing the 24 Boys' Club in Killeen, Texas, where we have played 25 bingo there. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 183 1 I would like to commend this committee for 2 at least bringing this issue up forward, Ms. Brackett, 3 your committee for putting this on the floor. I hope 4 that you will act on this. It's obvious that you may 5 have had less success on some items. It's obvious by 6 the crowd here that this is a number one priority to 7 the bingos and the charities in the State of Texas. 8 It's got a lot of attention as you have had people 9 witness all day long. I can't add a thing to that 10 except that they are right. I hope that you will put 11 everything else, everything, on the back burner, make 12 this your number one priority, act on it, make it a 13 motion, vote on it, and if you need any assistance 14 from any of the bingo operators in the State of Texas, 15 I believe you will get all the cooperation you need. 16 And that's all I have to say, sir. 17 CHAIR NEINAST: Thank you. Ms. Crist, 18 Theta Crist? 19 MS. CRIST: I'm Theta Crist, representing 20 AmVets Auxiliary 72, and I totally agree with this, 21 everything that has been said today. Thank you. 22 CHAIR NEINAST: Thank you. 23 MR. RINEHART: Mr. Chairman, after hearing 24 all of this from our audience out there and due to the 25 fact that the Sunset Committee meeting is going to be WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 184 1 either next week or some time this month or early part 2 of April, some time in April, I believe the audience 3 is 100 percent for this. Virginia's committee was 4 recommending this, and I would like to make a motion 5 that we recommend to the Sunset Committee that 6 Charitable Bingo Operations Division be a separate 7 state agency. Would that be to the Sunset Committee 8 or would it be to the Lottery Commission? 9 CHAIR NEINAST: I think it should go to the 10 Lottery Commission because it had to be resulting in 11 legislation. It certainly would not hurt them to make 12 it to the Sunset Commission, and I suggest you make an 13 amendment to your motion possibly to recommend to both 14 the Sunset Commission and -- 15 MR. TAWIL: Can we have discussion before 16 we go to the motion? 17 CHAIR NEINAST: Yeah, we are talking about 18 the motion. 19 MR. RINEHART: Yes, I so amend that, the 20 Sunset or the land lottery. 21 CHAIR NEINAST: I'll restate your motion 22 then. The motion is that this committee recommend to 23 both the Sunset Commission and the Texas Lottery 24 Commission that the Bingo Division be set up as a 25 separate agency. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 185 1 MR. RINEHART: Charitable Bingo Division. 2 MR. TAWIL: Before we get to -- 3 CHAIR NEINAST: Hear, hear, hear. We have 4 a motion on the floor. Is there a second? 5 MS. TAYLOR: I second that. 6 CHAIR NEINAST: And before we go to you, 7 Saleem, we also have one other member of the audience 8 who would like to address that subject. 9 Mr. Crist? 10 MS. CRIST: Mickey Crist, AmVets 72, and 11 I'm in compliance with everyone else on this movement. 12 Thank you. 13 CHAIR NEINAST: By my count, we've had 25 14 individuals speak in behalf of or in favor of the 15 motion before it was stated and one that says maybe, 16 leaning that way but maybe. Now we'll open it it up 17 for discussion of the committee. Saleem? 18 MR. TAWIL: I got a couple of things to 19 say. Number one is this is going to take legislative 20 action, and the reason I asked Mr. Fenoglio earlier 21 about his members that he represents and of course 22 also Mr. Steve Bresnen, my personal experience, a few 23 of us did some legislative work at the Federal level 24 and at the State level and you can't underestimate the 25 power of a letter to your Congressman and Senator, in WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 186 1 this case it would be the Representatives and the 2 Senators in the State Senate and the State House and 3 also the bingo -- I mean the administrative licensing 4 committee under Chairman Wilson. I believe that 5 Mr. Bresnen and Mr. Fenoglio ought to be able to get 6 each one of their clients to write a letter, so there 7 has to be a concerted effort on that front, a write-in 8 campaign. It also includes all of us on the committee 9 here since we support these efforts. I'll personally 10 commit to go see as many Representatives and Senators 11 on a one-to-one if I intend to support these efforts. 12 But before we get into all that, I think this is going 13 to take quite a bit of effort and time, and I know how 14 these things go and this has occurred before. 15 Listening to all the people out here, it 16 couldn't help but stir in my mind as a minimum, and I 17 would believe we could probably talk to Chairman Clowe 18 as part of this motion, that as a minimum they should 19 separate security and legal. It has sufficient 20 revenues generated, as has been pointed out, that 21 bingo generates. It doesn't take a rocket scientist 22 to say eliminate the majority of the conflict if we 23 had a separate security under Mr. Atkins and separate 24 legal division and his legal counsel that has nothing 25 to do with lottery. The only commonality is when they WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 187 1 go before the commissioners to conduct their business. 2 A good example, our company when they submitted their 3 system for approval, it took over a year to get it 4 approved. Why? Because it was being evaluated mostly 5 by the lottery staff, the security staff. Now the 6 system, I believe, and testing is done directly under 7 the Bingo Division separate and apart from that. It 8 is not just inherent, it is a conflict. So security 9 should be strictly under Bingo having nothing to do 10 with Lottery and legal should be totally separate from 11 Lottery and under Bingo. Now, if you have that 12 separation, completely separate and apart, it seems 13 the me like the only unresolved conflict that would be 14 left would be at the commissioners level because even 15 though we can have a write-in campaign and have a lot 16 of effort legislatively, frankly, we can't just rely 17 on that by itself. I believe these additional steps 18 to make these separations will go a long ways to solve 19 a lot of the problems that you all are talking about. 20 So I would like to have that motion amended to include 21 that as a subpart of it. In other words, we will do 22 everything that Mr. Rinehart was mentioning but, in 23 addition to that, recommend to the commissioners that 24 there is a dividing line of security staff and legal 25 staff and separate budget items that are strictly WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 188 1 under Mr. Billy Atkins. 2 CHAIR NEINAST: I'd like that to be a 3 separate motion. 4 MR. TAWIL: That would be fine, also. 5 CHAIR NEINAST: And I think that to comply 6 with the Public Notice Act, I think we need to 7 possibly put that on the agenda for next time, but I 8 think this would be mixing apples and oranges. I 9 don't think -- 10 MR. TAWIL: Tell us, Billy. 11 CHAIR NEINAST: This -- 12 MR. ATKINS: Well -- 13 CHAIR NEINAST: Well, the item and the 14 motion on the agenda was whether the charitable bingo 15 operations should be a separate state agency. 16 MR. TAWIL: Okay, fine, that's okay, but 17 the point that I'm getting at is that we've gone up 18 the flagpole about some items. As much as I am a 19 strong believer on getting things done, they don't 20 happen very fast, and I just can't imagine that if 21 we're unable to get something done in this legislative 22 session coming up, then we're going to be stuck for 23 another two years in the same mire that we're in. It 24 seems to me like in appealing to Chairman Clowe and 25 based on his wisdom and good-hearted comments this WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 189 1 morning, he may be receptive to convincing the other 2 commissioners into separating these divisions totally 3 separate and apart, so I would like to see that as an 4 issue in keeping with this, and if it means a separate 5 meeting, that's fine. 6 CHAIR NEINAST: I agree with your proposal, 7 and I would certainly back it, but I don't think 8 it's -- 9 MR. TAWIL: You are talking about the 10 protocol right now, and that's fine. 11 CHAIR NEINAST: I think it's just a 12 legality. 13 MR. ATKINS: And Kim has left. I don't 14 know that it would have to be a separate -- if the 15 discussion is if bingo should be a separate agency, 16 then that would be an issue that would fall under, in 17 my opinion, the total discussion. 18 MR. TAWIL: We're just separating G and A; 19 right? 20 MR. ATKINS: Yes. And I don't -- I mean I 21 understand you are wanting to err on the side of 22 caution, but I don't know that it would have to be a 23 separate item if the discussion is occurring under and 24 in conjunction with this item. 25 CHAIR NEINAST: Well, I plan to propose WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 190 1 another meeting of the committee before the April 26th 2 commission meeting. 3 MR. TAWIL: Good. 4 MR. RINEHART: This is what we've talked 5 about all day is putting stuff off, not having it, 6 bringing it up and everything, and I think we need to 7 go ahead and get started on it. We know it's going to 8 take a long time, it may never work, but we need to go 9 ahead and go forward on it and get started and then 10 see where it works into, what it works into. 11 MR. TAWIL: I want to see something 12 happening. Let's get it separated, and we'll worry 13 about the future later. 14 CHAIR NEINAST: Mr. Hunter? 15 MR. HUNTER: Ron Hunter, American Legion 16 Post 133 in Temple. To me you would be better off 17 separating it, because if you put it together, even if 18 they don't separate the two entities, at least you 19 could still get your own security and legal part 20 separate from it. Thank you. 21 CHAIR NEINAST: I was going to say, I 22 agree. I just have a legal question of putting it 23 under this item that way, and we're going to have 24 another meeting before the next commission meeting so 25 I would prefer to put that on as a specific item of -- WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 191 1 agenda item of the next meeting, the one that you are 2 talking about, Saleem. 3 MR. TAWIL: Either way. Also it goes 4 without saying that even though we're talking about 5 security and legal, it's really difficult on them to 6 try to separate or differentiate. By a clear 7 delineation they have separate delineated 8 responsibilities. 9 CHAIR NEINAST: And to sum up, I think that 10 Ms. London made the case best for why there should be 11 separate agencies, as she pointed out that the purpose 12 of the lottery is to raise money for the state, the 13 purpose of bingo is to raise money for charities, and 14 I think that alone says a lot. 15 And as to comment on another thing that you 16 said, Saleem, I think that we can all do what you say. 17 Starting now. But if we have the backing of the 18 Lottery Commission to the extent that they say we 19 think it ought to be, that just makes our -- but we 20 have to be careful, members of this committee, that we 21 don't go out and represent it as an official position 22 of the Lottery Commission or that we're reflecting 23 their views in any way, so just that cautionary word. 24 Any further discussion? 25 Call the question, all in favor of the WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 192 1 motion to recommend to the Lottery Commission and the 2 Sunset Commission that the bingo operation be 3 established as a separate state agency, aye? 4 COMMITTEE MEMBERS: Aye. 5 CHAIR NEINAST: Motion carried unanimously. 6 Okay. We now go to public comment, and 7 Mr. Hunter has asked that he be allowed the microphone 8 first because he has a scheduling conflict. 9 MR. HUNTER: Earlier today on I think Item 10 Number 4 it was brought up about the people who put 11 their names in or had their names put in for like your 12 chair itself. The people weren't here or anything. 13 If I'm not mistaken, this morning you decided you were 14 going to have a committee together and find out who 15 they were and what? Is that correct? 16 CHAIR NEINAST: Yes. 17 MR. HUNTER: All right. Was there a 18 deadline for the applications to be in? 19 CHAIR NEINAST: Yes. 20 MR. HUNTER: All right. This morning we 21 added two people added to it. I'd like to have mine 22 and Janice Woods added to it. If you can do theirs, 23 you should be able to do ours. 24 CHAIR NEINAST: Who was the other one? 25 MR. HUNTER: Janice Woods. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 193 1 MR. TAWIL: All right. Mr. Chairman, do 2 you want us to add those two names in consideration 3 with his recommendations? 4 CHAIR NEINAST: Yes, to that list that you 5 have there. 6 MR. TAWIL: Ronnie, what did you say, which 7 category? There is commercial or noncommercial 8 lessor. 9 MR. HUNTER: Noncommercial lessor. 10 MR. TAWIL: And what about Janice? 11 MR. HUNTER: I think is an operator or -- 12 MS. TAYLOR: Conductor. 13 MR. HUNTER: Conductor. 14 CHAIR NEINAST: There are some others. 15 MS. TAYLOR: While you are looking, if I 16 could ask one thing, I was wondering, one of the 17 people speaking earlier spoke about the computer 18 system, and I was just wondering, has that been put 19 into place yet? What happened with that? 20 MR. ATKINS: It has not. The contractor 21 didn't meet the deadline that was imposed by the terms 22 of the contract so they are still on site, they are 23 still working. We have assessed -- we've been 24 assessing liquidated damages of a thousand dollars a 25 day. It's probably right now approximately 75 percent WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 194 1 completed. 2 MS. TAYLOR: Okay. The liquidated damages, 3 you are collecting a thousand a day for them not being 4 finished? 5 MR. ATKINS: We're assessing. 6 MS. TAYLOR: So it's not a line item, it 7 wasn't budgeted in as a line item, right, so it's 8 extra money? 9 MR. ATKINS: Well, we haven't collected it. 10 MS. TAYLOR: When you collect it, will it 11 be collected as extra money? Can we set it for 12 advertising? 13 MR. ATKINS: My guess is probably not. 14 MR. TAWIL: Billy, how big was that 15 contract? 16 MR. ATKINS: It was right at $700,000. 17 MR. TAWIL: That's a pretty good size. 18 CHAIR NEINAST: Item Number 8, public 19 comment. 20 Mr. Pruitt? 21 MR. FENOGLIO: He had to leave. 22 CHAIR NEINAST: Mr. Hutchings? 23 MR. HUTCHINGS: No comment, sir. Thank 24 you. 25 CHAIR NEINAST: Steve Fenoglio. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 195 1 MR. FENOGLIO: It will be brief. I had a 2 question about the software system that was just 3 discussed, so it's not in effect now at all? 4 MR. ATKINS: No. 5 MR. FENOGLIO: How long has it been out 6 of -- how long have liquidated damages been assessed 7 or being assessed if you know, approximately? 8 MR. TAWIL: 700 days? 9 MR. ATKINS: It's been a good long time. I 10 believe since July. 11 MR. TAWIL: That's not too long. That's 12 only like 240,000 -- 13 MR. FENOGLIO: You rock. One of the other 14 comments that I had was the status of the approval of 15 electronics, and I know, Billy, that that was being 16 folded over to your division, and can you give me an 17 indication of how that's going, when that will occur? 18 I assume it hasn't been done yet. 19 MR. ATKINS: What is that? 20 MR. FENOGLIO: The approval process by 21 which Mr. Gonzales has approved electronic submittals, 22 cardminding device submittals. Is it under your 23 direction? 24 MR. ATKINS: Yes. 25 MR. FENOGLIO: When did that happen? Do WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 196 1 you know, Mike? 2 MR. PITCOCK: Mid last year or before. 3 MR. FENOGLIO: July sometime? 4 MR. ATKINS: Somewhere around there. 5 MR. FENOGLIO: All right. Those are all 6 the things I had. Thank you. 7 CHAIR NEINAST: Would anyone else like to 8 be a speaker for public comment? Okay. If not, we'll 9 pass to Item Number 9, which is -- 10 MR. ATKINS: Could I, Mr. Chairman, I 11 wanted to make one comment. Dianne, I know you 12 mentioned it and I think Steve Fenoglio and I think 13 others have, and if I missed it, I apologize that I 14 didn't get to point you out, but I sincerely 15 appreciate your comments about staff. Again I'm not 16 talking about me, I'm talking about the people in the 17 division that actually do the work. Those men and 18 women work very hard to help you in every way that 19 they can, and they put in a lot of time, and Steve 20 Fenoglio has been very vocal about the fact that they 21 don't get paid near enough for the work they do, but 22 they enjoy it and they enjoy working with you all, and 23 I appreciate you mentioning that, and I'll pass it 24 along to them. Thank you. 25 CHAIR NEINAST: Item Number 9 is WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 197 1 consideration -- 2 MR. FENOGLIO: And I'm sorry, one comment 3 on that, Billy, and I'll make it again. If the 4 division wants to go for salary adjustments at the 5 legislature, if you will let some of us know, we'll 6 support that because the salary structure is out of 7 whack in a bad way. 8 MR. TAWIL: Don't forget the letters. 9 MR. FENOGLIO: It will be taken care of. 10 They are going to start next week. 11 CHAIR NEINAST: The final item prior to 12 adjournment is consideration of and possible action on 13 future Bingo Advisory Committee meeting dates that are 14 items to be considered for future meetings. As I have 15 mentioned before, I'd like to call a special meeting 16 of the committee for April the 3rd, Wednesday, to 17 consider -- well, now, two items: The first item 18 would be a consideration of a report from the 19 subcommittee on nominations to the committee, and the 20 second item would be consideration of establishing the 21 legal and security operations as separate, distinct 22 parts of the Bingo Division. We may have to reword 23 that a little bit for public notification, but that's 24 the gist of it. 25 Are there any suggestions for other agenda WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 198 1 items? Would anyone from the -- yes, Steve. 2 MR. BRESNEN: I'd just like to inquire 3 about the issue about the seal cards and that the 4 draft rule that Ms. Magnuson came up with and that 5 Jane Thompson presented today could be added there so 6 we can have some follow up and discussion about that. 7 Everybody will have a couple of weeks to come forward 8 with questions or concerns about that. Maybe you all 9 could make a recommendation or something at that time. 10 CHAIR NEINAST: Thank you. I intended to 11 add that, and I just forgot. Thank you for reminding 12 me. 13 MR. BRESNEN: And not just that item, all 14 the what we're calling revenue enhancement items. 15 When the State says that, that means you are getting 16 taxed. In this case, we're trying to get the 17 charities some more revenue, so Steve had a handout 18 there that had four or five items on it, and I would 19 like to see specifically that the seal card item is on 20 there and any of those items that are on that list, if 21 we can get some sort of an update on those things, 22 too, because I think, Steve, didn't we include those 23 all can be done under the existing statute? So, thank 24 you, appreciate it. 25 CHAIR NEINAST: I'm not sure I understand WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 199 1 that last one. We will have as number three, Billy, 2 the pull tabs, but we have already made a motion to 3 recommend to the -- and passed a motion to recommend 4 to the commission that all four of those items 5 suggested by Steve be adopted. 6 MR. BRESNEN: I'm just looking for an 7 update on where we stand on that. Again, in keeping 8 with what I asked earlier and, Billy, you weren't here 9 at that point, I'm trying to put bingo first, and if 10 those items, if we can get some discussion about 11 those, where the staff stands on them, if anybody has 12 had a chance to look at -- if they just agree that 13 they are legal, if they agree that we need some rules, 14 then some idea about what process we're going to 15 follow to do those. I personally would like to see 16 those up at the top of our table there. I can write 17 up what the problem is, I think we've all articulated 18 it a lot, but I would like to get those elevated up, 19 so if you all would put those items on your agenda for 20 an update about how we're going to go about addressing 21 those other items, I'd appreciate it. We have some 22 specifics to work with on the seal card because Mary 23 has done the hard work of getting that draft rule 24 there. On the other items I think we need an update 25 on some follow up on how we're going to go about WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 200 1 addressing those and when and maybe setting a time 2 schedule and I'd like to discuss that then. 3 CHAIR NEINAST: All right. Let's add that 4 as an item to review and take action on the list of 5 revenue enhancements as included in the motion. 6 One question of you, Billy, in connection 7 with this. I was not at that February the 13th 8 meeting. Has that motion been taken to the commission 9 yet? Have they acted on it? 10 MR. ATKINS: No. 11 CHAIR NEINAST: Okay. So this proposed 12 April 26th meeting is the first time they will be 13 brought before the commission; is that correct? 14 MR. ATKINS: Yes. 15 CHAIR NEINAST: Okay. That was just for 16 clarification. 17 MR. BRESNEN: Mr. Chairman, I would like to 18 ask one other thing. I've been having a lively 19 discussion with my clients and with members of the 20 staff about defining what constitutes a charitable 21 purpose, and that was what Mr. Miccio was talking 22 about when he talked about these expenses for their 23 convention, travel in the veterans groups, and I would 24 like to see you put that subject on the agenda for 25 that meeting as well. Thank you. WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 201 1 CHAIR NEINAST: Okay. 2 MR. ATKINS: Steve, I'm -- you want a 3 discussion or do you want to get in the rulemaking 4 process? 5 MR. BRESNEN: I want to do it all at the 6 earliest time. I was hoping maybe the Bingo Advisory 7 Committee could get some education on what some of the 8 elements of that are in that point in time or maybe 9 they want to just follow up with where we are on that, 10 but in keeping with my new slogan, which is to put 11 bingo first in the rulemaking process, I'd like to see 12 that not get dropped out. I think the items that 13 Steve focused on are all products, it's new business, 14 new revenue types of deal. I view this as being 15 cutting regulatory costs because I think people will 16 save some money if they can get some clear guidance 17 about that particular issue, so, I think going forward 18 I'm going to try to get most of what I talked about 19 under those two things, how do we get more revenue for 20 the charities, so, I'm happy to work with you 21 personally about how we address it, whether that's an 22 appropriate time, whether you want to use that for. 23 MR. ATKINS: I'm not sure what we needed to 24 have to be ready for that. 25 MR. BRESNEN: You are never supposed to say WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 202 1 this in a public meeting, but I don't know either. 2 MR. ATKINS: We'll talk. 3 MR. BRESNEN: That's good. And as I 4 understand it, any of you committee members can have 5 that put on the agenda between now and then if you so 6 choose before the posting; is that correct? 7 CHAIR NEINAST: Well, yes, but the very 8 first item on this spreadsheet that Billy has passed 9 out is what they are going to be looking at. They may 10 not follow his amendment of definitions to incorporate 11 commonly used terms. I think it would be included 12 under that, and I think there is another one in here 13 where you talk specifically about charities. 14 MR. ATKINS: I think that's the one he's 15 talking about. 16 MR. BRESNEN: And I understand that that 17 list is not to convey in any order that you are going 18 to address things and all that, I just don't want it 19 to go off of y'all's radar because it's an important 20 issue, it's central, it's the central thing that we're 21 doing here is raising money for a charitable purpose, 22 and besides that, I'm not letting Mr. Miccio down so 23 I'm going to keep after it, keep harping on it. 24 Thanks. 25 CHAIR NEINAST: Thank you. Are there any WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 203 1 other suggestions for the agenda for the meeting on 2 April the 3rd? 3 MR. TAWIL: April the 3rd. 4 CHAIR NEINAST: If not, the chair will 5 entertain a motion to adjourn. 6 MS. TAYLOR: So made. 7 CHAIR NEINAST: Is there a second? 8 MS. BRACKETT: Second. 9 CHAIR NEINAST: All in favor? 10 COMMITTEE MEMBERS: Aye. 11 (Bingo Advisory Committee Meeting was 12 adjourned at 4:16 p.m.) 13 14 15 16 17 18 19 20 21 22 23 24 25 WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 204 1 CHANGES 2 3 Page/Line Correction Reason for Correction 4 ______________________________________________________ 5 ______________________________________________________ 6 ______________________________________________________ 7 ______________________________________________________ 8 ______________________________________________________ 9 ______________________________________________________ 10 ______________________________________________________ 11 ______________________________________________________ 12 ______________________________________________________ 13 ______________________________________________________ 14 ______________________________________________________ 15 ______________________________________________________ 16 ______________________________________________________ 17 ______________________________________________________ 18 ______________________________________________________ 19 ______________________________________________________ 20 ______________________________________________________ 21 ______________________________________________________ 22 ______________________________________________________ 23 ______________________________________________________ 24 ______________________________________________________ 25 WRIGHT WATSON STEN-TEL (512) 474-4363 BINGO ADVISORY COMMITTEE - March 20, 2002 205 1 REPORTER'S CERTIFICATION 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, MARGUERITE S. MACINNES, Certified 7 Shorthand Reporter for the State of Texas, do hereby 8 certify that the above-captioned matter came on for 9 hearing before the BINGO ADVISORY COMMITTEE as 10 hereinafter set out, that I did, in shorthand, report 11 said proceedings, and that the above and foregoing 12 typewritten pages contain a full, true, and correct 13 computer-aided transcription of my shorthand notes 14 taken on said occasion. 15 16 Witness my hand on this the 29TH day of 17 MARCH, 2002. 18 19 20 21 MARGUERITE S. MACINNES 22 Texas CSR No. 2029 Expiration Date: 12-31-03 23 1609 Shoal Creek Boulevard, Suite 202 Austin, Texas 78701 24 (512) 474-4363 25 JOB NO. 020320MSM WRIGHT WATSON STEN-TEL (512) 474-4363