0001 1 TRANSCRIPT OF PROCEEDINGS 2 BEFORE THE 3 BINGO ADVISORY COMMITTEE 4 (TEXAS LOTTERY COMMISSION) 5 AUSTIN, TEXAS 6 7 QUARTERLY MEETING OF THE § BINGO ADVISORY COMMITTEE § 8 WEDNESDAY, FEBRUARY 6, 2008 § 9 10 COMMITTEE MEETING 11 WEDNESDAY, FEBRUARY 6, 2008 12 13 BE IT REMEMBERED THAT on Wednesday, 14 the 6th day of February 2008, the Bingo Advisory 15 Committee meeting was held from 10:00 a.m. to 12:56 16 p.m., at the Offices of the Texas Lottery Commission, 17 611 East 6th Street, Austin, Texas 78701, before 18 CHAIR SUZANNE TAYLOR. The following proceedings were 19 reported via machine shorthand by Aloma J. Kennedy, a 20 Certified Shorthand Reporter of the State of Texas, 21 and the following proceedings were had: 22 23 24 25 0002 1 APPEARANCES 2 BINGO ADVISORY COMMITTEE: 3 Ms. Suzanne Taylor, Chair Ms. Kimberly Rogers 4 Ms. Rosalie Lopez Ms. Pat Gifford 5 Mr. Earl Silver Ms. Markey Weaver 6 Mr. Thomas "Tom" Weekley Mr. Larry Whittington 7 Mr. Knowles Cornwell 8 CHARITABLE BINGO OPERATIONS DIVISION DIRECTOR: 9 Mr. Phil Sanderson 10 AUDIT SERVICES MANAGER: Mr. Marshall McDade 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 TABLE OF CONTENTS 2 PAGE NO. 3 AGENDA ITEM NO. 1 - Meeting Called to Order... 5 4 AGENDA ITEM NO. 2 - Consideration of and possible discussion and/or action on the 5 minutes of the November 7, 2007 Bingo Advisory Committee meeting.................... 5 6 AGENDA ITEM NO. 3 - Report, possible 7 discussion and/or action on the 80th Legislature................................... 6 8 AGENDA ITEM NO. 4 - Report and possible 9 discussion and/or action on 3rd quarter calendar year 2007 bingo conductor 10 information................................... 34 11 AGENDA ITEM NO. 5 - Report and possible discussion on the development of an 12 on-line Operator Training Program............. 46 13 AGENDA ITEM NO. 6 - Report and possible discussion and/or action on proposed new 14 16 TAC §402.709 relating to Corrective Action-Audit.................................. 55 15 AGENDA ITEM NO. 7 - Report and possible 16 discussion and/or action on proposed new 16 TAC §402.210 relating to House Rules........ 60 17 AGENDA ITEM NO. 8 - Report and possible 18 discussion and/or action on proposed new 16 TAC §402.211 relating to Fair Conduct...... 65 19 AGENDA ITEM NO. 9 - Reports from workgroups 20 and possible discussion and/or action on draft and proposed new rules relating to 21 licensing and recordkeeping................... 103 22 AGENDA ITEM NO. 10 - Report and possible discussion and/or action on the need for 23 setting a pricing floor for the sale of card-minding devices in bingo halls........... 110 24 25 0004 1 TABLE OF CONTENTS (continued) 2 PAGE NO. 3 AGENDA ITEM NO. 11 - Report and possible discussion and/or action on the 2007 BAC 4 Annual Report................................. 139 5 AGENDA ITEM NO. 12 - Report and possible discussion and/or action on the Charitable 6 Bingo Operations Division’s activities........ 140 7 AGENDA ITEM NO. 13 - Public Comment........... 143 8 AGENDA ITEM NO. 14 - Consideration of and possible action on future Bingo Advisory 9 Committee meeting dates and/or items to be considered for future meetings................ 143 10 AGENDA ITEM NO. 15 - Adjournment.............. 155 11 12 REPORTER'S CERTIFICATE........................ 156 13 14 15 16 17 18 19 20 21 22 23 24 25 0005 1 P R O C E E D I N G S 2 WEDNESDAY, FEBRUARY 6, 2008 3 (10:00 a.m.) 4 AGENDA ITEM NO. 1 5 MS. TAYLOR: It's 10 o'clock. We do 6 have a quorum, so I would like to call the meeting to 7 order. 8 AGENDA ITEM NO. 2 9 MS. TAYLOR: Item No. 2 on the agenda, 10 Consideration of and possible discussion and/or action 11 on the minutes of the November 7, 2007 Bingo Advisory 12 Committee meeting. Those were posted on-line. Is 13 there a motion to approve as posted? 14 MS. ROGERS: I make a motion to approve 15 those. 16 MS. TAYLOR: And second? 17 MS. WEAVER: I second. 18 MS. TAYLOR: Markey? 19 MS. WEAVER: I second. Sorry. 20 MS. TAYLOR: Okay. There has been a 21 motion and a second. All in favor? 22 MR. WHITTINGTON: Aye. 23 MS. TAYLOR: "Aye"? 24 FROM THE COMMITTEE: Aye. 25 MS. TAYLOR: Opposed? 0006 1 Okay. Then it's unanimous. 2 AGENDA ITEM NO. 3 3 MS. TAYLOR: Item No. 3, Report, 4 possible discussion and/or action on the 80th 5 Legislature. 6 Nelda. 7 MS. TREVINO: Good morning, Madam Chair 8 and members. For the record, I'm Nelda Trevino, the 9 Director of Governmental Affairs. 10 During the legislative interim, the 11 Speaker of the House and the Lt. Governor assigned 12 charges to each committee to study particular issues 13 and possibly conduct committee hearings for the 14 purpose of making recommendations to the next 15 Legislature. 16 In your meeting materials, we provided 17 you a copy of the interim charges issued by Speaker 18 Craddick for the House Licensing and Administrative 19 Procedures Committee. As noted in the memo I 20 provided, Interim Charge 4 specifically relates to the 21 Bingo Enabling Act. Also while these other interim 22 charges for the House Licensing Committee are not 23 specific to bingo, I want to bring to your attention 24 Interim Charge 1, Interim Charge 5, and Interim Charge 25 7. 0007 1 And I mention Interim Charge 7 because 2 it is broadly written, and any agency matter could be 3 reviewed by the committee as we are under the 4 jurisdiction of this House Licensing and 5 Administrative Procedures Committee. 6 Additionally, the Lt. Governor issued 7 interim charges for the Senate committees last week, 8 and we included in your meeting materials relevant 9 excerpts. While there are no Senate interim charges 10 that were issued that are specifically related to 11 charitable bingo, there were some interim charges 12 issued to the committees on Finance and State Affairs 13 that relate to the lottery and to illegal gambling. 14 As of this date, no committee hearings 15 have been scheduled to consider any of these interim 16 charges. I know Phil will keep the committee advised 17 of any House Licensing Committee hearing that may be 18 scheduled to consider the interim charge related to 19 the Bingo Enabling Act. 20 This concludes my report. And I'll be 21 glad to answer any questions that you might have. 22 MR. CORNWELL: Nelda, can you help me 23 out? 24 MS. TREVINO: I will certainly try to. 25 MR. CORNWELL: Nelda, a couple of 0008 1 things. And I want to get back to these interim 2 charges. Could you help us all understand and maybe 3 give us some guidance why the Governor vetoed our 4 progressive bill from the last session? 5 MS. TREVINO: Knowles, I don't have the 6 veto message in front of me, and so I'm going to go on 7 some recollection here. And, you know, as far as any 8 guidance, I don't know that I have any guidance, other 9 than to really state what occurred. And the 10 progressive bingo bill did pass the Legislature. And 11 the Governor in this state, you know, is given the 12 opportunity to review legislation that is passed. And 13 it is, you know, under his authority to be able to 14 veto legislation, and that was a bill that he did 15 veto. 16 Again, I don't have the veto message in 17 front of me. Phil, I don't know if you recall. There 18 may have been some sort of reference, again going on 19 recall, about his opinion of this expanded the 20 footprint of what the original intent of charitable 21 bingo was. 22 MR. SANDERSON: I believe it mentioned 23 the increasing prize payouts from five to $10,000 per 24 day and also something along the lines of it wasn't -- 25 that vision being a neighborhood bingo game 0009 1 atmosphere. So -- 2 MS. TREVINO: And again, I'll be happy 3 to -- before the committee adjourns today, I can go 4 back to my office and get the veto message and then -- 5 MR. CORNWELL: I can get it on-line, 6 too. I just thought maybe you had something else 7 other than the veto message you might share with us, 8 in case we go through all that effort again and -- 9 MS. TREVINO: You know, the agency 10 serves as a resource to the Legislature. Certainly we 11 attended committee hearings. When that legislation 12 was considered, Phil was signed up as a -- you know, 13 again, as a resource to those committees. I don't 14 recall that we had any requests for any information 15 from the Governor's office while he was, you know, 16 considering legislation that had been enacted. And 17 again, the agency serves as a resource. 18 MR. CORNWELL: Right. 19 MS. TREVINO: And we just try to 20 respond to any inquiries that we might receive. 21 MR. CORNWELL: Okay. And in your 22 position with the agency, or even personally, Nelda, 23 do you have any -- we as an industry worked awful hard 24 with the Bingo Division here to get a very good 25 clean-up bill on some of the licensings and 0010 1 administrative stuff, and that bill never made it out 2 of calendars. Do you have any reason why it never 3 made it out of calendars? 4 MS. TREVINO: You're asking some very 5 provoking questions, Knowles. And -- 6 MR. CORNWELL: Well, we need to be 7 aware if we try this again, Nelda. 8 MS. TREVINO: Yes. 9 MR. CORNWELL: Us bingo folk would like 10 to know where we're going to encounter problems. 11 MS. TREVINO: Sure. And I certainly 12 understand the frustration that the industry has. 13 Again, you know, I don't want to sound repetitive, but 14 the agency does act as a resource. And as you're 15 aware, and I think other people that are members of 16 this committee and certain members of the industry, 17 the agency staff, particularly Phil and some of his 18 other staff members, worked with Chairman Flores and 19 with the industry as a workgroup in developing helpful 20 legislation. 21 And, as you said, that bill did not 22 come out of calendars. And, you know, those decisions 23 and how that all works is beyond this agency's 24 involvement. 25 MR. CORNWELL: As a resource to the 0011 1 Legislature and in us as a group -- industry group, 2 not just as a bingo advisory group. I don't think 3 that would clear -- do you have any guidance as to how 4 we can make that clear calendars in the next session? 5 MS. TREVINO: You know, Knowles, there 6 are -- I have been with this agency for -- 7 MR. CORNWELL: Forever. 8 MS. TREVINO: -- forever, and I have 9 seen the industry work very, very hard during the 10 legislative interims, during the legislative session. 11 I think there's some good representation coming from 12 people that are professional lobbyists that the 13 industry has retained to be able to go out and 14 advocate some of the industry's interests. And, you 15 know, I just think that you as members of the industry 16 just need to continue that involvement. 17 And I guess I would stress, you know, 18 that it just doesn't occur during the legislative 19 session. I think people lose sight of how important 20 the legislative interim is and how important any 21 contacts that you may have with your individual, you 22 know, your representative or your senator or other 23 members that you might have a relationship with or 24 members of the House Licensing Committee. 25 For example, going back to the interim 0012 1 charges, there is an interim charge specific to the 2 Bingo Enabling Act. And I think, you know, there's 3 some information that you think might be helpful or, 4 you know, for the committee to have as they review 5 this particular interim charge, I would certainly move 6 forward and start having that dialogue. 7 MR. CORNWELL: That doesn't necessarily 8 have to be a phone call. It could be a letter, 9 e-mail. 10 MS. TREVINO: Sure. 11 MR. WHITTINGTON: And to Milda. Right? 12 MS. TREVINO: To Milda Mora. She is 13 the committee clerk for Chairman Kino Flores for the 14 House Licensing Committee. 15 MR. CORNWELL: All right. And I'm not 16 going to ask. I was going to ask another question. 17 But I've got now some stuff on the interim charges. I 18 see that we have in Kino's bills got some stuff for 19 the horse and dog tracks, and it's got the Bingo 20 Enabling Act in here. Okay? And -- 21 MS. TREVINO: You're talking about the 22 interim charges? 23 MR. CORNWELL: The interim charges for 24 Kino, yes. And it's pretty broad and pretty 25 straightforward. But in the Senate charges -- 0013 1 okay? -- I've got a couple of questions in there. The 2 Senate interim charges looks like they are inviting a 3 bid on the lottery for contract services. Is that 4 kind of how you would read that? 5 MS. TREVINO: And this is the joint 6 interim charge that was just for the committee's 7 benefit. Interim charge -- 8 MR. CORNWELL: That's in the Senate. 9 MS. TREVINO: -- issued to the Senate 10 Finance. It was under the State Affairs Committee. 11 MR. CORNWELL: Right. 12 MS. TREVINO: And, you know, I guess my 13 response, Knowles, is that the way it's stated is the 14 way it's stated. And the agency hasn't received any 15 request for any information at this point. And, you 16 know, I would just go to the way it's stated, "Review 17 and evaluate appropriate state regulation of a private 18 operator of the state lottery should the state receive 19 bids for a lease of the lottery that merit strong 20 consideration." 21 MR. CORNWELL: It's "should they 22 receive." It doesn't say to do anything with it, but 23 it says "should receive." 24 MS. TREVINO: That's what it says, yes. 25 MR. CORNWELL: Okay. And the other 0014 1 charge that is related to our industry is the one 2 about the illegally operated 8-liners. 3 MS. TREVINO: Yes. That's an interim 4 charge issued to the Senate State Affairs Committee 5 and then giving you meeting materials, as in the 6 excerpt noted on Page 21. And it says, "Study and 7 make recommendations to reduce illegal gambling in 8 Texas, including, but not limited to, the illegal use 9 of Eight-Liners." 10 MR. CORNWELL: Are you aware, Nelda -- 11 and that's a pretty -- that could be a pretty serious 12 thing, I guess, depending on the how they take -- the 13 tack they take, and it's not clear which tack they 14 will take. 15 But let me ask you, Nelda, are you 16 aware of any other sunset self-evaluations or any 17 other agencies that have been through sunset, tracked 18 that same particular course, the study or the 19 elimination of illegally operated 8-liners? 20 MS. TREVINO: I would say, Knowles, 21 that, you know, every legislative session there are 22 agencies that go through the sunset process, and this 23 agency has gone through that process twice, and this 24 agency will again go through that process in the 2011 25 session. 0015 1 And what Knowles is referring to is 2 when each agency is going through the sunset process, 3 there is a self-evaluation report that each agency is 4 required to submit to the Sunset Commission, and that 5 is used as part of the sunset process before -- that 6 their review takes place of that particular agency. 7 I am aware that the Racing Commission 8 is undergoing some -- they're going through the sunset 9 process during this next legislative session, so they 10 have submitted their self-evaluation report. And I 11 know that -- well, I have not read their self- 12 evaluation report. Just in the past, in hearing 13 testimony that representatives from that agency, and 14 just as this agency has noted in agency strategic 15 plans and business plans, you know, we make comment -- 16 and I believe the Racing Commission has also made 17 comment about just the competitive nature that's out 18 there in the gaming industry. 19 And so to your specific question, 20 whether there is something specifically noted in an 21 agency self-evaluation report, I can't say for sure. 22 I can only comment that the Racing Commission is going 23 through their sunset. 24 MR. CORNWELL: Nelda, I've got one last 25 question. Okay? 0016 1 MS. TREVINO: I look forward to it. 2 MR. CORNWELL: Has this agency started 3 to prepare anything for these interim charges, 4 especially Kino's, more direct interim charge of Kino? 5 MS. TREVINO: We have not begun 6 preparing anything specifically. We have had some 7 informal discussions with the committee clerk. And, 8 you know, I don't know exactly what the course of 9 action that Chairman Flores is looking to take. I 10 don't know, although I think there has been some 11 again -- very informally some discussion about maybe 12 picking up sort of where the workgroup was during last 13 session that involves legislative staff, industry 14 members and agency staff, to maybe help the committee 15 in what they might be doing in their review. 16 But as far as this agency starting to 17 prepare something, we haven't. Phil and I have talked 18 about it. And certainly we stand ready for any 19 request that we might receive. But that's the other 20 thing, too, Knowles. You know, the agency acts as a 21 resource. And, you know, any requests that we might 22 receive from any of those committee members, we're 23 going to respond to those. 24 MR. CORNWELL: Nelda, thank you for 25 your report. And you are a great resource to the 0017 1 Legislature. 2 MS. TREVINO: Thank you, Knowles. 3 MR. CORNWELL: Thank you. 4 MS. TAYLOR: Are there any other 5 questions for Nelda? 6 Thank you so much. 7 MS. TREVINO: Thank you. 8 MS. TAYLOR: We do have one witness 9 affirmation form from Steve Bresnen. 10 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 11 MR. BRESNEN: I'm Steve Bresnen. I'm 12 here on behalf of the Bingo Interest Group. What I 13 would like to do just briefly is shed some more light 14 on the questions that Knowles asked. 15 Y'all may remember that this is the 16 second time that we've passed a progressive bingo 17 bill. The first time the Governor vetoed it because 18 there was no cap in it. This time we started out with 19 a low cap. There were some drafting problems. Some 20 people got excited. The final cap was $2,500 on the 21 progressive amount. The Governor vetoed the bill 22 partly because they concluded that the charities could 23 not sustain prizes at that level. 24 And basically there was one group in 25 the entire industry that was opposed to that bill, and 0018 1 it was Littlefield. The Governor's veto message, 2 which sounded remarkably similar to Littlefield's 3 complaints, in particular with respect to the internal 4 finances, whether a $2,500 prize could be supported or 5 not 6 The position that we took was that if a 7 given organization could not support a $2,500 prize, 8 they were not stupid, so they would not offer a $2,500 9 prize. That was a cap, not a requirement. 10 We worked hard to get that bill passed. 11 It got out of the Senate, against the opposition of 12 Littlefield. And Littlefield hired some lobbyists at 13 the last second to work against it. We got it out of 14 the Senate, the House bill out of the Senate on the 15 last day it could get out, got it concurred in in the 16 House, I believe it was on the last day that it could 17 get out. It might have even been when they suspended 18 the rules to pass the bills in the last few days. 19 We had discussed with the Governor's 20 staff, repeatedly during the session, that bill and 21 the limit that we were working on and were led to 22 believe that that bill would be acceptable to the 23 Governor. So you can draw your own conclusions about 24 why it ultimately got vetoed. But as a result, 25 there's no new games for people in bingo to offer 0019 1 against the competition from the state lottery and 2 out-of-state gaming offerings. So that's putting the 3 responsibility where the responsibility lies. 4 Secondly, the reform bill that we 5 worked with, Phil and his staff -- Bruce, I think you 6 worked with us on that. The Internal Audit staff 7 brought people over from the lottery side -- we met 8 for months on that bill. We knocked out a bunch of 9 stuff that was useless and obsolete, a lot of stuff 10 that's unnecessary in the licensing and regulatory 11 process. We defined some terms that the agency is 12 having a hard time enforcing. I think we tried to 13 elicit everything we could from the agency, knowing 14 that they're limited in what they can lobby on. 15 And we got that bill into what I 16 thought was very good condition. And we were unable 17 to get Chairman Flores' bill -- he is a member of the 18 leadership team in the House -- out of the House 19 Calendars Committee. Very surprising. And there's 20 really one reason for that, and that is because the 21 horse and dog track people in this state and the 22 out-of-state gaming people in this state don't want 23 bingo to thrive. 24 MR. WHITTINGTON: Exactly. 25 MR. BRESNEN: That's it, the short and 0020 1 simple of it. 2 MR. CORNWELL: Uh-huh. 3 MR. BRESNEN: And they were able to -- 4 you know, it doesn't that but one or two people to 5 object in the Calendars Committee to keep a bill from 6 passing. And here is why they don't want it to 7 thrive. Y'all may remember a couple of sessions back, 8 we passed -- with I believe 26 out of 31 votes in the 9 Senate -- we passed an electronic pull-tab bill. And 10 we went over to the House, and we didn't get even out 11 of the starting gate over in the House. We were a 12 complete and utter failure on the House side. But I 13 think it scared them. I think they saw that there was 14 an interest in bingo and helping bingo that was 15 substantially different from that that they faced, and 16 so now they're concerned. 17 That bingo bill with all the different 18 subject matters in it was a potential vehicle. And I 19 told the lobbyists for those groups that we would not 20 use it for that purpose. The bill sponsors indicated 21 that they would not use it for that purpose, but they 22 weren't going to let anything go out there that they 23 thought was a vehicle for that. 24 Since then, they've stuck their nose in 25 our business on the AG opinion on the video 0021 1 confirmation issue. They continue to nose around over 2 in Sen. Nelson's office. And I guarantee you, they're 3 going to do everything they can to see bingo shrivel 4 up. So between Littlefield opposing any progress for 5 bingo at the Legislature and the out-of-state gaming 6 people and the in-state people who are trying to bake 7 a pie but can't get it baked because they're too busy 8 carving it up, that's where we sit. We're caught up 9 in a much bigger fight out there, and it has nothing 10 to do with all this high-flown BS about, you know, 11 bingo being a little community neighborhood deal. 12 That's a bunch of garbage. 13 I know you guys as a group can't go and 14 speak or take a position as a group on legislation, 15 because your job is to advise the Commission. And the 16 Commission is constrained by law in what it can do in 17 terms of advocating legislation. But each and every 18 one of you individually can talk to your state 19 senators and state representatives and tell them, "Let 20 my people go," you know. 21 I understand if they don't want to do 22 full-blown electronic bingo. That's a hot button for 23 a lot of people. But there's lot of things we can do 24 within the current constitution to help bingo. We 25 supplied the agenda. We did a good job of supplying 0022 1 the agenda. We worked with the agency. Everybody was 2 walking lock step on that reform bill. And it's 3 unfortunate it didn't get done. And I consider it a 4 personal failure, and I ain't happy about it. 5 Let's see. There was another question 6 you asked. What was that? 7 MR. CORNWELL: Interim charges. 8 MR. BRESNEN: Interim charges. We 9 asked Chairman Flores to do a broad language interim 10 charge on bingo, because we want to go right back to 11 our reform efforts. And, Phil, I've talked to Milda 12 and asked her, at the appropriate time, to convene a 13 working group of people again. We may break it up 14 into different bills this time. We may have a little 15 different strategy. But I don't think we can afford 16 to quibble. I think there were cost savings for the 17 charities in what we were trying to do, cost savings 18 for the agency in what we were trying to do, making a 19 statute that was more clear and more enforceable. And 20 so it's well worth doing. And I'm hoping we'll have 21 everybody following in the same direction on that 22 again. 23 But I can tell you this: I will 24 personally kill the bill if Littlefield or anybody 25 else tries to lard it up with a bunch of crap that 0023 1 doesn't have to do with advancing the interest of 2 charities in this state. That bill did not do 3 anything to advance the interest of commercial 4 lessors, other than try to make charities healthy so 5 they could get on down the road and make a living, and 6 then they can pay their rent if we do that. So, 7 anyway, that's my marker on that issue. 8 The other interim study about illegal 9 gaming is an initiative of the Lt. Governor's office. 10 I hadn't talked to them about that. I'm not really 11 sure where they're coming from. 12 With respect to the -- was there 13 another interim charge that you were -- 14 MR. CORNWELL: It looks like they want 15 someone to do an unsolicited bid to the lottery -- 16 okay? -- so they could study that. 17 MR. BRESNEN: And I'm assuming that 18 that's a tip of the hat to the Governor's -- 19 MR. CORNWELL: Well, sure it is. 20 MR. BRESNEN: -- suggestion so generate 21 a giant amount of state revenue on the front end by 22 leasing or selling the lottery. I haven't seen a 23 great deal of -- you know, a big groundswell about 24 that over in the Legislature, especially when they're 25 sitting on a $16 billion budget surplus or something 0024 1 like that. But once they get the numbers and the 2 budget turns down with the economy -- 3 MR. CORNWELL: Yes. 4 MR. BRESNEN: -- that could become a 5 different deal. I think that has serious implications 6 for the bingo community, and I think we need to think 7 our way through that. I'm happy to meet with any of 8 y'all individually on that. I don't know that there 9 is directly a role for the group -- the advisory 10 committee itself as a group or as an organization. 11 But I do think it's something everybody ought to be 12 thinking about as to what would that mean, what would 13 that mean for bingo? 14 With respect to the sunset process, the 15 Racing Commission just kind of out playing out of thin 16 air, added into its agency's self-evaluation that 17 8-liners were causing problems for the race tracks. I 18 think that's just goofy. That's a completely 19 different form of gaming and entertainment. I don't 20 perceive it to even be the same market, don't know, 21 you know, who generated that. It was probably 22 somebody trying to cover their tracks because they 23 have sold the state a pig in a poke when it came to 24 racing. And they're failing, and they need a way out, 25 a scapegoat or something. And, you know, maybe that's 0025 1 what they're doing. I have no idea. It's goofy in 2 the extreme, don't know what will come out of that, 3 but we'll keep our eye on it. 4 I do want to mention one other thing. 5 I don't know if this is the appropriate time -- 6 MR. CORNWELL: Yes. I was going to get 7 it to anyway. 8 MR. BRESNEN: Which one, the AG? 9 MR. CORNWELL: Yes. Has everybody read 10 the AG's opinion on video confirmation? 11 MS. TAYLOR: (Shakes head) 12 MR. BRESNEN: The reason I bring it up 13 is, it could be a matter for the Legislature to 14 consider. And it came out of a request by a member of 15 the Legislature who will be back; and that is, the AG 16 affirmed the power of the agency to pass the video 17 confirmation rule and said that it's not electronic 18 bingo, and which we all agreed with. Many people 19 submitted briefs, including me and Steve Fenoglio and 20 various organizations. 21 So we felt really good about that. But 22 at the end of it, there was some gratuitous language 23 that basically said, "We have questions about event 24 tickets." That was not the question that was asked. 25 And, you know, why they would do that, I don't know. 0026 1 That's akin to a court opining on something -- they 2 didn't fully opine on it, but it was sort of menacing. 3 You guys know that event tickets have 4 been the thing that's injected a whole lot of new 5 player interest in bingo and helped to improve your 6 sales. So for them to get off the reservation and 7 just go asking about something that wasn't initially 8 inquired about is concerning, to say the least. 9 I have asked some people in the 10 industry to start assembling some historic information 11 about that. I want to remind you, if you talk to 12 members of the Legislature and that issue should come 13 up, this is my suggested message to you: Event 14 tickets are pull-tabs. Pull-tabs have been authorized 15 in Texas since the early eighties, first by rule in 16 about '82; or three, something like that -- 17 MR. SANDERSON: '85, '87. 18 MR. BRESNEN: -- and in the statute in 19 '85 or so. So for 20 years, pull-tabs have been 20 available in Texas, event tickets or pull-tabs. 21 There's some language in the AG opinion that says 22 something about it being a two-step process and 23 questioning that. To my knowledge, people have been 24 playing two-step kinds of bingo games for years and 25 years. You can win with one pattern and get into a 0027 1 group to, you know, play for the next pattern or 2 something. 3 So anyway, I don't know what's going to 4 become of that, but it is concerning because that 5 would be a dagger directly at the heart of your 6 business and be a horrendous setback. That's another 7 reason why we all need to be pulling in the same 8 direction on these things. You know, I don't agree 9 with everything everybody wants. But once the 10 community at-large has decided on something, I will 11 pursue it with vengeance, because you guys know your 12 day-to-day business. 13 If you have ideas and you want to 14 forward them, I don't represent everybody, you know, 15 so I may not be able to pursue it. But I'll certainly 16 give you my best feedback. And if it's something I 17 can incorporate into the workplan of my clients, we'll 18 throw it into the pile and go to work on it. 19 I would be happy to answer any 20 questions. 21 MS. ROGERS: I have a question for you, 22 just out of curiosity. I understand why there was a 23 lot of opposition from horse race tracks and et cetera 24 and out-of-state gambling companies. Why a 25 corporation within the State of Texas that benefits 0028 1 from bingo -- 2 MR. BRESNEN: You got me. 3 MS. ROGERS: -- in your opinion? 4 MR. BRESNEN: I'm sure it wasn't 5 consistent with their business plan. I testified to 6 that effect to the Senate State Affairs Committee. 7 So, you know, I'm not an expert on their business 8 plan. But I'm assuming they felt like it wasn't 9 consistent with the business plan of a commercial 10 lessor. 11 My clients, people who pay me, are all 12 commercial lessors. And they felt like it would be a 13 good shot in the arm for the industry and, you know, 14 at the prize level that we were talking about, that it 15 wouldn't have some of the problems that a large prize 16 would cause, including running around all over town 17 chasing, you know, a giant jackpot, thought it was a 18 reasonable amount, given the numbers of the 19 competition and those kinds of things. So, you know, 20 I'm not going to speak to anybody's motivation, so I'm 21 assuming they're business people and they didn't think 22 it fit with their business plan. 23 MS. ROGERS: Thank you. 24 MR. BRESNEN: Yes, sir? 25 MR. WHITTINGTON: Steve, do you 0029 1 actually think if we work hard and try our best on the 2 next legislation and get some of this material through 3 that bingo needs, that the big dog, if they don't get 4 what they need, is it going to do any good? And you 5 know what I mean by the "big dog"? I mean the big 6 out-of-state gaming, et cetera. 7 MR. BRESNEN: I think we have a little 8 bit of a challenge to try to get those people to be 9 cooperative with us. And several of us have talked 10 about, you know, meeting in advance with those guys 11 and reaching an accommodation. But I can assure you 12 they won't be able to pass gas if the VFW, the 13 American Legion, the Knights of Columbus and everybody 14 else in this state goes to work against them. 15 MR. WHITTINGTON: Okay. 16 MR. BRESNEN: Our position all along 17 has been, with respect to VLTs in particular, that if 18 the state needs the money, that's a decision for the 19 Legislature to make, and they will make it. If the 20 state needs the money or they've got the votes, but 21 bingo has to have something in any event to thrive, 22 and more so if they were to pass something like VLTs. 23 MR. WHITTINGTON: Right. 24 MR. BRESNEN: So we have never been 25 down there saying no on VLTs. We've never asked for a 0030 1 "No" vote. We've never done a single thing to hamper 2 their interests. You know, partly we don't have to 3 because they're so busy carving up a pie that hasn't 4 been backed that, you know, they can't get out of the 5 starting gate, to coin a phrase. 6 But the bottom line is, I think we're 7 going to need to go and meet with them. We've never 8 been a threat to them. But they're, you know, really 9 worried that, you know, somebody is going to get 10 something that, you know, they don't have. Well, they 11 don't have it anyway. 12 MR. WHITTINGTON: So basically what 13 you're saying is, if you don't have enough money to 14 get to the right people, it's hard to get something 15 passed? 16 MR. BRESNEN: Well, they've got a lot 17 of money -- 18 MR. WHITTINGTON: That's what I'm 19 saying. 20 MR. BRESNEN: -- and they've been 21 spreading it all over the place. And they're not 22 getting anything passed either. 23 MR. WHITTINGTON: Exactly. 24 MR. BRESNEN: That's the one thing -- 25 MR. WHITTINGTON: So they come after us 0031 1 a little harder because of that? 2 MR. BRESNEN: Yes. 3 MR. WHITTINGTON: Okay. 4 MR. BRESNEN: We can work as hard as 5 they work. I don't care how many people they put down 6 there, we'll work just as hard. We've got a 7 compelling message. I think the members at-large in 8 the Legislature need it. If I'm trying to kill a 9 bill, I go to the Calendars Committee, you know, or I 10 try to get 11 votes in the Senate. You know, it is 11 not -- right size, because I sell them. But it ain't 12 that big; it's not that hard. I mean, it may be hard 13 to do it, but it's not hard to understand. That's 14 what you have to do to kill bills. 15 So they went, you know, to the 16 bottleneck and choked it off right there. It's 17 unfortunate that the leadership wasn't willing to help 18 us. You know, they can keep us from passing anything 19 noxious. So it's not that big a threat, but it is 20 important. And these are marginal things for the 21 charities. You know, it's not like we're going and 22 delivering, you know, 200 bucks a session to every 23 charity by that bill. It's a marginal deal. But 24 y'all all know, if you've got another $50, $75 a 25 session just producing regulatory drag and being able 0032 1 to have a little nicer environment or whatever it is, 2 you know, that's what makes a difference between 3 success or failure out there. 4 So, anyway, I think we've got a good 5 story. But we'll go -- you know, we'll go back, go 6 back to it and try to do it again. And we do need 7 y'all's help. So if you don't know who your senator 8 or representative is, call me individually and I will 9 help you find out who it is. I'll come and meet with 10 you and them if you like. And in a couple of months, 11 we'll have a full agenda together in a format, and we 12 can distribute it to you individually and solicit your 13 help with that. 14 Any other questions? 15 Okay. Thanks a lot. 16 MS. TAYLOR: Thank you for all the work 17 you do, Steve. 18 MR. BRESNEN: Yes, ma'am. Thanks. 19 MR. CORNWELL: Madam Chairman, can I 20 take a moment to do an advertisement, please, for the 21 Texas Charitable Advocates? They're a statewide 22 organization that is attempting to do several things; 23 and that is, get as many charities enlisted in this 24 organization to get them active in their community, so 25 when a -- and to keep them informed about what's going 0033 1 on. 2 I don't think -- I cannot tell you what 3 the dues are, but it's not -- and it is run for the 4 charities and pretty much, you know, by the charities 5 for the charities. So you might want to consider 6 joining the Texas Charitable Advocates. And you can 7 contact them on their website through a lady by the 8 name of Melissa Young. And it would be a great thing 9 to join so you can get on the mailing list, the 10 newsletters, and keep informed. 11 And when they come to your part of 12 Texas, they're going to want to meet with your 13 legislators; they're going to want to meet with your 14 state reps and senators. Help them out. And they're 15 trying to, you know, improve in each of our industry 16 and impart knowledge on these people. It's a good 17 thing. 18 Thank you. The advertisement is over, 19 and there is no Super Bowl commercial. 20 MR. SANDERSON: Madam Chairman, before 21 you move to the next agenda item, I would like to 22 announce that Chairman Cox had all intentions of being 23 here this morning, but something came up and he's 24 unable to attend. And he wanted me to pass along his 25 apologies for not being here. He knows y'all do good 0034 1 work and he's here to support y'all also. 2 MS. TAYLOR: Any other discussion on 3 Item No. 3? 4 AGENDA ITEM NO. 4 5 MS. TAYLOR: If not, we'll move on to 6 Item 4, report, possible discussion and/or action on 7 third quarter Calendar Year 2007 bingo conductor 8 information. 9 MR. MINER: Good morning, Chair, 10 committee members. For the record, my name is Bruce 11 Miner, and I'm the Manager of the Bingo Services 12 Department. I'm here to report on third quarter 2007 13 data. That's also in your notebook. 14 Prize payouts for the regular bingo in 15 the third quarter were 77.4 percent of gross receipts. 16 Prize payout percentages for instant bingo were 17 72.7 percent of gross receipts. 18 This chart shows disbursements, other 19 than prizes, as a percentage of net receipts. The 20 highest disbursement continues to be rent payments, at 21 24.7 percent, followed by salary for callers, cashiers 22 and ushers, at 23.2 percent; and charitable 23 distributions, at 20.2 percent; lease payments to 24 distributors at 11.9, cost of goods sold, 7.3; with 25 the remainder of other expenses all under 7 percent. 0035 1 This pie chart is a graphical 2 representation of what percent each expense is as it 3 relates to total expenses. Once again, it does not 4 include prize payouts for charitable distributions. 5 So you can see that salaries for janitorial services 6 callers, cashiers, ushers, security, legal and 7 accounting account for 41 percent of total expenses, 8 while rent payments are just under 30 percent of total 9 expenses. 10 Instant bingo sales continue to exceed 11 regular bingo card sales. In the third quarter of 12 2007, instant sales represented almost 41 percent of 13 the total sales, while regular card sales represented 14 35.4 percent, and electronics was 23.7 percent. 15 This slide charts the average 16 attendance per occasion for the third quarter 2005, 17 '06 and '07. This indicates that the average 18 attendance per occasion dropped in the third quarter 19 of '05 and the third quarter of '06, and then remained 20 the same for the third quarter of '07. 21 This chart shows a comparison of net 22 receipts for the third quarter of each year, from 2003 23 to 2007. Net receipts, or gross receipts minus 24 prizes. As you can see, net receipts for instant 25 bingo have increased each successive year between 2003 0036 1 and 2007, while the net receipts for regular bingo 2 continue to decrease for the same time period. And 3 the green line at the top shows that the overall net 4 receipts have only increased by $1.2 million since 5 2003. 6 This slide charts the prize payout 7 percentage for regular and instant bingo for the same 8 time period, the third quarter of '03 to '07. As you 9 can see, the payout percentage for the past five years 10 for regular bingo has increased from 73.4 to 77.4 11 percent, while instant payout percentages increased 12 from 72.5 to 73.4 in '05 and then decreased to 72.5 in 13 '06, and a slight increase to 72.7 in '07. 14 We've added two additional slides to 15 compare the gross receipts and prize payout for the 16 third quarter in each of the past five years. This 17 first slide shows the trend of gross receipts and 18 prize payout for regular bingo. As you can see from 19 '03 to 07, gross receipts for regular bingo have 20 dropped $14.5 million, and prize payouts have dropped 21 $6.8 million, thus resulting in the higher percentage 22 of payout that was shown on the previous slides. 23 This next slide shows instant bingo. 24 It has had an increase of $32.7 million in gross 25 receipts and $23.9 million in prize payouts. 0037 1 In your notebook is additional 2 information on an analysis performed by Susan Beasley, 3 the program specialist for the Office of the 4 Controller. That includes some additional 5 spreadsheets. 6 This concludes my report for this 7 agenda item. And I'll be glad to try to answer any 8 questions you might have. 9 MS. TAYLOR: Bruce, have you seen 10 anything that was unanticipated or expected or does 11 this follow the course of what you were looking for? 12 MR. MINER: There's no anomalies at 13 this time. It's the same business as usual. 14 MR. CORNWELL: Madam Chair, I have a 15 question. Excuse me. 16 Bruce, is there any way that we could, 17 starting in '08, break out our reports between instant 18 pull-tabs and event pull-tabs? Is there any way we 19 could get that done? I think that would tell us a 20 better story of what that mix is 21 MR. MINER: I'll refer to Phil for 22 that. I'm sure he -- 23 MR. CORNWELL: Phil, what do you think? 24 Do you think we can get it done? Is that too fast? 25 MR. SANDERSON: Well, I mean, we can't 0038 1 do it because we don't have the information. All of 2 our information is based on what's reported by the 3 organizations. If the organizations want to start 4 reporting it separately, then -- 5 MR. CORNWELL: We can't get something 6 put into place where you ask of them to report it 7 separately? 8 MR. SANDERSON: Oh, we could, you know. 9 I mean, it's a -- you know, there's always that option 10 if we wanted to add, you know, more lines to the 11 quarterly report. 12 MR. CORNWELL: I know everybody is 13 raising hell because we've got more rules and more 14 things we've got to keep records of. But I think that 15 may be an item of enough, you know, importance to 16 split it out. I would like to hear other comments. 17 MR. SANDERSON: Well, I believe that -- 18 I know David Heinlein has mentioned it in the past -- 19 MR. CORNWELL: Numerous times, yes. 20 MR. SANDERSON: -- several times. And 21 I think that he may have his organizations actually 22 tracking some of that. 23 MR. CORNWELL: Well, I provide the 24 sales of event versus instant pull-tabs to him for his 25 charities. Now, that's just my sales to him. And 0039 1 then he does have the -- you know, what the gross 2 prize amount should be. 3 MS. ROGERS: So it's a simple thing for 4 a distributor to separate it out? 5 MR. CORNWELL: I can separate them out 6 all day long -- okay? -- and tell you -- and give you 7 a report of everything you bought, but that doesn't 8 tell me what got sold. 9 MS. ROGERS: Right. Right. 10 MR. CORNWELL: That doesn't tell a lot. 11 But, Bruce, can you also please go back 12 to that screen that you had -- I've got one other 13 question. And I promise, this is the last one I will 14 ask at this meeting, so we can go home early. Okay? 15 Let's see. It's the one where you did 16 the prize payout percentages with the net on paper, 17 where we did paper and you had double -- where is it 18 now -- 19 MS. LOPEZ: What page is it? 20 MR. CORNWELL: -- where you showed the 21 gross amount and the prizes on the same sheet? 22 MR. SANDERSON: The next-to-the-last 23 slide, I believe, or. 24 MS. LOPEZ: Page 2? 25 MR. CORNWELL: Where it went from 0040 1 $10 million down to -- there you go. I want everybody 2 to see this, is that -- and one of the things that 3 this committee probably has in its work study group is 4 that you will see that we continue to have less gross 5 receipts, but we continue to pay out the same amount 6 of dollars. 7 And I'm just curious if some really 8 bright people in our industry could put together -- 9 get on a workgroup and come up with prize board 10 management issues and see if that workgroup with the 11 lottery might have -- or Marshall might have a problem 12 with some of those prize board management issues and 13 make a presentation to the BAC sometime later this 14 year. 15 MS. TAYLOR: Okay. Since you're 16 bringing this up -- 17 MR. CORNWELL: Oh, no, I am not the 18 guy. 19 MS. TAYLOR: -- that means that you've 20 got to take the -- 21 MR. CORNWELL: I am not the operator 22 that would be able to -- 23 MR. WHITTINGTON: I second the motion. 24 MR. CORNWELL: Oh, you stop! 25 MS. TAYLOR: Knowles, is this something 0041 1 that you wanted to take care of? 2 MR. CORNWELL: But I need some people 3 that -- I'm not the guiding to tell you what the 4 players are going to accept and not accept and what 5 works. I've seen a lot of things. 6 MS. LOPEZ: You actually need charities 7 of individuals who are involved every single night, so 8 I'll willing to serve on the committee. 9 MR. CORNWELL: Thank you, Rosie. 10 Who else wants to join me on that? I'm 11 asking volunteers. 12 MS. TAYLOR: Markey, did you say you 13 wanted to work with Knowles on that? 14 MS. WEAVER: Yes, with Darin. 15 MR. WHITTINGTON: With Darin? 16 MS. WEAVER: Yes. Darin is 17 volunteering and I'm volunteering. 18 MR. WHITTINGTON: Okay. 19 MS. TAYLOR: It's Markey, Darin. 20 You were willing to work on that, 21 Darin? 22 MR. CORNWELL: Would Mr. Kris Keller 23 join us? 24 MS. TAYLOR: Mr. Keller, are you 25 interested in working on this workgroup? 0042 1 MR. KELLER: Sure. 2 MR. CORNWELL: Okay. Thank you. 3 MS. TAYLOR: So we have the workgroup 4 Knowles is chairing, with Rosie, Markey and Darin and 5 Kris. 6 MR. WHITTINGTON: Could I ask -- 7 MS. TAYLOR: Anybody else interested in 8 working on this workgroup can contact Knowles. 9 MR. WHITTINGTON: Could I ask a 10 question, too? You had mentioned the separation for 11 event tickets and instant bingo. Is that what I 12 heard? 13 MR. CORNWELL: Yes. 14 MR. WHITTINGTON: I'm trying to 15 understand what -- is that going to make sales 16 different for the charities if we do that? What does 17 it accomplish? 18 MS. TAYLOR: I think that what it's 19 going to show is the difference event tabs has made 20 for bingo in Texas. 21 MR. CORNWELL: Yes. 22 MR. WHITTINGTON: Okay. 23 MR. SILVER: Just a reporting issue. 24 MS. TAYLOR: I believe that on the 25 annual report last year, Knowles, I had asked you for 0043 1 information on percentages, so that we used that as an 2 analysis to explain why -- 3 MR. CORNWELL: Yes. 4 MS. TAYLOR: -- instant sales has 5 continued to rise, because the percentage of instant 6 to event tabs was huge, a huge difference. And we 7 used that in the report last year to try and show. 8 But it would be nice. We separate it out in my hall. 9 So -- I mean -- 10 MR. CORNWELL: If I was an operator -- 11 and I'm not. Okay? -- but one of the things I might 12 want to be interested in knowing is: Okay. I'm 13 sorry. I think I run a lot of event tickets. Right? 14 But you don't when you compare yourself to somebody in 15 another county or another part of the state. And 16 maybe I have an interest in picking up the phone and 17 calling those people to see how they work their 18 program. 19 MR. SILVER: And then you have some 20 halls that just minimize the pull-tabs and do more 21 event tabs. 22 MR. CORNWELL: Yes. There are halls 23 out there that are not selling any instant tickets, 24 which instant tickets have their place. 25 MR. WHITTINGTON: Okay. Back to my 0044 1 question. Well, wouldn't the manufacturer have that 2 information, since they're selling them to us? 3 MS. TAYLOR: Well, he said they have. 4 MR. CORNWELL: I have that, Larry. 5 Every distributor probably has that. I can't speak 6 for all of them. But I know that we have them and we 7 can provide that. 8 Danny, Jane, do you have that 9 capability of coding it? 10 MS. THOMPOSON: (Shakes head) 11 MR. CORNWELL: There's two more 12 distributors that have it. They can provide it to 13 you. 14 MR. WHITTINGTON: That's what I was 15 asking. 16 MS. TAYLOR: Well, I think what he was 17 saying earlier is, he can show what was sold to the 18 organizations, but he can't show what they sold. 19 MR. WHITTINGTON: Oh, okay. 20 MR. CORNWELL: In the halls. 21 MR. SILVER: Because of inventories and 22 stuff like that. 23 MS. TAYLOR: Yes? Please. 24 MR. BRESNEN: And I just want you to 25 put the number on. I just want to make a suggestion. 0045 1 Rather than, you know, add anything to the quarterly 2 report form or any of that kind of deal, can we all 3 just have kind of a working agreement that we'll use 4 the sales by distributors as sort of a surrogate for 5 what that number is? I would think over time, over 6 three or four or five years -- 7 MR. CORNWELL: It will give you a good 8 indication. 9 MR. BRESNEN: -- the percentage would 10 apply to the numbers he's got up there. So maybe the 11 BAC could request or ask the agency to request from 12 distributors, you know, something -- it doesn't even 13 have to be -- I don't think the hard number -- 14 MR. WHITTINGTON: Right; right. 15 MR. BRESNEN: -- percentages. And I 16 don't know. Is that asking for proprietary 17 information, if they do that? 18 MR. CORNWELL: I don't believe it is. 19 Danny, Jane, is that part of -- would 20 you consider that proprietary information? 21 MR. MOORE: No. 22 MR. BRESNEN: Okay. Whatever. I don't 23 want to ask anybody to, you know, divulge their 24 business secrets. But I think it would be very 25 interesting to know, especially with the Legislature 0046 1 coming up, to go and point out how important this is. 2 I mean, this is the -- you don't have to do anything 3 but look at those graphs to see the importance of it. 4 So anything -- that's just a suggestion. 5 MR. WHITTINGTON: That's a good idea. 6 MS. TAYLOR: Okay. Any other comments? 7 AGENDA ITEM NO. 5 8 MS. TAYLOR: Okay. We'll move on to 9 Item No. 5, report and possible discussion on the 10 development of an on-line Operator Training Program. 11 MR. FRYSINGER: Good morning. My name 12 it Rich Frysinger. I'm a Special Projects Assistant 13 in the Accounting Services section of the Bingo 14 Division. And this morning I would like to present 15 you with what we have as an overview of the Bingo 16 Operator Training Program, which we hope to move 17 on-line. 18 This is a tremendous opportunity to 19 harness available technology commonly used, as you 20 will see. And we're quite excited about the 21 possibilities of making the program web-enabled and 22 making it much easier on the licensed annual 23 conductors to stay in regulatory compliance. 24 These are some of the points that we're 25 covering today. As I said earlier, it's readily 0047 1 available technology. We're talking about a 2 PowerPoint, Microsoft PowerPoint platform that's 3 already in use with audio-narration capability. The 4 Bingo Division would also be able to better utilize 5 its current resources. And what's most appealing here 6 is that there would be less of a travel requirement 7 and less of an impact on licensees and also the 8 Charitable Bingo staff. As Mr. Bresnen mentioned 9 earlier, we're talking here about reduced the 10 regulatory drag on our licensees. 11 A great selling point here, one of our 12 big positives here, the training is available 24 hours 13 a day, seven days a week, anywhere in Texas, as 14 compared to the current situation where you have to go 15 to a physical location that occurs several times a 16 month in the different parts of Texas. 17 Also anticipated is a big reduction in 18 the number of annual license renewals that are held 19 up, either by days, weeks or possibly longer, because 20 the organization is found not to be in compliance with 21 the operator training program regulation, that an 22 individual is not currently trained by the 23 organization; therefore, the renewal is held up. 24 We're talking also about the travel 25 expenses being reduced for the organization. No 0048 1 longer would it be required for an individual business 2 or an organization to pay for the individual to travel 3 50, 100, 150 miles or greater to attend a scheduled 4 operator training program because they're in a bind 5 and they can't move on their renewal. 6 Because the training is free and 7 available, the organizations could easily have 8 multiple individuals taking the training, many more 9 than currently, that some of the organizations may 10 have three or four individuals taking the training 11 now, you could have 20 people taking the training, 40 12 people taking the training, because it's there. And 13 here we're thinking the more people that are familiar 14 with the rules and regulations help the organization 15 easily stay in compliance. 16 There will still be a physical site 17 location training within the state. We understand 18 that there's always going to be organizations that 19 have individuals that are not familiar or don't want 20 to mess with the computer and would rather attend 21 physical site training. So this requirement is not 22 going away; it will just be reduced. 23 Again, we understand that in the 24 current Operator Training Program, individuals are not 25 going to want to spend eight hours plugged into their 0049 1 computer watching module after module. This training 2 can be broken up. As you'll see in a minute, we've 3 broken it up into easily digestible modules. And the 4 individual could spend days taking the training, a 5 week or possibly a month. 6 As I said, the modules you'll see in 7 just a moment are designed to be short, interesting, 8 focused on a specific topic and easy to absorb. 9 Eight-hour training is required as per the Texas 10 legislative mandate. There would be an on-line test 11 part of the certification. And the individual would, 12 once they complete the certification or once they 13 complete the on-line modules, they would send in the 14 individual certification statement and a test answer 15 sheet. 16 Here we're talking about the very 17 minimum of equipment necessary. I'm talking to the 18 Information Technology people upstairs and also the 19 Media Relations people, to keep this simple and 20 available to the organizations. We're talking about a 21 computer, a monitor and speakers, possibly with a 22 printer for the answer sheet; Internet access, 23 obviously. Microsoft PowerPoint software would be the 24 platform. And, of course, they would need Microsoft 25 Word for the answer sheet. 0050 1 Here is how it's going to be envisioned 2 to work: 10 primary modules, with four other special 3 interest modules. You would do the 10 for 4 certification and any others you would be interested 5 in. Complete the answer sheet, along with the 6 individual certification, and mail it in. Here is 7 what we envision as a starting point for the modules: 8 The primary modules on the left-hand 9 side would be the four function modules that all 10 organizations would be interested in or would need to 11 go through. The special interest modules on the 12 right -- and there would be more added later -- would 13 be applied to some organizations and be of interest to 14 some organizations but not all. 15 Okay. Everybody wants to know about 16 this test issue. Multiple choice questions would be 17 randomly inserted throughout the different modules. 18 And it is designed to ensure that the individuals 19 spent the requisite amount of time going through the 20 modules. It would be relatively simple to pass. 21 We're not talking about hard core questions designed 22 to flunk out 60 percent of the people trying to take 23 the training. Occasionally the questions would be 24 scrambled so that the answers aren't known from one 25 point in Texas to the other, after a couple of months. 0051 1 Okay. Let's see what the -- 2 (Audio portion is as follows:) 3 "The individual taking the on-line 4 version of the Bingo Operator Training Program would 5 simply go to our website, click the 'On-line Operator 6 Training Program' icon, select the module they are 7 interested in viewing, then watch the module and 8 listen to the audio narration and record their answers 9 to the test questions embedded throughout the module. 10 "After completing the 10 required 11 modules, the individual would finalize their answer 12 sheet, ensuring their test answers for each module 13 were properly recorded, sign the individual 14 certification statement, then mail both the answer 15 sheet and the individual certification statement in to 16 the Charitable Bingo office at Austin. The Operator 17 Training Program certificates will be in the mail a 18 few days after processing. 19 "In Module No. 1, introduction, this 20 would be an example of some of the topics that would 21 be included. Here, for example, the Charitable Bingo 22 Operations Division Mission Statement and the 23 regulatory objective would be reviewed. The Mission 24 Statement helps define our day-to-day purpose as an 25 agency. The regulatory objective provides the 0052 1 framework in which all Charitable Bingo regulatory 2 activities will be conducted. 3 "The current organizational structure 4 for the Charitable Bingo Operations Division would be 5 reviewed, followed by a more detailed review of what 6 each section did and was responsible for, as well as a 7 review of regional audit offices. 8 "Here as an example of a test question 9 for this module. In case you're not sure, the correct 10 answer is d, Bingo Mission Statement 11 "In summary, we believe the web-enabled 12 Operator Training Program will be very helpful by 13 better utilizing Bingo Division resources by saving 14 licensees and individuals time and money as they seek 15 certification, by having the training available 24 16 hours a day, 7 days a week anywhere in Texas, by 17 having the material segmented into small specific 18 modules which would be easy to learn and easy to keep 19 current and updated, and by having a relatively fast 20 approaching implementation date. 21 "At this time, we'll be happy to 22 entertain any questions you may have concerning the 23 web-enabled Operator Training Program." 24 MR. WHITTINGTON: I would like to ask a 25 question. If I got a big screen TV hooked up to my 0053 1 computer, can four or five of my people take it at the 2 same time? 3 MR. FRYSINGER: Sure. 4 MR. WHITTINGTON: Okay. 5 MS. TAYLOR: How many times are you 6 going to let them flunk the test and retake it? 7 MR. FRYSINGER: That hasn't really been 8 decided yet. We can't imagine that they would miss 9 too many. 10 MR. WHITTINGTON: I actually feel 11 they -- 12 MS. TAYLOR: I have been to some of 13 those operator trainings. 14 MR. WHITTINGTON: Yes. I actually feel 15 they will get more from this, because they would be 16 looking and reading and actually paying attention 17 because, believe me, in most of those training 18 sessions, most people are asleep. 19 MS. WEAVER: That's right. 20 MR. WHITTINGTON: So they don't really 21 listen; they just sit through the whole hours -- 22 okay? -- and then get their little piece of paper and 23 go on about their business. But I actually think 24 they'll get more from this by actually looking and 25 reading and paying attention. 0054 1 MR. FRYSINGER: I went to the VFW 2 conference, the OTP session here in Austin, two weeks 3 ago. There were many, many, many people that could 4 not sit for 45 minutes. They just couldn't. And the 5 class went five hours, so they were up and down, up 6 and down the whole time. 7 MR. WHITTINGTON: I think it's great. 8 I think it's -- 9 MS. ROGERS: And your answers would be 10 the same? 11 MR. WHITTINGTON: Yes. 12 MS. ROGERS: Your format would be the 13 same as to what you need to do when you're filling out 14 a quarterly report and things of that nature? Because 15 sometimes auditors may have their own kind of 16 opinion -- 17 MR. WHITTINGTON: Exactly. 18 MS. ROGERS: -- on how things should be 19 done. So that's great. 20 MR. WHITTINGTON: I think it's great, 21 really going to help out a lot. 22 MR. FRYSINGER: Thank you. 23 MS. TAYLOR: I have one more question. 24 Are y'all thinking about starting to make people at 25 the physical locations take the test also? Or are you 0055 1 just going -- they just have to sit there in order to 2 get their certification? 3 MR. FRYSINGER: There is no discussion 4 that I know of making the test applicable to the 5 physical site training. 6 MS. LOPEZ: As far as the physical site 7 training, are they going to be minimized and allowed 8 the on-line to kind of replace the majority of the 9 on-site training? Because I've looked for it -- 10 MR. FRYSINGER: It would be envisioned 11 that there would be fewer physical site location 12 training. One of the reasons is, the Operator 13 Training program function is transitioning from the 14 auditors to the Licensing section. 15 MR. CORNWELL: Richard, staff 16 compliment you. This is the way to go. 17 MS. TAYLOR: Good job. 18 MR. FRYSINGER: Thank you. 19 MS. TAYLOR: Any other questions? Any 20 public comment? 21 We move on. 22 AGENDA ITEM NO. 6 23 MS. TAYLOR: Item No. 6, report and 24 possible discussion and/or action on proposed new 16 25 TAC 402.709 relating to Corrective Action-Audit. 0056 1 MS. JOSEPH: Good morning, members. My 2 name is Sandra Joseph, Assistant General Counsel. 3 And this item and the following two 4 items are all related to rulemaking that was proposed 5 last fall and was published in the Texas Register on 6 October 5, 2007, for public comment. 7 We wanted to update you on the status 8 of these rules. First of all, I would like to give 9 you some background that applies to all of the rules 10 that we're going to talk about today. That is, that 11 last session, the 80th Legislature adopted House Bill 12 3430, which requires that for any rule adopted after 13 January 1, 2008, as part of the rulemaking process, 14 state agencies must prepare an economic impact 15 statement that assesses the potential impact of a 16 proposed rule on a small business and a regulatory 17 flexibility analysis that considers alternative 18 methods of achieving the purpose of the rule, if the 19 rule would have an adverse impact on the small 20 business. 21 The bill also required that the 22 Attorney General, in consultation with the Controller, 23 prepare guidelines to assist agencies in determining a 24 proposed rule's economic impact on small businesses. 25 The Office of the Attorney General prepared interim 0057 1 guidelines in September and issued those to state 2 agencies. Now, these rules were published on 3 October 5, 2007, and they complied with the guidelines 4 that had been issued by the Attorney General at that 5 time. Those were interim guidelines. 6 Comments were received on the rules. A 7 public hearing was held. In January, the Attorney 8 General issued interim guidelines, interim proposed 9 guidelines. These were a little different in some 10 respects than their original interim guidelines issued 11 in September. And, in fact, they contained one 12 requirement that did not appear before, and that is 13 that if it's determined that the rules will not have 14 an economic impact on a small business, you have to 15 state a reasoned justification for that determination. 16 The rules that were published on October 5th did not 17 include the reasoned justification which the Attorney 18 General now says would be appropriate. 19 In an abundance of caution, staff 20 believes that the rules should be republished with the 21 reasoned justification statement so that when adopted, 22 and if adopted, they will fully comply with the 23 requirements of HB 3430. And that's the background 24 for all three of these rules. And you may hear more 25 about that requirement as it relates to other rules 0058 1 that are currently proposed. 2 As a result, staff plans to recommend 3 to the Commissioners at the next meeting that these 4 three rules be withdrawn, as published on October 5th, 5 and republished with the correct and complete 6 information to comply with the Attorney General's 7 guidelines. 8 The first one, which is the item that 9 Suzanne referred to, relates to 16 TAC §402.709, 10 corrective action audit. And a copy of the rule that 11 the staff plans to recommend to the Commission to 12 republish is in your notebook. Now, we did take into 13 account the comments that were received at the public 14 hearing and other comments that were received on these 15 three rules. So there have been some modifications. 16 They're a little different in some respects than what 17 was published on October 5th. 18 On Rule .709 in particular, the only 19 changes were to Subsection (c). And the substance of 20 it is virtually the same, that it was rearranged a 21 little bit. And previously there was a word in there 22 that we have taken out. The word "administrative" 23 appeared in the first sentence. And based on a 24 comment that we received from Mr. Fenoglio, we believe 25 that deleting that word would make it more clear what 0059 1 we were trying to state in that particular subsection. 2 Also previously there was a No. (4) 3 which has been moved up into the first sentence, and 4 that was the language that said, "more frequent 5 inspections and compliance audits." That used to be 6 listed as No. (4). Well, more frequent inspections 7 and compliance audits are not really disciplinary 8 actions, so it wasn't really appropriate to have it 9 listed as one of those enumerated. So we moved it up 10 into the first part of that statement. 11 That's all I have to say about this 12 particular rule. 13 When you're ready, I'll go ahead and 14 talk about the other two. 15 MR. WHITTINGTON: Yes, please. 16 MS. TAYLOR: Okay. Anybody want to 17 comment on this particular rule before Sandy moves on? 18 Sharon, did you want to talk about this 19 one? 20 COMMENTS ON BEHALF OF FORT WORTH BOOKKEEPING 21 MS. IVES: Hi. My name is Sharon Ives, 22 Fort Worth Bookkeeping. 23 On the corrective action rule, I 24 noticed that the non-bingo funds statement is still in 25 here. I would like to see that changed. 0060 1 Thank you 2 MS. TAYLOR: Any other comment? 3 AGENDA ITEM NO. 7 4 MS. TAYLOR: Then we go on to Item No. 5 7, report and possible discussion and/or action on 6 proposed new 16 TAC 402.210 relating to House Rules. 7 MS. JOSEPH: And I will say that the 8 comments from the previous hearings on these rules, in 9 as far as they are applicable to what is republished, 10 we will take those into consideration once again. So 11 we will go back and review all the comments we 12 received. 13 MR. CORNWELL: You won't have another 14 public hearing on them, you'll just re-review all the 15 comments? 16 MS. JOSEPH: We haven't decided for 17 sure. And I don't know if it would be necessary. Do 18 y'all believe it will be necessary to -- we probably 19 will schedule a hearing. I think we will. 20 MR. WHITTINGTON: Yes, I think so. 21 MR. CORNWELL: Yes. There's a couple 22 of things in here that -- 23 MS. JOSEPH: That I would say we'll 24 schedule a public meeting. In fact, we have that in 25 our notice. We will have a hearing on March 20th, 0061 1 unless I had a lot of feedback from you, you didn't 2 think it was necessary. But we will have a hearing on 3 March 20th at 10:00 a.m. At the same time, we will 4 incorporate the comments on the precursor rule, so to 5 speak. 6 MS. TAYLOR: So let me just make sure I 7 understand right. The comments that the staff already 8 agreed with have already been incorporated in here? 9 MS. JOSEPH: Yes. 10 MS. TAYLOR: So if they're not in here, 11 then you need to be back here on March 20th? 12 MS. JOSEPH: Yes, if you would like to 13 re-emphasize your point. 14 MS. TAYLOR: With signs and posters. 15 MS. JOSEPH: All right. And I believe 16 you called for the -- go ahead with the next rule? 17 MS. TAYLOR: The house rules, yes. 18 MS. JOSEPH: The house rules. This was 19 proposed new 16 TAC §402.210. And on this particular 20 rule, the staff did not really make any changes. We 21 pretty much did it the same way, I believe. 22 Let me look at it. Let me make sure -- 23 no, I'm wrong. I'm thinking about the wrong rule. 24 MS. TAYLOR: Okay. 25 MS. JOSEPH: I'm sorry. I was thinking 0062 1 about fair conduct. 2 MS. ROGERS: This is really different. 3 MS. JOSEPH: I missed this. 4 MS. TAYLOR: Okay. 5 MS. JOSEPH: I'm sorry. I'm getting it 6 out of order here. 7 Yes. In this one, we did modify it 8 substantially, in response to the comments we 9 received. And the comments indicated that we felt the 10 rule was burdensome, overly detailed, and might tie 11 the hands of people trying to conduct their games. 12 So in response to that, we made a much 13 simpler rule, as you can see, which merely requires 14 that organizations have house rules, that they adhere 15 to them, that they consistently apply them and that 16 they be made available to anyone upon request and, of 17 course, that they comply with the statute and other 18 existing bingo rules. And it would leave open the 19 ability of organizations to develop the details of 20 their own house rules. 21 MS. ROGERS: I just want to say "Thank 22 you." 23 MR. WHITTINGTON: Well, this is the 24 best one. 25 MS. ROGERS: Right. House rules are 0063 1 supposed to be house rules -- 2 MR. WHITTINGTON: Yes. 3 MS. ROGERS: -- not state rules. Good 4 job. Excellent. 5 MR. WHITTINGTON: Could I say 6 something? 7 MS. TAYLOR: Yes. 8 MR. WHITTINGTON: Whoever was involved 9 in this rule, writing this rule here the way it's 10 written, I think needed to be involved in .211. 11 (Laughter) 12 MS. TAYLOR: Okay. We all like it. Is 13 there any public comment on the house rules? 14 Sharon, did you want to say something? 15 MS. IVES: I try not to. This is short 16 and sweet. 17 COMMENTS ON BEHALF OF FORT WORTH BOOKKEEPING 18 MS. IVES: Sharon Ives, Fort Worth 19 Bookkeeping. 20 I just have I guess a comment, maybe a 21 suggestion. Anywhere where it mentions licensed 22 authorized organization, what about putting "or unit"? 23 I mean, that's in Paragraph (a), (b) -- 24 MR. CORNWELL: She's back with the next 25 rule. 0064 1 MS. IVES: -- as well as (c), because 2 if you have, you know, your five or seven 3 organizations per hall, all those organizations belong 4 to a unit. I mean, does that mean that each 5 organization within that hall would have to come up 6 with the house rules? I mean, that was a comment/ 7 question, I guess. 8 But that's it for me. Thank you. 9 MS. TAYLOR: Any other comments? 10 MR. BRESNEN: I think I signed up on 11 this one, didn't I? 12 MS. ROGERS: Yes. 13 MS. TAYLOR: Yes, you did. 14 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 15 MR. BRESNEN: Steve Bresnen on behalf 16 of the Bingo Interest Group. We would support the 17 revised rule. 18 MS. ROGERS: And I believe on the House 19 Rules Workgroup, we discussed that, that each 20 organization would have to make their own house rules. 21 Right? I don't know if that is something that needs 22 to be looked at. 23 MS. TAYLOR: I believe in most halls 24 that I've ever been in, the house rules normally are 25 posted on the wall -- 0065 1 MR. WHITTINGTON: For everybody. 2 MS. TAYLOR: -- and all the 3 organizations adhere to the house rules of the 4 facility. 5 MR. WHITTINGTON: Yes, yes. 6 MR. SILVER: Maybe they have to have 7 something in their minutes of their meetings or 8 something to adopt the house rules as posted or 9 whatever, from the charities or the trust. 10 MS. TAYLOR: Right. 11 Any other comment? 12 AGENDA ITEM NO. 8 13 MS. TAYLOR: Then we go on to Item No. 14 8, report and possible discussion and/or action on 15 proposed new 16 TAC 402.211 relating to fair conduct. 16 MS. JOSEPH: Yes. This rule remains 17 substantially the same as it was published, with the 18 exception that since your notebooks were prepared, the 19 staff determined that it would be more appropriate for 20 the substance of the rule to be included in the 21 current rule on general restrictions on the conduct of 22 bingo. That's Rule 200. 23 And I believe Phil handed each of you a 24 copy of that draft proposed Rule 200. So it is 25 different from what is in your notebook behind this 0066 1 tab, in that the language has been moved to the rule 2 on general restrictions. Furthermore, some of the 3 language in the rule currently existing on general 4 restrictions duplicates what was in the proposed fair 5 conduct rule. So that language would be deleted, and 6 it would just be stated one time, of course, but it's 7 the same subject. 8 Another slight change to the general 9 restrictions rule -- let me look at it just a second. 10 Under Subsection (b) on advertising, that is some 11 clean-up effort there that's not related to the fair 12 conduct rule that was published previously but changed 13 the language somewhat, as you can see, in that some of 14 the words are stricken. And the word "licensed 15 authorized organization" or "(organization) by name" 16 is inserted for the word "conductor, by name." 17 And also note that the wording that 18 presently exists, "as shown exactly as it is...on the 19 license," has been stricken. That would be eliminated 20 so that it wouldn't necessarily have to go out and be 21 a stickler that the name looks exactly as it is on the 22 license. In other words, if there is an abbreviation 23 on the license and it's spelled out on the 24 advertising, that would not be a violation. Under the 25 way the rule presently is, it's very particular. So 0067 1 that would be a relaxation of that requirement. 2 MS. TAYLOR: Well, I really haven't -- 3 I didn't have a chance to read this since I walked in. 4 But one thing I'm seeing on here on Page 6 that I've 5 never seen before under (j), "Bingo worker 6 requirements," No. 1, "Bingo workers and employees may 7 not play bingo." Does that mean even when they're not 8 working? 9 MS. ROGERS: Right. 10 MS. TAYLOR: Kim can't come to my hall 11 and play bingo or I can't play bingo at her hall. Or 12 if the workers that aren't on that session or on that 13 night to work can't come in and play bingo? Is that 14 what this means? 15 MS. JOSEPH: Well, we would need to 16 clarify that. I'm glad you raised the question. 17 MS. TAYLOR: So what is the intent of 18 that, because I've never seen this in any of these 19 before? 20 MS. JOSEPH: Well, I need to look -- I 21 would have to look back at my drafts. I need to check 22 with Phil on that as to the intent. So I hesitate to 23 say. I'm sorry, but he had to leave. But we could 24 certainly let you know. We can talk with Phil and let 25 you know what he's thinking the intent is right there, 0068 1 and clarify it. 2 MS. ROGERS: And also the next one 3 down, No. 2, "No bingo occasion shall be continued if, 4 during such occasion, any worker or employee who is 5 conducting or assisting in the conduct of the occasion 6 participates..." If you're just assisting a customer 7 because they missed some numbers, I mean, that 8 shouldn't be misconstrued as you're just trying to 9 play the whole game, because of lot of times you have 10 older -- I don't know what the intent of that is. 11 MS. JOSEPH: What number was that 12 again? 13 MS. ROGERS: Right below. It's No. (2) 14 on (j), No. (2), Line 13, Page 6. I mean, I've never 15 seen that one either. I just missed it or . . . 16 MS. JOSEPH: All right. We'll take a 17 look at that also. 18 MR. WHITTINGTON: I want to talk about 19 No. (1), playing down -- 20 MS. TAYLOR: Larry, which one? 21 MS. ROGERS: What page? 22 MR. WHITTINGTON: What you just handed 23 me, it's the fourth page. 24 MS. LOPEZ: Page 4? 25 MR. WHITTINGTON: Yes. A registered 0069 1 worker must inspect the bingo balls in the presence of 2 one or more players prior to a bingo game. 3 Daily? Why? Why do a customer got to 4 come up and inspect the balls? If they want to, yes, 5 they can. But why it must be presented and signed by 6 a player as well as my worker on the bingo balls and 7 equipment? I don't understand that. 8 MS. JOSEPH: Well, it's thought to be a 9 way to ensure the fair conduct of the game, to have a 10 player witness that inspection. 11 MS. LOPEZ: And then have to have them 12 sign off on it? 13 MR. WHITTINGTON: What inspection? 14 MS. LOPEZ: We always verify, you know, 15 through a player, you know, that obviously all the 16 balls are there. But now we're having to have a form 17 to sign off on every night? 18 MR. SILVER: And maintain that form? 19 MR. WHITTINGTON: Every day, seven days 20 a week? 21 MS. TAYLOR: Well, also remember 22 there's another additional law -- 23 MR. WHITTINGTON: Yes. 24 MS. TAYLOR: -- that was not in our 25 books, Item No. (6). There is also a log for the 0070 1 bingo console and the flashboard there -- 2 MR. WHITTINGTON: Yes. 3 MS. TAYLOR: -- that wasn't there 4 yesterday. 5 MS. ROGERS: I would have a problem 6 with those two. 7 MS. LOPEZ: I have a problem. 8 (Multiple people talking) 9 MS. TAYLOR: We haven't seen it before 10 to talk to you about it. 11 MS. JOSEPH: That's all right. And you 12 look and see that the -- that's fine. And that's why 13 we're bringing it to you, because we knew that there 14 had been some changes, and we want you to be aware of 15 it. Again, this is going to be recommended to be 16 proposed. If it is, there will be a public comment 17 hearing and a hearing. But I appreciate hearing your 18 immediate concerns. 19 MS. TAYLOR: Immediately the concern on 20 Page 5, (f), "All pull-tab bingo event tickets must be 21 sold prior to the occurrence of the event." And I 22 know I brought this up before. There are sessions 23 where we don't sell all the tabs. 24 MR. SILVER: You can't. 25 MS. ROGERS: That's right. 0071 1 MS. TAYLOR: We just don't get them 2 sold. Do you want to tell those people they can't go 3 home because, "We're not playing the game until you 4 buy every single one of these tabs"? 5 MR. WHITTINGTON: Yes. 6 MS. ROGERS: Right. 7 MS. TAYLOR: I mean, there's just times 8 we give them, you know, two minutes; we'll sell them 9 for two more minutes. And, you know, if nobody wants 10 them, then we'll going to play the game. I mean, we 11 wait until hands are down. 12 MR. WHITTINGTON: Right. 13 MS. TAYLOR: But if there's no hands 14 up, we play the game. 15 MR. SILVER: And that's what increases 16 the integrity of the hall, knowing that you're going 17 to play the game and not just say, "Oh, well, we're 18 not going to play." 19 MS. ROGERS: I know this has been asked 20 a few times to be taken out or revised or something, 21 because this is basically impossible. 22 MS. TAYLOR: Well, it's not. I was 23 just playing bingo in Ohio this past week, and they 24 play a flashboard game. And sure enough, they'll take 25 it forward to the next occasion. And I listened to 0072 1 the players grumbling about, "That's why I don't buy 2 any of these tabs" -- 3 MR. WHITTINGTON: Yes. 4 MS. TAYLOR: -- "because if they're not 5 going to play today, I'm not coming back next 6 Wednesday," because they only play twice a week in 7 those halls there. And they said, "I'm not coming 8 back Wednesday going to play it, so I'm just not going 9 to buy them." And, I mean, we would have exactly the 10 same knee-jerk reaction here, in that the players want 11 to play the tab that night; they don't want to come 12 back to another session to play the tabs. 13 MS. ROGERS: And you're talking about 14 coming back for another day? I heard the rumbling, 15 just coming back from, "We're having to wait until the 16 second session," because Laurie is ready to go home at 17 8 o'clock. She has dinner at 8:30. They don't want 18 to be held up. 19 MS. JOSEPH: Let me ask a question. If 20 all the tabs aren't sold, doesn't that possibly leave 21 some winning of the better tickets also? 22 MS. TAYLOR: It does. We do (multiple 23 people talking) an announcement is made that, "We have 24 tabs left." If the tabs are not sold and the winner 25 has not come out -- it depends upon the policy at the 0073 1 hall. Some of them will sell tabs, continue to sell 2 the tabs after the game, until all the tabs are sold. 3 In other halls, most of the halls I've been in make 4 the announcement that if the winner has not been sold 5 that we cannot pay it. 6 MS. ROGERS: Exactly. 7 MS. JOSEPH: And that doesn't seem to 8 cause the players a problem? 9 MS. TAYLOR: No, no, because, 10 unfortunately, most of the time the winner has been 11 sold. I would say 19 out of 20 times the winner is 12 sold. 13 MR. SILVER: Yes. And you have a lot. 14 MS. TAYLOR: That's how it's been done 15 for years. 16 MR. SILVER: I mean, it's just a 17 minimal amount of tabs, but you may not be able to 18 sell the whole box. And then when you try to sit 19 there and try to hawk 50 tabs, trying to get blood out 20 of a turnip, you then went over your licensed time. 21 MR. CORNWELL: Well, I'm real curious 22 to see what the Comptroller, on that issue, issues her 23 financial impact, because I would be interested to see 24 her study when we get through with 3430. 25 MS. JOSEPH: That reminds me of 0074 1 something that I failed to tell you about 3430, which 2 I need to do. Maybe I should just go ahead and do 3 that. 4 3430 applies to small businesses. 5 Small businesses are defined in the Act as for-profit 6 organizations; therefore, because licensed authorized 7 organizations are non-profit, that statute does not 8 apply to the charities. And, therefore -- 9 MR. CORNWELL: Well, I disagree with 10 that. It don't. If the charities can't make their 11 money, they can't pay their bills, it affects me -- 12 I'm a for-profit business -- and affects that 13 commercial lessor's profit for me, and he can't get 14 his rent. So is that not -- 15 MS. JOSEPH: So you're saying an 16 indirect effect on you? 17 MR. CORNWELL: It's a direct effect. 18 There is no indirect. It's the way the food chain 19 works. 20 MS. JOSEPH: Well, by "indirect," I 21 mean, it would be -- what's removed? The licensed 22 authorized organization would be the directly impacted 23 business -- 24 MR. CORNWELL: Yes. 25 MS. JOSEPH: -- the way I'm thinking 0075 1 about it. But I understand what you're saying. 2 Now, let me say as far as any rules 3 that might be proposed that affect manufacturers and 4 distributors directly, then this HB 3430 would apply 5 and an analysis would have to be done 6 MS. TAYLOR: One last -- 7 MR. WHITTINGTON: I've got a little 8 more, too. 9 MR. CORNWELL: Something just came to 10 my attention, Sandy. Maybe because some pull-tabs are 11 UBIT, subject to UBIT -- and that's unrelated business 12 income for a charitable organization -- would that 13 also follow under 3430 and say, "Hey, you know, under 14 certain guidelines, these are considered for-profit 15 endeavors for a non-profit"? How does that fit under 16 3430? 17 MS. JOSEPH: Well, I would need to talk 18 with you or someone more about that. I'm not -- 19 MR. CORNWELL: Talk to these two back 20 here. 21 MS. JOSEPH: Who is that, (multiple 22 people talking) and Steve Bresnen? 23 MR. CORNWELL: Yes. 24 MS. TAYLOR: Okay. I would be happy 25 to. 0076 1 MR. CORNWELL: Thanks, Sandy. 2 MS. TAYLOR: And, Larry, I believe that 3 you have something that you wanted to talk about? 4 MR. WHITTINGTON: Yes. I don't know. 5 I'm looking at your revised copy. But in the book, on 6 next page, (1)(H), by announcement -- talking about 7 the callers -- "clear and audible to the players the 8 number of winners and the total amount of money or 9 prizes awarded for that game." 10 No. 1 is, a lot of times they're not 11 going to know exactly what won, if they got a high 12 payoff. And to announce it over the microphone, 13 you've got four winners winning so-and-so amount of 14 money, they're not going to know that. So why do the 15 money got to be announced, how much they won? I can 16 understand the winners. But why the money amount? 17 Because they're not going to know the money amount 18 sometimes. 19 MS. TAYLOR: Well, and I agree with 20 that. If you want them to announce there were four 21 winners splitting -- you know, give them their share 22 of that $750. 23 MR. WHITTINGTON: Yes, something like 24 that. 25 MS. TAYLOR: So if you're saying 0077 1 there's four winners and the total amount of prizes 2 that was up for grabs was $750, I see that. But most 3 callers don't know -- 4 MR. WHITTINGTON: Yes. 5 MS. TAYLOR: -- whether it was for a 6 half. And you're asking them to sit up there. 7 They're getting ready to go on to their next game, and 8 they're not sitting up to try and figure out how many 9 were full and how many were half. 10 MR. WHITTINGTON: It's the total 11 amount. 12 MS. TAYLOR: So what number -- I mean, 13 sometimes it takes us a couple of minutes to do that 14 at the front counter with our calculator -- 15 MR. WHITTINGTON: Right. 16 MS. TAYLOR: -- to figure exactly what 17 we're paying out, because you've got games where you 18 might have 11 winners. 19 MR. WHITTINGTON: Correct. 20 MS. TAYLOR: And until all the papers 21 get up to the front, we don't know if they were a full 22 or a half or -- 23 MR. WHITTINGTON: Right. 24 MS. TAYLOR: You know, it's very 25 difficult to do. 0078 1 MR. WHITTINGTON: Total amount of money 2 won. Like I said -- 3 MS. TAYLOR: So I can see saying that, 4 "It was a $750 game, and there were 11 winners." 5 MR. WHITTINGTON: Exactly. 6 MS. TAYLOR: Yes. You know, there were 7 11 good bingos on that game, and the share of the 8 prize would be $750 to total prize. But I'm right 9 with Larry on that one. 10 MR. WHITTINGTON: Like I said -- 11 MS. ROGERS: And your next rule on (J), 12 you cannot communicate with a caller to tell them -- 13 MS. TAYLOR: Oh, that's right. 14 MS. ROGERS: -- how much it is supposed 15 to be. 16 MS. TAYLOR: Our caller doesn't know 17 that, because they don't have -- even on the 18 electronics, they don't have that to show them. I 19 mean, that prints up at the front counter where the 20 payoffs are made, whether it was a full or a half pay. 21 MR. WHITTINGTON: Plus, like I said, 22 whoever wrote 210, somebody didn't know what they was 23 doing when they was writing 211, because it seems like 24 they never been in a bingo hall. 25 MS. WEAVER: That's right. 0079 1 MR. WHITTINGTON: I mean, you talk 2 about slowing down, somebody -- No. 1 is, you ain't 3 going to hardly get a player to come up and sign 4 anything to be checking. Say, "Okay. What?" 5 "No, this guy -- no, man." 6 MR. CORNWELL: Are you cheating? 7 MR. WHITTINGTON: And there's a five- 8 minute holdup. I mean, we got to move. I mean, I 9 don't know if they've ever been in a bingo hall. You 10 go up there, my caller inspects the balls to make sure 11 all of them are there. Our customer is welcome to 12 come up and sit with him, look at them whenever he 13 wants to, but they are not required to do that. My 14 caller is. He is the one that makes sure the ball is 15 right. We try to change our balls at least once a 16 month, every three weeks or whatever, if they want to. 17 If the customers want it, we change it. But they 18 don't come up and inspect. As long as they're there 19 and they're lit up and they can see, they're happy. 20 The flashboard speaks for itself; the monitor speaks 21 for itself. They don't have to check no flashboard. 22 They got a bill. If a number is missing, they replace 23 that bulb. 24 MS. LOPEZ: That's right. 25 MR. WHITTINGTON: They need to make 0080 1 sure they see that number on that flashboard. It's 2 automatic when they walk in the hall. It's lit up; 3 everything is lit up. So it's just so much in this, 4 seems like somebody, "Okay. Let's write this; let's 5 put this in," and really never been to a bingo hall 6 before in their life. 7 MS. LOPEZ: And that's cutting down on 8 our time for selling. 9 MR. WHITTINGTON: Yes, yes, yes. 10 MS. LOPEZ: So, I mean, you don't 11 normally -- 12 MS. JOSEPH: I assure you that who 13 wrote it has been to a bingo hall. 14 MR. WHITTINGTON: Not the one I run. 15 MS. TAYLOR: I've got to agree with 16 Larry, in that customers are hesitant to come up 17 there, even when we've had the games where it's been 18 some really big pots on pull-tabs where, you know, 19 it's the last number out of the hopper. And we ask 20 somebody to come up and stand behind the caller. 21 MR. WHITTINGTON: They don't want to do 22 that. 23 MS. TAYLOR: I mean, it's like, "Will 24 somebody please come up here. I mean, anybody, 25 somebody, anybody." It's like nobody wants to be the 0081 1 one to stand up there and watch the caller pull the 2 balls out of the receptacle. 3 MS. ROGERS: Well, and I voiced this, 4 too, at one of the worker meetings. So a lady walks 5 up there and she signs the line. What good does it 6 do? It's no good. Or she signs Jane's name and her 7 name is really Lisa. Come on. It doesn't do any 8 good. They're not going to want to sign a paper. I 9 wouldn't if I went to a bingo hall. 10 MR. WHITTINGTON: No. 11 MR. CORNWELL: Can we step back and ask 12 the lottery -- okay? -- because I think everybody in 13 this room understands that you've got to maintain a 14 very high degree of integrity in your halls or else 15 your players won't come back. You don't know how many 16 times I've had people say, "Oh, man" -- 17 MS. ROGERS: That's right. 18 MR. CORNWELL: -- well, maybe they're 19 an absentee commercial lessor and have a manager and 20 do all those things -- "My goodness. My bingo dropped 21 off Thursday night, Friday, had a horrible weekend." 22 You know what? What happened? Nine times out of 10, 23 when you really dig into it, they had some type of 24 integrity breach and people wouldn't come back to the 25 hall for a while. Okay? 0082 1 So we're all aware of how important the 2 integrity issue is in our halls. So, obviously, 3 somebody is sitting down saying, "You know, I've been 4 getting complaints for this for years, the 5 complaints," because is all complaint-driven. I can 6 look at it and tell you that they're trying to resolve 7 the complaint. 8 Why can't we sit down and -- who 9 handles all the complaints, Marshall? Auditors now or 10 is it a separate division of -- 11 MR. McDADE: Currently complaint 12 investigations are handled by both Audit staff or 13 Security investigators -- Security Division. So -- 14 MR. CORNWELL: Who would handle -- 15 MS. JOSEPH: Could Marshall identify 16 himself, please, for the record. 17 MR. CORNWELL: I'm sorry. 18 MR. McDADE: I'm Marshall McDade, Audit 19 Services Manager. 20 MR. CORNWELL: Marshall, who handles a 21 complaint today that says, "They didn't pay me the 22 right amount"? 23 MR. McDADE: It primarily depends on if 24 there are other issues in the complaint. But a lot of 25 times it's one staff member. 0083 1 MS. TAYLOR: You know, Sandy -- you 2 saying that just made me think of something. I mean, 3 if the thing is that people think they weren't paid 4 the right amount, I don't have a problem with having a 5 chart up there where the caller could say full pays 6 would receive this much, half pays would receive this 7 much, and leave it at that. I wouldn't have a problem 8 with that either, because that's something we could 9 have a chart up there, and the caller could make that 10 announcement very quickly. 11 MR. CORNWELL: And, too, you would 12 have -- 13 MS. TAYLOR: You know, full pays would 14 get $750 and half pays are going to get $375, you 15 know, so that they've got it all divided up, because 16 then they're not making the distinction -- this person 17 was a full and this one was a half -- and trying to 18 figure out the total. So, I mean, if that is the 19 complaint, then I wouldn't have a problem with that 20 either, because it's something that they could have 21 and would just take a second for them to say. 22 MS. ROGERS: What if you have a 23 full-pay hall -- you do no half pays -- and you're 24 playing a $750 game and, for some whacko bingo reason, 25 you have 12 winners? 0084 1 MS. TAYLOR: Well, I mean, you could 2 have a chart. I mean, I'm not asking to do one, but I 3 know that you could have a chart up there that your 4 person could go down on very easily, because at one 5 time I was at a hall that had three levels of pay -- 6 MR. CORNWELL: Yes. 7 MS. TAYLOR: -- and we had a chart, and 8 it wasn't that big of a deal. 9 MS. ROGERS: You have to record that in 10 your daily cash report. In your daily paperwork, a 11 charity is required to keep that, full pays -- you 12 know, how many ways you split it, what the amounts 13 were. I don't see why -- if a customer has a problem 14 with wondering how much each person is supposed to get 15 paid, they go back and ask. 16 MR. WHITTINGTON: Yes. 17 MS. ROGERS: I mean, that information 18 is there. 19 MR. WHITTINGTON: That's what they do 20 in my hall, they come up to the counter. 21 MS. ROGERS: Why do it twice? We have 22 it in the bag at the cash registers: Five winners 23 split $750. This is how much they got paid. The 24 customer can walk up and ask us, you know, for that 25 paper. 0085 1 MS. JOSEPH: Bruce Miner, Manager of 2 the Licensing areas, would like to add something to 3 this, if that's permissible. Suzanne? 4 MS. TAYLOR: That's great. Thank you. 5 MR. MINER: To expand on what Marshall 6 was saying, that we have a meeting every week that 7 includes Enforcement, Audit, Licensing, Legal, and the 8 director to discuss each of these. Marshall is 9 correct, that these complaints do start with Audit. 10 But with the transfer of responsibilities, they're 11 coming into Licensing. I have five of them right now 12 that are all based on they didn't believe they were 13 paid the right amount. 14 So I don't know. You know, if you're 15 communicating this information adequately, that's 16 fine, but there's others that aren't. So I think that 17 was probably what we were trying to address. 18 MR. CORNWELL: Well, that makes -- 19 that's the other issue I was about to make, Bruce. Is 20 this coming from the same bingo hall all the time -- 21 MR. MINER: Not at all. 22 MR. CORNWELL: -- or is it very 23 widespread? 24 MR. MINER: It's very widespread. 25 MR. CORNWELL: You would consider -- 0086 1 okay. So it's not -- are any of these coming from an 2 isolated instance, like all pull-tab bingo event 3 tickets must be sold prior to occurrence? Do you have 4 a lot of complaints or does that come out of one or 5 two halls? 6 MR. MINER: I'm not aware of that 7 specific complaint right now. 8 MR. CORNWELL: Yes. 9 MR. MINER: That half pays and full 10 pays are not correctly paid in the main issue. 11 MR. CORNWELL: And, you know, those 12 integrity issues, if we went through here and sat down 13 and took a different approach for the integrity issue, 14 Bruce, they've got to run a fair game out there, or 15 else that bingo player is not going to come back. And 16 if they didn't -- that one time they didn't think they 17 got paid the right amount -- nine times out of 10, 18 they did, probably. And if they didn't, it could be 19 an honest mistake. Okay? I don't know. But instead 20 of having all these crazy rules for integrity issues, 21 could we not just address it in some way to sit down 22 and say: Fair conduct is, one, you need to maintain 23 the integrity; and this is, keep adequate for this, 24 instead of mandating all this? 25 MR. MINER: I have not been involved 0087 1 with the previous discussion of the rules, but I'm 2 sure that this will be taken back to be discussed? 3 MR. CORNWELL: I just think this is not 4 the right approach, to be honest with you. 5 MS. WEAVER: It makes the halls look 6 like we cheat. 7 MR. SILVER: It's almost like 8 micromanagement. 9 MS. WEAVER: Yes. 10 MR. CORNWELL: It's more than micro. 11 They're in your face -- 12 MR. WHITTINGTON: And let me -- 13 MR. CORNWELL: -- it's important to you 14 every day. 15 MR. WHITTINGTON: And one customer -- 16 MS. TAYLOR: One at a time. One at a 17 time. 18 Larry. 19 MR. WHITTINGTON: And what customer is 20 going to leave, No. 1, without coming up and talking 21 about their money if it's not right? I don't know 22 what customer is going to go home and say, "Oh, wait a 23 minute. I get paid. But let me call the Lottery 24 Commission." 25 I don't understand -- I can't see my 0088 1 customers doing that, none of them. "Hey, Larry, I'm 2 short a dollar. I want my money. I'm short a buck." 3 That's how critical it is when it comes to getting 4 paid. They want one dollar if we're short. If we 5 happen to miss a dollar, they want their dollar right 6 now. If it's short, they're going to come up to the 7 counter: "Hey, this is wrong." Then we correct them. 8 "No, it's right. This is what happened." Then they 9 understand. They ain't going to wait around. So I 10 don't know what kind of complaints y'all are getting 11 from customers going and calling back later. I don't 12 understand that. 13 MS. TAYLOR: Markey, what were you 14 going to say? 15 MS. WEAVER: I feel like this makes our 16 bingo organization look like we cheat, and we've had 17 our fingers pointed at us for a long time already and 18 scrutinized. Everybody knows that plays bingo in a 19 hall that you have blackout games, you've got -- 20 everybody is looking at the balls coming up. They 21 show up on the board. You've got your caller that 22 says, you know, half pay, full pay, before the game 23 starts. It's printed on your programs. You've got 24 your workers that are going to count the money. The 25 cashier is going to count it to the worker. The 0089 1 worker is going to count it to the customer twice. 2 You know, that customer is not going -- and you've got 3 your verifiers. You've got all this in there for a 4 hall that's ran properly. 5 These are the halls that are being 6 scrutinized, because we're the only ones that follow 7 the rules anyway. I mean, is that not true? I mean, 8 all y'all are doing is just holding our hands more and 9 more and more, and it's making it harder for the 10 charities to make money. Can you not go after the 11 halls that are not following the rules? Can you not 12 go after the halls that don't care that there's a 13 Bingo Enabling Act? And they're going to do what they 14 want to do anyway. Those are where your complaints 15 have got to be from. 16 MS. JOSEPH: Well, I appreciate what 17 you're saying. And I will promise you, we're going to 18 go back and consider everything you said. You know, 19 as far as complaints go, I would point out when you 20 say, "Can't we enforce the rule against the people 21 that aren't doing the right thing?" what we run into 22 in all of these complaints is, there's not a rule that 23 addresses the situation. And so -- 24 MS. WEAVER: Is there a hall rule, a 25 house rule? 0090 1 MR. CORNWELL: Well, no. You could 2 have a rule that if you found them violating the 3 integrity of the game, we'll take disciplinary 4 actions -- 5 MS. JOSEPH: Right. 6 MR. CORNWELL: -- but not to do all 7 this. 8 MS. WEAVER: That's right. 9 MR. CORNWELL: And, by the way, I 10 wanted to make this clear. Marshall -- and correct me 11 if I'm wrong -- but -- and, Suzanne, I don't know how 12 halls operate it. But under the current pull-tab 13 rules -- and, Darin, help me -- is not there a 14 provision that a deal must remain open on the floor 15 until the close of the session or all tickets have 16 been sold? 17 MR. PETERS: Or all the winners are 18 paid above the $25. 19 MR. CORNWELL: So, Marshall, if you 20 find somebody is not selling all their event tickets 21 during that session, or that unit session, and they're 22 not selling them to them, it's already a violation. 23 MR. McDADE: Say that again, please. 24 MR. CORNWELL: In the pull-tab rules 25 under -- I think it's 402.300. 0091 1 MR. McDADE: There are the three 2 options for -- 3 MR. CORNWELL: The only way you can 4 pull a deal -- okay. If all the winners above $25 or 5 all winners are won, you can pull the deal then. 6 MR. McDADE: All tickets sold. 7 MR. CORNWELL: Okay? All tickets are 8 sold, the deal is done -- okay? -- or session ends. 9 They cannot pull that deal for play. So if I'm 10 running a horse race game and O-75 is the winning 11 horse and I've 50 tickets over there, unfortunately I 12 know it's a problem, but I've got to offer those 50 13 tickets for sale. That's the law of the day. 14 MS. TAYLOR: Not unless you close the 15 session. 16 MR. CORNWELL: Unless the session is 17 closed. 18 MS. TAYLOR: That's the last game of 19 the session, the session is now closed. 20 MR. CORNWELL: That's if you're outside 21 your license time. You're right. 22 MS. ROGERS: Does that apply only to 23 event tabs or pull-tabs and event tabs? 24 MR. CORNWELL: Both. 25 MS. ROGERS: Pull tabs and event tabs. 0092 1 MS. TAYLOR: I think there is a time in 2 reality during every session when charities that are 3 still offering instant tabs, start closing the tabs 4 out so that they can leave some time during the day. 5 And sometime during the session, every hall I've ever 6 been in, I hear them say, "If there's any instant 7 winners, if you will please raise those up so we can 8 pay them out at this time," which is really in reality 9 the time the hall is stopping to sell the tabs, 10 because they need to get the paperwork done and be 11 able to leave the hall. 12 MR. CORNWELL: Start pulling down a few 13 tabs? 14 MS. TAYLOR: Yes. 15 MR. CORNWELL: And instant is -- you 16 know, they don't say all instants have to be sold 17 here. 18 MR. McDADE: I'm going to just try to 19 follow what the staff has said -- 20 THE REPORTER: Please speak up. 21 MS. TAYLOR: Marshall, the reporter 22 can't hear you. 23 MR. McDADE: Okay. I'm sorry. 24 One of the things that we have tried to 25 do with developing these rules is look at what other 0093 1 states are doing and tried to balance over-regulation 2 versus minimum -- no regulation. And as Sandy had 3 mentioned, a lot of times when we sit down and look at 4 these complaints, we don't have a rule or a statute 5 that addresses something specifically. So we're in 6 the situation of: What do we do about it? There's 7 nothing we can do. 8 So I think this was an attempt to get 9 some of those things written down in a rule format, to 10 help us either have something to base our case -- our 11 case or base an action on. So we're definitely 12 looking at those issues. 13 MR. CORNWELL: And, Marshall, I'm glad 14 you brought that up, because we had this discussion in 15 the workgroup. Okay? And I recognize some of these 16 rules. Some of these rules, like the signing, 17 verifying the balls, that's straight out of Missouri. 18 Okay? That language is very similar to what is in the 19 State of Missouri. 20 And the last report I have -- and it's 21 been a while. This is old information -- the State of 22 Missouri's charitable organizations have gone from 23 over 900 organizations, and now there's less than 300 24 playing. So I think -- looking at how other states do 25 things are real good. I think it's a good thing from 0094 1 a regulatory standpoint. But I think there needs to 2 be a balance to see what they did to their own 3 charitable bingo up there. They adopted some rules 4 that we fought hard up there on. 5 MS. LOPEZ: What's going to happen is, 6 if there's more and more of these requirements, there 7 will be more and more violations, because we're all 8 going to make mistakes and we're going to forget to do 9 some of these things from time to time every single 10 night. 11 MR. McDADE: I think we're also dealing 12 with kind of a follow-up to our internal audit report 13 that we had from last year about providing clear, 14 consistent information to charities by how they're 15 going to be evaluated. So we've kind of got all those 16 things trying to balance together. And so -- 17 MR. WHITTINGTON: Well, plus, I 18 understand other states. Okay? I don't know if the 19 other states got a bingo advisory committee to help 20 them with what goes on in the bingo world on a day-to- 21 day basis. I don't know if they've got that. 22 Apparently they don't. 23 But we could definitely use more common 24 sense when we're thinking about things like this, 25 especially when we've got nine people here that works 0095 1 in the field every day talking about bingo and how it 2 operates. Okay? And we are supposed to be working 3 together and trying to clear up a lot of these 4 problems. I mean, this could be very simple. I mean, 5 for bingo: Should inspect the balls, console and 6 flashboard. That should be it. 7 MS. LOPEZ: That's it. 8 MR. WHITTINGTON: That should be all. 9 I mean, just like you done on this other, 210, this 10 should be the same way. One little paragraph will 11 cover that whole thing. Okay? A registered worker 12 should inspect the balls, make sure they're proper, 13 the flashboard, console. Boom, that's it! That's the 14 way it should be written. That's all, something 15 simple like that. 16 MS. ROGERS: So what you're saying is, 17 as it's written right here, the draft, this is going 18 to the Commissioners? 19 MS. JOSEPH: Yes. The notice has not 20 been submitted yet for the open meeting for the agenda 21 that tentatively -- that's what? 22 MS. WEAVER: March the 20th? 23 MS. ROGERS: When is it going to the 24 Commission? When will it be presented? 25 MS. JOSEPH: Oh, February 20th, I 0096 1 believe is the date. 2 MR. CORNWELL: Public hearing will be 3 March the 20th, Kim. And I highly suggest you get 4 there. 5 MS. WEAVER: If it's going to the 6 Commission -- 7 MS. JOSEPH: And it's not for adoption. 8 It would only be presented to the Commission to give 9 them -- to recommend to them perhaps that they publish 10 this for public comment, so it's not by any means 11 ready for adoption. 12 MS. WEAVER: Okay. On February the -- 13 MS. JOSEPH: -- 20th. 14 MS. WEAVER: And then public hearing is 15 March -- 16 MS. JOSEPH: We're suggesting March 17 20th. 18 MS. WEAVER: That's during the spring 19 break. 20 MS. JOSEPH: Yes, it is. 21 MS. WEAVER: It is. 22 MR. SILVER: And not all of Texas is on 23 spring break at one time. 24 MS. WEAVER: Pretty much. 25 MS. JOSEPH: Austin spring break is the 0097 1 week before. So . . . 2 MS. TAYLOR: Okay. So as a group, if I 3 understand, we don't like this rule. 4 MR. WHITTINGTON: No. 5 MS. TAYLOR: Okay. We don't like it, 6 Sandy. 7 MR. SILVER: Simplify it. 8 MS. JOSEPH: All right. 9 MS. TAYLOR: I know that previously we 10 did have a workgroup that was put together. Should 11 that workgroup meet again, or it's too late, because 12 this is what you're giving to the Commissioner anyway? 13 MS. JOSEPH: Well, I think y'all have 14 made some really good comments and helpful comments, 15 and I would like to share those with Phil and let him 16 in on, you know, some of y'all's concerns and see 17 where we go from there. Perhaps he could send out an 18 e-mail to you as to whether he plans to go ahead with 19 this at the February 20th meeting or whether it's 20 modified or whether he thinks a workgroup would be 21 helpful. I'm sure he would be happy to communicate 22 with y'all further on this. 23 MS. TAYLOR: Okay. So the committee I 24 guess will need to -- 25 MR. WHITTINGTON: Right here is a 0098 1 long -- 2 MS. TAYLOR: -- communication. If the 3 staff is willing to pull this one back or not publish 4 it or not -- ask the Commissioners to publish it as it 5 has been presented to us, does the committee want to 6 have a workgroup? I believe we had a workgroup on 7 this already once. So does that workgroup -- would be 8 interested in meeting again. I know it's published 9 on-line who is -- 10 MR. CORNWELL: Apparently the workgroup 11 we had, which included myself -- okay? -- wasn't very 12 effective in getting these points across. I don't 13 know whether you want the same workgroup working on it 14 or not. 15 MS. ROGERS: I can remember going to a 16 workgroup meeting, and we voiced these exact same 17 concerns and yelled and hollered and asked. 18 MS. LOPEZ: I was on that. 19 MS. TAYLOR: Okay. So there is a 20 workgroup already in place. If it will help, then 21 that workgroup can meet again and work on this. Okay? 22 We have a couple of committee members 23 that would like to have a brief break, but I really 24 would like to get public comment before that. 25 MR. CORNWELL: Okay. Y'all make it 0099 1 short. 2 MS. TAYLOR: If I could have public 3 comment, please. 4 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 5 MR. BRESNEN: Steve Bresnen on behalf 6 of the Bingo Interest Group. This is kind of deja vu 7 all over again. 8 I want to subscribe, on behalf of the 9 Bingo Interest Group, to just about everything that's 10 been said today, but I do want to point out just a 11 couple of other problems that ought to be addressed. 12 On Page 7 at Line 3, the discussion 13 about the location of the caller, there is at least 14 one hall that I know of here that has the caller 15 significantly elevated above the floor where most of 16 the bingo players are located. It's an old building. 17 The person is in a wheelchair. They're not going to 18 be able to go up and see where the caller is. 19 So I think what you're doing -- what we 20 might be doing is either -- if this creates a right in 21 the player to observe the drawing of the balls from 22 the bingo receptacle and a handicapped person can't 23 exercise that right, I think we're causing a problem 24 for at least one successful hall that I know about. 25 So I think we talked once before about 0100 1 this being able to be accomplished via camera or some 2 sort of ability to visualize. We've got camera 3 equipment in most halls anyway, or at least the larger 4 halls, so I would like to give some thought of that. 5 The other one is "gain the attention of 6 the caller when the players bingo." We talked about 7 that a worker needed to be able to be contacted by a 8 player rather than gaining the attention of the 9 caller, because we have some people that are in 10 separate rooms, usually smoking/non-smoking facilities 11 they're not in direct proximity to. Those people that 12 are in one or the other of those rooms, I think it's 13 impossible to configure a building such that when 14 you've got, you know, three or 500 seats in there, for 15 somebody to be able to observe the drawing of every 16 ball. You're way in the back of the room, or if 17 you're in a side room that's set aside for smoking, it 18 doesn't seem like that works very well. 19 On the integrity issues, it seems to me 20 that we could come up with sort of a definition of 21 "integrity" to go in here that would simplify a lot of 22 this. And rather than being prescriptive in that you 23 have to say how much each person got paid, you could 24 say something like, you know, "A bingo player shall be 25 paid the amount they're entitled to." That gives a 0101 1 rule for the Commission to enforce. 2 I think the approach that you're 3 talking about, about maybe having a chart or saying 4 that there's, you know, 10 winners at $750 total. 5 That at least gives the player the ability to 6 calculate how much they should have been paid. So it 7 may help the Commission to fend off some complaints if 8 the people have that information. But if we can at 9 least, you know, go down a middle line here where 10 you're not having to calculate it by the individuals 11 and the onus is not on the caller to do that, so the 12 game could go ahead and go. Otherwise, I subscribe to 13 the other comments that were made. 14 I'm happy to volunteer Sharon Ives to 15 serve on any workgroup and -- just kidding about 16 that -- but I'll be happy to join you on that or get a 17 pick from our organization to work with you to 18 streamline those. 19 I would be happy to answer any 20 questions. Thanks. 21 MR. WHITTINGTON: You're welcome. 22 MS. TAYLOR: Any other public comments? 23 SPEAKER: I'll volunteer for that 24 workgroup, too. 25 COMMENTS ON BEHALF OF FORT WORTH BOOKKEEPING 0102 1 MS. IVES: Good morning. Sharon Ives 2 again here, Fort Worth Bookkeeping. 3 On Page 4 of this rule, No. (3), that 4 is going to take too much time, as y'all have 5 previously stated. 6 On No. (6) on the same page, talking 7 about the logs. 8 On Page 6, (j), No. (2), I know I've 9 testified on this in the past. Hopefully -- and this 10 always -- you know, you're always going to have new 11 players coming to your hall. If it's somebody new in 12 the neighborhood, new in the state, they go to a bingo 13 hall, they want to know, they want someone to look 14 over them to make sure they don't sleep through a 15 bingo: "What exactly am I looking for? What buttons 16 do I push if I'm playing the electronics?" 17 If this paragraph is still in here, you 18 will not be allowed to talk to your customers. And 19 I'm sorry. Bingo is a public -- 20 MS. LOPEZ: Bond. 21 MS. IVES: Exactly. You want to be 22 able to interact. And for that paragraph, that needs 23 to be struck. 24 And also I agree with what Steve 25 Bresnen had previously said on Page 7, Paragraph 0103 1 (k)(A) and (B). 2 And I do believe that will be it for 3 me. Thank you. 4 MS. TAYLOR: Any other comment? 5 If not, we're going to take a 6 5-minute -- 7-minute break. We'll meet back here at 7 12:00. We're pretty close to the end of the agenda. 8 So if it's okay with the BAC to finish up. 9 We'll meet back here in seven minutes. 10 (Off the record: 11:53 a.m. to 12:02 11 p.m.) 12 MS. TAYLOR: It's 12:02 or three. So 13 we can call the meeting back to order, please. 14 AGENDA ITEM NO. 9 15 MS. TAYLOR: Item No. 9, reports from 16 workgroups and possible discussion and/or action on 17 draft and proposed new rules relating to licensing and 18 recordkeeping. 19 We've had several workgroups that have 20 been meeting and we would like a report from each of 21 you, if there is a report. If not, you'll just let us 22 know. 23 The first person Mark I hear is Markey 24 Weaver. 25 Markey, what workgroup were you in as 0104 1 far as the -- 2 MS. WEAVER: Rules. 3 MS. TAYLOR: Any report? 4 MS. WEAVER: I had the flu for two 5 months. 6 MR. WHITTINGTON: Good report. 7 MS. WEAVER: It's the honest to God's 8 truth, you nutsy. I'm sorry. 9 MS. TAYLOR: Did you make out what she 10 was just saying? 11 THE REPORTER: No. 12 MS. TAYLOR: Good, because I didn't 13 either. 14 MS. WEAVER: I had the flu for two 15 months. 16 MR. CORNWELL: Get the microphone. 17 Just say you've got no report. 18 MS. WEAVER: No report. 19 MS. TAYLOR: No report at this time? 20 Thank you. 21 Okay. Knowles, do you have a report? 22 MR. CORNWELL: Our group has met twice, 23 and we have developed written comments. 24 MS. TAYLOR: Let me interrupt you. 25 Which group? What were you working on? 0105 1 MR. CORNWELL: Charity licensing and 2 the rules regarding -- I will have to get my notes 3 out. But it was primarily charity licensing issues. 4 And then I believe we had some additional fair conduct 5 or some additional rules that we have met about. I 6 would have to look. 7 Help me, Darin. 8 MS. TAYLOR: So this fair conduct rule 9 that we have here today is the work from your 10 workgroup? 11 MR. CORNWELL: It worked into our 12 workgroup with all the stuff that Phil had sent. He 13 sent out a whole grouping. We split that grouping 14 out. And we took those charity licensing deals and 15 those rules, and we have reviewed those and we have 16 prepared written comments. We are going to forward 17 those, too. We've got all the written comments in. 18 We're going to forward those comments to the lottery 19 and ask for a meeting on those rules. 20 MS. TAYLOR: Okay. So you've met 21 twice. You have prepared comments and you are going 22 forward with the staff? 23 MR. CORNWELL: We have written 24 comments. We're going to discuss our written comments 25 with the staff. At the end of our workgroup committee 0106 1 meeting, we're going to open it up for any new 2 comments. And if there's not any additional new 3 comments, then we'll make a full report back to you as 4 soon as that's completed. 5 MS. TAYLOR: Okay. I would like to 6 request that the written comments that you have, if 7 you could forward them to the rest of the committee -- 8 MR. CORNWELL: I will do so. 9 MS. TAYLOR: -- also for their 10 comments. 11 Okay. Earl -- 12 MR. CORNWELL: Suzanne, I can't do 13 that. I can forward those comments, but I cannot -- I 14 mean -- 15 MS. TAYLOR: Okay. You do not have to 16 accept our comments. But if you would please forward 17 those comments. 18 MR. CORNWELL: Well, there's public 19 meeting rule on that, that I cannot e-mail more than 20 four. 21 MS. TAYLOR: Okay. You can go ahead 22 and pick four people to e-mail that to, then. 23 MR. CORNWELL: Thank you. 24 MS. TAYLOR: Okay. And the last one is 25 Earl. Do you have a report? 0107 1 MR. SILVER: Yes. We met twice on the 2 licensing rules, Group 1. We worked through nine of 3 the 10 items. It's more concerned with the commercial 4 lessor common roof and license fees. We do have 5 written comments on nine of them. I'm going to submit 6 them back out to the workgroup to make sure I 7 incorporated all their comments before we get them to 8 the bingo staff and Phil and all concerned parties. 9 They should have them within a week or so. 10 On the last point, which is the 11 collection of rent, it's just going to take a long 12 time to digest that. 13 MS. TAYLOR: That was the one item 14 that -- 15 MR. SILVER: That we did not -- 16 MS. TAYLOR: -- you did not get through 17 yet? 18 MR. SILVER: -- get to. That's just 19 going to take a long time to go through. And we 20 didn't want to bog up the whole group with just nine 21 items and just wait on the tenth. So we'll get that 22 done and then cover the tenth item and submit that at 23 a later date. 24 MS. TAYLOR: Okay. Any other questions 25 or comments for these members? 0108 1 MS. LOPEZ: Do we also want to have 2 Earl also e-mail those comments? 3 MS. TAYLOR: Pick four people and 4 e-mail. 5 MR. SILVER: I'll pick four. 6 MR. CORNWELL: At a time; at a time. 7 MR. SILVER: At a time. 8 MS. TAYLOR: Thank you very much. 9 Okay. Any other public comment? 10 MS. JOSEPH: I wanted to clarify 11 something I just heard. It would not be acceptable 12 for you to e-mail four people and then do another 13 e-mail -- you know, four different people -- with the 14 same information. That would be kind of a subterfuge 15 of getting around the Open Meetings Act. So we can't 16 just block it up into separate e-mails. 17 MS. TAYLOR: Well, because they don't 18 have their written comments here to share with 19 committee members, is there a problem with them, as 20 long as we're not sharing information back and forth, 21 to -- I mean, I don't care if they send them to 22 Worlanda and she sends us the copy. I mean, I would 23 like to see what their -- 24 MS. JOSEPH: That might be better. 25 MS. TAYLOR: -- proposed comments are 0109 1 so the rest of the group, because we don't have it 2 here. 3 MS. JOSEPH: Interchange of ideas 4 between the -- 5 MS. TAYLOR: Right. But we can send 6 them on and they will be sent to us, to each of the 7 members? 8 MS. JOSEPH: I think they -- could we 9 do that, Marshall? 10 MR. McDADE: I think you can do that, 11 yes. 12 MS. JOSEPH: Yes. 13 MS. TAYLOR: Okay. You'll send them on 14 to Worlanda and Worlanda will go ahead and forward 15 them to the committee so that we can all see what you 16 are working on and come up with at this point. 17 Is that acceptable to everybody? 18 MR. WHITTINGTON: Uh-huh. I wanted 19 to -- 20 MS. TAYLOR: Larry? 21 MR. WHITTINGTON: I want to make a -- 22 this is going to be my last thing today. I'm not 23 going to say anything else. 24 But working with the Texas Lottery 25 Commission under the Bingo Division as a BAC member, 0110 1 we need to concentrate on more of innovations from out 2 of state that would help bingo in Texas. We sure 3 don't need to concentrate on paperwork, because we've 4 got enough for a lifetime here. And I just don't 5 think we need to go and look at somebody else and what 6 they're doing in the Licensing Division department or 7 any department and try to compare it to us. We need 8 to do it ourselves. 9 MS. TAYLOR: So you're saying that we 10 want to be leaders, not followers? 11 MR. WHITTINGTON: Yes, yes. 12 MS. TAYLOR: I like it. 13 Okay. Any other public comment on this 14 agenda item? 15 Steve, did you have anything to say? 16 MR. BRESNEN: Which one? 17 MS. TAYLOR: The item that we're on 18 right now. 19 MR. BRESNEN: No, ma'am. I'm done. 20 MS. TAYLOR: Any other comment? 21 AGENDA ITEM NO. 10 22 MS. TAYLOR: Okay. Now we going on to 23 Item No. 10, report and possible discussion and/or 24 action on the need for setting a pricing floor for the 25 sale of card-minding devices in bingo halls. 0111 1 I was asked to put this item on the 2 agenda by Kris Keller. And he is here to make a 3 presentation to the committee. 4 COMMENTS ON BEHALF OF TGI 5 MR. KELLER: Thank you for letting me 6 make this. My name is Kris Keller, and I have been in 7 the bingo industry for 27 years. And I just want to 8 share with the group here this -- we're in Bexar 9 County, San Antonio, and this is what is happening 10 in -- I just know to myself that we have to stop this 11 as an industry. If we don't, then we're setting 12 ourself up for bad, bad things here. 13 But this is an advertisement in the 14 Bingo Bugle. It says, "$10 any size paper for both 15 sessions and receive a free computer for both 16 sessions." Now, before anybody says you can't give 17 anything free out there, the word "free" is 18 highlighted. And there's several articles in here 19 where they're saying "free." 20 So -- and I'll leave this and y'all can 21 pass it around. 22 Oh, and real quick, I'm so glad, 23 Knowles, that you -- you did state earlier that you 24 weren't going to ask anymore questions, so you can 25 just pass this around. Y'all can look at that. 0112 1 So this brings me to the mission 2 statement of the lottery, the Charitable Bingo 3 Division. You know, I bet I've read this 1,000 times. 4 And sometimes I think: Am I the only person that 5 reads this? Does the Lottery Commission Bingo people 6 ever read this statement? Because it states, "Provide 7 authorized organizations the opportunity to raise 8 funds for their charitable purposes by conducting 9 bingo." And then further on it says, "To promote and 10 maintain the integrity of the charitable bingo 11 industry throughout Texas." 12 Well, to me, integrity is associated 13 with fairness, the word "fairness." So you take the 14 word "opportunity" and "fairness" in that mission 15 statement and anybody -- anybody in this room, if you 16 can tell me how a charitable organization can have the 17 opportunity to compete fairly in bingo if your 18 competitor is selling or giving a product away cheaper 19 than what you can purchase the product for, if anybody 20 can tell me that's fair, please do -- anybody. 21 If you can't say it's fair, then it's 22 got to be unfair. And then you've got to agree with 23 me -- and I want us to take this to the Commission and 24 tell them to set a minimum price -- not a price, but 25 just a bottom floor that a group can sell an 0113 1 electronic device for, because if we don't do it now, 2 we're going to see these prices go even lower, and 3 we're going to see an outside element come into bingo 4 to provide funds for the bingo game, which I'm not too 5 sure is not happening today already. 6 And Knowles, I'll just ask you. I buy 7 suppliers from you. And I see Danny Moore here and 8 Jane. I buy from all of y'all. 9 So, Knowles, ask yourself this 10 question: If Thompson Supplies came to me and said, 11 "We're going to give you your paper for half what 12 you're paying today and we're going to give you free 13 pull-tabs," could you compete with that? 14 MR. CORNWELL: Not for very long. 15 MR. KELLER: Not for very long. So 16 tell me again, anybody, anybody in this room, if you 17 can tell me how we can compete with somebody that's 18 willing to give something away that you're not 19 supposed to do, and lose money, just to try to put 20 your competitor out of business, we've got to stop it. 21 And that's all I want this group to do, 22 is take it to the Commission and say, "I had written a 23 rule, asked for a rule change, but it got knocked 24 down." And I am glad to sit with anybody, and this 25 includes people in the audience I know that might have 0114 1 a concern about this -- Steve and Darin or 2 Littlefield -- anybody. So can we say that we're 3 going to get this looked at or something? 4 MS. ROGERS: Well, I have a question. 5 Maybe Sandy can help; maybe Marshall could. I would 6 assume -- which we all know what assuming does -- $10 7 in there, just saying the paper is $8.00 and they paid 8 a dollar for a computer? 9 MR. WHITTINGTON: No. 10 MS. ROGERS: Because legally you cannot 11 give a computer away. So is it okay to advertise a 12 free computer? 13 MR. WHITTINGTON: No. What he's doing 14 is better marketing measure. He is basically selling 15 the computer and giving the paperwork free. He is 16 using the paper just to get -- because the computer is 17 going to attract more attention than the paper. 18 MS. ROGERS: So he's making his books 19 look -- 20 MR. WHITTINGTON: Yes. 21 MS. ROGERS: -- like he spreads it out? 22 MR. WHITTINGTON: Yes, yes, yes, that's 23 what he's doing. 24 MR. SILVER: It's all marketing and 25 merchandising. 0115 1 MR. WHITTINGTON: Yes. 2 MR. SILVER: If you take something like 3 that, I mean, you can go into a retail environment 4 and -- say Best Buy -- and just say, "Okay. You buy a 5 stereo, we'll install it free." 6 MR. WHITTINGTON: Right. 7 MR. SILVER: It's the same thing. It's 8 a loss leader. So what they'll do is, they'll just 9 incorporate that cost into the whole cost and try to 10 get the money somewhere else. 11 MS. ROGERS: And that's all well and 12 good, but there's no law against -- 13 MR. SILVER: Yes. 14 MS. ROGERS: -- but there is a law 15 against giving a computer away for free. 16 MR. SILVER: That advertising is wrong. 17 MS. ROGERS: And if that's what you say 18 you're doing, I would assume this is a violation -- 19 MR. WHITTINGTON: Yes, it is. 20 MS. ROGERS: -- of the Bingo Enabling 21 Act. 22 MS. WEAVER: Free. 23 MR. WHITTINGTON: Free is. 24 MS. WEAVER: Free is. Let me go back 25 to your computers and -- well, let me address this. 0116 1 You know, if you want to go and take the -- make bingo 2 look better and fix the integrity, go through the 3 Bingo Bugle on a regular basis and see who is not 4 following those advertisements, see who doesn't have 5 your numbers down there for your charities and see who 6 is putting things in for free. If you want to give it 7 away for a penny, okay. It's a penny, but it's not 8 free. 9 If we're following the rules, then 10 that's hurting our business. I'm sure Mr. Keller has 11 been in business this long, then he understands that, 12 too. Now, apples-to-apples and oranges-to-oranges, I 13 had a distributor the other day come to me and say, 14 "We'll offer you this computer at half of what we're 15 paying, our charities are paying for it right now." 16 But you know what? My players, if I put that computer 17 in my hall, they would march down the road somewhere, 18 way down the road, and it would all end up in Conroe. 19 So is it a computer that you're 20 selling? Is it a decent computer? I mean, I don't 21 know what this hall is selling. But is it giving away 22 the free computer, including only what you're doing, 23 the same computer? 24 MR. KELLER: Well, we don't have 25 computers at my hall. 0117 1 MS. WEAVER: Oh, you don't have 2 computers at your hall. 3 MR. KELLER: Our daytime hall does have 4 computers. We have all paper. But believe me, it 5 affects the paper business, too. 6 MS. WEAVER: Too. Okay. 7 MR. KELLER: You know, I could give two 8 shakes about the ad really, because I know they can 9 reword it somehow and do that. My main point here is 10 that if a hall is willing to sell a computer 11 product -- a product for cheaper than what I can 12 purchase it for or pay rent for, it can't be fair. 13 Now, you take a small bingo hall, well, 14 they pay -- I don't know -- $6.00 or $8.00 a play on 15 their electronics. So how can they go in there when 16 they're paying $6.00 every time they sell a computer 17 and compete against somebody that's selling them for 18 $5.00 and $4.00 now, and on the way to $2.00, every 19 day to anybody that wants it, as many as you want? 20 That hall cannot compete fairly. There again, anybody 21 that thinks that can, just stand up and say, "Here is 22 how they can do it." You can't. 23 MS. LOPEZ: Well, I'm looking at this 24 advertisement also, and it says that they have -- 25 looking at the advertisement, it says that they could 0118 1 stamp their computer at three locations. So does this 2 Callaghan Bingo have three locations in San Antonio? 3 That's how I understand it. Is that correct, that 4 they have three different locations? 5 MR. KELLER: Yes, they have three 6 locations. Two of them are under the same roof and on 7 the same foundation, but you're not supposed to do 8 that either, but they did it. 9 But there again, I don't care about 10 that. I'm just saying if we don't do something now as 11 an industry to stop larger -- maybe not as conscious 12 of the game itself -- people from doing this, it's 13 going to get worse and worse and worse. You do it for 14 pull-tabs. You have a price on pull-tabs, that you 15 have to sell it for face value. And what do you think 16 if you didn't have that on them pull-tabs? People 17 wouldn't be saying penny, "Give me a penny and take 18 it." 19 MS. WEAVER: But, Mr. Keller, don't you 20 think that maybe we should be looking at that hall or 21 that -- Callaghan. Is that what you're saying? 22 MR. KELLER: Callaghan. 23 MS. WEAVER: I mean, if they're one of 24 the halls that are making the integrity of bingo in 25 Texas look bad, I mean, that's one of the things we're 0119 1 here for. 2 MR. KELLER: Well, that guy can go look 3 at them. But I didn't come up here to point a finger 4 at any particular hall. You know, it takes two halls 5 to start this price war where -- and I don't want to 6 say they run a bad game, illegal game or anything like 7 that. I just want the Lottery Commission to set a 8 minimum price that you can sell your electronic bingo 9 for. 10 MS. ROGERS: Do you want a minimum 11 price on electronic -- are you suggesting a minimum 12 price on electronics, or are you suggesting that there 13 be some type of rule that you cannot sell it for lower 14 than what you paid for it? I think that's the 15 difference there. 16 MR. KELLER: I want a minimum price. 17 And if you can sell it for more money, if your area 18 allows you to do that, or you say, "You know what? 19 I've got a nicer hall than you have, and I've got a 20 friendlier staff. I can get a dollar more than you." 21 MS. ROGERS: I would see that being 22 kind of hard, because how is the Commission, the 23 Lottery, supposed to know: Okay. $5.00 across the 24 state? 25 MR. SILVER: Wouldn't a minimum price 0120 1 be like price-fixing? 2 MR. KELLER: No. 3 MS. ROGERS: Wouldn't that be price- 4 fixing? 5 MR. KELLER: No. 6 MS. TAYLOR: Let me respond there. 7 About 15 years ago when I first got involved with the 8 BAC, I came here asking the BAC to set a minimum price 9 on bingo paper in Nueces County, because we had a 10 price war that started back a good 15 years ago. And 11 I want you to know, to this day, the paper is still 12 $2.00 a book, which is what it went down to 15 years 13 ago, and we have yet to be able to get the prices up 14 in Corpus. 15 So on one hand -- at that time we had 16 lots and lots of letters, all the halls in Corpus that 17 weren't involved in this, and a bunch of the VFWs and 18 the Eagles and Moose Lodge, everybody sent in lots and 19 lots of letters. I mean, we snowed the Lottery 20 Commission with letters that I made sure to pick up 21 and mail in for everybody. 22 And they did bring -- the Lottery 23 Commission came to Corpus Christi and had a meeting at 24 a hotel in Corpus. And that's back when -- oh, many 25 directors ago, and we had a female director, was 0121 1 there, and the Commissioners were there. And they all 2 came to Corpus. And operators for each of the 3 organizations and the officers of the organizations 4 were invited to the meeting. Ultimately they got up 5 at the meeting -- I mean, we must have had 100 people 6 there. And that meeting took about 15 minutes. And 7 ultimately what they said is, "It would be price- 8 fixing and illegal in Texas." 9 And that's what came of that meeting 10 that we were all so happy to have with the Lottery 11 Commission. So I don't know if anything has changed. 12 But at that point in the Bingo Enabling Act, there was 13 something that they could set prices by county. And 14 all we were asking for was whether to set prices in 15 Nueces County. 16 MR. CORNWELL: It is there. 17 MS. TAYLOR: So I didn't know if it was 18 still there. But it didn't work for us. So I don't 19 know how much luck you're going to have. 20 MR. KELLER: Well, how many of those 21 VFWs and American Legions -- 22 MS. TAYLOR: They're gone; they're 23 gone. 24 MR. KELLER: -- are in business today? 25 MS. TAYLOR: There is one VFW. The 0122 1 Moose are gone; the Eagles are gone. You're 2 absolutely right. It did hurt the smaller 3 organizations. 4 MR. KELLER: There again, this mission 5 statement here, the opportunity and integrity of 6 bingo, for charitable organizations to operate bingo. 7 You know, any business in America, any business 8 anywhere -- a gas station -- just if you're on the 9 other corner and your guy is selling gasoline for 10 cheaper than you can buy it for, because he has 11 multiple locations and says, "You know what? I don't 12 care if I lose money here," that is against the law 13 today, can't do it. 14 MR. WHITTINGTON: Suzanne, plus. I 15 looked at this ad. And, like I said, what he's doing, 16 he's basically saying -- if you said, "Okay. You give 17 him a free computer." You can't use "free." If he 18 would have said one cent -- 19 MS. WEAVER: One cent. 20 MR. WHITTINGTON: -- it would have been 21 nothing said because, No. 1 is, he is incorporating 22 that paper and that computer as one price. And if the 23 Lottery Commission checked, "Yes, my computer is right 24 here. I got it from the $10 I got." That's what 25 they're going to say. That computer, it's going to 0123 1 have a price to it from that $10 with that paper, I 2 promise you. 3 MR. KELLER: Yes. 4 MR. WHITTINGTON: Okay? And if he 5 would have turned it around and said, "Okay. One 6 cents paper, $10 computer," almost the same thing. So 7 those two are together. And he's going to use them as 8 together, not as free. 9 MR. KELLER: Right. 10 MR. WHITTINGTON: That's what he's 11 going to do. 12 MR. KELLER: That why I say I don't 13 give two shakes about the ad, really. But, Larry, let 14 me just ask you, in your area, wherever you operate 15 in -- 16 MR. WHITTINGTON: Dallas. 17 MR. KELLER: Dallas -- how much do you 18 sell your electronics for? 19 MR. WHITTINGTON: We sell our 20 electronics -- we have full payout for $25 a session. 21 MR. KELLER: Would you be opposed, 22 then, if the Lottery Commission, "You cannot sell any 23 electronic for less than $10 a session," would that 24 bother you? 25 MR. WHITTINGTON: No, it wouldn't 0124 1 bother me at all. 2 MR. KELLER: Let me ask you this, then: 3 If your competitors lower their price to $5.00, would 4 that bother you? 5 MR. WHITTINGTON: Not really, because 6 they would have to have a lot of computers to beat me. 7 MR. KELLER: Lots of -- Knowles has 8 lots of computers. 9 MR. WHITTINGTON: I don't think that 10 would last long, because No. 1 is, I can't see them 11 making no money that way after a certain point -- 12 MR. KELLER: I can't either. 13 MR. WHITTINGTON: -- not with $5.00. 14 MR. KELLER: I can't either. But it is 15 going to last long. It lasted already for three, 16 going on four months. It lasted 15 years in Corpus. 17 It's going to continue. It's going to get worse. 18 MR. WHITTINGTON: Well, I understand 19 what you're saying. 20 MR. KELLER: You know, it's Bexar 21 County today; it could be Dallas County tomorrow. 22 MR. WHITTINGTON: I understand what 23 you're saying. What I'm saying, I'm just looking at 24 the ad, the way they've got it written. I understand 25 exactly what you're saying. Yes, it could be, but I'm 0125 1 trying to see where they're going to come from on that 2 point, trying to set a set price, which is based on a 3 fixed price, for computers. 4 MS. WEAVER: But paper is paper and 5 pull-tabs and event tabs, they showed what face value 6 is. A computer, there's all different kinds of 7 computers that our halls can sell to our customers. 8 One computer is not equivalent to another computer. 9 It doesn't have as many bells and whistles. You can't 10 play solitaire on it. You can't have -- 11 MS. TAYLOR: It's non-colored. 12 MS. WEAVER: -- brilliant colors. 13 MR. KELLER: You're saying I sell 14 colored units at my hall, you sell black and white 15 units at yours, I can get a higher price? 16 MS. WEAVER: Right. You can't have -- 17 MR. KELLER: And that's fine. 18 MS. WEAVER: -- where you fix that. 19 Well, but that wouldn't be fair. I mean, I understand 20 why you're saying this isn't fair. I mean, I totally 21 understand. I didn't appreciate my city council 22 letting Redmon come into our town, because of the 23 integrity of the game. But you know what? All 24 they've done is helped my bingo hall, because we don't 25 cheat -- excuse me. 0126 1 (Laughter) 2 MR. KELLER: I understand all of that. 3 And, you know, you are correct. You can compete to an 4 extent. But if you think to yourself that one or two 5 of your competitors in your area -- I don't know how 6 many games are in your area. How many are there? 7 MS. WEAVER: How many commercial halls? 8 There's two. We have two commercial halls in our 9 area. We have some smaller individuals like -- 10 MR. KELLER: Okay. 11 MS. WEAVER: Well, the VFW is gone. 12 American Legion is gone. But we have some Knights of 13 Columbus and some of those. 14 MR. KELLER: I'll promise you that if 15 you had three commercial halls and two of them were 16 half price of what you are, you could have computers 17 that sang to them while they played the game, whatever 18 you want, they will go to your competitor long enough 19 to where you feel the pinch and you're losing money. 20 And you're a legitimate operator saying, "I'm going to 21 make money for my charities. I can't do it this 22 month." Well, guess what? They can't pay the rent 23 this month. And it's going to be an effect that will 24 just get worse and worse and worse. 25 Now, you can say, "I can overcome it 0127 1 with better service and a better product." Your 2 bottom line of the thing is, your product is cash. 3 You can't do any -- you can't better it than your 4 competitor. Is that right? 5 MS. WEAVER: Well, there's been months 6 and months and months where I didn't get to collect 7 any rent at all. And all I could do was hope and pray 8 that our staff learned from other commercial halls 9 that I sent them to, to try to learn the game better, 10 to learn to do event tabs and stuff like that, and to 11 make the game a better -- make our hall a better hall. 12 And there's other commercial lessors in 13 the state that gladly opened their doors to us. And 14 then we did to other smaller halls also, to help. And 15 we went to our distributors, too, and said, "Hey, help 16 us," because the Lottery Commission wasn't helping us. 17 And I don't mean that disrespectful. But I just mean 18 as a bingo industry as a whole, just because we lost 19 so many charities. 20 MR. KELLER: Well, let me just ask. 21 Phil, does the Lottery Commission have the authority 22 to set the minimum price of a bingo product? 23 MR. SANDERSON: If you will just hold 24 on one second, I'll bring up the statute. 25 MS. TAYLOR: Kris, you don't feel that 0128 1 perhaps -- I mean, like your hall that is just paper, 2 every time I go down the highway and look at your 3 parking lot on the way here, I drool a little bit. 4 But don't most of those people come there because your 5 hall is a paper hall and not an electronic hall? 6 MR. KELLER: Correct. 7 MS. TAYLOR: Why is the electronics -- 8 I'm right with you. I understand how the price wars 9 can be, because I've been on one for so many years. 10 But what difference would it make what kind of price 11 they offer if you have a group of people that don't 12 want electronics? 13 MR. KELLER: Well, we've seen a drop in 14 our attendance since the price war over there started. 15 And, you know, who is to say? Maybe they'll come back 16 to us. Maybe they're going to save a lot of money 17 over here: "I'm not buying any pull-tabs. All I'm 18 doing is playing the electronics with my two bucks, 19 save a lot of money." 20 And it's not just me that I'm concerned 21 with. It's the whole big old industry. I'm telling 22 you, we take the small guy out of this game -- your 23 little churches, VFWs, that type of bingo games, 24 charity-run halls -- and we have shot ourself in the 25 foot so bad that it's just not right. 0129 1 So like I say, it's not just me. I'm 2 going to survive. We're healthy. Our charities were 3 No. 1 in the State of Texas again for charitable 4 distributions. We are healthy. But I see -- I see 5 the future here, and it's not good for bingo if we 6 don't stop this. And I'm telling you the truth, you 7 will see more outside, illegal activity funds coming 8 into bingo to fund it as this goes on. 9 MR. SANDERSON: Okay. I found Section 10 2001.056, Approval of Bingo Cards. Paragraph (c) 11 indicates that, "The commission may set the price or 12 adopt a schedule of prices for the sale of provision 13 of bingo cards by a licensed authorized organization." 14 And then additionally, "The commission 15 by rule may require a licensed authorized organization 16 to notify the commission of the price for bingo cards 17 the organization will use for one or more reporting 18 periods." 19 And another section, "A licensed 20 authorized organization may not sell or provide a 21 bingo card at a price other than a price authorized by 22 the commission or a schedule adopted by the 23 commission." 24 So it appears we have the statutory 25 authority for setting the price for a bingo card. 0130 1 MR. KELLER: Then I'm here to ask you 2 to do it. There again, anybody that says that it's -- 3 if you can tell me a different way to do it, please 4 do. I'm open for suggestions here. 5 MS. WEAVER: Suzanne? 6 MS. TAYLOR: Yes? 7 MS. WEAVER: Can Mr. Keller be put into 8 a workgroup or something and look into this in further 9 detail? 10 MS. TAYLOR: Is that what the committee 11 would like to do? 12 Rosie, Markey, do you want to serve on 13 that workgroup? Yes, Rosie? 14 MS. LOPEZ: Sure. Yes. 15 MS. TAYLOR: This doesn't necessarily 16 have to be here. You guys -- you know, you can work 17 on the phone or -- you don't need to continually 18 travel to Austin. 19 Any other members who would like to 20 serve on this workgroup? 21 MR. KELLER: Can I volunteer somebody 22 for this? I would welcome -- Steve, I would welcome 23 you to work on this, because I know you represent a 24 lot of halls. 25 MR. BRESNEN: I'm going to make some 0131 1 comments. 2 MS. TAYLOR: Change your mind? 3 MR. KELLER: You might want to save 4 those comments. 5 MR. BRESNEN: Well, I would like to 6 make them here. I'll work with you. 7 MR. KELLER: All right. 8 MS. TAYLOR: We have two members from 9 the committee. Is there somebody else that would like 10 to work on this? Earl, was that you? 11 MR. SILVER: Yes. You were looking 12 dead at me, so I will. 13 MS. TAYLOR: Thank you, Earl. 14 MR. SILVER: Would you repeat those, 15 please. 16 MS. TAYLOR: It's going to be Rosie, 17 Earl and Markey, Kris Keller and Steve Bresnen at this 18 moment. 19 MR. SANDERSON: And who will be the 20 chair? 21 MS. TAYLOR: Markey. And they can add 22 anybody else to it that they would like. 23 MR. SANDERSON: And this is a workgroup 24 to discuss? 25 MS. TAYLOR: Item No. 10. 0132 1 MR. SANDERSON: Setting -- 2 MS. TAYLOR: Setting pricing floor for 3 the sale of card-minding devices in bingo halls. 4 MR. CORNWELL: May I make an amendment 5 to that charge to that workgroup? 6 MS. TAYLOR: Possibly. 7 MR. CORNWELL: Could we make it market 8 conduct? 9 MS. TAYLOR: I think so. 10 MR. CORNWELL: Thank you. 11 MR. KELLER: Wait a minute. What does 12 that mean? 13 MR. BRESNEN: You like it. 14 MS. TAYLOR: Well -- 15 MR. KELLER: What? 16 MS. TAYLOR: Integrity. 17 FROM THE AUDIENCE: Position statement. 18 MR. CORNWELL: How the market is 19 conducted as a whole. Price-setting is a whole other 20 issues, Kris -- 21 MR. KELLER: Absolutely. 22 MR. CORNWELL: -- I think that means. 23 MS. ROGERS: Is it where you can -- 24 it's better. 25 MR. KELLER: That's better. I love it. 0133 1 Any more ideas? Okay. 2 MS. TAYLOR: Anybody else wishing to 3 join the committee can contact Markey and let her add 4 to her committee. 5 Markey, you just let us know wherever 6 you have a -- 7 MS. WEAVER: I was going to say, he 8 just volunteered, so that was all from the BAC to -- 9 MS. TAYLOR: So, Tom, you also just 10 volunteered. 11 MR. WEEKLEY: Okay. 12 MS. TAYLOR: Okay. We have four 13 members from the committee, so that's it for committee 14 members. You can add any other outside public members 15 that you would like. 16 MR. KELLER: Well, any more questions 17 for me? 18 MR. WHITTINGTON: I wonder, are you 19 full pay or half pay? 20 MR. KELLER: Full pay. 21 MR. WHITTINGTON: Your halls? Okay. I 22 just can't see another full pay hall doing that too 23 long; I really can't. Half pay, yes, but not full 24 pay. 25 MR. KELLER: Well, like I say, Larry, 0134 1 we can't either, but this has gone on for three 2 months. And I'm not going to accuse anybody of those 3 illegal funds coming into bingo, but you kind of 4 wonder who is footing the bill. 5 MR. WHITTINGTON: I mean, you've got to 6 sell 200 and something computers just to make $2,500 7 to pay out full pay. 8 MR. KELLER: Well, they've got 700 9 computers. 10 MR. WHITTINGTON: Not including the 11 bills. Okay. I understand you. 12 MR. KELLER: Okay? 13 MS. TAYLOR: Okay. Thank you. 14 MR. KELLER: Thank you. Thank you very 15 much. 16 MS. TAYLOR: Any other public comment? 17 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 18 MR. BRESNEN: Steve Bresnen on behalf 19 of the Bingo Interest Group. I'm happy to work on a 20 workgroup with Mr. Keller and anybody else. 21 And, Knowles, I think you did a really 22 good thing by broadening that to describe market 23 conduct. And let me say why. 24 First, a hyper-technical objection to 25 the use of the word "integrity" in the discussion of 0135 1 this. I understand the concern from a competitive 2 standpoint about people being able to do something 3 that doesn't appear to make any economic sense. But 4 in the statute, the word "integrity" is used, in my 5 opinion, to protect a player from an unfair practice 6 that affects the outcome of a game. There is a reason 7 this is important, and I'll come back to the helpful 8 part on the issue of market conduct. 9 Y'all may remember that the agency had 10 a case that involved a situation in which an 11 organization exceeded its licensed time, because a 12 game was not completed before the end of the licensed 13 time. And I'm going to invite staff to fill in any 14 blanks for me, but I'm not intending to put my thumb 15 on the scale on this story. 16 But the theory was that it affected the 17 integrity of the game. Well, we took the position 18 that it would have affected the integrity of the game 19 not to complete the game. And I'm not sure what 20 happened ultimately to that complaint, but I recall 21 Commissioner Cox raising a concern that one of the 22 lawyers was using as a legal theory, that the practice 23 affected the integrity of the game as a way to 24 shoehorn the Commission into authority to penalize 25 that conductor. 0136 1 And Commissioner Cox -- and I believe 2 rightly so -- questioned whether the integrity of the 3 game wasn't about how players are treated within a 4 given game in terms of the outcome of the game. So I 5 think if we're talking about market conduct and we can 6 tie back to the statute in a way that deals with 7 market conduct, that that's worth exploring. 8 Now, Kris, I would invite you to -- I'm 9 going to have a meeting of the Bingo Interest Group 10 sometime in the not-very-distance future. And I would 11 invite you, as I've done with Knowles and any number 12 of other people at one time or another, to come and 13 sit down and talk about what's happening and see if 14 you can reach common ground -- 15 MR. KELLER: I'll be glad to. 16 MR. BRESNEN: -- on that. So beyond 17 the workgroup, I want to get you involved with those 18 folks and talking, because none of them are from the 19 San Antonio or even the South Texas area -- 20 MR. KELLER: I'll be happy to do that. 21 MR. BRESNEN: -- nobody south of 22 Austin. So it will be good to have that communication 23 anyway. 24 Now, I was working for Bob Bullock when 25 Suzanne's price war started down in Corpus. And we 0137 1 received many copies of those letters. And, frankly, 2 until today, I had forgotten that's the reason I got 3 involved with bingo to begin with. Bullock had me 4 looking into that at the time. 5 And since then, that issue has come up 6 from time to time. And every time it's come up, the 7 devil has been in the details, because I'm 8 understanding from just this conversation that there's 9 a range of quality of products. So to set a numerical 10 price on a given -- and I'm assuming there's a range 11 of cost of those products -- setting a numerical price 12 may not work unless you were to do it product-by- 13 product. 14 As Larry pointed out, you can merge the 15 cost of the -- you could flip that deal right over and 16 say, "Well, it's free paper and a $10 computer," or 17 whatever the deal is. They can make the numbers work. 18 So if we just focus in on electronics, then I'm afraid 19 we won't solve the ultimate problem. 20 But I understand it has been a problem 21 in places. And, you know, I think one thing that's 22 kind of weaving its way through that discussion, too, 23 though, gives me a lot of concern, and that is where 24 the scenario is a multiple location scenario where one 25 location underprices its product in the extreme and 0138 1 somehow is subsidized by the other locations. 2 Well, you know, an organization can 3 only conduct at one location. You can't have a unit 4 that extends beyond one location. The ability to 5 cross-subsidize should be prohibited, or inhibited at 6 least, by the regulatory system. I suppose you could 7 have a lessor who was zeroing out the rent or 8 somehow -- you know, some sort of subsidy by not 9 charging a reasonable rent. But I think part of what 10 we ought to think about while we're looking at that 11 is, how do these subsidies occur that are allowing 12 that hall to do something that's commercially 13 unreasonable? 14 I want to be really -- we have always 15 opposed price-setting. Now, you've got a little bit 16 different wrinkle by talking about a minimum on 17 something. So, you know, I've talked a little bit 18 about the devil being in the details. I've talked a 19 little bit about this concern for cross-subsidization. 20 I've been hearing about people trying 21 to subsidize organizations to assist them in competing 22 with other organizations. That's caused me a lot of 23 concern. If there are ways that that can be done 24 under the current rules, we ought to think about that 25 and make sure that it's something that's consistent 0139 1 with the statute and in good practice. But I would 2 urge that we not talk about this issue in terms of the 3 integrity of the game, because we need to reserve that 4 concept for cheating, basically cheating in terms of 5 the outcome of the game. 6 I'm happy to work on the workgroup. 7 I'm happy to provide a meeting, a forum for you to 8 come and talk to us, and your colleagues in the field. 9 MR. KELLER: Great! 10 MR. BRESNEN: And just call me. 11 Thanks. I would be happy to answer any 12 questions. Thanks. 13 MS. TAYLOR: Any other discussion on 14 this topic? 15 Markey, we'll leave it to you to set up 16 the meetings, then. 17 MR. WHITTINGTON: Way to go, Mark. 18 AGENDA ITEM NO. 11 19 MS. TAYLOR: Okay. Next item, Item No. 20 11, report and possible discussion and/or action on 21 the 2007 BAC annual report. 22 We're setting up a workgroup for this. 23 I'll serve on that workgroup as chair. Kim and Rosie 24 are going to serve with me. Is there anybody else 25 that wants to be on this workgroup? 0140 1 Okay. Any other discussion on this 2 topic? 3 MR. SANDERSON: I have one, if you 4 don't mind. 5 In order for -- because most of you are 6 aware, the data that we have on the bingo system 7 changes daily as individuals file reports. For the 8 purposes of our annual report as well as what we 9 report to the national organizations, and for you in 10 working with your annual report, we will try to pick a 11 day that we're going to run the reports to get the 12 information. 13 MS. TAYLOR: Okay. 14 MR. SANDERSON: I will get that 15 information to you. 16 MS. TAYLOR: It did change a lot last 17 year, didn't it? 18 MR. SANDERSON: Yes. 19 MS. TAYLOR: Okay. Any other 20 discussion on this topic, public comment? 21 AGENDA ITEM NO. 12 22 MS. TAYLOR: On to Item No. 12, report 23 and possible discussion and/or action on the 24 Charitable Bingo Operations Division's activities. 25 MR. SANDERSON: Members, in your 0141 1 notebook is the report of the activities of the Bingo 2 Operations Division. I would like to, one, point out 3 that the next tentatively scheduled BAC meeting would 4 be May the 5th -- I'm sorry -- May the 7th. Further 5 reports were due on January the 25th. And I took a 6 quick look at the sales information, and it appears 7 that 2007 will show an increase in gross receipts over 8 2006, although the increase in percentage is getting 9 smaller and smaller, but it is at least an increase. 10 Other things in the report outlines the 11 website. We have a search function on the advisory 12 opinion portion of the website to where you can search 13 advisory opinions based on words or phrases. I think 14 that's beneficial. 15 Also we continue to post any news 16 articles that we find or we feel are noteworthy for 17 the bingo industry. And then additionally, as 18 previously mentioned earlier today in the meeting, the 19 on-line training program that we're looking at putting 20 up an operator training program web-based. 21 And with that, I'll be glad to answer 22 any questions. 23 MS. TAYLOR: I'm sorry. I didn't catch 24 earlier. When did they plan -- or when did y'all plan 25 to try to put that operator training on-line? 0142 1 MR. SANDERSON: We're looking at June 2 the 1st, I believe is the date that we're shooting for 3 as implementation of that process. 4 MR. SILVER: Is there going to be any 5 other discussion or input from the public about that 6 or -- from us or -- 7 MR. SANDERSON: As far as content of 8 the training program? 9 MR. SILVER: No. Just basically is it 10 good style and goals and stuff like that? 11 MR. SANDERSON: The public is always 12 welcome to comment or provide any information. 13 MR. CORNWELL: And, Earl, part of the 14 bingo advisory workplan includes getting involved. If 15 you see something on there that needs -- content that 16 needs to be changed, we do have a standing charge at 17 any of these committee meetings to talk about this 18 type of training. Okay? So any time you need to 19 bring that up, you just -- you put it on the agenda 20 item, and we can discuss the content of that website. 21 I'm sorry, Madam Chair. 22 MS. TAYLOR: Any other comment? Any 23 other questions? 24 25 0143 1 AGENDA ITEM NO. 13 2 MS. TAYLOR: Item No. 13, public 3 comment. 4 Any public comment? Okay. 5 AGENDA ITEM NO. 14 6 MS. TAYLOR: If not, then we'll go on 7 to Item No. 14, consideration of and possible action 8 on future Bingo Advisory Committee meeting dates 9 and/or items to be considered for future meetings on 10 the Bingo Advisory Committee workplan. 11 MR. SANDERSON: I'll go ahead and 12 start. 13 As I mentioned earlier, the meeting is 14 tentatively scheduled for May the 7th. One item that 15 will be on that will be the appointment of a workgroup 16 to study BAC nominations. 17 March the 1st is when we will open up 18 nominations for the three positions that their terms 19 end in August of this year. And we'll be accepting 20 nominations through the end of April. 21 And that's the only agenda item at this 22 point in time. Possibly the approval of your annual 23 report to be presented to the Commissioners. 24 MS. ROGERS: Phil, I have a question 25 for you. On the nominations, will you once again do 0144 1 it like we did it previously where you want to 2 nominations workgroup to look over the ones that y'all 3 have -- that first -- 4 MR. SANDERSON: Yes. 5 MS. ROGERS: -- first y'all had looked 6 over? Okay. 7 MR. SANDERSON: We'll provide you with 8 a copy of the nominations at the -- wherever the 9 workgroup is at that meeting. 10 MS. ROGERS: Okay. 11 MR. SANDERSON: And we'll issue -- the 12 workgroup do their research and interviews. The staff 13 will independently do theirs, both to make 14 recommendation to the -- 15 MS. ROGERS: Commissioners? 16 MR. SANDERSON: -- Commissioners. 17 UNIDENTIFIED SPEAKER: How many 18 positions are going to be open? 19 MS. TAYLOR: There was a lot of 20 discussion previously while you were out -- 21 MR. WHITTINGTON: Yours. 22 MS. TAYLOR: -- about one of the rules, 23 the fair conduct rule. If that is being presented 24 back to the Commissioners on the 20th and a public 25 hearing on the 20th of March -- February 20th to the 0145 1 Commissioners and a public hearing on March 20th -- is 2 that something that will already be set in stone by 3 the time the BAC meets again in May? 4 MR. SANDERSON: Set in stone? 5 MS. TAYLOR: Will it have already been 6 gone through, the Commissioners will already approved 7 it? I mean, is it already a done deal by the time we 8 meet? 9 MR. SANDERSON: By the time you meet in 10 May, it will probably -- I can't envision that it 11 would be up for their consideration by May but 12 potentially could be. 13 MR. CORNWELL: It could be as soon as 14 April, couldn't it? 15 MS. TAYLOR: But you envision it would 16 be something that the BAC would be able to discuss 17 again at that time? 18 MR. SANDERSON: At the May 5th meeting, 19 it would probably be too late for any discussion on 20 it, because of -- I wasn't here and I look to Sandy. 21 The indication was that it would be published on -- if 22 we present it at the February 20th meeting -- 23 MS. JOSEPH: I would think that 24 timewise, it would be possible to present it at the 25 April meeting. So that means if so, that the BAC 0146 1 would not have a chance to meet. 2 MS. TAYLOR: There was discussion on 3 whether or not the workgroup that was previously 4 formed to discuss that rule should get together, 5 again, since we found an awful lot of things in the 6 rule that we were in disagreement with. 7 MR. SANDERSON: Well, I mean, they're 8 welcome to get together again. But, I believe, you 9 know -- of course, the rule was published originally 10 and it had a public comment hearing, and BAC made 11 comments. We incorporated some of those comments. 12 I missed the discussion. I'll be glad 13 to go back and read the transcript. You're always 14 welcome to, you know, make comments during the comment 15 period as well as at the meeting where it's proposed 16 for publication by the Commissioners, I believe. You 17 know, they sometimes will take comment at that point 18 also. 19 MR. WHITTINGTON: When are you going to 20 read that, Phil? I think you need to read it right 21 away. 22 MS. ROGERS: Well, what is the 23 suggested track? Because there were quite a few 24 things in there that when -- and I can remember being 25 at the workgroup meeting, and we voiced our concerns 0147 1 pretty loud, and those are still there, and they're 2 going to hurt the industry. 3 MS. TAYLOR: In addition, there are 4 some items in the new one that we have never seen 5 before. 6 MS. ROGERS: Right. 7 MS. LOPEZ: Right. Yes. 8 MR. SANDERSON: I don't think there is, 9 because I cut and pasted from the rule that was the 10 fair conduct, with the exception of potentially the -- 11 there may have been one where they had to sign a log 12 for the -- 13 MS. TAYLOR: Two logs. 14 MS. LOPEZ: Yes, two logs. 15 MR. SANDERSON: The first log was 16 already there. The second log was added. 17 MS. ROGERS: And what about where you 18 cannot play bingo? 19 MS. LOPEZ: That's the new one on 20 there, too. 21 MR. SANDERSON: Where you can't play 22 bingo? That is currently in the rule right now, in 23 Rule 200. 24 MS. TAYLOR: But it doesn't say that 25 they can't -- it just says they can't play bingo. It 0148 1 doesn't say when they're not on -- if they're not 2 working. 3 MS. LOPEZ: Right. 4 MS. TAYLOR: According to this rule, 5 they still can't play bingo. 6 MR. WHITTINGTON: That's period. No 7 way. 8 MS. TAYLOR: I mean, it's the way it 9 sounds. 10 MR. SANDERSON: You know, I don't want 11 to get into a debate on what's in the rule and what's 12 out of the rule. I'll be glad to meet with you 13 individually on it. You know, some of the things in 14 here, you know, that's been brought up in the past 15 about, you know: Well, what does the lottery do? 16 Well, they have a 358-step process for every drawing 17 of any lotto game, that they have to go through. And 18 they sign a log that they weighed the balls and 19 they -- you know, all the processes that they go 20 through for that drawing. 21 And all we're asking -- and it goes 22 back to the complaints that we get. And, you know, 23 Mr. Bresnen talking about the integrity of the game. 24 You know, how bad is it when you get halfway through a 25 session and you're missing four bingo balls? And it's 0149 1 happened, you know. 2 MR. WHITTINGTON: Yes, that's very bad. 3 MR. SANDERSON: And we get complaints 4 about it. And so all we're saying is that before each 5 session -- before the session, the first session -- 6 only the first session, not after intermission -- that 7 you pull all the balls out and have someone verify 8 that they're all there and that there are not cracks 9 in them and, you know, they're falling apart. That's 10 the only thing. 11 MR. WHITTINGTON: How come the caller 12 can't do that? Why have somebody -- 13 MR. SANDERSON: The caller can do it. 14 It says a registered worker and an individual -- and a 15 player. 16 MR. WHITTINGTON: Why a player? 17 MR. SANDERSON: It adds to the 18 integrity, that there is a player -- you know, someone 19 else besides the caller has looked at them. 20 MR. WHITTINGTON: Well, shouldn't that 21 be on their discretion if they want to do that, 22 instead of saying you must do this? 23 MS. TAYLOR: Okay. This isn't really, 24 this agenda item -- 25 MR. WHITTINGTON: I know. I'm just 0150 1 talking -- 2 MS. TAYLOR: The question is: Were we 3 as a group going to meet again to discuss this prior 4 to -- 5 MS. WEAVER: February 20th. 6 MS. TAYLOR: And whether the workgroup 7 was coming in. 8 MR. SANDERSON: Based on the timeline, 9 potentially could not meet -- well, if the rule is 10 voted on at the February meeting to be published and 11 it gets published within two weeks after that day, 12 which would be the first part of March, then the 13 public hearing would -- the 30-day comment period 14 would end the first part of April. So it would 15 probably not be on the April meeting, it could be on 16 the following May meeting, but comment period would be 17 over at that point. 18 MS. TAYLOR: Would there be an 19 opportunity for the workgroup to meet with the staff 20 prior to the February 20th meeting to try and hammer 21 out a couple of these details? 22 MS. ROGERS: That would be my question. 23 Suzanne. Is it going to be worth meeting, one? Are 24 y'all looking at working again on this? 25 MR. SANDERSON: I'll definitely work 0151 1 with you on it, yes. 2 MS. ROGERS: Okay. 3 MS. TAYLOR: Who was on that workgroup? 4 MS. ROGERS: I was one of those. 5 Knowles was one. 6 MS. TAYLOR: Okay. The workgroup -- I 7 know on-line the workgroup is listed who was 8 originally working on this rule. Could we get with 9 the staff, the members of that workgroup that had 10 already been working on this -- again? 11 MR. SANDERSON: Sure. 12 MS. TAYLOR: Would that be -- is that 13 okay with the people that were on this workgroup? And 14 will somebody let those members know, because we have 15 a lot more than four members, I think, on the 16 workgroup. 17 MS. WEAVER: We had two workgroups that 18 were meeting, like some -- 19 MR. SANDERSON: Well, I don't recall 20 this being any of the -- the three workgroups that 21 were formed at the last BAC meeting dealt with the 22 licensing -- 23 MS. WEAVER: No, it wasn't. It was 24 licensing. 25 MR. SANDERSON: -- two licensing 0152 1 workgroups -- 2 MS. WEAVER: Yes. 3 MR. SANDERSON: -- and the books and 4 records rule. These rules were not in -- 5 (Multiple people talking). 6 MS. TAYLOR: It was before that. It 7 was moving that upstairs. 8 MS. WEAVER: It was the prior 9 workgroup. 10 MS. LOPEZ: Right. 11 MS. TAYLOR: Well, I know I was there 12 and -- 13 MS. WEAVER: I was here. I brought my 14 manager. 15 MS. TAYLOR: Yes, you had your managers 16 there. I'm just not sure exactly who was or was not 17 on that workgroup. 18 MS. ROGERS: There were two workgroups. 19 One was for fairness and conduct, and one was for 20 books and records. 21 MS. TAYLOR: Right. 22 MS. ROGERS: That's why -- 23 MS. TAYLOR: -- it looked like it was 24 so big. 25 MR. SANDERSON: I think the question 0153 1 was, who was not in the workgroup. 2 MS. WEAVER: Yes. 3 MS. TAYLOR: Okay. So, Markey, you 4 were on the workgroup, I was on the workgroup. 5 MR. CORNWELL: I was, too. 6 MS. TAYLOR: Rosie, you were there 7 also. Right? 8 MS. LOPEZ: I was on the workgroup, and 9 Kim. 10 MS. TAYLOR: And Kim. Okay. 11 MS. WEAVER: Larry says he was, too. 12 MR. WHITTINGTON: I think I was on one 13 of them -- 14 MS. TAYLOR: Kim -- 15 MR. WHITTINGTON: -- one part of it. 16 MS. TAYLOR: Okay. We're going to look 17 back -- I will look back and see who was on the 18 workgroup, in the notes, and then we'll get with the 19 staff and hopefully have a meeting prior to the 20 presentation to the Commissioners, see if we can 21 change their minds on anything. 22 MS. WEAVER: I that a question. I have 23 a question. 24 MS. TAYLOR: Is that within our agenda 25 item here or plans for future meetings? 0154 1 MS. WEAVER: Well, it was the one -- 2 it's terms. Okay. 3 (Multiple people talking) 4 MR. SANDERSON: Terms? 5 MS. TAYLOR: Right. 6 MS. WEAVER: He asked who it was. So 7 we went back and looked. And my term is actually 8 listed a year before I started. 9 MR. WEEKLEY: Is it -- 10 MR. WHITTINGTON: Were you filling in 11 for a resignation? 12 MS. WEAVER: So did -- 13 MR. SANDERSON: What do you mean, a 14 year before you started? 15 MS. WEAVER: I actually started in 16 February of '06, and it says February of '05. 17 MR. SANDERSON: You filled an unexpired 18 term. 19 MS. WEAVER: Filled an unexpired term. 20 Okay. That's what I was asking. 21 MR. WEEKLEY: So there are three terms 22 that are coming up? There's Rosie's, mine -- 23 MS. WEAVER: So Rosie, Thomas and I 24 need to put in new applications if we want to stay on 25 the BAC? 0155 1 MR. SANDERSON: That is correct. 2 MS. WEAVER: Okay. Thank you. 3 MS. TAYLOR: Okay. Any other items for 4 future meetings? Any other comment on that? 5 MR. SANDERSON: And I apologize that I 6 had to leave for a brief period of time. 7 MS. TAYLOR: But we know that you will 8 read that transcript as soon as it's available. 9 When will that be available? 10 MR. SANDERSON: I will request that it 11 be expedited, at least that item number. 12 I'll get you the item number. 13 MS. TAYLOR: Eight. 14 AGENDA ITEM NO. 15 15 MS. TAYLOR: Okay. If there's no other 16 discussion, then we will adjourn this meeting. Thank 17 you. 18 (Meeting adjourned: 12:56 p.m.) 19 20 21 22 23 24 25 0156 1 C E R T I F I C A T E 2 STATE OF TEXAS ) 3 COUNTY OF TRAVIS ) 4 I, Aloma J. Kennedy, a Certified 5 Shorthand Reporter in and for the State of Texas, do 6 hereby certify that the above-mentioned matter 7 occurred as hereinbefore set out. 8 I FURTHER CERTIFY THAT the proceedings 9 of such were reported by me or under my supervision, 10 later reduced to typewritten form under my supervision 11 and control and that the foregoing pages are a full, 12 true and correct transcription of the original notes. 13 IN WITNESS WHEREOF, I have hereunto set 14 my hand and seal this 20th day of February 2008. 15 16 ________________________________ 17 Aloma J. Kennedy Certified Shorthand Reporter 18 CSR No. 494 - Expires 12/31/08 19 Firm Certification No. 276 Kennedy Reporting Service, Inc. 20 Cambridge Tower 1801 Lavaca Street, Suite 115 21 Austin, Texas 78701 512.474.2233 22 23 24 25