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 7                 BINGO ADVISORY COMMITTEE
 8                     PUBLIC HEARING
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10                     AUGUST 23, 2002
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18             BE IT REMEMBERED that the BINGO ADVISORY 
19   COMMITTEE held a Public Hearing on the 23rd day of
20   August, 2002, at 10:00 a.m., before Kimberlye A. 
21   Furr, RPR, CSR in and for the State of Texas,
22   reported by machine shorthand, at the offices of 
23   the Texas Lottery Commission, 611 East 6th Street, 
24   Auditorium, Austin, Texas, 78701, whereupon the
25   following proceedings were had:
0002
 1                       APPEARANCES
 2   
 3   CHAIR, BINGO ADVISORY COMMITTEE
 4           Ms. Virginia Brackett
 5   Director of Charitable Bingo:
 6             Mr. Billy Atkins
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0003
 1                  MS. BRACKETT:  The Bingo Advisory
 2   Committee meeting will come to order.
 3                  Any of you who want to speak, please
 4   fill out a witness form and put it up there in the
 5   box, and then when you do speak, please identify
 6   yourself for the benefit of the court reporter.
 7                  We're going to -- because of a
 8   request from various people who are making reports,
 9   we're going to change the agenda a little bit.
10   Item 10 will now be Item 3; 12 will be 4; 14 will
11   be 5, and 17 will be 6.  Billy has agreed to do all
12   of his reporting later in the morning.
13                  I would like for you to be aware
14   that I did make a report to the Texas Lottery
15   Commissioners' Meeting that was on -- it was the
16   report of the meeting -- well, it was the report of
17   our meeting on June 28th, and just told the
18   commissioners what it is that we were planning to
19   do for the year, that we felt like that we needed
20   8-liner fighter and that we will be staying aware
21   of new products and hearing from the public
22   regarding bingo.
23                  On the minutes, have all of you
24   received the minutes and had time -- and you've
25   read them?  Do you have any changes, any
0004
 1   corrections or changes?  No?
 2                  Do I hear a motion to approve the
 3   minutes as they were printed and mailed to us?
 4                  MS. TAYLOR:  I make that motion.
 5                  MR. WHITTINGHAM:  Second.
 6                  MS. BRACKETT:  Okay.  It's been
 7   approved and seconded that we approve the minutes
 8   that we received in the mail.
 9                  All those in favor?
10                  There's no opposition, so those are
11   admitted.
12                  All right.  So we'll now take what
13   was originally planned as Item No. 10.  And Suzanne
14   Taylor is in charge of that.
15                  MS. TAYLOR:  The staff has been very
16   nice in inserting some information in the booklet
17   on past bills that have come up before the
18   legislature.  I also have a couple of people here
19   to talk to us about that.
20                  What is important about Satellite,
21   or linked bingo, is the same thing that we decided
22   as a group last time, that we needed to move
23   continually towards what's in the future, what is
24   good for bingo, what is a moneymaker for bingo, and
25   this is definitely something that we need to start
0005
 1   considering and we need to look at and be aware of
 2   and knowledgeable about it so that, if somebody
 3   asks us our opinion -- which God hope they do --
 4   that we'll be able to give an informed -- an
 5   informed report to them on what we're doing and how
 6   the BAC feels about this item.
 7                  So because of that, I've asked
 8   Ronnie Baker to come to our meeting to tell us a
 9   little bit about this subject.
10                  MR. BAKER:  I normally don't need a
11   microphone, at least that's what my kids say.
12                  I'm Ronnie Baker; I'm sales manager
13   for Texas Bingo Supply, and a lot of you know me.
14   For those of you who don't know me, I apologize.
15                  About two years ago, the state
16   legislature looked at the possibility and discussed
17   the options regarding Satellite and Link Bingo.
18   Over the last several months, it's become very
19   clear to all the people in bingo, as well as to
20   G-Tech, that the lottery and bingo is off here in
21   Texas.
22                  Two years ago, Suzanne Taylor put
23   forth some ideas on a new type of pull tab to
24   generate a new revenue stream.  We're finally
25   seeing that come to fruition.  When I turn on my TV
0006
 1   set and I hear the problems that are down at the
 2   lottery, and G-Tech is scrambling to garner as many
 3   dollars as they can, and they talk about the
 4   implementation of certain types of electronic
 5   devices, and the TV station up in San Antonio even
 6   termed those "look-a-like 8-liners."
 7                  I immediately got concerned because
 8   I feel like unless bingo stays on the cutting edge
 9   of what's available, we're going to see our profits
10   go further down than they already are.  For us to
11   be competitive with the lottery, I have been
12   working on a couple of projects with a group that
13   can probably speak a little more knowledge
14   concerning Satellite and link bingo.
15                  And to explain that concept, I asked
16   Mr. George Lasko, who is head of the technical
17   support division for Bingo Magic to give y'all some
18   ideas on the implementation and what Link and
19   Satellite would encompass.  It took two years to
20   get the new tabs in; I would hope this is something
21   that we can move a little faster on.
22                  So I'd like to ask George Lasko to
23   come up.  And I think he has signed a witness form
24   there, if that's okay with the Chairperson?
25                  MR. LASKO:  Good morning.  I am
0007
 1   George Lasko.  We have been working on a couple of
 2   projects that very well may interest different
 3   parts of bingo.  I use the term satellite bingo.
 4   Right now, I think what everybody's idea of
 5   satellite bingo is what the Indian Reservations are
 6   doing when they play their mega games.  Certain
 7   times of the day, they go live satellite feed and
 8   they play a million dollar game; that's $10 for one
 9   phase for a million dollar prize; $5 for a $500,000
10   prize.
11                  They generate a lot of income off of
12   it.  Of course, it's a progressive game, starts at
13   a lower number so they can build up their anti.  So
14   they're on the big end; they're on the very
15   expensive end.  It's a very valuable asset and it
16   really has some strength.
17                  Right now, that's still done by
18   satellite, and it has certain downfalls.  The
19   encryption level is there, but not to the standards
20   of the new digital encryption level we can do
21   nowadays.  You're susceptible to thunder and
22   lightning storms.  If you have a heavy lightning
23   storm in your area, it's going to black out your
24   satellite, and it's going to take 15, 20 minutes to
25   stabilize and refresh, so it kind of slows things
0008
 1   up.
 2                  Right now with the Internet and what
 3   we call VPN, very private networking, fiberoptics,
 4   DSL -- I'm sure you're all familiar with that -- we
 5   have a technology that we are using and
 6   implementing in two different areas right now where
 7   you can send, not only the audio and the video like
 8   they are on the satellite, but we can also send
 9   data.  In other words, we have a host hall that
10   would be calling the bingo games, and we would send
11   the audio and the video from the caller and the
12   ball camera and the data board from that blower to
13   actually light the flash boards in all the other
14   halls.
15                  Right now, your Indian satellite was
16   supposed to do that, but it doesn't.  You sit in
17   the hall and you watch the caller in one of the
18   host halls, and he watches the video screen.  When
19   the ball comes on the camera, he just sticks any
20   ball in that number to light your flash boards.  So
21   we're talking about greater flexibility; the cost
22   is minuscule compared to what Satellite Bingo is.
23                  Satellite equipment has come down in
24   price, but still the minute rate to be up on a
25   satellite is what's expensive.  A hookup for
0009
 1   Satellite Bingo throughout the State of Texas, you
 2   probably have to just have a DSL hookup in each
 3   hall, plenty of bandwidth; the video and everything
 4   can be encrypted; it's very safe because you do
 5   have it going over in audio and video and data.
 6   And this could generate between different charities
 7   link up.  VFW could have a game on a Sunday, and it
 8   could be a $30,000 game; it doesn't have to be
 9   $100,000 or a $1 million game.  It generates more
10   excitement and carries more play.
11                  This would also give the lottery the
12   chance to really control pricing and prizes.  You
13   wouldn't necessarily have to increase all the
14   prizes across the board from the $2,500 session,
15   which everybody wants.  This satellite type of
16   thing could be a separate entity that they would
17   have to sign up with you or get a special license
18   to run a satellite with a cap on it of X amount of
19   dollars.  It wouldn't necessarily have to progress.
20   Any monies, profits, out of that could be generated
21   to the individual charities, the individual halls.
22   So this would give you more or less an out.  To be
23   able to improve something like that, whether you
24   want to -- I wouldn't call it Satellite Bingo
25   because it's a different realm.  We call it
0010
 1   networking or, you know, whatever you want to call
 2   it, but then you could set the guidelines and the
 3   pay lines, the profit lines, for that without
 4   having to really alter your bingo laws as it stands
 5   now, so it wouldn't be a complete regeneration of
 6   the way things were.  You could take it on as a new
 7   resource.  That's the bingo side of it, to generate
 8   a lot of revenue.
 9                  That technology also can generate a
10   lot of income for the individual halls.  Remote
11   training is a big thing that's coming up, and
12   everybody is doing it, where they can actually rent
13   out their hall for a couple hours a day and have
14   the resources as extra income.  And they could pay
15   their overhead for the building, their employees
16   that way, their security, alleviate some of the
17   burden of monies that way with this technology.
18                  This technology is also being used
19   for security, you know.  They could leave a camera
20   or two in the hall on their register at their front
21   door and have it showing on a secure web site, and
22   they could see in that hall all the time.  I mean,
23   this is great technology that's available to a lot
24   of people, and they're starting to use it very
25   heavily in business, and it's a cash-generating
0011
 1   income, and it is very secure because of the
 2   possibility of the digital and encryption.
 3                  So I wish you would look at it with
 4   an open mind because it's got a lot of good
 5   possibilities, and it can generate the fun, the
 6   interest, and the income for the charities.
 7                  Thank you.
 8                  MS. TAYLOR:  Can I ask you a
 9   question, George?
10                  MR. LASKO:  Sure.
11                  MS. TAYLOR:  What is the difference
12   between a Satellite Bingo and Linked Bingo?
13                  MR. LASKO:  Beauty is in the eyes of
14   the beholder.  Some of the link games, like
15   Megamania, where you're actually playing the same
16   game in several halls and it will tell you how many
17   cards in play and you're for a common pot.
18   Megamania not only has the bingo pot, if you bingo
19   in four numbers, you get the grand jackpot; it also
20   plays corners, and the grand jackpot is split among
21   all the winners.  The corner play is every time.
22   If you get two corners up, you get $11; if you get
23   three on the first roll, you get $775, and that's
24   not split at all.
25                  So the difference between a Linked
0012
 1   and a Satellite, Satellite usually is from location
 2   to location, meaning, one bingo hall to another
 3   bingo hall with players in the hall.  The Link
 4   generally is a machine that one person sits on in a
 5   gaming casino, and it's linked to the network, and
 6   you're playing against other individuals, not
 7   another hall.  So you have Linked or Satellite, and
 8   I don't think there's anything right now that's
 9   combining both.
10                  MS. TAYLOR:  What kind of cost would
11   they generate to the charities?
12                  MR. LASKO:  Well, it's kind of on
13   the same realm as what you do with your bonus
14   games.  The game would not cover the pack.
15   Depending on you prizes, you could get $1 to
16   anywhere to $5 a face, a single face, because you
17   want to keep the numbers down; you want to keep it
18   fair amongst the people; you want it as an extra
19   game, and it's got that extra insensitive.
20                  Just the newness of it.  It's just
21   like anybody that's ever gone to an Indian
22   Reservation for the first time, they always play
23   the mega because, wow, it's high tech.  The income
24   generated, you'd have to do a little bit of
25   planning; plan on the game is very important, maybe
0013
 1   like a total blackout and a minimum of 48 numbers,
 2   and then increase it weekly or something so you can
 3   generate that income to pay the -- pay the prize
 4   out.  You have to cover the prize; you don't get
 5   any bigger than you're willing to pay out.  So you
 6   would have to put the pencil to it.
 7                  But I could assimilate it to your
 8   bonus games, and the charities know how much they
 9   make off their bonus games.  And the money is
10   already there, so you wouldn't be necessarily
11   taking the satellite or the network game out of the
12   cash prize from the $2,500 from the session.  You
13   would have to allocate and make a rule to pay over
14   and above that as a separate license division to
15   hold your hand up, then you wouldn't have to alter
16   your laws and change it for everybody.  You could
17   have a camera as separate, but it could generate
18   quite a bit of income.
19                  I've seen charities with an extra
20   bonus game of $150 on a half pay, and they could
21   make $500, $600 on floor sales just for that $150.
22   I mean, that's common knowledge.  Up that, up the
23   prizes, and it could generate an awful lot of
24   money.
25                  MS. TAYLOR:  Are there any states
0014
 1   currently playing these games?
 2                  MR. LASKO:  Oh, sure.  The Indians
 3   are playing it.  Washington has just passed
 4   Networking Bingo.  We're working with some cruise
 5   lines that are very interested; they're networking
 6   their ships together in mega games.  We've been
 7   contacted by the Army to get business.  So there's
 8   a lot of interest in it, and you put a pencil to
 9   the numbers.
10                  If you can get a game and -- most
11   games like that, that are progressive games, they
12   kind of gauge by the starting number to get a good
13   couple of weeks running room, and this is what, you
14   know, should put your -- bank your money for the
15   big surprise, should it be hit.
16                  There is a book out with odds
17   published on what the odds are, so many numbers in
18   it, so you would have to cross-reference that.  And
19   like I said, I wouldn't necessarily go for $1
20   million game.  But you talk to 85 percent of the
21   bingo players, if they can go into any Texas
22   Lottery Commission licensed bingo hall and have a
23   chance at a $25,000 pot, I think they'd pay $5 for
24   the face.  I mean, it's just common sense.
25                  But, yeah, the Indian Reservations
0015
 1   are very, very big on this; they make a lot of
 2   money, and I believe that you can get a published
 3   record of how many times it's been paid out.
 4   There's the Seminoles over in Florida that are
 5   doing it.  The ones up at -- Choctaw Indians are
 6   doing it; you can probably get some information
 7   from them.  And several up in Washington are just
 8   setting up, and I understand the Washington Lottery
 9   Commission has done some things with -- you know,
10   in the past, so you might talk to them about that.
11                  MR. WHITTINGHAM:  So, really, first,
12   we need to get the Progressive Bingo thing.  That's
13   what you said?
14                  MR. LASKO:  Well, yeah, because --
15   well, here again, if you have a block on the
16   progressive for the whole game, this could be
17   handled as a separate entity.  You're talking about
18   taking advantage of this new technology quickly,
19   not waiting two years.  You could pass the
20   networking -- I wouldn't call it satellite -- but
21   pass a networking bill that would include, just for
22   that networking, the progressive, the prize
23   lifting, and everything else and still handle your
24   progressive, or you could pass the progressive and
25   put it on top, but somehow -- to take advantage of
0016
 1   this networking, you're going to have to increase
 2   your prize limit and it's going to have to be made
 3   progressive.  That's the way you're going to bank
 4   your prize for the first couple of weeks.  That's
 5   the only way to do it unless the Lottery wants to
 6   write out a check and cover it.
 7                  MR. WHITTINGHAM:  Well, like I said,
 8   I heard you talking like, basically, the half bingo
 9   halls will benefit more from this, more so than a
10   full bingo hall?
11                  MR. LASKO:  Exactly.
12                  MR. WHITTINGHAM:  And we're talking
13   about the minimum/maximum.  Like, we might have a
14   $2500 payoff per session, but we have a limitation
15   of what would go up to $4,000 any given day.  I
16   think it would really help all the way around.
17                  MR. LASKO:  Yeah.  But you got to be
18   careful when you pass that because that's going to
19   cap your networking.  In other words, you need to
20   look at this and get the figures and look
21   long-range so that you justify enacting it to where
22   you're going to have a couple of years running, and
23   we don't have to sit back here six months from now
24   and say, wow, this thing took off and we've got to
25   look at it.  But, yeah, I'd look at the overall
0017
 1   picture.  But it does give you the back door to
 2   implement a lot of these things right away within
 3   this program so that you can do what you have to.
 4                  I mean, because laws are not changed
 5   over night; you know, we know that.  But as a
 6   moneymaker, yeah, even the networking games, you
 7   can still sell a half pay to the networking games,
 8   no problem.
 9                  MR. WHITTINGHAM:  Why do you think
10   people go to the Indian Reservation more?  Because
11   of the bigger prizes?
12                  MR. LASKO:  Oh, bigger prizes.
13   Definitely bigger prizes.
14                  We work all over the country.  The
15   other thing you have to understand, down in the
16   South, our Bingo does it a little bit differently,
17   say, use a state as Washington -- because, like I
18   say, you guys work with them -- you get up in the
19   cold North and the outskirts where it's very
20   sparsely populated areas, bingo is a social event;
21   that's what there is to do that day.  And we go
22   into Washington, and they start playing at 9:00
23   o'clock in the morning and they quit at midnight.
24   Their laws are different there, where charities can
25   only play one day a week, but they can play as much
0018
 1   bingo, as many games, and give away as much money
 2   as they want, but only one day a week.
 3                  Montana, same way; it's a social
 4   event.  Down South in the major cities, most of our
 5   halls play five $500 games; they want to hit it
 6   now, because there's something else to do in the
 7   big city.  It's fun; they like gaming; the
 8   charities need it to make money.
 9                  I mean, that's how I got involved
10   with bingo.  I sponsored bingo for the Jazz
11   Festival, and it opened up an awareness that I
12   never new existed about bingo.  So you have to
13   handle it differently, and the impact, yes, it's
14   going to give a few select winners a chance at a
15   little bit bigger pot, but across the board,
16   networking is going to put a lot more money into
17   the charities' pockets.  Just, like I say, look at
18   how much more they make on a half pay and the bonus
19   games.
20                  MS. BRACKETT:  Mr. Lasko, let me
21   interrupt you here a minute.  This, of course,
22   would be -- it would have to be a law change and it
23   would have to be done by the legislature.
24                  And, Billy, do you want to comment
25   on where we -- what would have to take place from
0019
 1   here and about the bill that was -- that did not --
 2   it was vetoed last session?
 3                  MR. ATKINS:  The satellite game
 4   never passed.
 5                  MR. TAWIL:  Progressive bingo --
 6                  MS. BRACKETT:  Right.  This is
 7   different.
 8                  MR. TAWIL:  The governor vetoed the
 9   bill.
10                  MR. ATKINS:  And I did -- I
11   identified the progressive bingo bill as a separate
12   discussion item, and any comments should be held
13   for that -- held for that item.
14                  If I did -- I would -- I would
15   recommend -- it's catching him off guard, so it
16   might not be fair, but Joe Garcia with Game Tech is
17   in the audience, and I think that they had some
18   knowledge of the satellite linked bingo game and
19   may be able to provide some information.  Again,
20   I'm catching him off guard, and I apologize for
21   that.
22                  But if I could, George, real
23   quickly -- I know Suzanne mentioned it -- but could
24   you talk a little more about the cost to and the
25   organization in terms of equipment costs?
0020
 1                  MR. LASKO:  Okay.  The equipment
 2   cost is minor when you do it this way.  And the
 3   possibility --
 4                  MS. BRACKETT:  Excuse me.  The
 5   equipment cost is what?  Minor, is that what you
 6   said?
 7                  MR. LASKO:  It's minor compared to
 8   the satellite.  We're talking about having a
 9   computer with a DSL hookup.
10                  MS. TAYLOR:  So what is that; what
11   is minor to you?
12                  MR. LASKO:  Minor, in my realm,
13   would be probably approach it just like the
14   electronics companies are, that no cost to them,
15   other than the telephone line or the DSL line, and
16   give them a weekly licensing fee; otherwise, it
17   would be -- for the manufacturers or the
18   distributors, it could be an accounting nightmare,
19   you know, in order to count how many they sold, but
20   just sell them the technology, our licensing fee,
21   to where they wouldn't have a cost.
22                  MS. TAYLOR:  So there would be a
23   net, not an expense, to the charities?
24                  MR. LASKO:  Exactly.
25                  MS. TAYLOR:  And they would receive
0021
 1   a net off their individual hall?
 2                  MR. LASKO:  Exactly.
 3                  MS. TAYLOR:  What they would sell in
 4   their hall, they would get a percentage of that
 5   sell?
 6                  MR. LASKO:  Exactly.  And because of
 7   the technology being in place, it also opens up
 8   another -- we have a way of actually doing
 9   advertising through the same type of system to
10   where the hall could actually create an income.
11                  MS. TAYLOR:  So like prior to the
12   session beginning, instead of having the TVs on
13   nothing, they would put the TV on, and Coke would
14   pay a fee to advertise Coca-Cola or whatever?
15                  MR. LASKO:  Your halls open at 5:30
16   at night; the game starts at 7:00; for a couple of
17   hours, you can have advertising mask your menu
18   board, a little two-minute thing on the charities
19   and where their money is going, who it's
20   supporting.  The Lottery Commission could put
21   present rules and regulations up there.  You can
22   have your camera on.
23                  I mean, you're talking about
24   establishing a private TV network as reality.  And
25   you're not talking about a very expensive -- the
0022
 1   expenses have been done in our research and
 2   everything, now it's just duplicating the
 3   equipment.  Several companies are involved.  Cisco
 4   has spent how many millions of dollars, so it's not
 5   something that they tell us is a great idea, and
 6   then they pull it.  This has been researched, and
 7   it's being using in banking and other industries.
 8   But you have to narrow it down to a service through
 9   the charities rather than an overhead.
10                  And it's a little premature; I may
11   be speaking out of turn, but what I can foresee is
12   maybe signing a contract at the beginning of the
13   year to do this at no cost to them, but the first
14   six months, allowing the company who puts it in to
15   recoup their monies for all the networking and
16   software, so that if there's anything generated at
17   the end of that contract, then the generated income
18   would go also to the hall, so it's a win-win
19   situation.
20                  The technology was very expensive,
21   but the technology is in place, so a lot of places
22   already have this technology, and it's a matter of
23   hooking up the DSL, you know, like people do in
24   their home.  However, the encryption -- because
25   it's all digital now, and high-end digital, the
0023
 1   encryption is very valid so that somebody couldn't
 2   tune in from their home.  This is not a means of
 3   being able to sit at home in your underwear and
 4   play bingo on the Internet in your home.  That's
 5   where the two don't mix.  That's why they just --
 6   the difference between satellite and linking.
 7                  This is not a linked game for
 8   individuals; we're not trying to link anything to
 9   the home.  I mean, it's very valid; it's very
10   secure.  I mean, any of your banking you do, your
11   information from your tellers and everything else,
12   that's shot through fiberoptics and wideband, and
13   it's very secure.  I mean, this is what we rely on.
14                  MR. TAWIL:  The problem is not the
15   networking.  The problem I think that needs to be
16   addressed is twofold.  One, the ability to play
17   bingo off-site because of these multi-hall linking.
18   That's an issue.  The other one is the governor
19   would not allow a progressive game that exceeded
20   the present links after the legislature enacted and
21   vetoed the bill.  I don't see any way you can
22   really aggregate the prize any greater than what
23   currently exists.
24                  MR. LASKO:  That's going to have to
25   be changed one way or the other.
0024
 1                  MR. TAWIL:  The governor is against
 2   it.
 3                  MS. TAYLOR:  But what if we can't --
 4   we know -- we know -- we can't just say the
 5   governor's against it, so we're not going to
 6   discuss it anymore.
 7                  MR. TAWIL:  It's not going to -- it
 8   doesn't matter what you pass.  I'm saying, I mean,
 9   the governor's position is against it.
10                  But the two important elements here
11   are not the transport mechanism.  If you spend
12   about 80 percent of your time talking about the
13   transport itself, that really doesn't matter.
14                  Don't you agree, from a technical
15   standpoint?
16                  MR. LASKO:  No.  It's very
17   important.
18                  MR. TAWIL:  Well, it's on a
19   curve-side basis.
20                  MR. LASKO:  It's just a duplication,
21   that's what --
22                  MR. TAWIL:  And the other issues
23   that I recall when this came up before at the
24   legislature, many manufacturers and distributors
25   were against the idea of having one license because
0025
 1   it allows that particular company to leverage the
 2   other distributors from being able to put their
 3   products in the halls.  So you've got these
 4   convoluted issues.
 5                  MR. LASKO:  Well, it doesn't.
 6   You're misinformed there.  Because the game will be
 7   played on paper or anybody's electronic -- they
 8   would all share in their revenue and income as a
 9   sale.
10                  MR. TAWIL:  So, really, can someone
11   participate in more than one hall under the present
12   laws and rules?  Can you play a game in two
13   different halls at the same time?
14                  MR. ATKINS:  I know the constitution
15   references a location.
16                  MR. LASKO:  Okay.  But it's not two;
17   it's one game being played.
18                  MR. TAWIL:  No.  You're not
19   listening to what I'm hearing, George -- what I'm
20   saying.  More than one location requires approval
21   of the legislature.
22                  MR. LASKO:  Right.
23                  MR. TAWIL:  So multi-hall is going
24   to be required there.  I understand what you're
25   talking about for security in just the hall.  I
0026
 1   think --
 2                  MR. LASKO:  I think that's what I
 3   was asked, what the expense was.  This is why I
 4   made the remark, you might want to handle it since
 5   it's all instituted from legislation because it
 6   encompasses things that you're up against, and they
 7   don't want to change for regular bingo, but this
 8   would be a separate issue, and they have to be
 9   enlightened on what it would do for the charities.
10   It will do probably twice as much as the computers
11   did for the charities as far as making more income.
12                  MR. WHITTINGHAM:  So basically,
13   you're talking -- you ain't talking about the past
14   now, you're talking about new innovation?
15                  MR. LASKO:  Oh, yeah, totally new,
16   and without the pitfalls of satellite that we go
17   through.  I mean, in Oklahoma, in certain times of
18   year, how many times a month are they down because
19   of thunder and lightning storms?  They're wiped
20   out.
21                  MR. TAWIL:  It doesn't matter.  I
22   think what we're dealing with here -- with regard
23   to technology neutral in the state, they ought to
24   be passing the laws that require multi-hall
25   locations, number one, and then the other one is to
0027
 1   aggregate the prizes exceeding the 2500.
 2                  MS. TAYLOR:  Absolutely.
 3                  MR. TAWIL:  Once you -- once you --
 4                  MR. LASKO:  That's the point I made
 5   when I started.
 6                  MR. TAWIL:  It ought to be
 7   technology neutral.  If a customer wants to use
 8   satellite or use DSL or use private lines, it
 9   doesn't matter.
10                  MR. LASKO:  Well, you just have to
11   set up a criteria for your --
12                  MR. TAWIL:  We shouldn't have to set
13   up a criteria for transport.  It should all be
14   based on doing it anyway he wants to.
15                  MR. LASKO:  You can't do that.
16   You've got to set up a criteria, just like the
17   banks do, with certain protocol, and you've got to
18   adhere to.  If you let every Tom, Dick and Harry do
19   their own, then we will have people at home sitting
20   playing in their underwear.  You've got to --
21                  MR. TAWIL:  I'm saying halls only.
22   Playing in the halls only; you can only play if
23   you're in a hall.
24                  MR. LASKO:  That's why you have to
25   be able to control it and make the laws and control
0028
 1   them; that's what I'm saying.  If you get a good
 2   hacker, he'll be sitting playing at home and get
 3   into your bingo hall, and you don't want that.
 4                  MR. TAWIL:  You missed the point.
 5                  MS. TAYLOR:  My point of asking
 6   him -- we know that this is a legislative change.
 7   This is not something we can currently do, but it
 8   is something that's going to be the future and
 9   could very well be the difference between our halls
10   being here five years from now and not being here.
11   We need to discuss future things, not just things
12   that we can do today, but things that we would like
13   to be able to do tomorrow.
14                  MR. WHITTINGHAM:  Well, just like
15   on -- even on cold days, bad weather days, where
16   people can't get out, I would love for them to play
17   at home instead of closing the hall down.  I mean,
18   that would be great.
19                  MR. LASKO:  Well, then you're
20   talking about networking.  It's almost a different
21   animal.  You would have to -- you would have to
22   handle those separately.
23                  MR. WHITTINGHAM:  Well, you know,
24   bad days, good days, that's what I'm talking about.
25                  MR. LASKO:  Because you would have
0029
 1   to -- under the current laws, you would have to
 2   have the individual, Sally Johnson, at home having
 3   to get a Lottery Commission license to be able to
 4   participate in that game.
 5                  See.  This is where you would have
 6   to set the laws and control this; it's not
 7   something you're just going to turn lose to
 8   technology, because it can be done ten different
 9   ways, and nine ways, you can cheat, and the tenth
10   way is going to be secure, so you've really got to
11   look at this seriously and not just throw it out
12   there.
13                  But it does -- it definitely takes a
14   change in the laws because you don't have the
15   ceiling cap on prizes right now to do that.  You
16   only have the laws still for one game; it's not
17   multiple games, so I wouldn't write it up as that.
18                  MS. BRACKETT:  Uh-huh.  Billy, did
19   you have a comment?
20                  MR. ATKINS:  I did.
21                  George, could you talk about your
22   experience with the accessibility of the game in
23   terms of, I guess, what I'll call full size?  I
24   mean, I can certainly see -- let's say if you take
25   a big hall like Larry's in the big city, I can
0030
 1   certainly see them having access to it, but what
 2   about, say, a small hall in Andrews, Texas?
 3                  MR. LASKO:  Yeah.  I mean, there's
 4   no problems with numbers.  You would have to sit
 5   down and figure out percentage-wise how they share
 6   in the profit.  You would have to prorate that to
 7   them, but you could take it -- if they have a legal
 8   bingo license and they've got 30 players, they can
 9   participate those 30 players because it's a DSL
10   hookup, and we would supply the equipment to
11   whoever got the contract to do it.  And, like I
12   say, it's not labor intensive.
13                  Satellite, in the last quotes I got,
14   it was -- if it was under $50,000 worth of
15   equipment for each hall, that's -- and if that was
16   affordable to a commercial hall, then it's the
17   satellite time.  The satellite time now we're
18   talking about is DSL hookup, $39 a month.
19                  MR. TAWIL:  They're doing Internet
20   over the satellite now.  You can call Direct TV and
21   get a DSL hookup with Internet for $39 a month,
22   too, so that could be the same thing for the hall.
23                  MR. LASKO:  It could be the same
24   thing, yeah.  It doesn't matter what vehicle, you
25   know.  We're working with --
0031
 1                  MR. TAWIL:  The equipment is under
 2   $5,000.
 3                  MR. LASKO:  What?
 4                  MR. TAWIL:  The equipment is under
 5   $5,000.
 6                  MR. LASKO:  Oh, yeah.  Yeah.
 7                  MS. BRACKETT:  Are there any other
 8   questions of Mr. Lasko?
 9                  Thank you, George.
10                  Do we have anyone else who would
11   like to comment on satellite bingo?
12                  MR. BRESNEN:  I'm Steve Bresnen
13   representing The Bingo Interest Group in Dallas.
14   Let me give you a little history.  We talked about
15   this some during the last interim, I think.
16                  Saleem, I really appreciate you
17   raising some of the technical issues, because all
18   that's way above my head.  I do have a DSL line in
19   my house, and it got me by surprise that you can
20   run an entire bingo hall on a single DSL line.
21   Doing this is going to draw so much play, but
22   that's a technical issue, and I don't know much
23   about that.
24                  So I've decided that I should best
25   characterize myself on this issue as a Reagan
0032
 1   republican who's subject to sex appeal.  You know,
 2   it's a really sexy idea.  We're going to draw a lot
 3   of people into the halls, and it's not going to
 4   cost you any money, and we'll just do it outside
 5   the current regime, and everything will be great;
 6   we'll make a whole lot of money, and all the
 7   charities will be just rolling in money and
 8   everything will be great.  That's the sex appeal
 9   part.
10                  The Reagan republican part of it is
11   trust, but verify.  And I've seen a lot of people
12   come around talking about this issue over the
13   years, but I've seen very few handouts.  I've seen
14   very few breakdowns on the money.  I hear people
15   tell you, you make a lot of money, but I don't hear
16   them show you the details in writing that are about
17   how the money moves.  Last time, they said, well,
18   we'll just hook everybody's accounts up
19   electronically and move the money out.  So we're
20   going to have a lottery controlled, lottery prize
21   set, separate regime, run from a central location,
22   bank accounts electronically connected, and the
23   money will move around, but you'll get a lot of
24   money, and we'll leave it in your account, and it
25   won't cost you anything.  I'm highly skeptical.
0033
 1                  The -- the analogy to the
 2   card-binder's experience would hardly be very
 3   comforting to most of the people that I represent
 4   and the experience that I'm aware of during the
 5   implementation of the card binders.  A lot of
 6   people made a lot of money on card binders;
 7   charities have made some money on card binders, but
 8   we've also seen what's happened to the price of the
 9   card binders over the years as the card-binder wars
10   ensued.  Now, some of y'all have firsthand
11   knowledge about the card binder wars, and I won't
12   go into it in detail, but I don't know that anybody
13   wants to relive that regime.
14                  The potential for a monopoly?  We're
15   already having a back and forth about what
16   technology it has to be and whether you have to
17   have a single criteria for it, and so it would seem
18   to me like an early sparring for who gets the
19   advantage on what technology is deployed.  Where do
20   the charities come out on that, and where have they
21   in the past?
22                  Personally, you know, I'm a
23   legislative guy.  I don't think you're going to be
24   having any $30,000 prize limit set by the Texas
25   Legislature probably before I retire, but that's a
0034
 1   progressive state, you know; we might -- we might
 2   get there, but that seems completely unrealistic to
 3   me.
 4                  The potential for centralization?  I
 5   think I credit Mr. Lasko, whom I don't know, for
 6   being very upfront in the description of the,
 7   quote, best way to do this.  But the centralization
 8   of a big lottery game -- I mean, a big -- excuse
 9   me -- a big centralized satellite game or linked
10   game under the direct control of the Lottery
11   Commission does little to comfort me.
12                  In short, I would say that it's kind
13   of pie in the sky.  We have schedules here; we
14   can't run -- you don't get to open your bingo hall
15   and start at 9:00 in the morning and run until
16   midnight, so how do you schedule all of that?  I
17   think the big/small -- big-hall/small-hall issue is
18   a real important one, and I appreciate you raising
19   that, Billy.
20                  You know, I represent -- one person
21   in our group has one hall with three charities, a
22   relatively small hall; some of them have a bunch of
23   big halls, and my guess is, as they sit down to
24   talk about this, those big-hall, small-hall issues
25   will be -- will be paramount.  Because we've always
0035
 1   tried to seek a balance, and you've never heard me
 2   come down here or go to the legislature and
 3   advocate for anything that would be to the
 4   disadvantage of the small halls or the big halls
 5   over the small halls.
 6                  So, the bottom line is, I think it
 7   sounds great.  I do think we need to be looking at
 8   new issues and new things; every industry needs to
 9   progress, but there are so many things related to
10   this issue and so many questions that need to be
11   answered in a trust, but verify mode that I'll be
12   satisfied with just the sex appeal part of it,
13   because I don't think the rest of it's going to be
14   answered for a very long time.
15                  Thanks.
16                  MR. MICCIO:  I'm Fred Miccio with
17   the American Legion.  I'd like to make a few
18   comments on that.
19                  Number one, we're probably talking
20   about statewide setup on these things.  And if
21   we're talking statewide, we're going to be playing
22   with 80 numbers.  Right now, we know, in our bingo
23   halls, sitting around with 150, 200 people, we get
24   multiple wins, sometimes as high as 20, 25 winners
25   in one game.  This prize money that we're talking
0036
 1   about, if we're going to statewide with all the
 2   halls in there, that brings new winners down.  We'd
 3   would be paying out less money than what we're
 4   paying in our halls right now.
 5                  That's the comment I got on that.
 6                  MS. BRACKETT:  Thank you.
 7                  MR. GARCIA:  Good morning.  My name
 8   is Joe Garcia, and I represent a manufacturer, Game
 9   Tech, and also a distributor named Trend.  I think
10   a comment was made regarding satellite bingo and
11   legislation.  Game Tech and Trend, in 1999, did
12   push satellite legislation.  I think you got a
13   hearing in committee, and I think some very valid
14   issues were brought up.  And I think a lot of it
15   has to do with control and integrity of the game,
16   and I think legislators realize that it is possible
17   to have one centralized system that runs a
18   satellite game where you have all halls hooked up
19   into it.  I think their concerns obviously are with
20   the integrity of the game and the money, following
21   the money trail.
22                  And I think there was several
23   solutions that were presented, but never really
24   pushed forward on the legislative front.  And I
25   think one of the big questions was put, we could
0037
 1   run a satellite game just like we run a lottery
 2   game.  You know, how many sales do you have in
 3   lottery a year?  Two million?  A billion?  I mean,
 4   so think about it; the technology is there; the
 5   control features can be implemented, and certainly
 6   I think it could be sold to the legislature.  I'm
 7   an optimist.  I always think that anything is
 8   possible with the legislature, given the right
 9   arguments and the right effort put forward.  And I
10   certainly think that satellites are something that
11   we can look at now.
12                  Now, in terms of some comments
13   regarding card binders, I think you can see that
14   card binders have been great for bingo.  If you
15   look at the numbers on card binders, sales have
16   gone up as opposed to other sales, and I think the
17   prices have become extremely reasonable from when
18   we started at 30 percent, and now, you know,
19   there's various pricing options.
20                  And there is a competitive market,
21   and the market is setting the price, so I think
22   card binders have been great.  I don't -- I don't
23   think it's been a fiasco, and I think that it is
24   attracting new players, or else where would -- we
25   wouldn't see the demand you have for it.  I think
0038
 1   we're just -- today's younger players are more
 2   technology driven, and I think you have to offer
 3   that if you want to be competitive with the other
 4   games that are out there.
 5                  And I -- like I said, I'm an
 6   optimist, and I think the legislature -- you know,
 7   you have to sell and make the right argument.  But
 8   I think satellite is something that should be
 9   discussed at the legislature, and hopefully it will
10   be.
11                  MR. TAWIL:  Can I ask you a
12   question, Joe?  I agree with your philosophy.  The
13   only thing that I recall during the '99 legislature
14   session was when some of the vendors -- because
15   what Trend and Game Tech proposed was a single
16   licensee, and that created a lot of nervousness
17   amongst the other suppliers because it would allow
18   them to merge with their distribution network
19   against the other distributors who had products
20   already in the halls.  I mean, that was the main
21   issue that created the competition and opposition
22   of it, and it got away from the principles of what
23   you're talking about.
24                  MR. GARCIA:  Well, I think when we
25   started out, we certainly didn't know, obviously,
0039
 1   what it would look like.  But, obviously, I think
 2   the legislature thinks that if we're going to have
 3   a satellite system, you're going to have assume the
 4   provider, and that provider would probably have to
 5   come and work with the Charitable Bingo Division to
 6   get an RFP out, and they choose somebody and they
 7   run it.
 8                  MR. TAWIL:  It's a free market.  If
 9   you want to aggregate five halls --
10                  MR. GARCIA:  I'm just -- I'm just
11   telling you what the legislative arguments for
12   controls were.  If -- I think -- I think if a
13   satellite bingo system is going to be successful,
14   it's going to have to be one that is centralized
15   with the bingo division having to select a vendor
16   that does it for the whole state.
17                  MR. ATKINS:  Wasn't there at least
18   one or more legislators who thought that the idea
19   of a linked or satellite game would be something
20   that could be used to actually attract or build
21   interest in bingo?  Didn't someone, like, suggest
22   that in one mega drawing, or one mega game, once a
23   year?
24                  MR. GARCIA:  Representative
25   Haggerty, who's been -- I think is pretty
0040
 1   knowledgeable on bingo, based on the fact that he
 2   ran bingo for one of his charities back in El Paso
 3   and is very familiar with a lot of the inner
 4   workings of bingo.  I mean, he's the one that
 5   suggested that we needed to, you know, put controls
 6   on it that he could feel comfortable with.
 7                  And in his version, he felt it was a
 8   good idea because he did think that a bigger prize
 9   won statewide would attract, you know, charities
10   from all over.  Not just your mega halls, but your
11   smaller size halls would at least play their bingo
12   that one night when you had the satellite game
13   going.
14                  So there's -- you know, he had some
15   very strong ideas about it, and I think that, you
16   know, he's one of the more diligent guys on
17   controls that you see up there.
18                  MR. MOORE:  Virginia, I got a
19   question for George.
20                  MS. BRACKETT:  Mr. Garcia, will you
21   please fill out a witness form?
22                  MR. GARCIA:  Yeah.
23                  MR. MOORE:  Thank you, George.
24   Danny Moore.
25                  I'm just wondering if there's a
0041
 1   current model that maybe the demographics are the
 2   same as Texas, where you have the larger and
 3   smaller halls?  You mentioned tribal games, which
 4   is not really what we have here.  Is there anywhere
 5   in the States that has some similar setup that's
 6   doing this?
 7                  MR. LASKO:  Washington is setting it
 8   up right now, because I believe they passed.  So
 9   that would probably be the most current, and you
10   would want probably the most current.  The way that
11   accounting has gotten so creative, you would want
12   the most current numbers you can get, and I think
13   that's where you would look.
14                  MR. MOORE:  Okay.  Because I think
15   that's what Steve is getting at, so we got
16   something to kind of look at.  The questions he
17   asked are valid, and I just think if we had a model
18   to look at, it would be helpful in the future.
19                  MR. LASKO:  One question for Billy.
20   The Lotto machines that we have that prints out the
21   Lotto tickets, is that under contract just to one
22   provider?
23                  MR. ATKINS:  Yes.
24                  MR. LASKO:  That's essentially what
25   you would have to do to really keep it safe and
0042
 1   honest.  And that's the only point we're making.
 2   We're not trying to make a competitive thing out of
 3   it.  Because all the manufacturers -- the deal is,
 4   that no matter whose card-binding service it is or
 5   whose verifier or anything, you were emanating the
 6   game over a microphone and a camera and just
 7   sending that data to all halls so they're sharing
 8   in the one game, and that's what would keep it fair
 9   to everybody because it could be paper and
10   machines, computers, whatever, and they would still
11   have to pay the going rate.
12                  MR. MOORE:  Thank you.
13                  MS. BRACKETT:  Are there any other
14   comments?
15                  MR. GRIFFITH:  My name is Buddy
16   Griffith, and I represent K & B Sales Good Time
17   Bingo in Dallas, Texas, a distributor.  And we
18   would like to, you know, profess that we are for
19   any type of satellite and link gaming for the
20   charities in Texas.  With dwindling profits at the
21   charity level, I think that we have to look at any
22   technology that's going to give them a boost to
23   stay with the current types of games that are being
24   played right now nationwide.  You're losing
25   customers to other states right now because of
0043
 1   linked bingo and satellite bingo.
 2                  I don't know if anybody else didn't
 3   quite understand the differences.  As I understand
 4   it, satellite would be played over a satellite and
 5   yes, you do look up at a big screen and see someone
 6   calling and you play it on paper inside the hall
 7   against all these other people that are hooked up
 8   with the satellite system.
 9                  Linked bingo, being a bit different,
10   is played on a video screen and with multiple video
11   screens in one location to where you would be
12   playing against actual other people around the
13   state, and you could take this linked gaming and
14   put it in, not only the larger halls, but into some
15   of the smaller halls, too, to give them the same
16   advantages that the large halls are getting, and,
17   yes, this system would be provided by a
18   manufacturer to the charities.
19                  And we think that this type of
20   system, the linked gaming system, has more relevant
21   possibilities in Texas with the way we operate our
22   bingo under the certain -- the way we operate it
23   now under the hours of operation, satellite games
24   would present a few more problems.  But we are for
25   both because it will give the charities the added
0044
 1   advantage of current technology to make money.  And
 2   all the charities want to do is compete, and that's
 3   been their deal all along.
 4                  So to make my comment short, yes, we
 5   are for it.  There are ways to control it.  There
 6   are ways for the lottery to control it.  It's a
 7   proven art form, so to speak, in other areas.
 8                  So with that in mind, hopefully the
 9   BAC will make a recommendation that we do get
10   satellite games and/or linked games for the
11   charities in Texas to help their bottom line.
12   Thank you.
13                  MR. WHITTINGHAM:  Let me ask you a
14   question, Buddy.
15                  Would it be on a specific time; this
16   game would be played like evening in halls only, or
17   would it be played one time a week, or one time a
18   month, or what?
19                  MR. GRIFFITH:  The way -- the way
20   I've seen satellite games -- currently, satellite
21   games would play at one specific time.
22                  MR. WHITTINGHAM:  Okay.
23                  MR. GRIFFITH:  And, of course,
24   satellite time -- and George brought that up -- is
25   kind of expensive.  The advantage that I see
0045
 1   personally -- and this is me personally -- to link
 2   is that it could be played under -- right now under
 3   the four-hour rule that we have for our charities
 4   now, and they would be playing against other
 5   charities.  They would be playing against other
 6   people inside the state at other halls.  One game
 7   being called from a central location, these people
 8   are playing it on a terminal that they're sitting
 9   in front of that they paid for, and they're playing
10   against other people in the state.
11                  Satellite, you could probably do the
12   same thing; I've never really looked at that.  But,
13   in my opinion, it's a little bit more expensive
14   proposition.  The current technology on link bingo
15   is that we could link up inside Texas very easily
16   and play against -- the American Legions could be
17   playing against the large halls on any given night.
18                  MR. WHITTINGHAM:  Okay.  Back to the
19   course.  The progressive part comes first.  We've
20   got to get that approved first?
21                  MR. GRIFFITH:  Link bingo is not
22   necessarily progressive bingo.  Link bingo --
23                  MR. WHITTINGHAM:  Still we made
24   money.  I mean, we got a cap on our prize giveaway.
25                  MR. GRIFFITH:  Cash to be playing
0046
 1   outside the $2500 --
 2                  MR. WHITTINGHAM:  Yeah, that's --
 3                  MR. GRIFFITH:  It has to be a
 4   separate game.  Just like our progressive game in
 5   the legislature two years ago was going to be
 6   outside the 2500.  This has to fall outside the
 7   2500; otherwise, there's not a manufacturer in the
 8   world going to touch it, I don't think.
 9                  MR. TAWIL:  Buddy, don't you agree
10   we've got to get -- the two issues are, getting the
11   legislature to approve being able to play with two
12   or more halls first?
13                  MR. GRIFFITH:  All of that would
14   have to be legislated.
15                  MR. TAWIL:  That's right.  But, I
16   mean, it's not -- it's not that critical to do
17   link, relatively speaking, because an enterprise
18   like K & B could link just five halls if they
19   wanted to, if it was in place, and then have --
20   like you're saying, maybe just the Legionnaires --
21   the Legion could play.
22                  So the two issues are the ability to
23   link and then the prize.  But what you're saying,
24   you don't even care what the prize is as long as
25   you aggregate prizes and be linked, they would be
0047
 1   subject to the increased revenue.
 2                  MR. GRIFFITH:  I think for any kind
 3   of accounting purposes, the link gaming would be --
 4   would have to be outside the 2500, which would have
 5   to be legislated.  And also, too, any time you link
 6   two halls together, yes, it's got to be legislated.
 7   I mean, that's -- under current rules, you couldn't
 8   do it.
 9                  MR. TAWIL:  So if you're going to
10   pass that on the legislation, why not just pass
11   progressive bingo as well at the same time?
12                  MR. GRIFFITH:  Like Billy said,
13   that's another item on the agenda.  And I think
14   that, yes, we're for that, too.
15                  MR. PAVLOVSKY:  I have a question.
16                  MR. GRIFFITH:  Yes, sir.
17                  MR. PAVLOVSKY:  Earlier, you made
18   the comment about that this -- that this hookup
19   could be done to the larger halls and some of the
20   small halls?
21                  MR. GRIFFITH:  Some that are
22   interested.  I wasn't trying to exclude anyone from
23   that.  The smaller halls have three days a week, 12
24   hours with -- you know, 12 hours that they can play
25   if they have one license.  And if the -- if there
0048
 1   was enough participation in the state, I think the
 2   price of that could come to a point to where those
 3   particular locations, such as American Legions,
 4   Elks, Moose, whoever, could participate in this on
 5   the nights that they have bingo, yes.
 6                  MR. PAVLOVSKY:  Even one night a
 7   week?
 8                  MR. GRIFFITH:  I'm not sure.  I
 9   can't specifically say that that would be the case,
10   but hopefully, the pricing would be there for them
11   because, quite frankly, those are the guys that
12   brought us to where we're at today as a distributor
13   anyway, and hopefully we wouldn't leave them out.
14                  MR. PAVLOVSKY:  I hope you never
15   forget where you come from.
16                  MR. GRIFFITH:  Absolutely not.
17                  MR. WHITTINGHAM:  On Friday and
18   Saturday, I'm sure everybody plays on a Friday or
19   Saturday, at least one of those days?
20                  MR. PAVLOVSKY:  No.
21                  MR. WHITTINGHAM:  What day?
22                  MR. PAVLOVSKY:  Not Friday or
23   Saturday.  Thursday.
24                  MR. WHITTINGHAM:  Thursday.
25                  MR. GRIFFITH:  Some people play
0049
 1   Sunday afternoon.
 2                  MR. WHITTINGHAM:  Oh, well, yeah.
 3   Seven days a week.
 4                  MS. TAYLOR:  So, if you were talking
 5   a linked game, you would say that 7:00 o'clock is
 6   going to be there at the hall.  As far as
 7   participating at 7:00 o'clock, they would tune in
 8   to the linked game and play a linked game?  I mean,
 9   this is a --
10                  MR. GRIFFITH:  The game could be
11   turned on at any specific time, and, yes, it could
12   be that, you know, with your four hours, you could
13   have people sitting in a separate room or an
14   enclosed area inside an American Legion or a bingo
15   hall, and they could play linked bingo at the same
16   time your regular bingo is going on if it's outside
17   that 2500.  It could all be being played at the
18   same time, and they could be linked with several
19   people statewide, you know.  If it's unlinked, I
20   don't think you can link it.
21                  MR. TAWIL:  Buddy, you're basically
22   saying, with a satellite, in order to make it
23   economical, you would have to have a statewide
24   coordinator, where, with the link, you could be as
25   small as you want to.
0050
 1                  MR. GRIFFITH:  Like I said, whatever
 2   time you want.  I think linked has a small and
 3   larger possibilities, yes.  Satellites, you know,
 4   any time you use a satellite, it's been -- you
 5   know, in our discussions and what we've gone over,
 6   it's fairly expensive.  But I don't want to exclude
 7   satellite; I think satellite has its place in bingo
 8   in Texas as an art form in itself.  But for smaller
 9   games, I think link has much more possibilities.
10   Thank you.
11                  MS. BRACKETT:  At this time, I would
12   like to appoint a group to investigate this and
13   come back with a recommendation to the Advisory
14   Committee on whether we want to make a
15   recommendation to the legislature on a bill.
16                  And, Suzanne, would you and Larry
17   and Pete work on this?  Is that a pretty good
18   representation of the different sizes of halls that
19   we're talking about?
20                  MS. TAYLOR:  Great.
21                  MS. BRACKETT:  Okay.  Now, one thing
22   I'm thinking of, this is August, and probably no
23   later than October, we need to have a
24   recommendation in.
25                  MS. MATTHEWS:  Virginia, can I say
0051
 1   something?
 2                  MS. BRACKETT:  Yes.
 3                  MS. MATTHEWS:  Picking up on what
 4   Danny said.  As an accountant, I would like to see
 5   something on paper.  Is there something available
 6   from other states?
 7                  MS. BRACKETT:  Right.  And that's
 8   what this group will find out.  They'll be sure and
 9   do investigate this and do bring us things of this
10   type that we can study.
11                  MR. TAWIL:  Well, let me recommend
12   one thing, Virginia.  Three years ago, the Province
13   of Alberta implemented satellite bingo in Alberta
14   as a Province statewide, and you might want to look
15   at that.
16                  MS. BRACKETT:  Okay.  Anyone else
17   have any other suggestions of things that might be
18   looked at?
19                  And be sure and consider the bill
20   that was presented the last session of the
21   legislature.
22                  Suzanne, since I named your name
23   first, that means you're chairman.
24                  MS. TAYLOR:  Okay.
25                  MS. BRACKETT:  Is there any --
0052
 1   there's no further discussion on this item.
 2   Correct?
 3                  All right.  I had made a mistake.  I
 4   said that item number 4 would become -- that item
 5   number 12 would become item number 4, and that was
 6   incorrect.  It's item number 9 -- number 4 -- oh,
 7   wait a minute.  Item number 9 is now number 4,
 8   which is the consideration of and possible
 9   discussion and/or action, including a demonstration
10   of sealed cards and event tickets.
11                  And Suzanne Taylor is in charge of
12   that item.
13                  MS. TAYLOR:  About two years ago, I
14   first brought this up to the Bingo Advisory
15   Committee on additional facts that would be
16   available to us, and Susan Schultz from Douglas
17   Press had come and shown us those.  And I realized
18   at the last meeting that we've talked about these
19   for two years, and the Advisory Committee has seen
20   them and people that had been there have seen them,
21   but the new committee hasn't seen these tabs.
22                  So, Susan, once again, volunteered
23   to come and share with us sealed cards and event
24   tickets -- she's from one manufacturer -- and that
25   way when, hopefully, we get these soon, very soon,
0053
 1   we'll all know what they are and be able to get a
 2   better picture to explain to our hall and to other
 3   halls in our area and anybody that calls us exactly
 4   what these items are.  Because I was aware last
 5   time that quite a few of us don't know what they
 6   are anymore since we have a new committee.
 7                  So, Susan, if you can come up here.
 8   She brought some visual aids for us.
 9                  MS. SCHULTZ:  Like Suzanne said, my
10   name is Susan Schultz.  I'm from Douglas Press, and
11   obviously I'm just going to be showing you Douglas
12   Press' games, but they all play the same, so it
13   doesn't make any difference.
14                  I think Billy is tired of the
15   seal-card issue, and he knows how they play.  He
16   scooted out on us, but that's okay.
17                  I'd like to start by thanking
18   you-all for pursuing this over the last couple of
19   years.  I hope that it will give you a little bit
20   of -- your charities a little bit of a shot in the
21   arm in terms of different games that can be played
22   different ways to make money.  These particular
23   seal-card games I brought -- I brought the games
24   that we have submitted to the commission and, thus
25   far, had it approved in terms of artwork.  We have
0054
 1   sent the sets in.  I'm not sure how they're going
 2   to proceed in terms of their testing and whether
 3   they're going to -- whether they intend to release
 4   the approvals for the tested sets all at the same
 5   time or if they're doing them as they are received.
 6   I know we had a six-week window in which to get the
 7   sets in for testing.
 8                  What I brought today, as I said, is
 9   an example of the -- I turned myself off.  It's
10   probably a blessing for some people -- I brought
11   examples of the games that we submitted.  We
12   submitted a regular traditional seal-card game; we
13   submitted a bingo event game.  And then we
14   submitted another seal-card game; it's a mountain
15   style that has proven to be very popular in bingo
16   halls.  It gets a group of folks involved.
17                  I'll just start by distributing.  I
18   brought along the -- kind of what we call a
19   how-it-works sheets, that I submitted along with
20   the games to the commission, so that you can follow
21   along or take them and understand or read through
22   them as I go through them and understand exactly
23   how the games are played.  They're relatively
24   simple, and I have a feeling that your players are
25   going to understand them much quicker than anybody
0055
 1   else does.  They usually pick up on these things
 2   very quickly.
 3                  So I'll just start with distributing
 4   the instructions and a couple of the tickets and
 5   seal cards.  And if y'all don't mind sharing, I had
 6   limited room in my suit case.  And if you have a
 7   winner I don't pay.
 8                  I'm sure that everyone can hear me
 9   if I just talk like this because I'm rather loud.
10                  MR. ATKINS:  Well, Susan it's most
11   important that she can hear you.
12                  MS. SCHULTZ:  Okay.  Okay.  All
13   right.  I'll try and kind of do this in, you know,
14   a viewing way here.
15                  The first game that we have is --
16   let's see -- this would be form number -- if you
17   look -- 4941.  It's called Bingo Monster; it's just
18   a traditional seal-card game.  And if you look at
19   either the player or the tickets, you have instant
20   winners just like you do with your traditional
21   pull-tab game, and those are shown both on the seal
22   card and on the ticket itself.
23                  The various -- in this game, the
24   various monsters, if you will, which there's one on
25   each, have, you know, prizes denominations from $25
0056
 1   down to $10.  Then you have your numeral tickets,
 2   and the numeral tickets are -- let's see -- numbers
 3   ending in double fives in red will win $10.
 4   Tickets with numerals ending in double red sevens
 5   will win $5.
 6                  The third component of this is the
 7   sign-up sheet which appears on -- or what we call a
 8   register that appears on the seal card itself.  And
 9   I keep referring to these as seal cards; I know you
10   refer to them as sign-up boards, but bear with me.
11                  Those numbers ending in double red
12   zeros from 100 to 1500, those persons will hold
13   their ticket and bring the ticket up to the
14   operator and sign their initials on the line that
15   corresponds to the number of the ticket that
16   they're holding.  When the register is full, when
17   everyone has signed their name, the operator is
18   simply going to literally remove the seal to reveal
19   the number underneath.  And the number underneath
20   there, then that individual -- in the case of my
21   seal card, I have number 900.  The person that has
22   initialled and is holding a ticket with the 900
23   with the double red zeros would then win the $100
24   prize at the top.  The games are short count; they
25   play out very quickly.
0057
 1                  The other thing that you might want
 2   to note -- and I say, I run our games obviously,
 3   but I speak for all the manufacturers because there
 4   are, you know, different names, different
 5   characters, but all the same kind of games -- when
 6   you see the numbers ending in the double red fives,
 7   double red sevens, or the double red zeros, to
 8   avoid confusion, there won't be any tickets in the
 9   game that end in double five, double seven, or
10   double zero that would be in black.  They'll only
11   appear in the red color so you know right there
12   that you have a winner or a hold ticket.  And as
13   usual, the card that -- the prize value will be
14   printed on the inside of the ticket.
15                  If you look at form number -- the
16   second in this series of the bingo monster -- 4942,
17   it plays the exact same way, but this is a game
18   that is called -- we term it -- it's an operator's
19   choice.  When the deal is open and the tickets are
20   being sold, the operator is going to designate at
21   the beginning of the game whether they're going to
22   be playing for three winners at $100 under the seal
23   or if they're going to be playing for one winner at
24   $300.
25                  Same principle applies:  Double red
0058
 1   zeroes are sign-ups, double fives and double red
 2   sevens, et cetera.  Again, when the register is
 3   full, if the operator has chosen to award one $300
 4   winner, what he should do actually is cross off the
 5   other option so people understand what's in play.
 6   All right.  When the register is full, whichever
 7   option he's chosen -- he or she has chosen, they'll
 8   lift that seal.  If they've chosen to award three
 9   at $100, they will lift the seal, and there will be
10   three numbers underneath.  Okay.  If he's chosen to
11   award just one $300 winner, he'll open that seal,
12   and there will just be one number underneath.
13                  Okay.  If anybody has any questions,
14   stop me.  I think it's pretty straightforward.
15                  The second kind of seal card game
16   that we brought is a mountain style game.  This one
17   being called King of the Mountain.
18                  Oh.  Let me back up.  When we
19   submitted these for approval -- and everything that
20   I brought here has been approved in artwork form --
21   they also come with a seal card option of a last
22   sale.  In the case of a last sale, there will be --
23   in this particular game, there will be the $100
24   through $1,500 hold tickets, and there's a line on
25   the -- on the seal card itself that will be
0059
 1   designated last sale.
 2                  The person that purchases the last
 3   ticket in the deal is eligible, and they sign up;
 4   they're given -- they place their initials on the
 5   line that is designated last sale.  On those seal
 6   cards, there is an opportunity that -- the words
 7   "last sale" will appear underneath the seal as
 8   opposed to a number or in conjunction with a number
 9   if you're awarding more than one prize.
10                  So, as I said, they're short count
11   games already; they sell out very quickly, but it's
12   an added incentive to make sure the whole deal goes
13   if you use the card with the last-sale feature.
14                  The second one, as I said, was King
15   of the Mountain.  And it's not going to seem like
16   this to you, but it's very exciting.  King of the
17   Mountain.  Again, the game play itself is the same
18   principle.  You've got your instant winners, which
19   are the three crowns for $50; the three diamonds
20   for $20; three emeralds for $5; and gold chunks for
21   $2.  In you notice on the bottom of the ticket, it
22   will say numbers ending in 77, 88, and 99 each win
23   $1.  The game itself -- these are sample tickets,
24   so in this example, these are printed in black.
25   The actual tickets, those numbers will be blue, and
0060
 1   they will correspond -- or purplish.
 2                  And the same principle applies.
 3   You're not going to have those double digits in
 4   anything except blue.  All right.  In this case,
 5   again, the only difference is, your sign-ups are
 6   the numbers that are ending in a red 13.  013
 7   through 1713, in this example.  When the sign-up
 8   board is filled -- and this is where the excitement
 9   comes in -- the operator is going to go to the seal
10   card, and he's going to open up the bottom four
11   seals, which are designated as $5 winners.  So if
12   you want to pop those open.
13                  Each one of those seals will have a
14   number underneath it that corresponds to the
15   numbers on the register.  All four of those players
16   win $5.  The operator then goes to the next
17   level -- and you're working from the bottom up, so
18   it's a process of elimination -- you can then open
19   up the next three seals.  There will be three
20   numbers underneath those.  Each of those players
21   will win $20.  Because the first four players -- at
22   the bottom level, the first four players, those are
23   the qualifiers; do not incorporating any other
24   numbers with these.
25                  Okay.  So you have the first -- the
0061
 1   four players at the bottom that win $5.  When you
 2   open up the next level, three of those four will
 3   win an additional $20; one drops out.  So now you
 4   have three players that have won $25 total.  And
 5   the same thing, the operator then goes to the third
 6   level which is awarding a $50 prize.  Two of those
 7   players will win the $50 making their total prize
 8   accumulation $75; again, one more drops out.  They
 9   then go to the top level, and there is one player
10   left.  In this particular -- well, in my example,
11   number 213 has made it all the way to the top.
12   That person has won a cumulative total of $300, so
13   they are the top winner.  As I said, when the flaps
14   are open on the bottom, those four players are the
15   only ones that are involved in the seal card play;
16   each level, one drops out.  Okay.
17                  I think we submitted one with a $500
18   top as well, and we also have -- they have not been
19   submitted yet -- also with a last-sale feature, if
20   they choose to use that.
21                  Again, if you have any questions,
22   stop me.
23                  MR. WHITTINGHAM:  So these are
24   pulled after the whole box is sold?
25                  MS. SCHULTZ:  Not after -- not after
0062
 1   the box is sold, after the sign-up sheet is full;
 2   either/or.  If you have a last-sale feature, yes,
 3   you're going to wait until the whole deal is sold
 4   because that last -- the person that buys the last
 5   ticket has the opportunity to sign up on the board.
 6   If not, you can try and sell out the whole deal,
 7   but the seal-card play comes into -- the seal card
 8   comes into play, if you will, of the sign-up board
 9   when the register is full.  Because the people that
10   have signed up on this register, the numeral
11   tickets, those are the only people that are
12   involved in the seal-card play.  You still have
13   instant winners available.
14                  MR. MOORE:  The player doesn't have
15   to sign up on that?  I mean, is that the rule?
16                  MS. SCHULTZ:  I think that -- I
17   think -- they may; they don't have to.  I would
18   suggest that they do.
19                  When we went to Louisiana, Danny,
20   and I noticed that they were not signing up on
21   them, we now had balls that --
22                  MS. TAYLOR:  However, it's there for
23   them to sign up.  If they don't sign up --
24                  MS. SCHULTZ:  I would think that if
25   you have to bring that -- if you don't sell the
0063
 1   whole box and you need to go into the next session
 2   to play, then you would need them to sign up
 3   possibly; but otherwise, they were not having the
 4   players sign up, because they said they didn't want
 5   them to know when all of these were filled.
 6                  And then they sold the boxes really
 7   quickly, and they sold them very quickly while we
 8   were there watching them.
 9                  MS. TAYLOR:  I will just keep my
10   personal preference to myself.
11                  MS. SCHULTZ:  As a manufacturer, it
12   matters not to me, as a matter of allowing the
13   player to make decisions of whether he wants to buy
14   something knowing whether he's got an opportunity.
15                  MS. TAYLOR:  How do they do -- do
16   they just wait until the whole thing is sold and
17   then --
18                  MS. SCHULTZ:  Okay.  Well, there's
19   your advantage of the last-sale feature.
20                  MR. WHITTINGHAM:  Well, let me ask
21   you another question, Susan.  On these pull tabs, I
22   see, obviously, there's a number, is what you said.
23   These are winning numbers.  Right?  When they pull
24   this ticket, do they see 41413 on the ticket when
25   they pull it open?
0064
 1                  MS. SCHULTZ:  Yeah.  When they open
 2   up the ticket, the number -- however many, 15 or 17
 3   of them -- if they open up the ticket, in this case
 4   with a numeral ending in a red 13, and --
 5                  MR. MOORE:  Does anybody have a
 6   winner?
 7                  MS. TAYLOR:  We have a 77.
 8                  MR. PAVLOVSKY:  Yeah.  I got one of
 9   those.  It doesn't mean anything.
10                  MS. SCHULTZ:  Generally speaking,
11   with the samples, they don't necessarily mean --
12   they don't necessarily -- well, if you just take a
13   look at the black numerals in there, if you can
14   just imagine, instead of a 663, you've got a 613,
15   and the 13 is in red.  That's a qualifier.  They
16   bring it up -- the way it's designed, they bring it
17   up to the operator to sign their initials on the
18   613 when, you know --
19                  MR. WHITTINGHAM:  Well, what I'm
20   saying, why should they sign it if they -- number
21   one, I'm going to be trying to sell people more
22   tickets because, if they got one 13, they're going
23   to try to get some more 13s.
24                  MS. SCHULTZ:  The way you play it is
25   up to you.  I'm just -- I'm just explaining the
0065
 1   design and the game and what these lines are for.
 2   If you don't -- you know, if you don't want them to
 3   sign up, they don't have to as long as they've got
 4   their ticket.  But then the prize awarded -- I
 5   don't know, do you -- of minimum prize value, at
 6   which one you'd see that, they would have to sign a
 7   form or something.  See.  It's up to the operator
 8   how they want to play it.  Because it's just -- you
 9   know, it's there for your use.  If you don't want
10   to use it.  Some people -- I know in the past, some
11   people just kept a separate sign-up that they had
12   made themselves so the operator can keep track of
13   who has what ticket, or like Suzanne said, if they
14   do roll it over to the next session, but that's
15   completely up to the operator of the organization.
16                  Anything else on that one?
17                  The last game I brought is a bingo
18   event game.  And the difference here is -- I'm
19   going to pass out a seal card.  The reason for that
20   is because -- I'm showing it with a seal card
21   because there -- we manufacturer the seal cards for
22   states in which they are not allowed to use a ball
23   blower or some kind of mechanical device in order
24   to determine the outcome of a pull-tab game.
25                  In this, you all do, so you won't be
0066
 1   using the seal card, per se; you won't have to open
 2   it up.  The game plays, again, the same.  You've
 3   got your instant winners, your -- for the bingo
 4   players, you've got your pink elephants and
 5   shamrocks and trolls and horseshoes, which are
 6   instant winners.
 7                  In this game, the hold tickets are
 8   bingo balls.  Okay.  Inside the -- once again, I
 9   don't know if anyone has got a winner, but the
10   appearance of a bingo ball is a hold ticket, and it
11   will be a bingo ball that is literally numbered the
12   same way with the letter and the number as a
13   regular bingo ball.  Okay.  So you've got your --
14   let's see.  The B numbers, B1 through 15, would
15   appear in green; I16 through 30 would appear in
16   yellow; N31 through 45 would appear in red; G46
17   through 60 would appear in blue; and O61 through 75
18   numerals would appear in purple.
19                  Okay.  There is no sign-up on this
20   game.  Again, it's a very quick game.  At the
21   beginning of the session, the operator will say
22   we're going to play a game of lucky letters bingo,
23   give the form number -- in this case, 4781 or
24   4780 -- and serial number so-and-so.  Again, short
25   count game, quick sellout.
0067
 1                  As soon as all the tickets are sold,
 2   they'll draw a -- if you're going to use the ball
 3   blower, they'll draw a ball out of that, and
 4   because you've got -- and bear with me, this sounds
 5   complicated, but it's really not.  In fact,
 6   Virginia figured it out yesterday afternoon, didn't
 7   we?
 8                  Because there are 15 numbers in a
 9   bingo game, for each letter -- for instance,
10   there's B1 through 15 -- all the numbers and the
11   letters are represented in the game.  All right.
12   When they draw the balls, the 15 players that are
13   holding the letter revealed will win $25.  In other
14   words, if the -- if the number is B12, all of the
15   persons holding a hold ticket with a B bingo ball
16   will win the $25 -- or whichever seal card you
17   have, they win the, you know, smaller prize.
18                  The person that is holding the
19   actual number and letter of the bingo ball, B12,
20   will win $25 plus the $475 for a total of $500.
21   Okay.  This is a rather seemingly complicated twist
22   on a real simple game.  Am I making sense?  Because
23   the entire spectrum of the bingo numerals and
24   letters are represented within the pull-tab game,
25   so there's going to be B -- literally, B1, B2, B3,
0068
 1   B4 and -- correct me if I'm wrong -- 31, 32, 33,
 2   34, et cetera, represented in the game.  So you're
 3   going to have 15 B numbers, 15 I numbers, 15 N, 15
 4   G, and 15 O.
 5                  So when the ball is drawn, the 15
 6   players holding the tickets with the corresponding
 7   letter win the smaller prize; the person holding
 8   the ticket with the actual bingo ball number and
 9   letter combination wins, then, the larger prize as
10   well.
11                  They play similarly -- number games
12   don't have two steps; they simply have one.  You
13   draw a ball, and the one player holding that ticket
14   wins the whole prize.  This just adds an extra step
15   so you have more winners; you have more player
16   involvement in it.
17                  MS. TAYLOR:  So when you draw the
18   ball, you have five winners; four winners win the
19   $25 and --
20                  MS. SCHULTZ:  15.
21                  MS. TAYLOR:  15.  Okay.  For the
22   total.  Okay.  So 14 win the $25 and the 15th
23   person wins $20, for a total of $475?
24                  MS. SCHULTZ:  Correct.
25                  MS. TAYLOR:  And the advertising
0069
 1   circulars and the information that comes with the
 2   game explains it all.  Do these tabs sell for
 3   approximately the same price as the other tabs?
 4                  MS. SCHULTZ:  I think the -- yeah.
 5   Between 25 cents and $1.  25 cents, 50 cents, and
 6   $1.
 7                  MS. TAYLOR:  I mean, the cost to the
 8   charities.
 9                  MS. SCHULTZ:  Oh.  Are they the same
10   price?  I would imagine -- because of the seal
11   card, I think the seal-card game might be a little
12   bit more.  I'm not -- I'm not sure.  I don't think
13   so; I think the price is about the same.  And
14   they're lowered price because the manufacturer is
15   priced by per ticket.
16                  MS. TAYLOR:  Well, these boxes have
17   fewer tickets than the normal tabs we used to sell.
18                  MS. SCHULTZ:  Much fewer.  In fact,
19   on monster, I think one has 440 -- yeah, 420 for
20   the one number and 940 for the second.  I don't
21   think there are any games here that are more than
22   about 1700 tickets.  They're a lot smaller.
23                  MR. WHITTINGHAM:  If I'm playing a
24   bingo game and I'm incorporating this pull tab in
25   this bingo game, so if I call B1, the first number,
0070
 1   and somebody got it --
 2                  MS. SCHULTZ:  Yeah.  You're only
 3   going to call one number.  When the game -- when
 4   the pull-tab game is sold out, you're going to call
 5   one number, just one bingo ball.  And so all of the
 6   players holding a ticket with a bingo ball number
 7   with a -- with that corresponding letter, win the
 8   smaller prize, and then the person with the bingo,
 9   the actual person with --
10                  MR. WHITTINGHAM:  They're going to
11   win the prize.
12                  MS. SCHULTZ:  That's it.  The first
13   number, one call, that's it.  Okay.
14                  MS. MATTHEWS:  If you don't -- if
15   you're not able to sell the box, do you hold it
16   over until the next one?
17                  MS. SCHULTZ:  You could, but
18   honestly, I don't know -- I don't think I've known
19   a situation where they haven't sold out the
20   whole -- because they're playing it while they're
21   playing bingo.  You allow your workers to walk
22   around and sell tabs --
23                  MS. MATTHEWS:  Okay.
24                  MS. SCHULTZ:  -- so they're just
25   letting people know at the beginning, this game is
0071
 1   in play.  The workers are walking around, and in
 2   between sessions, once that deal is sold out, the
 3   set is sold out, they just announce, okay, at the
 4   end of this game, we're going to draw a ball and
 5   that's going to be the prize winner for such and
 6   such.
 7                  MS. MATTHEWS:  You'd pretty much
 8   have to sell them out, wouldn't you?
 9                  MS. SCHULTZ:  You have to sell them
10   out.  In a bingo event game, it has to be sold out,
11   because, otherwise, you don't -- first of all, you
12   don't have a register, so no one knows if it's --
13   if there are any more available and, secondly, it
14   isn't a -- you've got to sell it out because all of
15   bingo balls are represented there.
16                  If it's not sold out and it's -- you
17   know, the winning -- the winning -- they draw O75,
18   well, O75 might still be in the set, so they have
19   to sell it out.  Again, they're very -- once
20   players get involved with it, they sell out, I
21   mean, extremely quickly.  In fact, this King of the
22   Mountain, in places back East, they would go
23   through -- a larger bingo hall will go through
24   between 10 and 15 sets in a session.
25                  I will leave all of these things
0072
 1   here, or up there, if anybody wants to take
 2   anything, please feel free.  It lightens my load
 3   for the trip home.
 4                  Any other questions?  Okay.  Thanks
 5   again, for indulging me.  And thanks, Billy, and
 6   your staff, for getting that artwork and everything
 7   approved.  I hope the people like the games.
 8                  And congratulations on your upcoming
 9   nuptials.
10                  MR. ATKINS:  Thank you.
11                  MS. BRACKETT:  Right now I'd like to
12   introduce you to the newest member of the Lottery
13   Commission.  Mr. Cox is with us this morning.
14                  Would you like to say anything to us
15   right now?
16                  MR. COX:  I was appointed in June by
17   Governor Perry, and I thank you.  Billy invited me,
18   and I'm glad to be here with you.  I look forward
19   to learning what y'all do, and I appreciate your
20   service.
21                  MS. BRACKETT:  Well, thank you.  We
22   appreciate your service, too.  And if we can
23   provide you with any information, please let us
24   know.
25                  MR. COX:  Thank you, very much.
0073
 1                  MR. MOORE:  Are we done with the
 2   seal cards?
 3                  MS. BRACKETT:  Yes.
 4                  MR. MOORE:  Can I just ask one --
 5   Billy, where is the approval process as far as the
 6   tickets that are in right now?
 7                  MR. ATKINS:  We're currently testing
 8   the actuals deals.  All of our work has been
 9   reviewed.
10                  MR. MOORE:  Okay.
11                  MS. TAYLOR:  Is there any time line
12   when you think that they might be available?
13                  MR. ATKINS:  We've asked the
14   manufacturer to have them in by September 12th for
15   testing, and after that, we don't have a time line.
16   We're processing them as quickly as we can.
17                  MS. BRACKETT:  Before we go on to
18   item number 5, which I would like -- well, each one
19   of you should have this folder.  This is an order
20   form that Worlanda would like for us to complete.
21   And you can order lunch from this menu in here, and
22   then she will get the meal, and we can take about a
23   30-minute break and have lunch in the break room in
24   there.
25                  Let's take just five seconds and do
0074
 1   this right quick.
 2                  (A short break was taken.)
 3                  MS. BRACKETT:  Item number 17.
 4                  MR. TAWIL:  Okay.  Since our last
 5   meeting, I had an e-mail -- or voice mail
 6   discussions with Keith regarding this issue, and he
 7   looked into it.  The question that brought it up
 8   was that the commission.
 9                  UNIDENTIFIED FEMALE:  Excuse me.
10   Can you hold on one second?  Keith went out for a
11   minute.
12                  MR. TAWIL:  Sure.
13                  MS. BRACKETT:  Danny, while we're
14   waiting on Keith, would you like to go ahead and do
15   your item, which is item number 14 on the agenda?
16                  MR. MOORE:  Sure.  This is for your
17   guys' benefit.
18                  There was a meeting in July here in
19   Austin.  There was five manufacturers, three
20   distributors, a few commercial lessors, and some
21   charity representatives, and also some lobbyists
22   that attended a meeting right here at the Sheraton.
23                  We discussed the possibility of
24   video pull tabs under the current statute and the
25   possibility of changing the statute to allow maybe
0075
 1   a different type of machine or device to display
 2   pull tabs.  The feeling in the group, we really
 3   don't have a direction at this point.
 4                  We know that multimedia right now
 5   has something they're doing that they're trying to
 6   get under the current statute.  They weren't
 7   present at the meeting.  They're a part of this;
 8   they have been involved in conversations since
 9   then.
10                  I think the goal is to move in
11   another direction, maybe, to allow pull tabs to be
12   presented at bingo halls in a different capacity.
13   The statute for Texas was written 20 years ago.
14   There's been a hell of a lot of changes
15   technologically that allow these devices.  They are
16   currently available outside the states, but I
17   believe that Mississippi and New Jersey right now
18   have something.
19                  I guess our goal is just to get to a
20   point where everybody could be on the same page.
21   We may try to lobby for something like this, but we
22   haven't even gotten to that point yet, but I'm just
23   going to let you know that the discussions are
24   going on, and I really personally feel that it
25   would be a huge benefit for the charities to
0076
 1   have -- I hate to use the term 8-liners, but it
 2   really is that type of machine.  It really --
 3   that's where we stand right now.  There's different
 4   forms of it that we're not ready to roll out to
 5   show anybody.  These companies have told us that
 6   they can basically tweak the systems they already
 7   have to work just about any way.
 8                  Multimedia right now is trying to do
 9   something that has a perforated ticket.  The other
10   ones could probably do that, maybe not today, but
11   they could do it in six months if they had to.
12   It's just not that tricky anymore.  These guys have
13   the technology to do it and the resources.
14                  So, that being said, I just wanted
15   to give you an update.  There will be more
16   meetings.  And I do want to ask Billy a question in
17   reference to multimedia.
18                  What is the update on the equipment,
19   and has anything been submitted?  Is there -- is
20   there going to have to be an opinion whether it's
21   from the -- from Kim or from the attorney general,
22   on these?
23                  MR. ATKINS:  I'm not going to
24   discuss an individual licensee and, you know, any
25   of their products or anything like that.  They have
0077
 1   submitted something, and we've been in contact with
 2   them.
 3                  MR. MOORE:  Okay.
 4                  MR. TAWIL:  I think your idea,
 5   Danny, in general, is good philosophically.  If
 6   something like this was done, it would eliminate
 7   the problem of people moving away, to have game
 8   rooms right next door.  I believe it helps the
 9   charities.  We ought to just be open about it and
10   make it -- let as many companies that can provide
11   it, do it, instead of having one set of rules that
12   would prohibit all of them -- that was my only
13   objection, when we were talking about this subject
14   before, as far as pull tabs.
15                  MR. MOORE:  No.  And I agree with
16   you, and that's why there were five manufacturers
17   sitting there, so this wasn't a one-horse show.
18   And they all have the ability, so that -- I think
19   we have to have it competitive, that's why we
20   invited as many as we could get to the table.
21                  MR. ATKINS:  I appreciate that
22   update, Danny.  And you had also mentioned to me
23   before that this meeting, or a similar meeting, had
24   taken place, and I appreciate you identifying those
25   folks there.
0078
 1                  And I'm just curious if you could
 2   share why the bingo division wasn't invited -- or
 3   not invited, but be included.
 4                  MR. MOORE:  No particular reason.
 5   But I can assure you that if we do it again that
 6   we'll invite y'all because we do need your input.
 7                  MR. ATKINS:  Okay.
 8                  MS. BRACKETT:  Saleem?
 9                  MR. TAWIL:  Yes.  The issue
10   regarding advertising, Keith and I talked through
11   technology not in the presence of real time, and
12   came to the conclusion that currently the Texas
13   Lottery has problems with getting broadcast
14   stations to carry the drawings real time.  And that
15   being the case -- I personally am a broadcaster and
16   own Channel 2 in San Antonio -- know that there is
17   a lot of competition for airtime.  I was under the
18   assumption, when this first started, stations were
19   really interested in carrying the live drawings,
20   but apparently, it's gotten to be to where it's not
21   that much anymore.
22                  And Keith went on to tell me that he
23   has a difficult time; and I sympathize with him.
24   When you're trying to get something on the air,
25   there's no way to really put a bingo tab on there.
0079
 1                  So I would like Keith to give us, in
 2   general, instead of me paraphrasing, a little more
 3   insight into the fact of how the Lottery itself
 4   deals with these issue, and then if y'all have any
 5   questions.  Because I have nothing else to
 6   contribute on the matter.
 7                  MR. ELKINS:  For the record, my name
 8   is Keith Elkins.  I'm the communications director
 9   for the Texas Lottery Commission.  And Saleem is
10   absolutely right; we've seen a decline in the
11   number of stations that are interested in carrying
12   the live drawings in Texas since the very
13   beginning.  In the early years, everybody carried
14   the drawings live.  It was the talk of the state.
15   It was competitive.  You had to carry the drawings.
16                  Now, I think that, between the
17   Pick 3 day draw at 12:27 p.m. and the nighttime
18   draws six nights a week at 10:12 p.m., we have
19   about 32 total stations combined that carry some of
20   the drawings.  Few of the stations carry all of the
21   drawings, most of them carry the Lotto Texas
22   Drawings only.  And we've had to even shift the
23   time from the 9:59 time slot at night to 10:12 to
24   try to pick up a few more stations.  We're
25   gradually getting a little bit of interest, but
0080
 1   there's still some ill issues for the broadcasters.
 2                  Specifically, the biggest complaints
 3   that we get are that the 9:59 or the 10:12 time
 4   slot, they're really giving up time that they could
 5   be selling to advertisers.  The Lotto Texas Drawing
 6   is 30 seconds, and that -- if you were to buy that
 7   time in a 10:00 o'clock newscast, you could be
 8   looking anywhere from a couple hundred dollars to a
 9   couple thousand dollars depending on the TV market.
10   Of course, there are about 20, 22 markets in Texas,
11   so it could be pretty expensive, which is exactly
12   the reason that the Texas Lottery doesn't buy the
13   time outright. we can't afford to do that;
14   although, we know that there is an interest from
15   the public's point of view of having the live
16   drawings available, we see that in the research.
17                  We are constantly being asked by the
18   broadcasters to shorten the drawings to make it an
19   even shorter and shorter.  A lot of the
20   broadcasters have moved away from showing the live
21   drawing to actually just putting up the results as
22   soon as the drawing is over because they can put up
23   the six numbers or the five numbers or the three
24   numbers, depending on the game, and leave it up
25   there for about six or eight or ten seconds versus
0081
 1   an entire 30-second drawing, and they feel like
 2   they're still achieving their public service in
 3   providing the results to the players.
 4                  As long as they get the results out
 5   pretty quickly, in most cases, they're got getting
 6   a huge cry from the public to see the draw;
 7   although, we do here from players who can't see the
 8   drawing in their area who complain to us, why are
 9   you not providing the drawings anymore like you
10   used to?  They don't understand, we don't control
11   the broadcasters; we simply provide the service to
12   the broadcasters and it's actually at their choice.
13                  By moving to 10:12, we accomplished
14   a few things.  Now TV stations, if they want to
15   carry that 30-second draw, they do have an
16   opportunity to sell some sponsorships and keep some
17   of the revenue, but it's still problematic.
18                  Yesterday, the Texas Association of
19   Broadcasters annual conference was here in Austin,
20   and we attended and had a booth there.  And I had
21   an opportunity to speak to a lot of the news
22   directors and general managers that were in
23   attendance and try to get some of them to agree to
24   carry us if they're not currently carrying us or
25   thank those that are carrying us if they are.  And
0082
 1   it's kind of a touchy situation.
 2                  To hit exactly at 10:12 means that
 3   they've got to time out their broadcast absolutely
 4   perfectly on time so they can go straight into the
 5   live drawing.  Our drawing is at the same time
 6   every night; we don't shift that, but if they have
 7   breaking news or they have something developing,
 8   it's very hard to hit that time slot, and they say
 9   that that is still a problem for them, so it's
10   still a developing situation.
11                  The other issue that we have at the
12   Lottery, obviously, is the conflicting statutes
13   that we operate under, Lottery statutes, the bingo
14   states, and the inability sometimes to have to
15   crossover.  And I know that in -- several years
16   ago, we did address, in our legislative
17   appropriations request, the possibility of using
18   some Lottery monies for some bingo motions, and
19   that simply just didn't fly with the appropriations
20   committee.
21                  I hope this has been helpful.  But
22   from where I'm coming from, beyond that, I really
23   don't have any control over marketing for
24   advertising here at the Lottery Commission.  I work
25   more in an area of nonpaid media, trying to get
0083
 1   reporters to cover stories about the Commission,
 2   about charitable bingo, and about Lottery issues,
 3   and that's really my area of expertise.
 4                  Once a week, we -- I guess since
 5   1999 -- because we do have to buy satellite time in
 6   15-minute blocks, is the minimum that you can buy,
 7   we had a period before the draw and after the draw
 8   that's really dead time, nothing was happening in
 9   that period, and then we'd throw the drawings up
10   anywhere for a 30-second drawing, or in some cases
11   if we have more than one draw, say, a Lotto Texas,
12   a Pick 3, or Cash 5, they may go a minute and a
13   half to two minutes.  That still left a pretty
14   considerable amount of dead airspace that we were
15   paying for, but really not using.
16                  We decided to -- that we could
17   utilize that by producing some video news releases,
18   kind of a short news story, if you will, about
19   various issues here at the Lottery Commission,
20   whether it's the future of charitable bingo or
21   whether it's a new game being introduced by the
22   Lottery or those types of things.
23                  We have an in-house audio/visual
24   crew that goes around, interviews folks; we have
25   some editing equipment that we edit the news story.
0084
 1   And we provide this free of charge to the TV
 2   stations of Texas both in English and in Spanish,
 3   and we put out an advisory to them in advance that
 4   the story is coming.
 5                  It usually is -- it goes out on
 6   Wednesday night, I believe, at 10:05 p.m., they can
 7   record that as they're getting ready for the live
 8   draw.  They can air it as a news story if they want
 9   to; they can re-voice it with their own talent as a
10   news story if they choose to, or they can simply
11   keep the video and the interview clips on their
12   files and they can use that as they need to.  It's
13   a service that we try to provide to them.
14                  We're having some luck with that.
15   We don't have as many stations that use that as we
16   would like.  Some of them see that as crossing over
17   the journalistic boundaries; they would rather
18   develop the stories themselves.  But in some cases
19   it still has the same effect that we're hoping for;
20   it gets a message to the broadcasters.  And even if
21   it raises an issue that they may want to cover on
22   their own, at least it's getting information out
23   there, which is what we really want.
24                  MR. WHITTINGHAM:  Let me ask you a
25   question.  I mean, I just don't understand.  I
0085
 1   mean, when it comes to charitable bingo, I think
 2   people need to know about it.  The Lottery
 3   Commission, I don't think it's a charity thing, I
 4   don't think.  I just feel they need to know more
 5   about bingo.  And I don't care if it's once a month
 6   or twice a month or once a year, I think there
 7   should be at least some very serious impressions
 8   about helping your charities in your local state or
 9   local town because bingo is all about that, and I
10   don't think a lot of people know that.
11                  And I think if it was aired on a --
12   well, I think if it's tangible, something they can
13   see about bingo and what bingo is all about, I
14   think people will respond to us a lot just by
15   seeing it on TV or something like that.
16                  MR. ELKINS:  I agree.  But, again,
17   if I might address this, but if you're asking us to
18   produce a TV commercial --
19                  MR. WHITTINGHAM:  No, not a
20   commercial, just a public announcement once a
21   month.
22                  MR. TAWIL:  I think, Keith, they
23   don't quite understand; maybe you can clarify.  We
24   were talking before.
25                  The appropriations is where the
0086
 1   issue begins.  For the Lottery, there is an
 2   advertising budget as part of the appropriations.
 3   The bingo division would have to do the same thing
 4   to be able to do these kinds of things, as far as
 5   advertising and making commercials and promoting
 6   bingo and so on.  Is that correct?
 7                  MR. ELKINS:  I'm really not the
 8   person to be asking that, but if I might just go on
 9   a limb, I do believe you are correct.  I know that
10   on the Lottery side of the house, this would
11   actually be more appropriate for a marketing
12   director, but on the advertising side of the house,
13   our -- the total amount that we can spend on
14   advertising and promotions is set by the
15   appropriations committee.  And I know that, two
16   sessions ago, they even put a limitation on that,
17   that for every point that we exceed our price
18   payout beyond a certain level, we must reduce our
19   advertising budget, I think, a millions dollars or
20   something.  So it's pretty tightly controlled, what
21   we can use that money for.  I believe that bingo
22   might have to do the same thing.
23                  MR. TAWIL:  They don't have an
24   advertising item at all, and I think that's the
25   key, is that we need to, as a committee, recommend
0087
 1   to the commission as a whole or work with our
 2   legislators to try to get them as a lined item,
 3   which is an advertising promotion, but for bingo.
 4                  MR. ELKINS:  I think you're right.
 5   Now, I will tell you that the area that I am
 6   responsible for where we tried to accomplish what
 7   you were talking about, Mr. Whittingham, is in
 8   trying to get reporters interested in covering
 9   bingo issues and reporting about that and calling
10   attention to things like the 20th anniversary of
11   charitable bingo in Texas.  Here, with the video
12   news releases, we try to get some interest out
13   there.
14                  Billy and I have talked about this
15   through the years, and it is a -- it is a
16   continuing struggle.  And I know the difficulty
17   that you are facing because I face it on both
18   sides.  I face it, both, trying to sell charitable
19   bingo as a media item, if you will, as well as
20   selling the lottery.
21                  From your perspective, you may think
22   that the Lottery gets all the attention, but I can
23   tell you that, from four to, say, $20 million, we
24   don't get any attention.  The reporters are not
25   that interested; some of the players are not that
0088
 1   interested.  They used to be.
 2                  It used to be, you put $4 million
 3   up, and everybody went and bought a ticket, and you
 4   got a lot of media coverage.  Now we can have a $4
 5   million winner come in, and unless there's
 6   something really special about that winner or some
 7   controversy associated with them, you're probably
 8   not going to get any coverage at all, which
 9   astounds me.  $4 million, to me, is a significant
10   amount of money, but maybe that's because I'm a
11   state employee.
12                  MR. WHITTINGHAM:  Maybe I'll do
13   their bingo sometime on TV at 10:12, but I don't
14   think they would do anything with bingo, it's
15   always Texas Lottery.
16                  MR. ELKINS:  Yeah.  But if we make
17   it available, I can't make the stations carry it.
18   That's the point I'm trying to make.  We do video
19   news release about charitable bingo interests, and
20   in fact, I think Billy is scheduled to be
21   interviewed about one today that will be produced
22   and provided to the stations in the future.  If
23   they don't choose to air that or use that, that's
24   really out of our control.  And it is a challenge;
25   it is a struggle to try to get your industry to get
0089
 1   some attention there.
 2                  If I might offer a suggestion -- and
 3   I offered this in the past, and it's a difficult
 4   one -- but as a former reporter, I spent 18 years
 5   covering the news, and I covered charitable bingo
 6   and I covered lottery issues, and I'll tell you
 7   that, on the one hand, the best thing that you got
 8   going for you is the fact that bingo supports
 9   charities, and if you could find a way to get that
10   word out of what the good works are a specific
11   charity is able to do with the bingo proceeds,
12   that's really the key in your local area to getting
13   coverage about your bingo industry.
14                  Lottery gets all the attention on
15   giant jackpots; that's where we really get a lot of
16   attention.  If it's a $70 Million jackpot, and
17   instead of it being in Dallas or Houston or San
18   Antonio, it's a $70 million offered in Texas, and
19   maybe it's the largest in the country.
20                  For charitable bingo, where you
21   really get your -- the interest, I think, in your
22   area is that if XYZ charity in Dallas is using
23   their money to support this particular program, and
24   you can find charities that are willing to talk
25   with reporters and open up their doors and let
0090
 1   people come in and just see how they're using their
 2   money and that sort of thing, you can develop that
 3   story.  And you can then use that as a -- as a
 4   beginning to launch the bigger charitable bingo
 5   stories, which is, you know, this charity in Dallas
 6   helps this particular cause and, by the way,
 7   charitable bingo in Texas has returned this much
 8   money to charities across Texas.
 9                  If I'm making myself clear.  That's
10   really the interest to reporters.
11                  MR. ATKINS:  And that's where,
12   Larry, Keith's folks can come in.  Once the local
13   charities make their project and their activities
14   known to their own local media, then you, at the
15   same time, can say, you know, you can also go to
16   the Lottery Commission and they will give more
17   information than you ever wanted on bingo
18   statewide, including bingo, press releases,
19   whatever you want.
20                  MR. WHITTINGHAM:  Exactly.  Like I
21   said, of course, I'm concerned about Dallas bingo,
22   but I'm concerned about Texas.
23                  MR. TAWIL:  Well, Danny, you've
24   prompted me to look into this issue, but what we've
25   ultimately discovered was the fact that the Lottery
0091
 1   has a budget item for advertising.  And I know for
 2   the last three or four years Suzanne has been
 3   pressing these issues about advertising.
 4                  So what I'd like to do is make a
 5   motion that Danny be in charge of trying to get
 6   through the legislature, including whatever
 7   assistance you need from the Advisory Committee
 8   members, a line item for advertising and promotion
 9   for charitable bingo so that a lot of the money
10   doesn't go into the general fund before that piece
11   is taken out.
12                  MR. MOORE:  That's fine with me.  I
13   just got to have something clarified now.  The
14   State recommends your budget for advertising for
15   the Lottery?
16                  MR. ELKINS:  The amount of the
17   budget is set by the legislative appropriations
18   committee.
19                  MR. MOORE:  Okay.
20                  MR. TAWIL:  We need advertising
21   appropriations.  We need an item that says,
22   "advertising charitable bingo," now because there's
23   more money made.  As Suzanne pointed out, there's
24   $10 million a year that goes into the general fund
25   that's not used by charitable bingo.  So if we had
0092
 1   a line item that said, hey, advertising promotion
 2   budget, $2 million a year.
 3                  MR. MOORE:  I follow you.
 4                  MS. TAYLOR:  Is there a PSA for
 5   bingo that is made available for us to be able to
 6   try and utilize?
 7                  MS. BRACKETT:  Let me interrupt here
 8   a minute.  Do we have a motion?  Did you make that
 9   a motion.
10                  MR. TAWIL:  I said I'd like to make
11   it a motion.  Yes, I'd like to make the following
12   motion.  I make a motion that --
13                  MS. BRACKETT:  Well, you really
14   don't have to.  I just -- if you've made a motion,
15   I wanted a second before we discussed it.
16                  MS. TAYLOR:  I second it.
17                  MR. TAWIL:  Here's the motion:  A
18   motion that a subcommittee be created to get a line
19   item through the appropriation to the legislature
20   for advertising and promotion for charitable bingo.
21                  MS. BRACKETT:  Okay.  Just a moment.
22                  While we're having this timeout.
23   This is on the same subject that you were talking
24   about.  I saw this article in the Dallas News.  I
25   think it was just last week.  Let me see.  Yeah, it
0093
 1   was Saturday, the 17th.  Did you see this?
 2                  This is an article.  Did you see it,
 3   Larry, in the Dallas News?  It was A Cheap Date,
 4   and it was a Cheap Date Contest.  And they went --
 5   they played bingo and had tacos, and they had a
 6   wonderful time, but it didn't mention that the
 7   profits went to charity.
 8                  Would you please read back the
 9   motion to us?
10                  (Material was read as requested.)
11                  MS. BRACKETT:  Okay.  And we need to
12   clarify this, that we are making a recommendation
13   to the commissioners.  Is that correct, Diane?  And
14   that we are not going to be lobbying.
15                  MR. TAWIL:  Yeah.  That's right.  We
16   can't lobby.
17                  MS. BRACKETT:  We cannot lobby.
18                  MR. TAWIL:  Do you understand what
19   we're trying to do?  We're trying to get a line up
20   in the legislature?
21                  MS. MORRIS:  The point is, the job
22   you're doing today is a Bingo Advisory Committee
23   member.  You can't lobby; you pass motions.  What I
24   think you might have meant is that you were going
25   to have your meeting and try to figure out how much
0094
 1   and how to do it and recommend it to the Texas
 2   Lottery commissioners what you would like made
 3   available as a resource, through discussions, what
 4   you would like and respond with what this committee
 5   thinks is an appropriate amount of money if a line
 6   item could be added.
 7                  MS. BRACKETT:  So the motion was to
 8   make a line item recommendation on an amount of
 9   money to the commissioners, the Lottery
10   commissioners, for advertising for bingo.
11                  Who made that motion?
12                  MS. TAYLOR:  Saleem.
13                  MS. BRACKETT:  Saleem made that
14   motion.
15                  Saleem, do you mind the correction
16   or the change -- not correction, but the change of
17   the language?
18                  MR. TAWIL:  Yes, I support the
19   change.  I think it ought to be changed to be
20   correct.
21                  MS. BRACKETT:  And we do have a
22   second for that.
23                  Now with this new wording, Danny,
24   are you still willing to accept that position?
25                  MR. MOORE:  Yeah.  I got a lot of
0095
 1   spare time.
 2                  MS. BRACKETT:  I'll call for the
 3   question on that.  All those in favor of the
 4   reworded motion, please say aye.  Is there any
 5   opposition?
 6                  And I think that we're parliamentary
 7   correct then on that.  Do you have anything else
 8   that you would like to --
 9                  MS. TAYLOR:  I do have that
10   question.  Is there a PSA for bingo that is
11   available at this time, or is that something that
12   would have to be produced?
13                  MR. ELKINS:  It would have to be
14   produced?
15                  MS. BRACKETT:  There is one comment
16   that I would like to make.  Last week I was at a
17   meeting of a lot of people who contract with the
18   Department of Protective Services to provide
19   services for children's care and get reimbursed,
20   and they were showing how bad the budget is going
21   to be in the shortfall, and had the big pie, which
22   showed the income from the Lottery, and it was a
23   very small portion of the whole budget.  But all I
24   can think of is, it's not -- no one in this room
25   knows that part of that is from bingo, which is
0096
 1   probably not real bad, but what really bothered me
 2   is that there's no way to calculate in how much
 3   money is spent before it gets to this pie to
 4   support charities.
 5                  For instance, my charity does
 6   contract with the State, but it does -- what they
 7   reimburse us on a daily rate for the care of
 8   children is far below what it actually costs us,
 9   and if we did not have -- we depend on bingo for
10   about $130,000 a year, and if we did not have that,
11   boy, our children would be suffering.  And the
12   services that we render to them, if there was a way
13   that we could get that point across.
14                  But anyway, that was just my little
15   thing, and I felt real bad that everybody in that
16   room didn't know about that, but, you know what,
17   nobody cared.  All they cared about was, wow, our
18   contracts might be cut back.  That was what
19   everyone was caring about.
20                  MR. ELKINS:  I understand.  And you
21   make a very good point, that is a -- that is a good
22   story, and it's a matter of shopping that out,
23   through like a reporter.  I would be glad to work
24   with you on that if we could.  The experience that
25   we have had sometimes in the past is when we do
0097
 1   hear good stories like that from certain charities
 2   and then we follow it up and try to get some media
 3   attention, they are reluctant to basically open the
 4   doors and let the reporter come in and video or --
 5                  MS. BRACKETT:  Right.  And that's
 6   what you were saying.  And the facility I work for
 7   is an emergency shelter; it's a secret location;
 8   we're not supposed to identify the children that
 9   are there, but we could get a bunch of little
10   models in there and use them, you know.
11                  MR. ELKINS:  Well, it's possible
12   that that might be a story that you could sell
13   to -- pitch to a newspaper that would agree not to
14   disclose the location, or whatever.  And, again,
15   through Billy, I would be more than glad to work
16   with you if we can help you get some interest.
17                  Sometimes, we do have some friends
18   in the media that we can contact in certain areas
19   and suggest a story to them, and they'll take that,
20   and they might develop an article like you
21   mentioned earlier about the Cheap Date.  Sometimes,
22   we follow up on articles like that, and we'll be
23   glad to on that one if you'd like, complimenting
24   the reporter and suggesting to them, if they do a
25   similar article in the future, just keep in mind
0098
 1   charities receive this much money from the state
 2   because.  We'd be glad to do something like that.
 3                  MR. PAVLOVSKY:  I just want to thank
 4   you for coming here this morning.  I understand
 5   what you're saying.  I worked at the DIO for a long
 6   time.
 7                  Now you know how we feel in the
 8   small hall division.  Small bingo halls, it's
 9   getting tougher and tougher to make a dime out
10   there.  Thank you.
11                  MS. BRACKETT:  It's tougher and
12   tougher in the large bingo halls, too.  It's
13   probably proportionate according to size.
14                  MR. PAVLOVSKY:  Thank you very much.
15                  MR. ELKINS:  Well, I appreciate the
16   opportunity to be here.  I look forward to working
17   with you in trying to overcome this dilemma.  It's
18   something that we both face, and I just want you to
19   know that we're not turning a blind eye to it; we
20   are sensitive to that as well.  I welcome any
21   suggestions, and I would be glad to work with you
22   on those and some -- like this article, I would be
23   glad to contact a reporter and remind them of the
24   good work the State does.
25                  MS. BRACKETT:  Well, and he has
0099
 1   another good story out of it.
 2                  MR. ELKINS:  Absolutely.  Thank you.
 3                  MR. MOORE:  Could the staff
 4   recommend to the tuitioners an appropriation budget
 5   for bingo?
 6                  MR. TAWIL:  That's what you would be
 7   doing.  You're the subcommittee.
 8                  MR. MOORE:  Okay.  Subcommittee.
 9   I'm talking about the BLC staff, your staff, Billy.
10   Has that ever been requested?
11                  MR. ATKINS:  Yeah.  As Keith
12   mentioned, you know, we've done it in the past.
13                  MR. MOORE:  Right.  But you said out
14   of the Lottery money; you never asked out of the
15   bingo money.  He said out of the lottery money.
16                  MR. ATKINS:  We asked -- we went
17   specifically to the legislature for authorization.
18                  MR. MOORE:  Okay.
19                  MR. ATKINS:  We put forward either
20   out of, I think, Lottery funds or out of the
21   additional funds that were -- came from bingo.
22                  MR. MOORE:  Okay.
23                  MS. TAYLOR:  It's my understanding,
24   Billy, from one of our conversations that this year
25   that the commission -- or the staff is not planning
0100
 1   to ask for an appropriation for advertising bingo?
 2                  MR. ATKINS:  We have not, no.  We
 3   submitted our legislative appropriations request,
 4   and it did not include any requests for funds for
 5   that advertising of bingo, no.
 6                  MS. TAYLOR:  So it's too late to add
 7   that on there?
 8                  MR. ATKINS:  It's too late to get it
 9   into our LAR.  I'm also going to look to Diane to
10   see if a discussion regarding the LAR and the
11   appropriation process is relevant under this item.
12                  MS. MORRIS:  Your item is a possible
13   discussion report and/or action on bingo
14   advertising with the Texas Lottery games, including
15   Lotto Texas.
16                  I'm thinking a general discussion on
17   our current -- when you talk about the advertising
18   in the Lottery games, advertising, for you to reach
19   much further and to have opinions on LARs and
20   amendments to that or other processes, that's
21   really not what's on the agenda.
22                  MR. ATKINS:  But it could be a
23   future agenda item?
24                  MS. MORRIS:  Yes, sir.  I would
25   imagine when your committee comes back and has
0101
 1   their report on whatever amount they think should
 2   be recommended, it would be very appropriate to
 3   have an agenda item that took that into account on
 4   how can that be implemented.
 5                  MS. MATTHEWS:  Can I ask why it was
 6   not completed?  Is that beyond the scope of this
 7   agenda item?
 8                  MS. MORRIS:  I don't know who wrote
 9   this agenda item.
10                  MR. TAWIL:  The item came from my
11   discussions with Linda, I believe, that we just
12   wanted to bring up the issue about advertising
13   bingo, and we have learned since then what it
14   entails.
15                  MR. ATKINS:  Well, that wasn't my
16   understanding of the purpose of the agenda item.
17   It was originally raised with the fact that the
18   Lotto drawings are aired weekly, and I think it
19   was -- I can't remember if it was your request or
20   Larry's request wanting to know how to get bingo
21   included in those drawings.  And that's what I
22   thought the agenda item was for.
23                  MR. TAWIL:  That's exactly right.
24                  MS. MORRIS:  That's why I say, in
25   all fairness, I'm not trying to stop y'all's
0102
 1   discussions, but the point is that was what the
 2   agenda item was about.  It was not about, how can
 3   it be included in an LAR, and if it's too late, how
 4   can that happen.
 5                  But it does sound like you have time
 6   if you wanted to hear from somebody, say, the
 7   amount or a fair idea of how much amount to
 8   recommend that to be included.  And I think then
 9   you could have that specific discussion on, if it's
10   too late for LAR, where else do we go, and that
11   would be a properly posted item.
12                  As I understood this item, it was a
13   discussion that Saleem had with Keith regarding,
14   can't bingo be included in the lottery drawings or
15   somehow bingo be part of the lottery drawings.
16   What you're talking about now, I think we all have
17   to agree is a little far away from that.
18                  MR. WHITTINGHAM:  Well, we're
19   talking about advertising.  Even far away, it's
20   worth it, but what lottery drawings are separate;
21   we still need to talk about advertising.
22                  MR. MOORE:  Well, we got what we
23   wanted.  We wanted a direction, and you gave it to
24   us, and we're going to go with it.
25                  MS. MORRIS:  Yeah.
0103
 1                  MS. BRACKETT:  Okay.  Billy, report
 2   possible discussion and/or action on the second
 3   quarter.
 4                  MR. MOORE:  Hold on.  I think
 5   somebody wants to speak.
 6                  MS. THOMPSON:  I wanted to say
 7   something on advertising about that.
 8                  MS. BRACKETT:  I'm sorry.
 9                  MS. THOMPSON:  I'm Jane Thompson
10   with Thompson Allstate Bingo Supply, and I'm here
11   actually on behalf of Chuck Bertan.  He had planned
12   to be here today, and the advertising issue was
13   something that he feels so strong about.  And he
14   got sick last night, and he called me this morning,
15   and he asked me if I would explain.  And I can't go
16   into detail about his ideas on advertising.  He's
17   got some very intelligent ideas and thoughts.  But
18   you've handled what, I think, he wants to do by
19   having a subcommittee researching it and making a
20   structured effort to get something done about
21   advertising.  We've been trying for years and years
22   to get advertising more profitable for the
23   charities.  And here again, I think by doing the
24   subcommittee, getting some structured work done on
25   it, getting in into the legislature process, that's
0104
 1   what Chuck is really interested in, and I'm
 2   interested in it as a distributor.
 3                  I think there's ways that all of us
 4   could help.  We can all benefit, distributors,
 5   manufacturers, lessors, charities.  We can all
 6   benefit by advertising if it's done properly.  I
 7   feel like you taken care of it by this.
 8                  I know the other thought I had:  Can
 9   a subcommittee work with people from the bingo
10   industry to put these thoughts and ideas together,
11   or is it just strictly needs to be members of the
12   committee?
13                  MR. ATKINS:  Subcommittees can get
14   comments from whomever they like.
15                  MS. THOMPSON:  I know that he's got
16   thoughts he'd really like to input, and I know
17   there's others on his behalf.  I'm just saying,
18   mainly, just keep him in mind.
19                  MR. MOORE:  I'll go see him.
20                  MS. BRACKETT:  All right.  If there
21   are no further comments, Billy, you're at last
22   going to get to give your report.
23                  MR. ATKINS:  Okay.  You have,
24   members, in your notebook, information relating to
25   the second quarter of 2002, statistics for
0105
 1   charitable bingo.  As you know, that quarter ended
 2   on June 30th; reports were due into our office by
 3   July 15th.
 4                  And we have graphs for you that
 5   identified figures relating to four, what we
 6   consider to be key elements, gross receipts,
 7   prizes, charitable distributions, and attendance,
 8   and you have two graphs for each item.
 9                  The first graph will show you just
10   the second quarter of 2002 compared to the second
11   quarter of the previous years.  That graph that
12   follows with show you the second quarter of 2002
13   compared to the first quarter of 2002 as well as
14   comparable figures for previous years.
15                  It's pretty obvious comparing the
16   second quarter of 2002 to the same quarter of 2001.
17   Gross receipts are down almost $1.7 million, for
18   1 1/4 percent.  Gross receipts are down from the
19   first quarter of 2002 almost $6 million for not
20   quite 5 percent.  Those are the figures that are
21   down.
22                  I think it's important to note that
23   the decrease in gross receipts from the first
24   quarter to the second quarter is the smallest
25   decrease between comparable quarters that there's
0106
 1   been since 2000.
 2                  Next, we go to prizes, and you can
 3   see a decrease from the second quarter of 2002 to
 4   the second quarter of 2001, again, of almost $1.7
 5   million.  This, again, is the smallest decline
 6   between comparable quarters since 1999, but there
 7   is a slight increase from the second -- from the
 8   first quarter to the second quarter.  That is
 9   unusual; that isn't consist with previous patterns.
10   It could be a result of a data entry error or
11   whatever.  It's just about .2 percent, so we're
12   investigating that anomaly a little farther.
13                  Next, looking at charitable
14   distributions in there decline from 2001 of about
15   6.4 percent.  And since distributions are based on
16   the previous quarter, you see an increase in the
17   first quarter -- you see an increase in the second
18   quarter of 2002 to the first quarter of about 280,
19   $290,000.
20                  And then finally, attendance, you'll
21   see that attendance decreased from the second
22   quarter of 2002.  Decreased from the first quarter
23   of -- from the second quarter of 2001 as compared
24   to the second quarter of 2002 by about 2 percent.
25   Again, this is the smallest decrease in attendance
0107
 1   since 1998.  And, finally, attendance is down from
 2   the first quarter of 2002 of about 5.6 percent.
 3                  This is the same information,
 4   members, that was provided to the commissioners at
 5   their meeting on Tuesday.  They were very concerned
 6   about these figures and the continued trend that we
 7   see in bingo-related figures.  And as a result of
 8   that, the chairman has made a specific
 9   recommendation that -- actually, I would like to
10   address under -- when you get to item 19.
11                  And that concludes my report.
12                  MS. BRACKETT:  And your next report
13   is item number 4.
14                  MR. ATKINS:  Okay.  Members, this is
15   Charitable Bingo Administrative Rule 402.558.  It
16   was first considered at your meeting on June 28th.
17   We have received comments from that since that
18   time, and those comments are included in this rule,
19   and it would be our intent to take any comments
20   that we may receive today and incorporate those,
21   and subsequently take this rule before the
22   commission at their next meeting for publication in
23   the Texas Register.
24                  MR. TAWIL:  I've got some comments,
25   Billy.  I appreciate you putting the comments on
0108
 1   this report.  I think it was just an oversight, and
 2   I want to just point out the oversight.  If you
 3   would look on page 3 of 9, item number E, at the
 4   bottom, it's making reference to what requires
 5   approval, so it's obvious from that item that a
 6   series number is not really important because a
 7   vendor can change the series number; it doesn't
 8   have to get preapproval.  Is that correct?
 9                  MR. ATKINS:  Well, I don't think it
10   says a series number is important.
11                  MR. TAWIL:  Well, bingo papers
12   modify them anyway with the exception of the color
13   series numbers.  It didn't have to be resubmitted.
14   So it doesn't have to be resubmitted.  It's a
15   vendor issue.
16                  So I'd like to -- keeping that in
17   mind, if you would turn to page 5 of 9, item B up
18   there, I think that might have been just an
19   oversight.  It says, a series of numbers shall,
20   which means it's a requirement, be displayed in the
21   center square.  In keeping either with the
22   definition that it just must be displayed on the
23   paper regardless of where they put it, and so it
24   shouldn't matter or if you could make that may, I
25   think it would be fine.
0109
 1                  I don't have any problem with having
 2   the series numbers displayed.  They should be just
 3   displayed on the paper as it presently is and not
 4   be required that it has to be in the center area
 5   square.
 6                  And there's only one other item
 7   after that.
 8                  MR. ATKINS:  Hold on.  Let me --
 9                  MR. TAWIL:  Sure.
10                  MR. ATKINS:  Okay.
11                  MR. TAWIL:  The only other item I
12   have -- I personally don't have a passion about it,
13   but just as a previous prize business person -- on
14   pain 4 of 9, item number F, it says, the commission
15   may require re-submission of an approved card,
16   slash, paper at any time.  That, to me, seems very
17   depressing and restrictive.
18                  Someone that has a business
19   established, they've got paper out distributed
20   throughout the state, and then suddenly you're
21   telling them, okay, I want you to resubmit that for
22   approval because I want to make a change on it
23   without giving you a reason or explaining, is the
24   way I would read that.  Is that correct?
25                  MR. ATKINS:  That is, I think,
0110
 1   probably a compromise that was reached between
 2   manufacturers beginning back with the pull-tab rule
 3   when there was a requirement that pull tabs be
 4   resubmitted every two years for approval.
 5   Manufacturers asked that that not be, you know, a
 6   requirement, but that if there was ever a need that
 7   it be resubmitted, that they would be, I think,
 8   more receptive, because I asked them just having to
 9   automatically resubmit them every year.
10                  MR. TAWIL:  Can somebody explain why
11   you required somebody to submit -- resubmit a group
12   paper?
13                  MR. ATKINS:  It would generally just
14   be if there were questions or potential issues that
15   had arose from the paper, ask them to resubmit it
16   at that time.
17                  MR. TAWIL:  What would be an
18   example?
19                  MR. ATKINS:  You know, if
20   organizations were getting cases of paper that were
21   containing incorrect counts --
22                  MR. TAWIL:  Then it should be --
23                  MR. ATKINS:  -- or have the wrong
24   series numbers.
25                  MR. TAWIL:  Those would be
0111
 1   defective.
 2                  MR. ATKINS:  And they could either
 3   be required to be withdrawn or given them -- or
 4   they could be resubmitted.
 5                  MR. TAWIL:  But, I mean, you have
 6   that power under defective for disapproval.  So I'm
 7   talking about this is just -- this a blanket
 8   approved paper, so it's not defective when it's
 9   approved, you just tell us that.  So Larry says, I
10   want to discontinue that paper now.
11                  MR. ATKINS:  Well, we would -- we
12   would request that it be resubmitted.  Just because
13   it's been resubmitted doesn't mean it automatically
14   has to be taken off the market.  It would have to
15   be tested, go through the same testing process.  If
16   it fails the testing process, then it could be
17   disapproved.
18                  MR. TAWIL:  So, generally, you would
19   disapprove it with cause?
20                  MR. ATKINS:  Oh, yeah.
21                  Suzanne has a question.
22                  MS. TAYLOR:  I have a question I
23   would like to ask him.  Under 5D, is this what I've
24   heard before was going to be costly to them?
25                  MR. TAWIL:  What page?
0112
 1                  MS. TAYLOR:  Page 5D, large D.  Or
 2   is just the records part on page 6, a series of
 3   each number and card have to be shown?
 4                  MR. ATKINS:  When I was going
 5   through this proposal, the first thing that struck
 6   me was that the first thing that wasn't described
 7   under the descriptions was set.  You don't have --
 8   you've got all these -- you have all of these
 9   definitions in here, but set not being one of them,
10   and I was kind of thrown off a little bit by what
11   you were going to call a set.  A set of paper, to
12   me, is one to nine thousand bingo cards, is a set.
13   Then a group of sets put together would be an ups
14   pack.
15                  Now, if a set of bingo cards being
16   in one nine thousand, such as your floor paper, has
17   got one serial number, that's the way it is now.
18   Now if that set is going to -- if you're saying
19   that an ups pack, three on ten up, nine on ten up,
20   whatever, has to have the same serial number on
21   each specific page in there, then that is a problem
22   for us.  We don't want -- as it goes right now,
23   yes, that would be an expensive proposition for
24   most manufacturers.
25                  MS. TAYLOR:  Which, in turn, would
0113
 1   be passed along to the charities?
 2                  MR. ATKINS:  Absolutely.
 3                  MS. TAYLOR:  So that -- into the
 4   next page, page six, Under G reference, D6, and it
 5   is saying that you must provide all of your
 6   information on each invoice, it goes down serial,
 7   and a series of numbers of each bingo card sold.
 8                  So I wanted to know if that was the
 9   top card of the set or if that's every single
10   individual card?  If you're playing five up, is
11   that all five cards?
12                  MR. ATKINS:  We've always used the
13   top serial number as the controlling serial number
14   in ours.  We're against having to do serial numbers
15   on our invoicing anyway.  As a distributor, we did
16   an eight-month check and we literally spent right
17   at $100,000 on a computer system to handle serial
18   numbers because we wanted to be ahead of the curve.
19   We spent this money, put in this system, and we
20   can't control it.  It's going to cost multi
21   hundreds of thousands of dollars for each
22   distributor to put in a system by which he can
23   track every serial number.
24                  In my Dallas warehouse alone, which
25   is one of four, I have over 27,000 serial numbers
0114
 1   in stock at the present time, if you look at every
 2   serial number in the building.  Plus, any time you
 3   start asking people to -- a distributor to put
 4   these serial numbers on invoicing, you're -- you're
 5   going to put people into play, and people are going
 6   to make mistakes and -- and we just see that the
 7   end user, the charity, has to write the serial
 8   numbers down anyway on their daily report forms.
 9   We can see it as an unnecessary step in the
10   process.
11                  We get in our paper from the
12   manufacturers; we sell it to the charities, and the
13   charities use those serial numbers.  With the
14   Lottery Commission seal on the paper, it's already
15   seemed that it's been, you know, that the Lottery
16   has put their mark on the paper, and we see no real
17   use in trying to track all of these serial numbers.
18   And if I am forced into doing that, I feel like the
19   cost of doing business is going to go up for the
20   charities.  It just -- it can't but, because I've
21   got to put -- I'm going to have to put one person
22   on serial numbers all the time.  It's just that
23   intensive.
24                  So I think that the rule is -- the
25   proposed rule is cumbersome to the -- to all of the
0115
 1   distributors, not just us.  And I'm definitely not
 2   in favor of doing the serial numbers on the
 3   invoicing.  It's just something that doesn't need
 4   to be done, and I think we're having -- we have
 5   accounting that's set in place now to take care of
 6   it.
 7                  MR. MOORE:  Hey, Billy, does the
 8   manufacturers have any input?
 9                  MR. ATKINS:  We received input from
10   one manufacture.
11                  MR. MOORE:  Okay.
12                  MS. TAYLOR:  You know, there was on
13   other thing I noticed as I was going through this
14   on page eight of nine, it talks about progressive
15   bingo on number three, and before that it talks
16   about early birds, but early birds doesn't mention
17   that it also has to fall within the 2500 smaller
18   prize limit like it does on your progressive.  And
19   if you're basing it upon the sum of money received,
20   I think you definitely need to state not to be
21   receiving the $2,500, because that sounds like it's
22   outside of the game.
23                  MR. ATKINS:  Okay.
24                  MS. BRACKETT:  Okay.  Before we hear
25   from a witness, I would like to ask you, do you
0116
 1   want to eat your sandwich here or take a break?
 2                  MR. PAVLOVSKY:  Let's take a break.
 3                  MS. BRACKETT:  Is that all right,
 4   Steve?
 5                  MR. FENOGLIO:  You bet.
 6                  MS. BRACKETT:  We'll come back to
 7   this item.
 8                  And let me caution you that while
 9   you're taking a break, do not discuss anything
10   that's on the agenda with anyone, each other or
11   anyone else.
12                  MR. FENOGLIO:  How long is the
13   break?
14                  MS. BRACKETT:  Oh, I'm sorry.  I
15   guess just until we feel like coming back.  Can't
16   we do that in twenty minutes?
17                  (A lunch break was taken)
18                  (Mr. Tawil has left for the day)
19                  (Mr. Manio has joined the meeting)
20                  MS. BRACKETT:  It's a little bit
21   after 1:00.  I think we need to note that Saleem is
22   gone for the day.
23                  Let's get back to Steve.  Are you
24   ready to give testimony?
25                  MR. PAVLOVSKY:  What's the item?
0117
 1                  MS. MORRIS:  I think you called it
 2   numbers eight or nine, but it's the consideration
 3   and possible action on the -- was it the repeal of
 4   402.558?  It's the old number four.
 5                  MR. PAVLOVSKY:  Got it.  Thank you.
 6                  MS. MORRIS:  Is that right, Steve?
 7   Is that what you think?
 8                  MR. FENOGLIO:  That's what I think
 9   I'm going to call it.
10                  MS. BRACKETT:  Just one more thing,
11   does the record show that Mario has joined us?
12                  THE REPORTER:  Yes.
13                   MS. BRACKETT:  Okay.  All right.
14   Steve, we're ready to hear from you.
15                  MR. FENOGLIO:  Thank you.  For the
16   record, my name is Stephen Fenoglio.  I'm an
17   attorney in Austin, and I represent a variety of
18   charitable organizations, commercial lessors,
19   distributors, licensed and non-licensees, and I
20   attached a list of some-900 and some odd
21   organizations.
22                  I'm not clear on the pull tab -- or
23   the paper rule, and I know Mr. Atkins had e-mailed
24   to me an earlier version of this rule.  It was
25   similar, but this looks like several steps after
0118
 1   the e-mail that Mr. Atkins had sent to me and some
 2   others in the industry to tell me what you think
 3   about it, which I did.  And I think that was the
 4   end of May, maybe early June, of this year.
 5                  And I guess, I get -- the first
 6   question I have is, is this -- well, the premise I
 7   start from is, I have -- none of my clients think
 8   that the rule ought to be changed.  It's not broke,
 9   so let's not try to fix it.  They would like to
10   conserve resources and not engage in further rule
11   making along the lines of this paper rule.
12                  And I can't tell -- I thought we had
13   an informal understanding that there would be a
14   process for rules to come forward, and I may be
15   totally off base in that regard.  And this may be
16   just the start of that process.  I don't know.
17   Mr. Atkins and I have not had a chance to talk
18   about this issue since the pull tab ruling.
19                  But if it -- I guess if it is, I
20   think we ought to take the approach first is, is
21   the existing rule favored or flawed?  And bracket
22   that also with what the Sunset Commission report is
23   doing.  And in the Sunset Commission report,
24   there's a section on rule making that is the Sunset
25   Commission recommendation that became effective
0119
 1   with a number of new rule makings.
 2                  Bingo is not healthy.  I think
 3   talked to all of y'all about that.  As a matter of
 4   fact, it's very sick.  And you can put a patient
 5   who's sick on a deathbed by adding additional
 6   regulatory requirements.  The other thing is, you
 7   can also have a rule that's crafted, that because
 8   the patient is very sick and not examine the rule
 9   closely enough, get the rule passed, and then later
10   on, there are other problems with the rule come up.
11                  And the charities I represent are
12   not healthy.  River City Bingo, as Mr. Atkins
13   knows, is a conductor-run hall in North Austin at
14   I35 and Braker.  And for two months this summer, we
15   had no charitable distributions made.  Our rents
16   are about a $182 a session.  There is no commercial
17   lessor in the true sense of the word; it's a purely
18   charitable run hall.  Historically, it has been the
19   most profitable hall, or one of the five most
20   profitable, certainly one of the five most
21   profitable halls, in the state.  And by profit, I'm
22   not talking about the charitable distributions that
23   are being made to charities.  The basis for that is
24   6,000 per month, per charity, for five charities,
25   so that's 30,000 a month charitable distribution
0120
 1   that that hall makes.  And it's made, pardon the
 2   pun, like a slot machine for the last seven years.
 3   It's not doing it this year at all.  For two
 4   months, there was no money to distribute.  As a
 5   matter of fact, for two months, there was a paper
 6   loss.
 7                  And I see some heads shaking and I
 8   think y'all have probably seen the same thing.  So
 9   before you start deciding that, let's go down and
10   do some more rule making, remember why you're here,
11   and that's for charitable bingo.  And is this rule
12   going to help charitable bingo?  There are some
13   good commonsense issues, unquestionably.  For
14   example, I don't know who came up with the idea to
15   staff, but on the subparagraph G1, page seven of
16   nine, the style and minimum standards, you ought to
17   read it, player pickups.  A progressive pickup,
18   which I think you would probably need statutory
19   authority to do.  The warm-up early bird is -- part
20   of these are concepts that certainly warm up an
21   early bird, or what halls already do.  Bingo bonus
22   numbers, multi color bingo, pre-call double number,
23   et cetera.  And then certainly a lot of re-up for
24   us Anglos is a new concept, I think in the valley.
25                  There are some good concepts in the
0121
 1   rule.  I just don't think the timing is right to
 2   come forward with more rule making.  As to some
 3   specific issues, and you heard Mr. Griffith talk
 4   from K & B's perspective -- and I do represent for
 5   the record K & B -- some of his concerns.
 6                  At this point, it's anecdotal, but
 7   my understanding is, there's one manufacturer that
 8   can do the type of -- that has paper today that
 9   could accomplish the results on the manufacturing
10   requirements, subparagraph D2, subparagraph D,
11   which is at the top of page five of nine, each set
12   of bingo cards and paper must be comprised bearing
13   the same serial number.
14                  And that raises an interest -- if
15   that's true -- and I don't know that today, but
16   I'll certainly find out.  Certainly, if y'all take
17   any action leading to adoption or recommendation --
18   it raises an interesting issue and takes you back
19   to the card-binding device statutory changes that
20   the legislature made.  In particular, one
21   manufacturer had a monopoly for about a year, and
22   that manufacturer had charged astronomically high
23   rates, like 30 percent of the revenue, and the
24   charity got the charges of $100; the manufacturer
25   and the distributor got $30 of it.  And I'm worried
0122
 1   that this same rule -- perhaps not intended, but
 2   other manufacturers can't get there.
 3                  At the River City Bingo Hall -- and
 4   I'm not sure you meet -- because at the River City
 5   Bingo Hall, under page seven of nine, subparagraph
 6   E3A, little I, that charity already does that, and
 7   I know Suzanne is very involved and Virginia.  I'm
 8   guessing that y'all already do that at the hall.
 9                  In one sense, I think you're
10   formalizing what charities already do, and that's
11   not a bad idea, you know, to formalize what the
12   recordkeeping process already is at most halls.  I
13   don't know the small halls, if the small halls do
14   that.
15                  MS. BRACKETT:  Tell me again where
16   you are.
17                  MR. FENOGLIO:  At the top of page
18   seven of nine.  It's actually subparagraph E
19   records, subparagraph three, authorized licensed
20   organization, subparagraph A.
21                  These are the recordkeeping
22   requirements that a charity would have to have, and
23   obviously they're going to keep on record of their
24   name, their taxpayer number.  I don't know that
25   they always keep a distributor's taxpayer number.
0123
 1   We certainly have an invoice date, a distributor's
 2   name, and an invoice number anyway.
 3                  And, again, the five charities at
 4   River City already do this.  I don't know that
 5   every other charity does it, and if they don't,
 6   then ask yourself should they be required to do so,
 7   and what's the ultimate purpose of this.  If it's
 8   an audit issue, maybe this ought to be part of an
 9   audit rule.
10                  You heard K & B talk about on the
11   recordkeeping requirement from the manufacturer,
12   which is page six of nine, subparagraph E1C, that
13   K & B has over 20 thousand -- 27 thousand serial
14   numbers in one warehouse in his -- and people will
15   be recording those numbers; they're not bar coded.
16   I don't think any distributor has bar coding.  If
17   you're recording those numbers, they're going to be
18   human errors, transposed numbers.
19                  I had 21 hours of accounting, and I
20   may have been an accountant, except during cost
21   accounting, I learned that I had transposed numbers
22   like crazy, which is not a good thing if you're
23   keeping track of numbers.  People transpose numbers
24   all the time.  When you are requiring numerous
25   recordkeepings on serial numbers, there is going to
0124
 1   be -- human error is going to have errors.
 2                  And then when the charity -- or the
 3   inspector from the Lottery Commission, the auditor,
 4   comes out and looks at something, and all the
 5   numbers don't add up, is that going to be a
 6   licensing matter?  It can be, because you're
 7   supposed to keep those serial numbers when you're
 8   setting up charities for licensing sanctions.
 9                  If you have an eighteen up paper,
10   which some halls play, you'll have eighteen
11   different serial numbers to be recorded.  And for
12   what reason and at what cost?  I was talking with a
13   couple of the people in the audience earlier about
14   the subparagraph D2D, which is found at the top of
15   page five of nine, each set of bingo cards, slash,
16   paper shall be comprised of bingo card sets.  I got
17   two different definitions of what they think is a
18   set of paper is.  It's not defined in your section,
19   and it probably should be in two different -- if
20   several different distributors have different
21   definitions they use of what a set of bingo card
22   paper is.
23                  An additional comment -- and again,
24   I just saw this about noon today.  I'd seen an
25   earlier version.  Subparagraph B1, approval of
0125
 1   bingo cards paper.  Bingo cards paper shall not be
 2   sold in the state nor furnished to any person in
 3   this state until the paper has been approved, and
 4   gotten written approval.
 5                  So that means that when a
 6   manufacturer wants to come down and show its
 7   distributor, here's some new paper that we think
 8   would be a good idea, they bring it to Texas, and
 9   Mr. Whittington, they're automatically in
10   violation.  If they show it to some of your
11   charities, your charities have now violated the
12   rule.  Why?  It hasn't been approved yet.  It's a
13   concept.
14                  And we came through this issue
15   before with card-binding devices when manufacturers
16   wanted to show -- and Dave's nodding his head.  He
17   knows what I'm talking about -- the manufacturers
18   wanted to show the concept of what they had in mind
19   of a card-binding device.  Maybe it was a device
20   that had already been approved in another state.
21   Ms. Taylor or Mr. Williams and his charities want
22   to come see it.  We have written letters from the
23   Lottery Commission that say if you do that, you're
24   in violation of the statute.  You can't see the
25   concept.  That would be like GM trying to roll out
0126
 1   a concept car at an auto show.  You know, can't do
 2   it; it's not approved yet.  You can't show it.
 3   That's what that language says.
 4                  I would hope that the staff wouldn't
 5   take that position, the staff we have today.  The
 6   staff of the Charitable Bingo Division when it was
 7   a different director took a different approach.
 8   And my client, the distributor -- or several
 9   distributors I represent at the time, said you're
10   at risk of your license being sanctioned if you
11   show this concept, even if you have everyone sign a
12   paper under oath that says I understand I can't use
13   this product; I understand it's not being offered
14   for sale or lease; I understand that it's just a
15   concept.
16                  That language there says, if the
17   Lottery Commission wants to sanction the
18   manufacturer, the distributor, or the charity, they
19   can do so.  I think that's wrong.
20                  One final comment on the notion in
21   promotional bingo under subparagraph H1, nine of
22   nine, and page I.  What this rule doesn't apply to
23   is the promotional bingo that you see in a toy
24   store, or the senior citizens, a VA hospital
25   exemption from unlawful bingo under section 551.
0127
 1                  You don't have a section in here
 2   that exempts it if it's on a military reservation.
 3   Statutorily, you can't -- I don't believe the
 4   Lottery Commission can enforce the rule at Fort
 5   Hood Military Reservation or at the Air Force Base
 6   in San Antonio where they play bingo, probably not.
 7                  But if you're going to have
 8   exemptions in here, you ought to at least have them
 9   to recognize other places where this rule just
10   simply does not apply.  I'll be happy to answer any
11   questions.
12                  MS. BRACKETT:  Are there any
13   questions that you'd like to ask Steve?
14                  MR. WHITTINGHAM:  Yeah.  So we do
15   have a rule that if something hasn't been approved
16   by the Texas Lottery Commission that we can't even
17   look at the demo of any type?
18                  MR. FENOGLIO:  I think that's in the
19   current rule.  I would have to check.
20                  MR. ATKINS:  I don't have a
21   question, but I do have a comment.
22                  MS. BRACKETT:  Go ahead.
23                  MR. ATKINS:  Steve, I just want you
24   to know that I'm very disappointed in your
25   comments.  They seem to be exactly counter to what
0128
 1   we had tried to achieve through the pull-tab rule.
 2   You're correct.  This rule was sent to you.  It was
 3   on June -- July 1st, a couple of days after this
 4   committee first got a copy of it.  And there's
 5   been, I think, ample time for you to come in
 6   informally and comment on these rules, as you did
 7   several times in the pull-tab rule, to address some
 8   of these issues.  And I find it very troubling
 9   that, given all that time, you now choose to come
10   in and give that type of testimony.
11                  MR. FENOGLIO:  Well, I'm sorry if
12   you're troubled by it.  I was made aware four
13   days -- or five days ago that this was on the
14   agenda.
15                  MR. ATKINS:  Are you saying that the
16   agenda wasn't posted timely?
17                  MR. FENOGLIO:  That's when I learned
18   about it, five days ago.  Every week I go on the
19   Lottery Commission web site and look for agenda
20   items, once a week, and so that was about five days
21   ago that we found out that this was on the agenda.
22                  My notes initially reflected this
23   meeting was August 20th, and we do build in a -- we
24   have -- if we know of a meeting that's supposed to
25   occur, we build in a ten-day back time to look at
0129
 1   it.  So we did check from the State web site, the
 2   Lottery Commission web site, and they didn't show
 3   this on or about August 10th, which would have
 4   been -- I believe, it was prior to -- I think y'all
 5   actually posted, I'm told, around the 12th of this
 6   month.
 7                  MR. ATKINS:  Yeah.  We posted some
 8   of these items.
 9                  MR. FENOGLIO:  Well, I was made
10   aware of the last time, I believe, it was Friday of
11   last week.  So, you know, my understanding is --
12   and you had floated, back in April of this year,
13   about 25 different rule makings, and my clients
14   don't have the financial stamina to go through what
15   we did with the pull-tab rule 25 times.
16                  And I understand that's an issue
17   going to come up again today.  I understand we're
18   now looking at late September before pull-tab
19   products will get on the market.  As Ms. Taylor is
20   aware and some of others have been asking for pull
21   tabs for two years.
22                  MR. ATKINS:  Well, I'm not really
23   sure how being notified of this being on the agenda
24   deals with your ability to contact me, you know,
25   prior to that with any questions or concerns with
0130
 1   this direct rule.
 2                  MR. FENOGLIO:  Well, Mr. Atkins, I
 3   know it may come as some surprise, but I have other
 4   clients and other agencies that I litigate and
 5   represent people before.  I sent out, when I got
 6   your notice, to a group of clients, here's a
 7   proposed rule.  A half dozen responded and said,
 8   well, what do you think?  I said, well, is this
 9   good or bad?  You tell me.
10                  And their view was, well, if it's
11   not -- we don't need a new paper rule; there's
12   nothing wrong with what we have today.  There's
13   certainly more important issues in the community of
14   bingo than another rule-making proceeding.
15                  As you know, I represent a -- over
16   900 organizations, so when I get a half a dozen, or
17   more, in one way or another -- maybe 30
18   organizations, I decided I'd wait and see if
19   anything came up.
20                  MS. BRACKETT:  Okay.
21                  MR. BISHOP:  My name is Don Bishop,
22   and I'm here to represent myself as a commercial
23   lessor.  And my organization AMVETS Post 31.  I
24   like to say I had the pleasure, but I had the,
25   maybe an honor, of serving the first year on this
0131
 1   committee, and I just want to tell you, I empathize
 2   with you having to listen to all this.
 3                  On this topic, my comment is one of
 4   telling this committee what my charities, my AMVETS
 5   as well as other charities, they all play the same
 6   game plan.  We're small bingo halls, and we play a
 7   lot of small games.  A game plan itself has 12
 8   games in the set, we play a 12 up.  We play three
 9   or four early birds, small amounts of money.  We
10   have two floor games in the middle of the sets,
11   then we play night owls on a split-tape basis,
12   sometimes seven or eight night owls.  We only give
13   away 12 or 1500 bucks; we never even get close to
14   the $2500 limit.
15                  But in the early days of bingo, we
16   had to keep a log, and we had to try to keep up
17   with the serial numbers and the quantity of sales
18   on each one of those serial numbers, and we had to
19   keep one employee up to four hours after our bingo
20   session to keep him in tracking and writing down a
21   log on all of that paperwork, and today we're
22   struggling just to pay our personnel that operate
23   bingo during bingo.  We don't need an additional
24   burden of payroll put on our charities.
25                  Everybody here that's involved in
0132
 1   the operation of bingo knows that.  I don't know
 2   anyone, really, who isn't struggling in whatever
 3   area, big games, small games, whatever.
 4                  Billy, I'd like for your people to
 5   be mindful of that, please, when you're making
 6   these rules, cut us some slack; we need help.  We
 7   don't need more burden put on us.  Thank you very
 8   much.
 9                  MS. BRACKETT:  Thank you very much.
10                  Steve Bresnen.
11                  MR. BRESNEN:  Well, here I am again,
12   Steve Bresnen on behalf of the Binai Brith Youth
13   Organization, Odessa, Texas; New Rosenburg,
14   Scholarship Fund in Odessa, Texas; The Bingo
15   Interest Group.
16                  I'd like to divide my comments into
17   two sections on this.  One would be on the process
18   and one would be on the subjects.  Billy, I think
19   you have some justification for being disappointed
20   that I haven't given you feedback on this rule
21   prior to this meeting, because I got an e-mail of
22   it, and it was on the agenda, I think, the previous
23   meeting, in a different form.
24                  On the other hand, what I've been
25   working for, for a long time, was a process that
0133
 1   had a little more give and take built into it and
 2   more efficient than single phone calls back and
 3   forth.  You've been very good about calling me back
 4   if I called you, and our conversations are usually
 5   high quality conversations.  But there's something
 6   that gets lost, and it seems terribly inefficient
 7   from a staff point of view with limited resources
 8   to have individuals calling in and having the
 9   discourse where you don't get the give and take,
10   maybe, that you would with people with several
11   perspectives.
12                  The several perspectives would be
13   particularly helpful to me on this because I do
14   have some administrative and business background,
15   but I don't really know paper, so if there was
16   several stake holders involved in some process to
17   get that give and take, I might think of things,
18   and we might come up with ways to solve those
19   problems.
20                  Those words are probably nearly
21   verbatim with what I said in August of last year
22   that led to a sequence of times of me asking for
23   that kind of process.  If it occurred on this
24   occasion, I'm unaware of it other than the fact
25   that it was distributed out and informal comment,
0134
 1   before any publishing or anything took place, was
 2   solicited.  I like that part of it, but I don't
 3   think it quite goes far enough.
 4                  At this point, after talking to
 5   several members of the Advisory Committee about the
 6   last meeting, including asking about it again
 7   today, I still don't know what the problems are
 8   that are attached to any specific aspect of this
 9   rule that we might, then have the ability to say,
10   here's a better way to go about this or, you know,
11   that's not that big a problem or the cost of that
12   problem in complying with this solution of that
13   problem is greater than the problem itself.
14                  So I do -- you haven't heard from me
15   on this.  I got the same excuses as everybody else,
16   and I took a vacation in there in the middle
17   somewhere, you know.  So I think there's some merit
18   to you being disappointed in -- I'm just -- I'm
19   just assuming you're disappointed, I guess, about
20   my comment.
21                  But I think the process has to be a
22   little bit more robust and a little more give and
23   take.  Once before, I said in this format, we come
24   up and we acted just like a legislative committee,
25   and you go up and you act as a witness, and they
0135
 1   ask you questions, and there's some give and take
 2   here, but it just doesn't feel -- maybe I'm too
 3   government oriented -- it doesn't feel like the
 4   kind of give and take that you have in a, quote,
 5   round table discussion.
 6                  So I've got a number of questions
 7   about it, and I don't know if it's the appropriate
 8   time to ask them, but I'd like to ask them.  So if
 9   it is, I will; if it's not, I won't.
10                  MS. BRACKETT:  What else are you
11   suggesting?  Are you suggesting a work time to get
12   together with Billy or --
13                  MR. BRESNEN:  Good idea.  If several
14   people got together with different -- differing
15   interests.  I represent lessors and a few
16   charities.  I'm looking at it from the charity end,
17   new recordkeeping requirements.  You know, I just
18   don't see how we can, month after month or quarter
19   after quarter, report the results for bingo and
20   then add on new regulations, and it's a -- it
21   doesn't seem much of a stretch to me to draw that
22   conclusion.  In fact, it seems almost absurd that
23   we'd draw any other conclusion, when we ought to be
24   looking for a regulatory relief instead of piling
25   it on.  And it's -- I think we might be able to
0136
 1   solve it if there's some legitimate administrative
 2   problems, then I think people who are knowledgeable
 3   in this industry, like being bankers and
 4   distributors and manufacturers and lessors, could
 5   sit down together and hear what the problems are
 6   and ferret out the kernel that's always in the
 7   middle there.
 8                  I'm hearing constantly that their
 9   staff is under funded and that there's not enough
10   people to do the job, and yet, I know from my
11   person experience, this takes a lot of time and a
12   lot of work.  And this is the second meeting,
13   e-mailings, receiving comments from people, and
14   that takes a lot of work.
15                  So, you know, maybe if we understood
16   the rationale, it would be -- it would be -- it
17   would be helpful, and there might be solutions that
18   would be more administratively -- less
19   administratively burdensome.
20                  So, yes, ma'am, I am suggesting a
21   process like that.  If there's not going to be a
22   process like that, I'd like to see y'all study it a
23   little bit.  Anybody -- I think one thing I don't
24   want to see, I don't want to see us get punished
25   and have one of those statements in the Texas
0137
 1   Register that all of the agencies use -- I'm not
 2   just singling you out -- that says, this isn't
 3   going to cost any small businesses anything.
 4                  You know as well as I do, that
 5   happens all the time, and this is going to cost
 6   them; it's going to cost them a bunch of money.
 7   It's going to cost the distributors money, and it's
 8   going to cost the -- probably cost the
 9   manufacturers money, and it's darn sure going to
10   cost the conducting organizations money, so I sure
11   don't want to see that happen.  So I'd like to see
12   y'all get to the bottom of the cost.
13                  A really robust discussion about
14   this would get to the bottom of what it's going to
15   cost people to comply.  What are they doing now;
16   what are they not doing now that this would require
17   them to do; and is there an easier way to do it?
18                  You know, I suggested -- I think it
19   was on the pull-tab rule, I suggested that the
20   distributors supply the information to the
21   charities about the -- that had all the sales
22   information and the tracking information that you
23   would need and it would all be on the invoice
24   instead of having it on a separate log that you
25   have your invoices or something supplied by the
0138
 1   distributor, but I think all that information is in
 2   the depository of the distributors to begin with.
 3   And, anyway, I don't think I wanted that; I might
 4   have, but it doesn't feel like I wanted it.
 5                  So, I don't know.  One question I
 6   have is, is it true that there's one manufacturer
 7   that can supply the paper in it's existing
 8   production methods with the same serial numbers all
 9   the way down through the set?
10                  MR. ATKINS:  I don't know.  That's
11   the first time I heard that.  I think it would
12   be -- I think it's unfortunate that we didn't hear
13   that before --
14                  MR. BRESNEN:  Well, I --
15                  MR. ATKINS:  -- so that it could
16   have been addressed.
17                  MR. BRESNEN:  I just heard it.  And
18   I'm sure wanting to know it because I -- and I hope
19   I'm being as consistent as the sun coming up about
20   this -- I get really watchful for manufacturers of
21   any type who come through here and get a monopoly,
22   and get a leg up.  We had the same discussion about
23   the satellite deal this morning, about a single set
24   of standards that cut people out.
25                  I've been involved in government for
0139
 1   other 20 years, and I've seen plenty of overreached
 2   and greedy attempts to cut people out by
 3   legislation.  If that's the effect of that section
 4   in this rule, then it needs to be out of there.
 5   And number one, it needs to be out of there.
 6                  Number two, I think that however it
 7   got in there ought to be identified and discussed
 8   openly.  We ought to figure out whether it was a --
 9   whether it was intentional.  If that's the result
10   of somebody's comment, I'd like to know who made
11   the comment and see if it's the person -- if it's
12   the person and/or company that would benefit from
13   it.  So I think that needs to be looked into to
14   ensure the integrity of the process, and I would
15   request that that be done.
16                  Anyway, I have a number of questions
17   like that, that are probably less contentious and
18   difficult in a stake-holder type process, in a
19   public hearing type process like this, and I would
20   request that it be done.
21                  For the record, let me say that to
22   the extent that the items on page seven in the
23   recordkeeping for organizations are in excess of
24   anything that's required today, we are against them
25   for the simple purpose that it will decrease net
0140
 1   proceeds to bingo.  I don't -- I do not see how
 2   this concern for increasing net proceeds to bingo
 3   that allows people to make suggestions about
 4   changes in the structure of the bingo industry can
 5   be honored on the one hand and then ignored on the
 6   other like that particular page appears to and
 7   those particular requirements appear to.
 8                  And when I get to the card-binder
 9   rule, I'll make a similar comment about that.  I'm
10   happy to answer any questions if I can.  If I don't
11   know the answer, I'll get you the answer.
12                  MR. ATKINS:  Let me try and answer
13   one question you had, why the concept to the
14   changes to this rule first came about.
15                  I think you'll recall a couple of
16   months ago, there was a pull-tab rule that was
17   under consideration, and a lot of the talk centered
18   around how there are a variety of different types
19   of pull tabs that are available and that those pull
20   tabs will, you know, hopefully save the bingo
21   industry in Texas.
22                  And as we got through that process,
23   we became aware there's different types of paper,
24   different ways that paper can be played, so let's
25   do the same thing.  If we're going to do the same
0141
 1   thing, let's do the entire rule.
 2                  MR. BRESNEN:  Well, I guess, can
 3   I --
 4                  MR. ATKINS:  -- including
 5   definitions, approval process, recordkeeping, et
 6   cetera.
 7                  MR. BRESNEN:  Are you through?
 8                  MR. ATKINS:  Yes.  Go ahead.
 9                  MR. BRESNEN:  I just think it's the
10   last phrase that is -- I guess that's where we bar
11   custom.  Why not do the whole rule?  It's -- you
12   know, when we -- when you come down the chute and
13   they spank your butt and you start crying, at that
14   point in time, people generally are going to
15   justify what they do to you on the basis of
16   something that's good for you or needs doing.
17   They're not going to say, why not do this.  They
18   put you in a little playpen so you don't crawl out
19   into the street or in the swimming pool or
20   anything.  They give you the bottle because you
21   need substance; they don't say, why don't we give
22   him the bottle.
23                  And the government's the same way.
24   I'm not -- I don't mean to be absurd, and I'm not
25   attacking just you, but, I know, I lived in an
0142
 1   agency, and we woke up in the morning and we came
 2   up with brilliant ideas every day for things that
 3   needed to be done.
 4                  But just the fact that you're -- I
 5   like the fact that you're going out there and
 6   saying there's different kinds of games.  I think
 7   Steve said that.  I'm trying not to be duplicative,
 8   but he specifically pointed to lottery and the
 9   progressive and all that.  I think that's great.  I
10   guess where I disagree with is the next end of it,
11   why not do the whole thing?  If there is a problem
12   that is -- and it -- and it means something; It's a
13   significant problem and it requires a regulatory
14   fix, and if it's really a problem and bingo just
15   has to suck up and take it, then they'll have to
16   suck up and take it, but if it's not a problem,
17   let's don't do something about it just because we
18   happen to have a rule going by that has the same
19   number as the administrative rule for paper today.
20                  I think that's really where we -- I
21   think that's where we disagree.  I'd like to see a
22   little -- a little different process, and then I --
23   I think that's where we disagree, Billy, and I
24   think that's where we're going to -- I think that's
25   where we're going to --
0143
 1                  MR. ATKINS:  We're going to
 2   disagree.
 3                  MR. BRESNEN:  If we keep doing --
 4   we're going to do like this every time one of these
 5   rules comes up because people are -- bingo is
 6   sucking wind out there, and those things cost them
 7   money.  I'm sure you can see how any additional
 8   recordkeeping or something like Don says, somebody
 9   has to stay afterward and they pay somebody another
10   four hours, all that's coming off the bottom line.
11                  And even a suggestion to take the
12   charitable distribution off the top of the expense
13   ledger and then let everybody pay their expenses,
14   you know, that's -- that's not going to solve that
15   problem of still having to have somebody there
16   doing that paperwork, maintaining that log, putting
17   the sign up that's required in the next rule,
18   whatever it is, all of that stuff costs money, and
19   it's all coming out of the bottom line.  And this
20   is completely headed in the opposite direction.
21                  MS. TAYLOR:  On behalf of the
22   Lottery Commission -- and you know I don't show my
23   support often -- but the recordkeeping that he's
24   asking us to do is things that, I think, the
25   majority of halls are already doing.  I mean, I see
0144
 1   everyone of these things, and there's not a thing
 2   in here that we don't do in the normal course of
 3   action to keep our records.
 4                  MR. BRESNEN:  Are there any of them
 5   we can do without?
 6                  MS. TAYLOR:  I think to keep a -- if
 7   you're going to keep an adequate record and know
 8   which paper and logs, no, those are the things -- I
 9   mean, to write the taxpayer number of the
10   distributor, yeah, I don't think we need that, but,
11   I mean, that is not very time consuming to do, and
12   it's nothing that's going to take four hours.
13                  We can do three in a session in a
14   matter of minutes, truthfully.  The recordkeeping
15   they're asking here is something -- it only takes
16   minutes to do, and I can't imagine an organization
17   that's not doing that and keeping decent records of
18   their inventory.
19                  MR. BRESNEN:  That may be very well
20   true, that's why I made a point out of prefacing my
21   statement to just saying to the extent that this
22   new recordkeeping, and I'm talking --
23                  MS. TAYLOR:  I don't believe that
24   it's asking the charities for new recordkeeping in
25   that.
0145
 1                  MR. BRESNEN:  Is it a separate log
 2   that they're creating today or --
 3                  MS. TAYLOR:  It's a log that the
 4   Lottery Commission provides a form in their book,
 5   and you just write the numbers right on there.
 6   It's very easy to keep; it's fast, and it doesn't
 7   take any time.
 8                  MR. BRESNEN:  Is there another -- is
 9   there another way to do it?
10                  MS. TAYLOR:  Oh, I'm sure there is.
11   We used to do it another way.  It makes good sense.
12   I mean, some of this stuff, I don't think that's
13   good, but this particular item makes sense that
14   they provide to and everybody knows these in and
15   out.
16                  MR. BRESNEN:  Well, what we really
17   need is some give and take around all of these
18   things where people can say -- and, you know, I'm
19   not quick to judge you, I mean, you know that,
20   because I'm not at the halls every day -- but I
21   would be willing to bet you, somebody's got an idea
22   about, you know, we can leave that off.  I'll tell
23   you what, I'm extreme about this at this point, and
24   I'd say, if you don't need the tax -- the
25   distributor tax ID number, or whatever it is you
0146
 1   just referred to, then don't require it, don't put
 2   it in the rules.  Somebody is going to leave it off
 3   here sometime, and then they'll be in a pinch.
 4   Don't put it in the rules if they're doing it
 5   anyway.
 6                  MS. TAYLOR:  I mean, personally, I
 7   would want to see some of these new items that
 8   they've gotten here.  I mean, there's paper in here
 9   that I've asked about when I've looked through
10   catalogs many, many years ago, I mean, ten years
11   ago I was asking about the cards, and it's items
12   that I think could possibly help make our bingo a
13   little more interesting.  I mean, bingo is not a
14   real interesting thing for a lot of people.
15                  So I understand that you hate to
16   have more regulation, and I hate it too, but I
17   would love to see an expanded definition.  And I'd
18   hate to see everything completely slow down because
19   we're so worried about some of items that we're
20   already doing.  You know, I would love -- I would
21   hate to see the process stop, because I think we
22   should have a greater variety of bingo paper
23   available to us.
24                  MR. BRESNEN:  See.  I'm inflicted
25   partly by being a lawyer, although Steve is the
0147
 1   real lawyer, and as things get enumerated in the
 2   rules, then it's, to me, important to know, you
 3   know, A, what they mean and B, is it is new?  If
 4   this is something different -- if we're already
 5   doing it, then, on the one hand, it doesn't make
 6   any difference if you put it in the rules except
 7   that if you -- if you stop doing it or you fail to
 8   do it accurately or something, then you're in a
 9   pinch, so I believe that does matter.
10                  And I can fix the parts of this that
11   you care about with a pair of scissors in probably
12   about 15 minutes, you know, and some tape.  But
13   I'll tell you what, I don't want to come down here
14   every time there's going to be a rule making and
15   say, well, there's some good stuff in here and we'd
16   really like to have it and I really don't want to
17   slow that down, so let's suck up the rest of the
18   stuff that has a potential to add cost.
19                  I've heard two witnesses come up
20   here -- or three witnesses now and talk about
21   additional costs of that --
22                  MS. TAYLOR:  There's no cost --
23                  MR. BRESNEN:  The way this rule
24   is -- well, I'm just saying, you're -- you're
25   minimizing the aspect of additional cost, and I'm
0148
 1   telling you I've heard three witnesses that know a
 2   fair amount about bingo and --
 3                  MS. TAYLOR:  Oh, no, no, no, don't
 4   misunderstand me.  I brought up the cost to start
 5   with because that's -- that's the part that I had
 6   marked before I walked into this meeting.  Because
 7   I think any more cost to the charities is a huge
 8   negative, and I'm not saying that we should just
 9   forge along and -- and say it's okay to have the
10   cost because we need the product.
11                  But I'm glad to see the commission
12   working with us to bring new products, and if this
13   is just here for us to talk about and discuss again
14   today, I'm all in agreement with that.  I don't
15   agree in us making a decision because, as it is, I
16   think there are a lot of problems with it, but I'm
17   glad to see it here so that we're discussing it and
18   talking about it.
19                  MR. BRESNEN:  I agree with that,
20   too.  You know, one of the problems of being a
21   witness is that you never get to say everything
22   that you ought to, you know.  I do; I do appreciate
23   that, Billy.  I've also been on record numerous
24   times of saying we need to get, you know, some new
25   things going, things that are available in other
0149
 1   states ought to be available here.  I agree with
 2   that 100 percent, but if we can do those without
 3   complicating a difficult situation already.  Thanks
 4   appreciate it.  I didn't mean to spend that much
 5   time.  Thanks.
 6                  MS. BRACKETT:  Is there anyone else
 7   that wants to speak to this?
 8                  What is -- what is the pleasure of
 9   committee at this point?
10                  MS. TAYLOR:  Well, we've appointed
11   several committees at this point, and there's
12   several different rule making things on here that
13   I'm sure that -- that we're going to come to them,
14   and the same thing is going to happen that's
15   happening right now.
16                  I'd like to see a subcommittee
17   appointed that can study this with the different
18   aspects of the industry and the staff and come
19   forward with a recommendation to the committee
20   after the whole thing has been studied.
21                  MR. ATKINS:  And my only response to
22   this would be, as I mentioned, I think the staff
23   has, in good conscious, put their attention forward
24   on a process that they anticipated following up
25   with this.  I think at the last meeting, I
0150
 1   discussed laying this rule out for a period of
 2   discussion and bringing it back before taking it to
 3   the commission.  And right here today, I'm thinking
 4   that that still may be my desire to see if I can
 5   get this on the next commission agenda and ask the
 6   commission for publication.
 7                  MS. TAYLOR:  I think the one thing
 8   that bothers me about this rule is that -- the same
 9   things that worried me today about the cost, and we
10   discussed the series numbers at the last meeting
11   also.  You know, it's -- it's still right in here,
12   even though we've already discussed it at the last
13   meeting that this is going to affect the cost of
14   paper, not all manufactures can comply with that as
15   they currently produce their paper.
16                  MR. ATKINS:  And I guess, Suzanne,
17   the thing that confuses me, or the thing I just
18   don't understand is that I haven't received any
19   additional information about it.  I think somebody
20   was saying earlier on another item, you know, that
21   they haven't gotten a piece of paper that shows
22   what the cost is, and I haven't gotten that piece
23   of paper, and I think that would help very much,
24   and, you know, the last meeting was June 28th,
25   today is August 23rd.
0151
 1                  MS. TAYLOR:  I agree with you.  I
 2   think that Danny needs to get on the manufacturers
 3   and distributors and get these items to us.
 4                  MR. MOORE:  You know, my comment --
 5   I'll tell you what, I didn't -- I've read through
 6   this thing but, Billy, I got to tell you that that
 7   item D is flawed if it's the way I think it is.  I
 8   know probably more about bingo paper than anybody
 9   in this room, and I can honestly say that I've been
10   dealing with it, with my hands on it, for 16 years,
11   and nobody can produce that paper.
12                  In the Houston market, particularly,
13   there's one manufacturer that actually makes a
14   serial number that goes through the sets.  And
15   Houston is a twelve-line market, and as much paper
16   as they go through in a bingo session, they would
17   have to duplicate paper in a bingo hall, and I
18   don't know if you know anything about that, but if
19   two people are sitting next to each other with the
20   same set of paper, they're not going to be very
21   happy.  And I just -- I know that it's not going to
22   work the way this thing is written right now, if
23   the serial number has to be consistent through the
24   whole set.
25                  MS. BRACKETT:  Okay.  Billy, let me
0152
 1   ask you something.  You're wanting us to go on the
 2   agenda with the Lottery Commission so it would be
 3   available for public comment?
 4                  MR. ATKINS:  It's been available for
 5   public comment; however, I would ask that it should
 6   be published in the Texas Register and start with a
 7   formal rule-making process.  Now, once that occurs,
 8   there's a formal period of public comment, and you
 9   can do that in a number of ways.  You can receive
10   written comment; you can have public hearings like
11   we've -- as we've done before.
12                  MS. BRACKETT:  Are there any other
13   suggestions or action?
14                  MR. ATKINS:  And, again, that
15   doesn't mean that the Advisory Committee is
16   prohibited from, you know, saying to the commission
17   that they disagree with my recommendation.  I just
18   want to be very upfront with everybody and let you
19   know what my intent is.  Because, again, I think
20   that we have gone through this process in good
21   faith and, you know, to have this come up now, to
22   particularly have it come up with the fact that,
23   you know oh, we need these new games; we need these
24   innovations, it's -- I don't think is consistent.
25                  So that would -- you know, that's
0153
 1   just my intent to move forward with the commission.
 2   It's still ultimately the decision of the three
 3   members whether they actually publish it or receive
 4   additional informal comment.
 5                  MR. MOORE:  Sure.  But if there's a
 6   mistake made and it's found now, isn't it better to
 7   correct it before it goes any further?
 8                  MR. ATKINS:  Well, and, you know,
 9   I'm not going to --
10                  MR. MOORE:  You guys are not
11   infallible to make a mistake.
12                  MR. ATKINS:  And you're right,
13   Danny.  And I'm going to take all of these comments
14   that we've gotten today and review them before it's
15   put in a format for the commission.  I'm not saying
16   I'm going to make every change that is discussed.
17                  MR. MOORE:  No.  I understand that.
18                  MR. ATKINS:  Okay.
19                  MR. MOORE:  I understand that.
20                  MR. ATKINS:  Okay.
21                  MR. WHITTINGHAM:  But, basically,
22   what they're saying, it seems like if the card
23   numbers are -- like the twelve, if y'all got it,
24   it's the same number that goes all the way through
25   the series and it hasn't been tested and marketed,
0154
 1   if we do just put this stuff out here, a lot of
 2   people are going to duplicate.  Duplication causes
 3   a bingo hall to even really lose more attendance or
 4   close down because -- if we get two people to
 5   duplicating the cards, I mean, that's chaos.  So we
 6   have to be very careful dealing with these card
 7   numbers.
 8                  I can deal with the innovations of
 9   doing different things with paper.  As far as
10   changing the paper we got now, I really don't -- I
11   really don't see that.  There's so many -- so many
12   cards on paper as well as in computers; it's a
13   whole different series, and you're taking about a
14   major, major, you know, deal to do it, but -- and a
15   lot of manpower, I'm sure, to get this stuff done.
16                  MR. PAVLOVSKY:  I have a question on
17   B1.  What are -- what was the intent the
18   gentleman -- I forgot his name -- that was speaking
19   about that awhile ago, if he brought in something
20   to a hall that it would be illegal?  What's -- what
21   was the intent for this particular paragraph?  I
22   mean, what is the intent?
23                  MR. ATKINS:  The intent, I think, is
24   to keep unauthorized paper out of the state.
25   The -- now, I don't know that I'm going to go as
0155
 1   far.  I might have to go back and look at some
 2   other information, but that necessarily involves
 3   product samples or anything like that.
 4                  I don't think the comparison to the
 5   card-binding devices is necessarily an adequate
 6   comparison, or a fair comparison.  But, I mean, I
 7   know that there are several manufacturers who
 8   produce as folders, I guess, with different
 9   varieties, different products, that they have that
10   aren't all necessarily approved in this state, that
11   they distribute to, you know, organizations and
12   potential customers, and I don't remember us ever
13   taking action against any of them for that.
14                  MR. PAVLOVSKY:  Okay.  I've dealt
15   with attorneys for a long time and I know how they
16   can read things into things that's not there; they
17   make you believe it's there.  But, anyway, I really
18   wish you would look at that also, and perhaps there
19   can be some terminology added to that to where --
20                  MR. ATKINS:  Clarifying the intent?
21                  MR. PAVLOVSKY:  Yeah, just a little
22   bit, please.
23                  MR. ATKINS:  Sure.
24                  MS. BRACKETT:  Any other comments on
25   this?
0156
 1                  So where we stand now, this will
 2   be -- what am I trying to say -- published in the
 3   record?
 4                  MR. ATKINS:  No.  This -- I will ask
 5   that this be placed on the next commission agenda
 6   for them to vote to publish in the Texas Register
 7   for public comment.
 8                  MS. BRACKETT:  The Register for
 9   public comment.  All right.
10                  And the next Lottery Commission
11   meeting -- commissioners meeting is the 11th.  Is
12   that correct?
13                  MR. ATKINS:  Yes.
14                  MS. BRACKETT:  September 11th.  We
15   can't forget that date.
16                  MR. ARNOLD:  Can I make one comment?
17                  MS. BRACKETT:  Yes, go ahead.
18                  MR. ARNOLD:  My name is Phillip
19   Arnold from Houston, Texas, representing the
20   Reunion Institute and several other charities in
21   the Houston area.  Just a brief comment.
22                  I realize there are some
23   technicalities that are important to certain people
24   and property for the success of this that need to
25   be worked out, but overall, I am absolutely
0157
 1   overjoyed that we have, now, the opportunity to
 2   have this written that would include some of these
 3   new game -- new paper formats, that include the
 4   possibility of new games.
 5                  This is the kind of thing that
 6   charities have been asking for, for the last
 7   several months in regards to the event tickets and
 8   pull tabs, and we see it now applied to games such
 9   as the double numbers on the paper and the pinball
10   and also the -- I guess you pronounce it Loteria.
11                  The Loteria, for example, I was
12   taking a trip to Brownsville from a church to San
13   Juan down to the Valley, and some of my Hispanic
14   friends that were with me just started talking
15   spontaneously about, as his little children,
16   growing up playing a form of bingo called Loteria.
17   They began to discuss the symbols.  I'm sorry, I
18   just didn't -- I've been in bingo for 15 years, and
19   I had never heard of this.  And they brought up the
20   subject, and they were talking about how much they
21   loved it and how nice it would be if their
22   particular cultural approach to this particular
23   game was included somehow in bingo.
24                  And then I was totally mystified,
25   and I started reading about this, and I put two and
0158
 1   two together and see what we're talking about here.
 2   You know, this is a pluralistic society.  This is a
 3   way of including many people from many different
 4   walks of life into the whole bingo arena.  So I see
 5   a lot of very beautiful things here, and I hope it
 6   goes through.  Thank you.
 7                  MS. BRACKETT:  Thank you.  All
 8   right.  Let's move on to item number five, which is
 9   rules -- Amendment 567.
10                  MR. ATKINS:  Thank you, Madam Chair,
11   Members, this is amendment to Charitable Bingo
12   Administrative Rule 402.567, Bingo Advisory
13   Committee.  This rule was first read at the June
14   28th meeting.  We received no written comments or
15   any informal comments other than those raised at
16   the last committee meeting, I think, by Saleem and
17   they dealt with the length of term and staggering
18   the term.  And we have included those changes.
19                  He was correct in pointing those
20   out.  They are in, I believe, C4.  It references
21   the three-year term and that members hold staggered
22   terms with three terms expiring February 1st of
23   each year.
24                  Again, it would be my intent to ask
25   the commission at their next meeting to publish
0159
 1   this rule for public comment in the Texas Register.
 2                  MS. BRACKETT:  Are there any
 3   comments on this?  Any comments from members of the
 4   committee?
 5                  MS. TAYLOR:  Yes.  One of the things
 6   that I brought up at the last meeting was in, like,
 7   Larry's case where he represents unlimited
 8   charities, as long as one of his charities that he
 9   represents remains in good standing, then that
10   would not apply that he would be taken off the
11   committee if one of them was not in good standing?
12                  MR. ATKINS:  And that's one of those
13   issues where I don't know that we concur.
14                  MS. TAYLOR:  Okay.
15                  MR. ATKINS:  I think -- I think our
16   position would be that the -- that any Advisory
17   Committee member, any record that they're a part
18   of, any organizations that they're a part of the
19   record, should be operating in compliance, not a
20   majority of their organizations or something like
21   that.
22                  MS. BRACKETT:  Any comments?
23                  MS. TAYLOR:  Well, I don't --
24   personally, I don't agree with that idea as long as
25   one of his organizations was in compliance.  I
0160
 1   mean, there's people that are on multiple licenses
 2   because you work for many charities.  I just think
 3   that that's a real hardship if one of his
 4   licensees, for some reason, falls into that.  I'm
 5   just using Larry as an example because I believe he
 6   has multiple organizations.
 7                  I just think it would be easy for
 8   one or two to have a problem, and he would be
 9   ineligible, and I think that that would be a real
10   shame to take somebody off the committee for that
11   reason.
12                  MR. WHITTINGHAM:  I don't think
13   Billy would do that.
14                  MS. TAYLOR:  It's not his choice
15   anymore.
16                  MR. ATKINS:  As a matter of fact, I
17   did, but it didn't -- it doesn't affect us.  I
18   mean, you know, I think there's probably an
19   expectation by some, at least, that members of the
20   Advisory Committee, you know, like other people who
21   assume some sort of leadership position, be held to
22   a little higher standard.  And if -- you know, if a
23   member of the Advisory Committee chooses to be a
24   part of a multiple record, like many of them may
25   do, I think that's fine.  I think that's their
0161
 1   personal opinion -- or decision, but that they
 2   should be held to the same standard.
 3                  And, you know, it -- you know, it
 4   just doesn't sound very good to me, you know, to
 5   have to explain to someone, well, you know, that --
 6   since Suzanne started picking on y'all, I'll --
 7   I'll keep it up.
 8                  MR. WHITTINGHAM:  That's fine.
 9                  MR. ATKINS:  Larry is associated
10   with 23 organizations, you know.  22 of them, you
11   know, have some sort of administrative action, you
12   know, pending or completed against their
13   organizations, but there's still that one.  I mean,
14   that would just be my argument for it.
15                  MS. TAYLOR:  One other thing I was
16   going to ask about on attendance, the failure by
17   any member to attend two regular meetings can be
18   cause for removal.  Is that going to be mainly
19   cause, or are we going to have to -- I mean, is
20   that something that is really going to happen?
21                  MR. ATKINS:  It will be the decision
22   of the commissioner, so I wouldn't -- I wouldn't
23   speak for the commissioner, but I would say that if
24   there is a member that misses two or more meetings,
25   that it's brought to the commissioner's attention.
0162
 1                  MS. TAYLOR:  Okay.
 2                  MS. BRACKETT:  Any other comments on
 3   this?
 4                  Okay.  This is not an action right
 5   now, is it?
 6                  MR. WHITTINGHAM:  I want to comment
 7   on one thing.  You're talking about the charities.
 8   I understand you said 22; I got 23.  What about one
 9   out of 22?
10                  MR. ATKINS:  Yeah.
11                  MR. WHITTINGHAM:  I mean, you said
12   22 might be bad, 23, one might be okay.  What if
13   one is just bad, and two is good?
14                  MS. TAYLOR:  You're gone.
15                  MR. ATKINS:  You know, I think it's
16   the committee's chair -- it's the committee's
17   decision, you know, if they want to take action on
18   either of those rules either, you know, supporting
19   the publication or opposing the publication or
20   doing either one.
21                  MS. BRACKETT:  Okay.  All right.
22   But I would like to ask you -- well, let's wait and
23   go ahead and go forward to 555.
24                  MR. ATKINS:  Well, 555 would be.
25   Now, it's on the first reading, and it is not my
0163
 1   intent to take that for publication.
 2                  MS. BRACKETT:  All right.  On the
 3   Rule 558 and 567, do you add your support to Billy
 4   presenting these over to the commission?
 5                  MS. TAYLOR:  Do we have to put those
 6   for publication?
 7                  MS. BRACKETT:  For publication.
 8                  MS. TAYLOR:  I would prefer to do
 9   that separately.
10                  MS. BRACKETT:  Yeah.  We can do it
11   separately.
12                  Okay.  So we'll do -- I withdraw
13   what I previously said.  I am now asking for an
14   action on Rule 558 on Billy presenting that onto
15   the commission for publication.
16                  You want me to ask for a vote or are
17   you going to volunteer or are you going to ask for
18   a vote?
19                  MS. TAYLOR:  I would say that --
20   that I would make a motion that we support it with
21   reservations.
22                  MS. BRACKETT:  Okay.  The motion has
23   been made that we support it with reservations.  Is
24   there a second?
25                  MR. MOORE:  I second that.
0164
 1                  MS. BRACKETT:  Okay.  Submitted and
 2   seconded that we support the submission of Rule 558
 3   to the Lottery Commission for publication -- or for
 4   publication -- I keep throwing in the Lottery
 5   Commission for publication -- for reservation.  All
 6   those in favor?
 7                  MS. TAYLOR:  Are y'all voting?
 8   Maybe I need to see a show of hands.  So we have
 9   two votes for this, three -- four votes for it and
10   two -- two opposed to it.  So it carries.  Motion
11   carries.
12                  All right.  On item number 567.  Do
13   I hear a motion for support of Billy presenting
14   this for publication.
15                  MR. PAVLOVSKY:  I make a motion.
16                  MS. BRACKETT:  So moved.  Is there a
17   second?  It's been moved and seconded.  That item
18   number 567 that we support Billy getting that for
19   publication.  All those in favor?  Any opposed?
20   All right.  We have support of that.
21                  All right.  Now then, moving down to
22   item 555.
23                  MR. ATKINS:  Madam Chair, Members,
24   at the last committee meeting on June 28th, a
25   member of the public hearing, during the public
0165
 1   comment period, requested that this item be placed
 2   on the agenda for a first reading.  It is attached.
 3                  It contains changes that have
 4   already been suggested by staff, particularly the
 5   staff that's involved in the testing of the
 6   card-minding devices, and we have also received
 7   comments from one manufacturer of the card-minding
 8   devices that have been considered, and some of
 9   those changes have been included, some were already
10   included, and some of the changes have been made
11   and some were not.
12                  So this would be a rule where,
13   again, what we're calling the first reading before
14   the Advisory Committee for informal comments from
15   the committee and the public.
16                  The one -- I think in our opinion,
17   the biggest change in this rule is the deletion of
18   the 66 card face limitation, and it's one where the
19   staff would hope to receive meaningful public
20   comment on the position of licensees regarding
21   either the completion, the modification, or the
22   retention of the 66 card face limitation.
23                  MS. BRACKETT:  Are comments
24   appropriate at this time?
25                  MR. ATKINS:  I believe so.
0166
 1                  MS. TAYLOR:  I'd like to ask a
 2   question.  On page five, number five, down where it
 3   says that -- after where it has the underlined
 4   part, where it says, in such a manner that it's
 5   completed and clearly visible to the player using
 6   the card-minding device at all times and printed on
 7   the receipt issued to the player using the
 8   card-minding device.
 9                  Is this currently printed on the
10   receipt, the 1 (800) gambler's number?
11                  MR. ATKINS:  I don't believe so.
12                  MS. TAYLOR:  So now we're -- this
13   will be printed on every receipt and handed to
14   every player?
15                  MR. ATKINS:  Uh-huh.
16                  MS. TAYLOR:  I have a problem with
17   that.  I mean, we've already had it on the units;
18   we already have it hanging on the walls.  I don't
19   see people buying lottery tickets getting a receipt
20   with a gambler's hotline number on there.
21                  And I just think that they'll keep
22   acting like bingo players or, you know, you're a
23   bad person because you're a gambler, so we're going
24   to print this on every receipt we give you.
25                  But we're not following -- I think
0167
 1   the lottery reads -- look at how the lottery is
 2   run; the lottery doesn't require it.  Why in the
 3   world would we want to require that to be on every
 4   receipt given to our electronic players?  We
 5   don't --
 6                  MR. ATKINS:  Well --
 7                  MS. TAYLOR:  I have a problem with
 8   that.  That's just one of my -- one of my --
 9                  MR. ATKINS:  Well, can -- can I
10   respond to it?
11                  MS. TAYLOR:  Sure.
12                  MR. ATKINS:  I think the number is
13   printed on every ticket, and, you know, I think the
14   ticket is really the only receipt you get.
15                  MS. TAYLOR:  Well, you get handed a
16   card binder, and that information is printed on
17   each individual card binder, so why would we need
18   to put this on the receipts also?
19                  MR. ATKINS:  Recommendation.
20                  MS. TAYLOR:  Okay.  Well, that's one
21   of my problems.
22                  Number seven, under E, print up
23   requirements.
24                  MR. ATKINS:  Are you still on page
25   five?
0168
 1                  MS. TAYLOR:  No, I'm on page seven,
 2   E number two.  Each conductor shall conspicuously
 3   display, during all bingo occasions, a sign
 4   indicating the number of individuals attending the
 5   bingo occasion if they use electronic card-binding
 6   devices.  The letters on the sign shall be no less
 7   than one inch taller than the name of the
 8   conductor.
 9                  I can't imagine why you would want
10   to have to post a sign at the occasion, because
11   that number continually changes during the course
12   of the occasion.  I mean, when the first people
13   that ever walk in the bingo hall are electronic
14   players, at that point, the amount of electronic
15   players you're allowed to have is zero.
16                  Because until you get your first
17   four people in the hall that are not electronic
18   players, the amount of electronics you can really
19   have is zero; and yet, your first four players in
20   the hall are your electronic bingo players.
21                  So to post numbers -- I mean, if
22   this is saying how many people are allowed to use
23   an electronic during the occasion, I mean, that's
24   also some information most halls wouldn't want to
25   post.  Because if I walk in a hall and it tells me
0169
 1   exactly what 40 percent of their attendance is, I
 2   don't have to try and count their attendance; I can
 3   look at the little sign and see what their
 4   attendance is.
 5                  So I don't understand why in the
 6   world you would require the conductor to post a
 7   sign saying how many people can use electronics.  I
 8   just think that that's a problem also.
 9                  And then on number four, the
10   conductor shall inform all bingo players that the
11   bingo player cannot be required to provide
12   information for tracking.
13                  I mean, I can see if you need to --
14   if you're asking for that information from a player
15   that you would tell that particular player that
16   it's not a requirement that they give the
17   information, but why would you require to tell all
18   bingo players that they don't have to give that
19   information.  You're not even asking them.
20                  You know, if you ask it, I can see
21   where you should tell them it's not required, but
22   if you're not asking for it, why should you have to
23   tell them that?
24                  Anyway, that's -- those are -- those
25   were my problems reading this rule.
0170
 1                  MS. BRACKETT:  Any other comments?
 2                  MR. PAVLOVSKY:  What was the purpose
 3   of numbers four?
 4                  MR. ATKINS:  I think that number
 5   four is probably worded wrong.  Different, you
 6   know, player tracking systems, for example, can
 7   request certain information, you know, name,
 8   address, phone number, age, things like that, and
 9   you may have a player who only wants to give you
10   their name.
11                  MR. PAVLOVSKY:  If the commission
12   tells them they must do something then --
13                  MR. ATKINS:  They're -- they're not
14   being told they have to do this; they don't have to
15   do this, but if they choose to do it, they have to,
16   you know, do it according to these guidelines.
17                  MR. PAVLOVSKY:  Okay.  Okay.  I got
18   you.  Thanks.
19                  MR. ATKINS:  Okay.
20                  MR. MOORE:  Who recommended to do
21   this, or is the staff just taking this on by
22   themselves?
23                  MR. ATKINS:  Oh, no.  Joe Garcia at
24   the last -- at the last Advisory Committee hearing,
25   the public comment period.
0171
 1                  MR. MOORE:  That's right.
 2                  MS. BRACKETT:  Are there any other
 3   comments on this Rule 555.  You ready to vote?
 4                  MR. BISHOP:  I'm Don Bishop still.
 5   I have a question about the procedure that y'all
 6   are following because I hear members of the Bingo
 7   Advisory Committee asking questions from Mr. Atkins
 8   like it's the first time they're seeing this and
 9   the first time they've had a chance to discuss
10   this.  Is the staff making rules ready or almost
11   ready for publication and then bringing them to the
12   Bingo Advisory Committee to see and comment on --
13   for the first time like us?  Is that the --
14                  MR. ATKINS:  That's right.
15                  MR. BISHOP:  I've been away for a
16   while.
17                  MR. ATKINS:  Okay.  We're at the
18   very beginning of a process.  And you're right,
19   this is the first time that this committee has seen
20   the rule.  And what we will do is, for a period of
21   time, keep this rule out there in an informal
22   manner for people to comment on and negotiate --
23                  MR. BISHOP:  But what --
24                  MR. ATKINS:  -- changes and it's --
25   let me finish.  Is that okay?
0172
 1                  MR. BISHOP:  Sure.
 2                  MR. ATKINS:  Thanks -- and comment
 3   on it.  And after that period of time, it will come
 4   back to the Advisory Committee, and then we will go
 5   in front of the commission and propose that it be
 6   published for public comment in the Texas Register.
 7   So we're three or four months out from the official
 8   public comment period ever taking place.
 9                  MR. BISHOP:  So how do we determine
10   the difference between 402.558 that you're getting
11   ready to take to the commission for publication and
12   the one we're talking about now that's just now
13   coming to the forefront?  How do we know what stage
14   something is in?
15                  MR. ATKINS:  Okay.  Let me say it
16   again.  402.558, that's come before this committee
17   before; this is the second time they've seen this
18   rule.  Now, from the first time they saw it, we got
19   comments, and those comments have been incorporated
20   in here.  But this is the second time that 558 has
21   been published, or noticed, for a hearing by this
22   group.  This is the first time 555 has had a public
23   hearing before this group.
24                  MR. BISHOP:  Since I let you repeat
25   that, let me repeat my question.  How do we tell
0173
 1   which is which and what stage what's in?  Say, I
 2   mean, I wasn't able to be around when this passed
 3   through.
 4                  MR. ATKINS:  I don't know what it is
 5   you're holding up.
 6                  MR. BISHOP:  558.
 7                  MR. ATKINS:  Okay.
 8                  MR. BISHOP:  It's ready to go.
 9                  MR. ATKINS:  All right.
10                  MR. BISHOP:  How do I know when I
11   can and decide to come down here, because I live in
12   Arizona now, so I can't just throw a hat on and
13   trot down here every time y'all give a short notice
14   for a meeting, so my question still is -- I don't
15   have a copy of the agenda, maybe that could be put
16   in the agenda, maybe it's in the agenda, maybe
17   that's what I'm missing.
18                  MR. ATKINS:  No, it's not, and
19   that's a great idea.  Yeah, we can do that.
20                  MR. BISHOP:  And without being
21   adversarial, I'm wondering why we do come down here
22   and comment, because the comments I've heard Billy,
23   I've heard them systematically, and I had the same
24   experience when I was on this Advisory Committee,
25   the staff, given the time and going through and
0174
 1   through and whatever they decide to do to start
 2   with, so maybe that's why there aren't more people
 3   down here commenting.  I know it's why I quit
 4   coming down here and commenting.  That's exactly
 5   what I heard today.
 6                  MR. ATKINS:  Well, and, Don, you
 7   know, that's another area that we're working on;
 8   agreeing to disagree.  And I, you know -- I guess
 9   the assumption some folks is that every comment
10   just has to be accepted.  And, you know, I said it
11   upfront a lot of times; I said it today; I said it
12   before, that's not going to be the case.
13                  Every comment is considered, and
14   it's evaluated, But just because someone makes a
15   comment, you know, doesn't mean that that's going
16   to automatically be incorporated and, you know, put
17   in the staff's recommendation to the commission.
18                  MR. BISHOP:  How about just one?
19                  MR. ATKINS:  You know there are a
20   number that have already been made to this rule,
21   Don, and, you know, I just know how that attitude
22   really helps.
23                  MR. GRIFFITH:  Buddy Griffith with
24   K & B Sales.  On page seven, conductor
25   requirements, it's the position of our company that
0175
 1   you should abolish the 40-percent rule as
 2   unenforceable to start with, and that way you
 3   wouldn't have to have a sign to deal with in the
 4   hall, but let the halls run their halls.  And you
 5   know, you can ask for your paperwork, and you can
 6   see the money trail, but let the halls run their
 7   own halls and make their own decisions.
 8                  Along those same lines, page 9,
 9   number 5, at the bottom of the page, we went
10   through this once before a few years ago, the price
11   on electronic bingo should be -- the price should
12   be allowed to be made by the charity and not made
13   by a State person or persons trying to get into
14   their business.  If they want to sell their
15   electronic bingo machines for less than the price
16   that they get for paper, that's their business.
17   And if their business goes under because of it,
18   that's -- that's the price they pay.  You know, I
19   don't think the State really should get into
20   setting pricing policies for charities.  And this
21   is a -- this is bad rule and should be looked at
22   very closely because I don't think that it's
23   something that -- that we want a governing agency
24   to get into.  Let the games run the games.  Thank
25   you very much.
0176
 1                  MR. ATKINS:  Let me refer you back
 2   to D1 on page 7, before you push that requirement,
 3   it's not regulatory; it's statutory.  That require
 4   a change in the law.
 5                  MR. GRIFFITH:  Is that being
 6   enforced today, sir?
 7                  MR. ATKINS:  Yes.
 8                  MR. GRIFFITH:  It is.  Okay.  Thank
 9   you.
10                  MR. BRESNEN:  Steve Bresnen on
11   behalf Binai Brith Youth Organization, Lou
12   Rosenburg Scholarship, and The Bingo Interest
13   Group.  Well, I'd like to divide my comments to the
14   two categories, process and substance.  I basically
15   got the same thing to say about process on this,
16   except I think this is maybe even more truncated
17   than the process on 558.  558, if I'm not mistaken,
18   Billy, when I heard you describe it earlier, it
19   didn't sound like this got quite as wide a
20   distribution.  I don't think I got a copy of it.
21                  MR. ATKINS:  Of what?
22                  MR. BRESNEN:  Of the 555.
23                  MR. ATKINS:  It hadn't gone out
24   because it hadn't gone before.
25                  MR. BRESNEN:  You indicated you had
0177
 1   one manufacturer's comments about it.  But I would
 2   renew my request that you use a stake-holder type
 3   process when you're developing these things.  And
 4   I'll just -- if you can put the bid out and send me
 5   a transcript there for everything I said about the
 6   process before, I'd appreciate it.
 7                  To the substance, I agree with what
 8   Mr. Griffith said about the agency setting prices.
 9   I'm speaking specifically on page 9 item 5, at the
10   bottom of that page, G5, I'd like to know what the
11   problem is that's being resolved by requiring that
12   an electronic card face not be priced cheaper than
13   a paper face.
14                  MR. ATKINS:  I don't have that
15   answer right now, but I can get it for you.
16                  MR. BRESNEN:  My second question
17   would be, why is the -- why is the commission staff
18   proposing to regulate the competitive balance
19   between paper and electronics?
20                  MR. ATKINS:  In what way?
21                  MR. BRESNEN:  If one can't be less
22   than the other, than it's obvious that, by that
23   formulation, paper is advantaged, or at least
24   prohibited from being disadvantaged, in the pricing
25   policy of the charity.  Y'all are stepping into a
0178
 1   market decision and prohibiting somebody from
 2   pricing an electronic face at less than the price
 3   of paper, and I'd like to know what justifies that.
 4   What's the problem that leads you to want to set a
 5   price, or engage in pricing, any kind of price
 6   control, and, secondly, why would you weigh in on
 7   behalf of the paper manufacturers in this
 8   particular instance?
 9                  It seems to me that that policy is
10   clearly to the advantage of a paper manufacturer,
11   and I'm wondering why we -- what the commission
12   staff's interest is in regulating the competition
13   between paper and electronics.
14                  MR. ATKINS:  I don't know that
15   you're -- that I agree with your assessment that
16   it's in favor of one paper manufacturer as much as
17   it's probably --
18                  MR. BRESNEN:  I don't mean one.
19                  MR. ATKINS:  Oh, okay.
20                  MR. BRESNEN:  I mean paper engine or
21   electronics.
22                  MR. ATKINS:  As much as it's in
23   response to the complaints that we've gotten over
24   the years from conductors regarding the price of
25   the devices.
0179
 1                  MR. BRESNEN:  The complaints that --
 2   I'm not understanding.
 3                  MR. ATKINS:  Okay.
 4                  MR. BRESNEN:  What complaints are
 5   you referring to?
 6                  MR. ATKINS:  Complaints that
 7   conductors have had with what they're being charged
 8   for card binders.
 9                  MR. BRESNEN:  The complaints, some
10   of which I've made, have been about the price of
11   the product, the electronic product, to the
12   charity, not what the charity charges it's customer
13   for an electronic face.
14                  MR. ATKINS:  Then, I think this is
15   the perfect opportunity for you to submit an
16   alternative language.
17                  MR. BRESNEN:  Well, I will, but in
18   the form of a memo that says drop it.  But I have
19   the same question, things -- you know, some
20   intelligent people sat down and drafted this
21   language, and they had a thought and a reason for
22   putting it down; and the same way on the previous
23   rule, they had a reason for putting a single serial
24   number all the way down.
25                  In that case, it appears that -- it
0180
 1   appears that somebody didn't do enough
 2   investigation to find it whether that was a
 3   competitively neutral provision in the marketplace,
 4   or at least so I'm told here today -- I may be
 5   proved wrong on that.  I hope I will be -- but
 6   anyway, somebody did it, and it had an effect.  And
 7   in this case, somebody did it, and it clearly would
 8   have an effect, and it doesn't take too much
 9   analysis to see that there's a leavening, if you
10   will, of the competitive balance between paper and
11   electronics, in that sentence.
12                  It's both the regulation of a price;
13   it's telling the charities, in effect, you go set
14   your price in relation to these two different
15   commodities.  In relation to each other, they have
16   to correlate.  And, secondly, it's saying that one
17   of those cannot be put -- the paper can't be put at
18   a competitive disadvantage to electronics.
19                  Somebody intended something when
20   they did that.  They must have been responding to a
21   problem; they must have had a policy in mind, and
22   not just a policy, but a policy preference.  I
23   would like to know, and I think you-all ought to
24   know, when these things are being drafted, why do
25   those things happen like that?  It seems to me like
0181
 1   a reasonable question.
 2                  MR. ATKINS:  And let me try and
 3   answer part of that, Steve.  You know, if there's
 4   an expectation on anybody's behalf that when we
 5   bring this forward the first time, it's going to be
 6   perfect, they're going to be disappointed almost
 7   every time because, again, we're looking for a
 8   process, and we're looking for a way that people
 9   can comment on what we have.
10                  You know, I'm going to be real
11   honest, a lot of the stuff in this rule, a lot of
12   the stuff in the paper rule, we went to other
13   states, and we saw what they had.  And so a lot of
14   times, you know, you talk about a pair of scissors
15   and some tape, that's what a lot of this is.  And
16   the purpose for this is to put it out there to get
17   a discussion started.
18                  MR. BRESNEN:  Okay.  I appreciate
19   that.  This is -- is this another state's law?
20                  MR. ATKINS:  Steve, I don't know.
21   You know, I didn't write the thing.
22                  MR. BRESNEN:  Do we --
23                  MR. ATKINS:  We can find out.
24                  MR. BRESNEN:  I would be interested
25   in being involved in a stake-holder process where
0182
 1   those kinds of issues are discussed upfront, and if
 2   there's a policy preference that's being stated --
 3   I mean, you don't just pick everything or otherwise
 4   you would say, we're using Washington State's law
 5   and, you know, here it is.  You cut something out,
 6   and you put it in place, and there has to be a
 7   reason for it.
 8                  What I'm trying to get to is -- I'm
 9   not trying to say this is not perfect.  I've
10   already said, I don't -- I think that's not
11   perfect.  I'm trying to say, I want to know the
12   reasons for it.  In the same way, if there's a
13   problem -- I've said this until I'm blue in the
14   face.  It seems simple enough to me.  If there's a
15   problem and you will articulate it, or somebody
16   with articulate it, then we might be able to say,
17   well, here's another way to skim that or, oh, we
18   see the problem.  That is a bad problem.
19                  I went to the legislature in '97,
20   and I closed up some loopholes -- I think you were
21   involved with bingo at that time -- and I went up
22   there on behalf of my group.  We had a big bill
23   that closed up a bunch of loopholes that were
24   allowing a bunch of lessors to cheat in this state
25   and use charities and drive them into the ground
0183
 1   and just skim the cream and go on.  I'm on record
 2   for that.
 3                  I've been up there every session
 4   trying to do something.  Not to open up, not to get
 5   lessors off the hook on anything, not to -- I've
 6   done very little that even remotely had anything to
 7   do with lessors up there.  It's been about trying
 8   to close up loopholes, make for competition, and
 9   eliminate some regulatory overkill.
10                  And when y'all adopt something like
11   this, it seems to me you ought to be able to say,
12   we got this from here and here's why we got it;
13   here's the policy concern that motivated that, and
14   here's the way Washington State addressed that
15   policy concern, and we're trying this out to see if
16   it works in Texas, what do you think?  That would
17   be a more robust conversation in my point of view.
18   That's why I'm frustrated with the process.
19                  When I look up and see something and
20   people who are very knowledgable tell me only one
21   manufacture can meet that standard, I get worried
22   about that.  And then when I see something where
23   the commission is on -- or the staff is embarking
24   on a proposal, that's a departure from 20 years of
25   agency policy with regard to pricing of these
0184
 1   commodities, it makes me wonder why somebody would
 2   toss away a 20-year-old policy rather than just to
 3   say it's not perfect; we just thought we'd see what
 4   you think about it.  I don't think that's an
 5   unreasonable question.  Somebody knows why that was
 6   done, and they ought to answer it, and it ought to
 7   be answered in the public.
 8                  Secondly, I believe I've had a
 9   discussion with you in the past about the
10   40-percent rule.  It was my understanding that it's
11   very difficult to enforce, and I consider -- it's a
12   stupid policy, but I'll agree with you entirely
13   that it's a legislative policy and you're stuck
14   with it.
15                  MR. ATKINS:  I was going to say -- I
16   was going to clarify, it's not a rule.
17                  MR. BRESNEN:  I understand.  If
18   legislature did it, it may have -- it may have
19   served purposes at the time, but it's clearly
20   archaic and needs to be gotten rid of.  I tried to
21   do that last time.
22                  On the other hand, you have what the
23   lawyers call prosecutorial discretion, and I
24   believe you've been exercising that prosecutorial
25   discretion.  And if I'm not mistaken, generally
0185
 1   speaking, that that rule is being enforced now on
 2   the basis of complaints.  If you get a complaint,
 3   you follow up on it.  Am I right about that?
 4                  MR. ATKINS:  Yes.
 5                  MR. BRESNEN:  I'm not asking you to
 6   make any declarations about, you know, whether
 7   you've got an aggressive policy of enforcement or
 8   anything because I wouldn't expect to do that if I
 9   were you.
10                  When you post the sign out there, it
11   seems to me, you're just inviting additional
12   complaints.  And there is a law out there and, you
13   know, if people want to complain about it, they can
14   complain about it, and then you'll have to go
15   enforce it.  I think -- I agree with you 100
16   percent about that, but I wouldn't want to be in
17   your position with having to enforce it.
18                  But I think putting a sign up about
19   something that we all think is ridiculous just
20   invites you to have to put your scarce enforcement
21   dollars into something that everybody agrees is
22   ridiculous and serves no particular purpose.
23                  So I would suggest that, as an
24   exerciser of prosecutorial discretion and just out
25   of practicality, that you drop that out of this
0186
 1   rule, not invite anymore complaints, and I will do
 2   my best to try and get rid of the 40-percent rule
 3   in the legislature the next time.  Those are my
 4   first two comments about the rule, and I'll -- I
 5   promise to have some more for you.
 6                  MR. WHITTINGHAM:  Mr. Bresnen, I'm
 7   looking down at the bottom of page 902.  Number 1
 8   is, bingo is down already, and one of the reasons
 9   is, if this was to be put in effect, you would have
10   to price the stuff too much, you won't get any
11   people in the hall because the price is too high.
12   If you go too low, you get a lot of people, but you
13   won't make a dime for the charities, the way I'm
14   looking at this card compared to computers, because
15   you got to be on the same playing field all the way
16   around, and it really won't work.  It will kill
17   bingo, this page right here.
18                  MR. BRESNEN:  I understand.  But
19   that -- I agree with you.  I think that's what my
20   clients would tell me; we know this is on a
21   day-to-day basis, but, you know, my comment is a
22   little bit different.
23                  People go in and out of business all
24   the time.  Charities, they're already involved in
25   bingo, going in and out of the business all the
0187
 1   time, because they can't do their business or, you
 2   know, or people don't contribute, or for whatever
 3   reason.
 4                  And in this case, you've got two
 5   distinct elements of the industry.  And, you know,
 6   I haven't been down there exactly defending the
 7   card binding people for the last couple of years,
 8   so it's not like I'm carrying water for the card
 9   binding people.  As much as I love Joe Garcia, and
10   he's my friend, I'm not down here on their behalf,
11   at least to help them.
12                  So, anyway, I'd ask you to revisit
13   that, and if there's a process to do it, I'll visit
14   with you about, you know, how it got there and what
15   y'all are thinking, what the problem was, and all
16   that.  Thanks.
17                  MR. GARCIA:  Joe Garcia,
18   representing Game Tech on this issue.  We
19   requested, as indicated, that the bingo division
20   was going through the rule process and reviewing
21   all their rules.  We decided, as Game Tech, that we
22   would ask -- I came here before y'all to ask that
23   you review the card-binder rule.
24                  And part of the reason is, card
25   binders were allowed during the 1995 legislative
0188
 1   session and implemented and put in place in '96 by
 2   the Lottery Commission.  And a lot of things have
 3   changed technology wise, and we just wanted to take
 4   the opportunity to go through the rules and update
 5   things that were, I think, technologically no
 6   longer needed.  And so that was one of the
 7   impetuses for us asking for the review.
 8                  And while I've only had the rules
 9   since this morning, we certainly will make some
10   comments; although, we're not ready to make them
11   now because we haven't fully analyzed all of the
12   rules.  And we'll be coming back and, either
13   through the formal process, making the -- our
14   comments on it, but we appreciate the work of the
15   staff.  There's some things we like and some we
16   don't like, but that's just the way it is.  Thank
17   you.
18                  MS. BRACKETT:  Okay.  Right now,
19   let's take a 15-minute break; the court reporter
20   needs a break.
21                  (A short break was taken.)
22                  MS. BRACKETT:  The clock says 3:00,
23   so let's get back and call back into order, please.
24                  Are there are any other people who
25   want to make comments regarding item number 6, the
0189
 1   first reading of 455?
 2                  Okay.  Since there's not, we'll move
 3   on to -- since there's not, we'll eat move on to
 4   item number 7.  Suzanne Taylor, it's the
 5   consideration of the 1 (800) number.
 6                  MS. TAYLOR:  I asked this item to be
 7   placed on the agenda.  I don't know if any of y'all
 8   make a practice of calling the 1 (800) number; I
 9   do.  Until recently, it's been really difficult to
10   get a hold of the bingo staff to talk to them
11   because of all of the numbers you have to push and
12   all of the Lottery items that you have to hear
13   about.
14                  So I tried again yesterday, and I --
15   well, actually about a week ago, I tried, and I
16   realized that it had been changed recently, and I
17   asked the staff member I was talking to when it had
18   been changed, and she said that she wasn't sure,
19   but that they received lots of complaints from
20   people calling and how hard it was to get a hold of
21   the staff.
22                  But if you call the 1 (800) BINGO77
23   number, you still hear the first two sentences say,
24   thank you for calling the Texas Lottery Commission.
25   For the Lotto Texas Drawing held Wednesday, August
0190
 1   21st, there were no six out of six jackpot tickets,
 2   so the Lotto Texas Drawing rolls to an estimated
 3   $12 million, then it goes into our menu has
 4   changed.
 5                  If you call up the Lottery number,
 6   the 1 (800) 37LOTTO number, low and behold, you
 7   hear exactly the same recording.  So my request is
 8   that the bingo number either talks about bingo,
 9   tells how many prizes have been one in the last
10   quarter, the last year, the last six months, or
11   that the Lottery number includes the bingo
12   information, and we do a little trade, since we're
13   advertising the Lottery on the bingo line, that the
14   Lottery line advertises bingo and tells how much
15   money has been won in bingo.  So that is why I
16   asked this be placed on the agenda.
17                  MS. BRACKETT:  Are there any
18   comments from any members?
19                  MR. WHITTINGHAM:  Yes.  I think
20   that's a great idea.
21                  MR. PAVLOVSKY:  Super.
22                  MS. BRACKETT:  How would this
23   happen, Billy?  How would we get this to happen?
24                  MR. ATKINS:  That's one of the
25   things that I'm going to have to look into.  It
0191
 1   goes back to -- I e-mailed Suzanne several weeks
 2   ago requesting what the information -- or what the
 3   specific issues were, and I heard back from her
 4   yesterday morning, and I haven't had any time to
 5   gather any information on anything.
 6                  MS. BRACKETT:  I have to agree with
 7   Suzanne's comments.  It's often just made me
 8   thoroughly disgusted to have to sit and listen to
 9   that.  And so I really very seldom use the 1 (800)
10   number.  For that reason, I just try to have a
11   number that I dial straight through.  That's just a
12   comment, for what it's worth.
13                  What is the pleasure of the
14   committee?  Would you like for this to come up
15   again and have Billy get some more information for
16   us?  Any proposed action that we might -- we could
17   consider proposed action then?
18                  MR. WHITTINGHAM:  Yeah.
19                  MS. TAYLOR:  That's fine.
20                  MS. BRACKETT:  And item number 8 is
21   also by Suzanne, and it has to do with how the
22   bingo income shows up in the Lottery Commission.
23   Is that correct?
24                  MS. TAYLOR:  Right.  We have a lot
25   of records that are provided for us that explains
0192
 1   where the money that comes from the -- what we
 2   gross, what our net is, what money is distributed
 3   to the charities, and how much money goes to the
 4   State.  I have people ask me all the time, well,
 5   how is the money spent once it goes to the State?
 6   Where does it go from there?  And I know that we've
 7   heard people, well, how much is spent to actually
 8   regulate bingo; how much money goes into the State
 9   treasury?  We hear about that, but, how much money
10   goes into the state treasury?  How much money is
11   going to our local jurisdiction?  How much does
12   Nueces County receive from the organizations
13   playing bingo in Nueces County?
14                  The information is all out there,
15   but I would like to see it as some kind of report
16   that we have in our booklets that, you know, we see
17   how bingo is doing and where our money is going,
18   and I'd like to see where the income produced from
19   bingo for the State, where that money is going,
20   also.
21                  And I just want to jump in on the
22   agenda because I'm asked that question and I really
23   don't know.  I say, well, about $4 million regulate
24   bingo, and the other $11 million, it just goes to
25   the State.  But where does the $4 million go?  I'd
0193
 1   like to see a breakdown of where that $4 million is
 2   going.  And if I'm saying the numbers wrong, I
 3   apologize.
 4                  But where is the money that is spent
 5   at the Lottery Commission?  How much of it is spent
 6   on salary?  How much of it is spent on rent?  You
 7   know, where the money actually is going to and the
 8   breakdown of the money that's going to the State.
 9   How much is going just to the State and how much is
10   going back to local jurisdictions?  And I know that
11   it's about 50 percent, but I'd like to know -- I'd
12   like to see it broken down.
13                  How much is going to Nueces County?
14   How much is going to your county, Virginia?  And
15   what are they getting for y'all playing bingo?  Are
16   they helping support your organizations?  Your
17   creating an income for your county, are they
18   supporting you?  You're supporting them.
19                  So I think if we had more of that
20   information available to us here at future meetings
21   that maybe we could use that to help with what
22   we're trying to each do on our own local, and,
23   obviously, that's increase attendance and increase
24   the amount of money that we're making in bingo
25   games.
0194
 1                  MS. BRACKETT:  How do we get that
 2   figure?
 3                  MS. TAYLOR:  I'm sure that would be
 4   something the staff would need to get together and
 5   just have as a report in our folders.
 6                  MR. ATKINS:  It's relatively simple
 7   to get it.
 8                  MS. TAYLOR:  Well, so that's what
 9   I'm asking.  I mean, I'm asking -- you know, I'll
10   meet you.  That's all I asked it to be put on is so
11   that possibly in the future that that could be
12   something that could be included in our booklets.
13   But I didn't know if the rest of the BAC felt like
14   I did.  Is it something they're interested in or
15   not interested in?
16                  MS. BRACKETT:  Any other comments on
17   that?
18                  MR. WHITTINGHAM:  Well, I feel it
19   definitely would help if you go to your local
20   county, like Dallas, and we can tell them that you
21   get the same amount of money from Dallas, can't you
22   help us with your advertising and whatever we need
23   to do in that county; that would help to have that
24   information.
25                  MS. BRACKETT:  Well, there are two
0195
 1   different things here because our county is already
 2   getting money back from bingo, but what we're not
 3   getting counted in on is what part of the Lottery
 4   money is bingo-generated money, and that's the
 5   figure you're looking for.  Right?
 6                  MS. TAYLOR:  I know it's a very
 7   small figure.  I just would like to see the gross
 8   and where the money goes to.
 9                  MS. BRACKETT:  Okay.  Well, we'll
10   have that report next time.
11                  Item 11.  Suzanne, have we covered
12   that consideration possible discussion or action on
13   the progressive bingo?
14                  MS. TAYLOR:  No.  This was something
15   that was brought up last time, and Billy had made,
16   I think, the information available to some of the
17   new committee members.
18                  For those of you that weren't aware,
19   progressive bingo was approved in the last
20   legislature, and unfortunately was vetoed by our
21   wonderful governor, who I will not be voting for
22   this time.  But we don't express any opinions on
23   the vetoes for the only thing that passed from
24   bingo for the last legislature.
25                  But I just thought that maybe the
0196
 1   committee members ought to be aware of the fact
 2   that this did pass and this -- because it was
 3   vetoed last year doesn't mean that it isn't
 4   something that we shouldn't be supportive of and be
 5   thinking about and want to know about for the next
 6   legislature, which is coming up.  It will be too
 7   late.  If we don't talk about it now, it's going to
 8   be too late.  So if it's something that the current
 9   BAC supports, I wish the team to make a motion that
10   the current BAC does support progressive bingo
11   games.
12                  MR. WHITTINGHAM:  Second.
13                  MS. BRACKETT:  Okay.  It's been
14   moved and seconded that the Bingo Advisory
15   Committee support progressive bingo.  Would that be
16   supporting as it was presented the last time?
17                  MS. TAYLOR:  Yes.
18                  MS. BRACKETT:  Supporting that same
19   bill?
20                  MS. TAYLOR:  Yes.
21                  MS. BRACKETT:  What we would be
22   doing is making a recommendation to the commission
23   that this bill be re-presented as it was written
24   for the last session.
25                  So your changing your motion to read
0197
 1   that way?
 2                  MS. TAYLOR:  I sure am.
 3                  MS. BRACKETT:  Are there any
 4   comments, any negative comments, about this?  So
 5   all of you have a positive opinion on this and do
 6   support it?  Okay.  We do support making a
 7   recommendation to the legislature.
 8                  Item number 12 is consideration and
 9   possible discussion or action on automated
10   charitable bingo system.
11                  Explain, Suzanne, what the automated
12   charitable bingo system is.  I had a couple of
13   questions from people about that.
14                  MS. TAYLOR:  Back in August 24th of
15   '99 -- I have a letter that I'm handing out to the
16   BAC members that was in the booklet provided to us
17   at the meeting -- and what it was talking about is
18   the fact that administrative rule 402.572 allows a
19   one-time 25 percent increase in license renewal
20   fees for conductors and lessors for renewing their
21   license Class E through J to purchase a charitable
22   bingo system for the Lottery Commission to use.
23                  And at that time, the staff had come
24   forward and -- I mean, they were using a pretty
25   out-dated system to try and do some pretty
0198
 1   complicated work, and the Advisory Committee did
 2   support this one-time fee, and it was a temporary
 3   fee, and it was paid.
 4                  And it's my understanding that, as
 5   of this date, even though this fee has been paid by
 6   all the organizations conducting bingo games, that
 7   we still don't have the charitable bingo systems.
 8                  So I felt like it's something that
 9   needs to come back up on the agenda because we need
10   to abreast of what's happening with this.  The
11   charities have already paid for it, and we need to
12   be aware of what's happening with it and is it in
13   place?  Well, no it's not in place.
14                  But I just felt this needs to be an
15   agenda item so that we can keep this in our minds.
16   This is something we need to be looking at since
17   the charities paid for this piece of equipment.
18                  I asked -- in my e-mail to Bill
19   yesterday, I asked if he had any new knowledge
20   about this particular item, but I don't believe --
21   I don't know if he does or doesn't.
22                  MR. ATKINS:  This is a matter that's
23   in -- that the agency is involved in litigation in,
24   and I'm not in a position to discuss that.
25                  MS. TAYLOR:  So I would just like,
0199
 1   if it's okay with the committee, to have this be
 2   one of our agenda items that we just kind of keep
 3   track on so we can follow the progress of what's
 4   happening to the system that the charities paid
 5   for.
 6                  MS. BRACKETT:  Okay.  So we will
 7   keep an eye on this situation.
 8                  MR. BRESNEN:  May I just ask a
 9   couple of quick questions?
10                  MS. BRACKETT:  Two questions.
11                  MR. BRESNEN:  Just two.  Okay.  Can
12   it be a compound question?  Two compound questions?
13   I don't know if I put this agenda item on my
14   sign-in sheet.
15                  I guess my first question is, are
16   the people who ponied up before disposed to
17   potential future rule making to decrease the fee
18   again and get money together to produce a program?
19   Because I know we needed the program to begin with
20   and, you know, I supported that, went to the
21   legislature and helped and kind of got -- it got
22   approved at the end, in a way, I was surprised
23   about, but other than that --
24                  But I don't want to pay for it
25   twice, so, I mean, is there any way under your
0200
 1   existing authorization that you can change the fees
 2   again and to get more money to build a system if
 3   you have to?
 4                  MR. ATKINS:  Let me try and answer
 5   that one.  I'm not going to -- I'm not going to
 6   comment or speculate on what we may have to do to
 7   resolve this situation.  I mean, I'm not going to
 8   go there, but let me try and answer the broad
 9   question.
10                  The Act says the minimum license fee
11   and that says that the commission, per rule, can
12   increase those fees.  So maybe that will answer
13   one.  But, again, any -- I guess, any increase in
14   license fee, those increased funds would have to be
15   appropriated.
16                  MR. BRESNEN:  Okay.  Was that done
17   by -- can this be like a bifurcation of my first
18   question?  Did they -- I can't remember how they
19   did that.  Was the --
20                  MR. ATKINS:  It was a contingency.
21                  MR. BRESNEN:  But was there a -- was
22   there a sum certain in the contingency, or was it
23   just enough to get a computer?
24                  MR. ATKINS:  Uh-huh.
25                  MR. BRESNEN:  It was a sum certain.
0201
 1   Okay.  Was the amount that was contracted for, did
 2   it eat up the whole sum certain?
 3                  MR. ATKINS:  I'm not going to
 4   comment on that.
 5                  MR. BRESNEN:  Okay.  Then I really
 6   only have one other question.  This really kind of
 7   relates to the structure.  Maybe I'll ask this.
 8   Are we going to talk about Sunset?  Let me just ask
 9   it now because it will inform me, and I may need to
10   leave.
11                  The purchasing process for that
12   system, does the agency use like a separate
13   purchasing deal, or is that something that happens
14   through the bingo division, or how did that -- how
15   was the purchase made?  Just internally, was
16   there -- I'm sure there was an RFB.
17                  MR. ATKINS:  RFO.
18                  MR. BRESNEN:  Okay.  Was that
19   done -- did bingo division do that, or did y'all
20   have a separate purchasing division, or did
21   someone -- you know, did general services or
22   somebody do that, or how did that work?
23                  MR. ATKINS:  The RFO was drafted by
24   the legal division, and there was input with other
25   pertinent divisions besides the bingo division.
0202
 1                  MR. BRESNEN:  Right.  And then
 2   the -- ultimately, did you select the final bidder
 3   or, how did that, you know --
 4                  MR. ATKINS:  Yes.
 5                  MR. BRESNEN:  Okay.  Thanks.
 6                  MS. BRACKETT:  Thank you, Steve.
 7                  Item number 13.  Larry Whittington
 8   is going to talk to us.
 9                  MR. WHITTINGHAM:  Well, basically,
10   what I want to speak about is, last year whenever
11   the legislation was passed, they almost agreed to
12   put 8-liners -- I'm just going to say 8-liners --
13   in bingo halls.  What I want to discuss, from
14   firsthand experience with game rooms, 8-liners
15   means bingo and, of course, all the charities that
16   are affiliated with each hall.
17                  As you, bingo has taken like a 25 or
18   30 percent decline in the last three years.  And
19   this is part and part due to casinos, the Indian
20   reservations, as well as free-standing game rooms,
21   which is basically 10 to 30 minutes from any
22   gambling bingo hall in Texas.
23                  These places are still standing, and
24   they are pulling a lot of customers away from the
25   bingo halls because the customers, they tell me all
0203
 1   the time, we love the games; we love the game of
 2   chance, and we're going to play these games no
 3   matter where they are, whether they're in Texas or
 4   Louisiana or whatever, we're going to go play these
 5   8-liners; they love them.
 6                  So we can look at all the
 7   demonstrations, all the pull tab machines, any
 8   machine basically that has a player on it is
 9   basically considered as an 8-liner, as far as I'm
10   concerned, no matter what we look at.  In other
11   words, given the same playing field as some of
12   these game rooms, we got to compete.  Okay.
13                  And, of course, most bingo halls
14   have had 8-liners in them at one time or another.
15   When they raided the game rooms back two years ago,
16   they also raided a lot of the bingo halls, and they
17   took the games.  Okay.  And a lot of bingo hall
18   owners told me that that's the only way they're
19   existing was through the 8-liners, money coming in
20   for the charities.
21                  But we went a step farther; we went
22   to the City of Richardson, which is a suburb of
23   Dallas.  We went in and talked about 8-liners
24   pertaining to bingo.  We went into the first place
25   that you see, we went in and talked to the City of
0204
 1   Richardson, the city council.  They, in return,
 2   turned around and voted and gave us approval to
 3   open a large bingo hall, which is four hours per
 4   session, plus a 30-minute break, which they gave us
 5   nine hours total to open up the game room to our
 6   bingo.
 7                  And as you can see on page 3 that I
 8   gave you is a copy of a bingo gift certificate.
 9   That's all we gave away, going through what I gave
10   you, because it's -- we all would do bingo gift
11   certificates only.  We thought we wasn't going to
12   lose a lot of business because we had a
13   free-standing game room; they gave away Wal-mart,
14   K-mart, and everything else.  But we agreed with
15   the City that we were going to go strictly bingo
16   gift certificates.  So we said, we know we probably
17   won't have a lot of people, but at least we have
18   something for them to do in the bingo hall, some
19   type of activity.
20                  And you know as well as I do, no
21   matter what you do, you cannot get those people in
22   the first hour of bingo.  You got four hours,
23   they're coming to play bingo, so they're not going
24   to come out -- come in for four hours of bingo.
25                  So they came in early, and we
0205
 1   thought we was going to lose a lot of business, but
 2   they came in, and we actually kept about 8 percent
 3   of our business.  And we found that our bingo
 4   players were basically playing in these game rooms;
 5   they would go wherever a game room was to play
 6   these games.
 7                  So they agreed to give us a
 8   nine-hour slot for our game room, and we thought we
 9   was okay, and we gave away a lot of bingo gift
10   certificates.  Basically saying, you're only
11   playing for bingo gift certificates and you're only
12   playing for the charities.  And the lessor agreed
13   to give 50 percent to our charities.  Okay.
14                  Bingo was down, but in return, these
15   game rooms brought in another $1,000 for our
16   charities every day without the bingo.  Okay.
17   Because sometimes we didn't have bingo money to
18   give to our charities, but they helped a lot.  And,
19   in return, we turned around and opened up a
20   pull-tab stand -- which you see a picture of -- we
21   could never get nobody in early for just bingo, but
22   once we opened this pull-tab stand up along with
23   the game room, these people was winning bingo gift
24   certificates, so, in return, they turned around and
25   played more pull tabs three hours before bingo, and
0206
 1   we tripled ourselves in pull tabs just by having
 2   them in the game room.  Okay.
 3                  The third page is a check and
 4   balance system.  We did it daily, and this is easy
 5   to keep up with, daily check and balance system.
 6   And, of course, the next page is the weekly check
 7   and balance system.
 8                  But low and behold, we got raided
 9   any way, and we lost our game rooms.  They came in
10   three months later, but didn't know why because we
11   had made an agreement with the City, and they said
12   it was okay, but they raided our game rooms any
13   way.
14                  So what I'm trying to say is, no
15   matter what we do, no matter what we talk about, we
16   have lost at least 30 to 40 percent of our people
17   to these free-standing game rooms.  I can go in any
18   game room in Dallas during bingo time and see at
19   least 20 percent of our customers that used to come
20   to our bingo halls.  Okay.  And they turn around
21   and tell me, Larry, they've got to fill up the game
22   rooms; I don't care what y'all is giving away, we
23   just wanted to play the games; we wanted something
24   to do.  Okay.
25                  And I said, wow.  Basically, I said,
0207
 1   you know, you're right because we went strictly to
 2   bingo gift certificates, and y'all turned around
 3   and still played -- 80 percent of them still came
 4   to play in our bingo hall.  And every time when
 5   bingo started, they played bingo; when bingo was
 6   over, they went back into the game room and played
 7   some more just to win some more bingo gift
 8   certificates for the next day.
 9                  So this has happened so much, and it
10   is really critical for us to get on the same
11   playing field.  This will accomplish three things.
12   It will definitely increase revenue for the
13   charities every day.  Okay.  That would be monies
14   to hire people to handle these jobs, and then you
15   also will open doors up for all the jobs for
16   people, too, because people are in need of jobs
17   these days, especially qualified people.
18                  You can also license and charge a
19   fee for these distributors who have these machines
20   for them to pay a license fee coming to the State
21   of Texas just to have these machines in their hall.
22   The monies would be taxed daily just like bingo,
23   which is very easy to keep up with; it's not a
24   difficult process.  5 percent can go strictly to
25   the bingo advertising fund, or whatever we decide.
0208
 1   We will have enough money to pay a person and
 2   enough money to advertise bingo just by doing this,
 3   just by regulating these machines and taking 5
 4   percent tax, just like a bingo session.
 5                  And from firsthand experience, we
 6   have went down about 40 percent compared to when we
 7   had the games six months ago, 40 percent in
 8   revenue.  So it's very important.  I mean, the
 9   games are put in for a purpose, guys, and I really
10   feel that purpose was to help the charities.  And
11   this little bingo gift certificate, that's all it's
12   for; it's for helping charities, that's all it's
13   good for.  That's all they're going to win.
14                  And in return, this is going to
15   circulate back in the halls.  They're going to win
16   the bingo gift certificates; they're going to play
17   bingo pull tabs every day.  It just circulates.
18   You will be bringing these people back all the
19   time.  And that will increase our revenues for
20   these charities, I know, about 25 or 30 percent if
21   we was to regulate these machines and make them
22   legal in the bingo halls.
23                  Does anybody got any comments about
24   it?  I would like for you to at least speak about
25   it or comment about it.
0209
 1                  MS. TAYLOR:  I have a question for
 2   you.  I noticed in there that letter written to
 3   Lieutenant Kevin Hughes that it says that y'all
 4   were operating within 47014B.  So your machines did
 5   not pay out in more than $5 or ten times the cost
 6   of a single play?
 7                  MR. WHITTINGHAM:  No.  We paid out
 8   gift certificate, and we got that approved.  We
 9   didn't -- we weren't going on the 10-percent rule.
10   We went in front of the city counsel and got it
11   approved.
12                  MS. TAYLOR:  So you weren't actually
13   complying with 4701B?
14                  MR. HENNESSY:  Can I speak to this?
15                  MS. BRACKETT:  Sure.
16                  MR. HENNESSY:  This is what I'm
17   interested in.  I Dan Hennessy, and I represent a
18   number of charities.  I'm a lawyer in Dallas.  This
19   is not my main line of business, but it's becoming
20   more important all the time.
21                  What we did, we figured those gift
22   certificates -- the gift certificate itself has
23   little or no value.  I'll give you a comparison.
24   You know, if you get a discount on a bar of soap or
25   on tooth paste or something at the store, they'll
0210
 1   always put a value -- look at the value of what
 2   that's worth.  It may be 100th of one cent, one
 3   tenth of one cent.  They value.  It's the same
 4   thing here.  What we're selling, in a sense, are
 5   discounts for bingo.  And we give those discounts
 6   in my ways.  One, is we have a dart throw every
 7   day.  You know, they get a door prize.  They throw
 8   a dart, and if you hit it, one person will win a
 9   penny computer and one person will win a penny nine
10   dart, for example.  We also have, it's your
11   birthday, and you can get a penny computer.
12                  The same thing here, if you win that
13   gift certificate in there, you can come on in --
14   and the piece of paper is good nowhere else -- but
15   you could walk through the hall and get a discount
16   on pull tabs or you can get a discount on playing
17   your bingo.  There was no -- and there's no change
18   given, by the way.  You can't go and get that $5
19   gift certificate or discount and get -- buy one
20   pull tab and get $4 in change back.  There's not
21   change.  If you just wanted one pull tab, you gave
22   the $5.  That's all you got, so the cash is out of
23   that program entirely.
24                  That's the reason I was arguing that
25   this thing complied with that fuzzy bear exception
0211
 1   in the rule.  Actually, the Richardson Police
 2   Department didn't disagree with us, but what
 3   happened was, somebody up there that had a game
 4   room that was closed complained about us -- I don't
 5   know which one it was -- and so they put some heat
 6   on somebody in Richardson on the city council and
 7   then they came in and shut us down.  But they were
 8   very friendly about it.
 9                  MS. BRACKETT:  So they -- actually,
10   what you were saying is that there was no cash
11   value --
12                  MR. HENNESSY:  That's right.
13                  MS. BRACKETT:  -- to the reward that
14   they were receiving for playing the machine?
15                  MR. HENNESSY:  That's right.  And
16   that's something you can argue all day long.  But
17   one thing to clarify the thought that I had on
18   this, if we took this and made it part of the Texas
19   Bingo Enabling Act, you could use most of what the
20   statute that's already there.  The persons that
21   come in and manufactures those machines have to be
22   licensed, just like they have to be now in the
23   Bingo Enabling Act.  The distributors of those
24   machines have to be licensed, just like they do
25   now.  The same way all the way through.  Just
0212
 1   incorporate it into a statute.
 2                  And then I also thought, so that you
 3   wouldn't cause these big game rooms to bloom, say
 4   you had 500 square feet, and the spaces on the side
 5   of your wall -- if you have up to a maximum of 25
 6   machines, let's say that you had one machine for
 7   500 square feet.  If you had a 15,000 square foot
 8   hall, a big hall, you wouldn't get 30 machines, we
 9   would just limit to 25, say, max.
10                  So it won't be a big obnoxious -- I
11   know in some places it became hundreds of machines.
12   You don't need that to do what we're trying to do
13   here.  If you have a small number of these
14   machines, like 25, that's plenty, and it gives your
15   bingo customers some entertainment, something to
16   do.
17                  And what we found was, they will
18   really stay there, and they'll enjoy that bingo
19   certificate to no end.  It really works.  And
20   that's why we then went to selling the larger pull
21   tabs, you know, 599 has almost disappeared from the
22   State of Texas because charities just couldn't
23   afford to have somebody hit a 599.  It would wipe
24   them out for that day, so people were scared to
25   death of those big payoffs on pull tabs.
0213
 1                  But if you've got a lot of people
 2   playing a lot of different pull tabs, it really
 3   works.  And, in fact, Mr. Whittington went up to
 4   Ohio where they have these pull tab places up
 5   there.  The way they allow the charities up there,
 6   they actually have places to just sell pull tabs
 7   under their walls, and they would have like 10, 12,
 8   15 different pull tabs with a lot of 599 winners in
 9   there.  And it was a very popular.  There, it
10   caught on just in and of itself.
11                  But the idea was to kind of parrot
12   that down here, but to combine it with your game
13   room where people could win these discounts and
14   then go buy all these extra pull tabs.  And it
15   worked, by the way; the combination did work.
16                  And so what we would like to suggest
17   is that we consider amending the statute to
18   incorporate these machines on this limited basis
19   where they only can give a bingo gift certificate,
20   no cash, no way, and they can establish a value for
21   that thing and pin it under that fuzzy bear
22   exception, and then enforce it with all the same
23   type of regulations that you have currently for
24   your manufacturers and your distributors.
25                  And by the way, I know a statute was
0214
 1   coming out for a rule on accounting for these
 2   things, which was quite convoluted.  I remember
 3   reading it sometime time ago.  I saw one and read
 4   that rule.  The accounting can be done very easily
 5   for this.  It doesn't have to be complicated or
 6   overly regulated.  Just like you're doing
 7   currently, but the way you're doing the bingo.  We
 8   can do it in the same format.  So I think of a lot
 9   of what you're doing within the bingo division,
10   those same ideas fit perfectly, and we can fit this
11   type of concept we're talking about right in there.
12                  And then if you have your 5 percent
13   tax, for example, on the gross revenue from those
14   machines, you will have a lot of money, enough to
15   hire the additional enforcements that you need to
16   keep them regulated as well as to advertise bingo.
17   It would be a lot of money.
18                  MS. TAYLOR:  I agree with most of
19   your concepts.  I don't agree with limiting the
20   number of machines to the size of the location, for
21   the reason that I think that -- for the VFWs.  You
22   know, some of the halls are really small, and I
23   think that would be --
24                  MR. HENNESSY:  I just wouldn't let
25   it get too big.
0215
 1                  MS. TAYLOR:  I understand limiting
 2   the numbers, but I'm just saying --
 3                  MR. HENNESSY:  The idea is to keep
 4   it in balance.  But, no, you could have the VFW
 5   have -- let everybody have 25 machines.
 6                  MR. WHITTINGHAM:  Just like I went
 7   to the attorney general's office and talked to Jeff
 8   Guard as well as the governor's office and talked
 9   to them.  I had appointments with these people, and
10   I explained our theory, and they were really
11   surprised.  They said, man, that's great.  That's a
12   good thing, but we got these rules.
13                  Some that was recent legislation we
14   can't change, but we understand, we sympathize with
15   you.  That is a great idea what y'all are doing.
16   But if we was in Dallas County, maybe I could help
17   you more, he said.
18                  But he was really surprised when it
19   come to game rooms and bingo gift certificates and
20   circulating the money back into the charities like
21   that.  And it's just a great entity, and we really
22   need that because this is not a new thing.  This is
23   an age-old thing that customers love these games,
24   and they're going to play them no matter where they
25   are, whether here in Texas or Louisiana or
0216
 1   whenever, they're going to play the games.
 2   
 3                  MS. TAYLOR:  So what if you used the
 4   machines that have the best report.
 5                  MR. WHITTINGHAM:  The what?
 6                  MS. TAYLOR:  The best report, the
 7   one that -- or the game count.  Where when they
 8   play, they're only allowed to win five times -- or
 9   ten times their bet or $5 in a single spin.
10                  MR. WHITTINGHAM:  You still got the
11   free-standing game rooms; that's going to kill you.
12   We tried that.  We got free-standing game rooms
13   five minutes away, so they're going to go there.
14                  MS. TAYLOR:  Because they can win a
15   larger amount with a single spin?
16                  MR. WHITTINGHAM:  Yes.  We tried
17   that.
18                  MR. HENNESSY:  You're more
19   competitive if you can have -- you know, if you
20   think a guy could win $500 in discounts.  But, you
21   know, really, what we're talking about is very
22   similar.  If you go into a Dave & Busters or one of
23   these places, you know, you can go win a stereo.
24                  MS. TAYLOR:  I won't argue with you.
25   Five minutes from my home, the game rooms are legal
0217
 1   because you're across the county line.
 2                  MR. HENNESSY:  Yeah.  It depends
 3   upon -- unfortunately, it's spotty in portions
 4   right now.  But we're being killed by Oklahoma and
 5   Louisiana; they are killing us.  Anyway those are
 6   my comments.
 7                  MR. HUNTER:  My name is Dave Hunter.
 8   We have three halls that have been around since the
 9   '80s, and two of the three halls right next door,
10   game rooms came in, and we lost about two thirds of
11   our customers, so we figured, hey, we can't beat
12   them, we'll join them; we'll get our machines and,
13   you know, get the money to the charities.
14                  And for different reasons, we were
15   told to shut down while the other game rooms kept
16   open.  And I'm sad to report that I only have one
17   hall now.  Two of them have been forced out of
18   business because they can't make it without the
19   machines.  We went from having well over 100 people
20   consistently to about 40.  And you just can't make
21   it with those kind of people.
22                  And you ask them why they don't
23   come, and they say, you don't have the machines.
24   So, I agree with Larry, and I just wanted to
25   express how I felt.
0218
 1                  MR. PAVLOVSKY:  David, where are you
 2   from?
 3                  MR. HUNTER:  Fort Worth, Texas.
 4                  MR. PAVLOVSKY:  Why are the other
 5   free-standing game rooms legal and you were not?
 6                  MR. HUNTER:  They're not in the city
 7   limits.
 8                  MR. PAVLOVSKY:  Okay.
 9                  MR. HUNTER:  In the county, they can
10   do whatever they want.
11                  MR. WHITTINGHAM:  Plus a lot of the
12   states don't have the money and the manpower and
13   the budget to even close them down anymore.
14                  MR. PAVLOVSKY:  A lot of the states
15   or the cities?
16                  MR. WHITTINGHAM:  A lot of the
17   cities.
18                  MR. PAVLOVSKY:  Thank you.
19                  MR. HUNTER:  Thank you very much.
20                  MS. BRACKETT:  Is there any other
21   comments regarding this?
22                  MS. TAYLOR:  I would like to ask one
23   question.  I don't know if -- Diane, I don't know
24   if you want to even respond to this in this forum,
25   but we had two bingo halls in Corpus Christi that
0219
 1   had machines on their premises, and when the law
 2   enforcement -- one of them was not mine, by the
 3   way -- when law enforcement came to shut them down,
 4   a member of the Lottery Commission was with them.
 5   Is there a reason why?
 6                  I know that one of the girls called
 7   him and asked later why he was there, and he said
 8   he was just there as a private individual police
 9   officer.  Is there a reason that the Lottery
10   Commission was there?  I mean, since we're bringing
11   up 8-liners and stuff, I just thought I would ask
12   you if the Lottery Commission has taken a stance on
13   8-liners in bingo halls?
14                  MS. MORRIS:  It may be that
15   Commander Pitcock may want to address --
16                  MS. BRACKETT:  Diane, why don't you
17   use that microphone.
18                  MS. MORRIS:  It maybe that Commander
19   Pitcock, who is the director of the security
20   division of the lottery, he may want to address
21   that.
22                  I have to say, though, that I'm
23   concerned as far as some of the discussions may
24   have to deal with private rights.  You're free to
25   say whatever you want to say about your own
0220
 1   behaviour and things like that, but if there's
 2   issues that are potentially coming before
 3   Mr. Atkins or the Bingo Division or the Lottery
 4   Commission, if they involve regulatory issues, if
 5   people want to come up and talk about it, that's
 6   fine, but I'm the attorney that is here, somewhat,
 7   for the Lottery Commission, as my client, and I
 8   would prefer for my client not to discuss their
 9   regulatory behaviour.
10                  So I think that if what you want is
11   to meet and just talk, someone from the Lottery can
12   generally discuss it.  Put that on your agenda, and
13   they can be here.  But if you want to pick apart
14   and discuss particular behaviours and a particular
15   call, I'm going to say to you, it would be
16   Commander Pitcock, but having said that, I would
17   say right now, I would wanting to advise him to
18   refrain from that specific discussion.
19                  Any other questions?
20                  MS. BRACKETT:  Billy, if we wanted
21   to make this recommendation, who would write the
22   proposal?
23                  MR. ATKINS:  If you wanted to make
24   what recommendation?
25                  MS. BRACKETT:  That we tried to
0221
 1   have -- that we could have the 8-liners in the
 2   bingo halls that give bingo certificates, or is
 3   there any reason to change anything, or is it
 4   already -- is there anything that would prohibit
 5   this from going on as it is now?
 6                  MR. ATKINS:  You know, I can't think
 7   of any comment I could make that's, you know, broad
 8   reaching all across the state.  I would guess each
 9   one would be looked at on a case-by-case basis.
10                  MS. BRACKETT:  Okay.  So then do we
11   need to pursue some legislative action?
12                  MR. ATKINS:  I was going to say, I
13   thought you were going to ask that this was going
14   to be something you were going to ask to take
15   before the commission then make that --
16                  MS. BRACKETT:  Okay.
17                  MR. WHITTINGHAM:  This is -- I think
18   it's just very important because, guys, bingo is
19   dying, and the dollar is so tight after September
20   11th, so many layoffs, and they're going to choose
21   one or the other, and 60 percent of the people
22   choose the gaming rooms over bingo.  They say, do
23   you have any halls?  We'll be there.  That's the
24   way it is.
25                  MS. BRACKETT:  All right.  So we
0222
 1   need to -- All right.  If we agree, we need to take
 2   this to the Lottery Commission meeting on the 11th?
 3                  MR. ATKINS:  If that's the will of
 4   the committee.
 5                  MS. BRACKETT:  All right.  What is
 6   the pleasure of the committee?
 7                  MR. WHITTINGHAM:  I agree.  I make a
 8   motion.
 9                  MS. BRACKETT:  Okay.  Larry has
10   moved.  Do I hear a second that we take this matter
11   to the Lottery Commission at their next meeting,
12   which is September the 11th?
13                  MS. MATTHEWS:  I'll second.
14                  MS. BRACKETT:  Okay.  It's general
15   consensus.  We really don't, I think, have to be
16   that -- a general consensus is as binding as a
17   motion, so we're okay on that.  So we will be doing
18   this.
19                  Larry, will you be preparing to make
20   this report?
21                  MR. WHITTINGHAM:  Yes.
22                  MS. BRACKETT:  Be the lead in this
23   report?
24                  MR. WHITTINGHAM:  Yes.
25                  MS. BRACKETT:  And I hope that other
0223
 1   members of this committee can attending that
 2   meeting in support of this, or if you're not in
 3   support of it, just state that.
 4                  And, Larry, bring your friends with
 5   you, too.
 6                  MR. WHITTINGHAM:  I got one.
 7                  MS. BRACKETT:  Okay.  I think we're
 8   finished with that issue and we can move on now.
 9                  Okay.  Larry, did you have anything
10   else you wanted to cover on that, or do you feel --
11   do you feel good about the action taken?
12                  MR. WHITTINGHAM:  Yes, I feel very
13   good.  I just think -- innovations is -- this is
14   definitely going to be an age-old innovation we
15   need to do.  It's been around for awhile.
16                  MS. BRACKETT:  Will the 11th meeting
17   be here in this room?
18                  MR. ATKINS:  Yes.
19                  MS. BRACKETT:  And they start early.
20                  MR. ATKINS:  8:30.
21                  MS. BRACKETT:  8:30.  All right.
22   Item number 15, consideration of and possible
23   discussion and/or action on the concept of revenue
24   and expense sharing between charities and
25   commercial halls.
0224
 1                  And Danny Moore is going to --
 2                  MR. MOORE:  I'm going to pass on
 3   this.  Chuck asked me to put it on there, and he
 4   obviously fell ill.  Jane passed that on to us
 5   earlier, so we can just move on.
 6                  MS. BRACKETT:  Do you want to have
 7   this on the agenda for the next meeting?
 8                  MR. MOORE:  Sure.  That would be
 9   great.
10                  MS. TAYLOR:  Virginia, was there
11   anybody that had come to speak on that topic?
12                  MS. BRACKETT:  Not that I'm aware
13   of.
14                  Is there anyone here, any witnesses
15   here, who have come to speak on this item number
16   15?
17                  MR. BRESNEN:  I do.  We're strongly
18   for it.
19                  MS. BRACKETT:  Listen.  A record has
20   been made.  How many words were in that sentence?
21   Thanks Steve.
22                  MR. HEINLEIN:  Dave Heinlein.  I'm
23   with Jetta Management, counsel for a number of
24   charities, about 40 of them.  I support that
25   concept, and I would really like to see it
0225
 1   explored, because I did explore it with the Sunset
 2   committee, or the staff.  And I think even within
 3   the current statute, there would be some
 4   possibilities.  If we carefully looked at some of
 5   the ways that it could be done, that could save the
 6   Charitable Bingo Division staff some considerable
 7   amount of money and make things a lot easier for
 8   everybody, just at least administratively.
 9                  You know, if you have a hall that
10   has five or six charities, they all have separate
11   bingo records, and we are audited each
12   individually, the audit staff has to come in and
13   audit this charity, and then about a month later,
14   come down and do the next charity until they have
15   audited all of the charities of that hall.
16                  In one occasion, we did have every
17   charity at the hall audited all at the same time,
18   which I thought was pretty efficient to do it that
19   way, except that it took three auditors and a
20   truckload of stuff to carry all the stuff back to
21   San Antonio.
22                  But if we could be very creative
23   with our thinking and look very carefully, I think
24   without violating any of the statutes -- the
25   statute says that the bingo conductor has to
0226
 1   deposit the funds from his daily session by the
 2   next business day into a bingo bank account.  Is
 3   that right?
 4                  MS. BRACKETT:  (Nods head.)
 5                  MR. HEINLEIN:  Now, if his bingo
 6   bank account -- we don't do this, okay, but we
 7   would sure like to see it explored -- what if that
 8   single bingo bank account at the Campass Bank, say,
 9   every one of the conductors at that hall had that
10   same bank account; they were all on that bank
11   account.  I've never thought about that before
12   until I started thinking about this from the Sunset
13   Committee.
14                  Well, I thought, you know, what
15   really would prevent you from making all your
16   deposits from one bank account?  You would simplify
17   a lot of activities.  Right now what we have to do
18   to be able to keep all the charities healthy in a
19   single hall where you have a multiple amount of
20   charities operating on different days, some of the
21   times you have a charity that's conducting bingo on
22   Monday, and Monday is just terrible, so they get
23   $100 deposit, and if they play on Friday, they'd
24   get a $3,000 deposit.  Well, the way we solve that
25   problem is, this week you get Monday; the next week
0227
 1   he gets Monday.  So you are constantly having to
 2   amend the licenses.  Now, the Charitable Division
 3   made it possible for Steven to think about doing
 4   some of these kinds of things in revenue sharing
 5   simply because they simplified some of the
 6   paperwork.  They did that by having -- allowing us
 7   a fax amendment.
 8                  Boy, that has really helped us
 9   because we can make decisions and see that the bank
10   accounts are comparatively even and make a decision
11   and request a charity to move to another session
12   within a couple of days and fax the amendment to
13   the staff who gives us approval of that and he
14   changes the schedules.  But in doing so, you also
15   open yourself up to human error, which sometimes
16   does cause us some problems.  Maybe the Kawanas
17   [phonetic] Club money ended up become deposited to
18   the Optima Club bank account.  So that's wrong;
19   that's a violation.  We have to then take that
20   money out of the bank and put it in another bank.
21                  So there's a lot of administrative
22   problems with working a hall where everybody is
23   agreeing that they want to all reap the same
24   benefits.  So if we distribute $100,000, and
25   there's four of us, we want to all get $25,000
0228
 1   each, and make that agreement to do that.  But it's
 2   really hard to administer to make that happen.  We
 3   do the best that we can to make it as possible for
 4   all of the -- nobody to go broke, nobody to lose
 5   any money because they're on a bad day.  And then
 6   that way, they don't fight about changing things.
 7                  Now, if you go into an old hall
 8   that's been there a long time, of course, they're
 9   not interested in doing that.  They say, I've got
10   Thursday and Friday; I've been making a lot of
11   money over the years, and you're not going to ever
12   change it.
13                  But if you've got a new hall that
14   starts off with that approach, then it's pretty
15   easy then to get them to agree that, well, I don't
16   want to lose any money, so I want to make the same
17   money that you are.
18                  But I thought, you know, if -- you
19   know, like I said, we're mending that to try to
20   help charities make the same amount of money as a
21   hall.  What if they were able to all put the money
22   in the same bank and pay all the expenses and
23   distributions out of the same bank account, and you
24   could separate the five reports for each charity,
25   or just have one report, and then the Lottery --
0229
 1   the general bingo division would only have to go in
 2   and audit one single bank account.  In one fell
 3   swoop, they could walk through the whole hall.
 4                  So I think the concept is worth
 5   thinking about.  Boy, I'd really like to see us,
 6   you know, setting out on a study session on looking
 7   at the possibilities and what we would have to do.
 8   And would there even be an environment for any
 9   statute change?  Maybe we could do it within the
10   current statute.
11                  MS. BRACKETT:  Okay.  Thank you.
12   Anyone have any questions about this?  Thank you.
13                  We're going to item number 16,
14   consideration and possible discussion and/or action
15   on the Sunset process involving the Texas Lottery
16   Commission.
17                  My name is on that as Chair, and I
18   know nothing about it.  I just noticed this was
19   sitting here.  This is what it looks like, I can
20   tell you that.  So what is it we need to do?  Take
21   this and read it and then -- are actions
22   recommended in here?
23                  MR. ATKINS:  There are actions
24   recommended in there, and that's the primary reason
25   for the commission holding their next meeting on
0230
 1   September 11th, to approve the agency response to
 2   the commission report.
 3                  There is a hearing scheduled for
 4   either September 24th or September 25th.  We don't
 5   know at this time exactly which day when the Sunset
 6   Committee will take up this report.  And then there
 7   is a subsequent meeting November 13th or 14th where
 8   the Sunset Committee will then adopt -- formally
 9   adopt the Sunset recommendations.
10                  The hearings on September 24th and
11   25th are public hearings, and the public is invited
12   to attend and comment.
13                  MR. MOORE:  I think the BAC should
14   have an opinion on this.  And I don't know if we
15   need to have a special meeting just for this
16   subject alone.  I think it's pretty important.  The
17   timing is kind of tricky, I guess, because would we
18   want to have that meeting before your September
19   11th meeting, or does that matter?
20                  MR. ATKINS:  If the -- I think it
21   wouldn't matter if the Advisory Committee wanted
22   the commission to be aware of and consider their
23   comments on it.  And there would be a seven-day
24   posting requirement -- that's what I was looking
25   at -- if the commission is meeting on the 11th,
0231
 1   then something would have to be filed by the 3rd.
 2   So again, if the Advisory Committee was just going
 3   to meet any time before that, you would need to
 4   keep that seven-day period.
 5                  MR. MOORE:  What do y'all think?  Do
 6   we need -- how do we want to do this?  I think we
 7   need to be heard.  I'm just trying to figure out if
 8   we need to meet before the commission meets.  I
 9   know we need to get together; we just need to make
10   a decision how we want to do.  We're kind of on a
11   short leash here on time, I think.
12                  MS. BRACKETT:  Well, I definitely
13   agree that we need to, as Danny say, be heard.
14   Should we be heard on the 11th or at the hearings
15   on the 24th and 25th?  I think that's the question.
16   Correct?  And in order to be heard on the 11th, we
17   probably need to have a meeting before then.  So
18   someone think about it right quick and make a
19   suggestion.
20                  MR. ATKINS:  Well, the 10th would
21   give a filing date of the 2nd.
22                  MS. BRACKETT:  The 2nd is Labor Day.
23   Does it count?
24                  MS. MORRIS:  I don't think it does,
25   but I don't know.
0232
 1                  MR. ATKINS:  So they could file on
 2   the 3rd?
 3                  MS. MORRIS:  I think you have to go
 4   ahead of it instead of behind it.
 5                  MR. ATKINS:  Well, I was going to
 6   say you can file at any time before that, but the
 7   2nd is the latest that you can file.
 8                  MS. BRACKETT:  Okay.  Well,
 9   actually, if we decided to meet, if we set a date
10   now to meet, then we could -- it could be filed
11   immediately.
12                  MR. ATKINS:  That's correct.
13                  MS. MORRIS:  Yes.
14                  MR. ATKINS:  As long as it was at
15   least seven days out.
16                  MS. BRACKETT:  Right.  Yeah.  Within
17   that time frame.  And you're saying the 10th is in
18   that time frame?
19                  MS. MORRIS:  Well, no.
20                  MS. MATTHEWS:  All right.  Could we
21   meet on the 10th and possibly be here for the
22   meeting on the 11th, and file a notice of that
23   meeting by the 2nd, and meet on the 10th.  And then
24   if we wanted to, attend the meeting on the 11th?
25                  MS. BRACKETT:  Yes.
0233
 1                  MR. ATKINS:  So you could, for
 2   example, if you wanted to meet the week of
 3   September 2nd, you would just need to file at least
 4   seven days before that, which would be, I guess, by
 5   the 3rd.  I guess you would have to file by the
 6   27th of August.
 7                  MS. BRACKETT:  Okay.
 8                  MR. PAVLOVSKY:  That means we get
 9   one day.
10                  MS. BRACKETT:  Well, let's think
11   about Marilyn's suggestion that if we met on the
12   10th, then we would be here to attend on the 11th,
13   and that is something to consider.
14                  MR. WHITTINGHAM:  That's a good
15   idea.
16                  MS. BRACKETT:  So does someone want
17   to make that motion.
18                  MS. MATTHEWS:  I'll make the motion.
19                  MS. TAYLOR:  I'll second.
20                  MS. BRACKETT:  Okay.  And so moved
21   and seconded that we meet on the 10th to consider
22   the Sunset Commission review, or report.
23                  And that is the only business that
24   we can conduct at that meeting.  Is that correct?
25                  MR. ATKINS:  On the 10th?  It just
0234
 1   depends on how you post it, what else you would
 2   want on the agenda.
 3                  MS. BRACKETT:  Okay.  We probably
 4   would not want more than one or two other items.
 5                  MR. MOORE:  So you want just the one
 6   item.  Okay.  So we want to post just the one item.
 7   And I suggest we meet in the afternoon maybe after
 8   lunch if that's possible.
 9                  MS. BRACKETT:  And then we could go
10   late if we need to.
11                  MR. MOORE:  It's one item.  I don't
12   see us being here all day.
13                  UNIDENTIFIED MALE:  Would you like
14   to include the progressive bingo on the agenda?
15                  MS. BRACKETT:  Well, we have to
16   decide now if we're going to include it.
17                  MR. WHITTINGHAM:  It's important.
18                  MS. BRACKETT:  What did you say,
19   Larry.
20                  MR. WHITTINGHAM:  It's very
21   important, the progressive bingo issue.
22                  MS. BRACKETT:  Okay.  Now, I have
23   not looked at this, so are we talking about a
24   one-hour discussion on this or a two-hour
25   discussion, and a one-hour discussion on
0235
 1   progressive bingo?
 2                  MR. ATKINS:  There's a lot of
 3   information in that report on bingo.
 4                  MR. MOORE:  Just do it another time.
 5                  MR. BRESNEN:  I have a suggestion.
 6   Am I over yet?  If you'd style the posting that --
 7   such that, if you want to adopt a position on
 8   things to tell the commission and/or the Sunset
 9   Commission that you'd like to see ultimately in the
10   Sunset Commission's recommendations, then all
11   the -- you know, subject matters like that could
12   come up.  Y'all know a lot about progressive bingo
13   and probably don't have a whole lot of discussion
14   about it, but there may be other things.  I've
15   probably got some things that I'd like to mention,
16   and I promise not to drag it out.
17                  But I think you can write the
18   posting in a way where you can adopt your own
19   provisions and you're not just locked into what
20   your reaction to that report, so you'll be solving
21   a whole laundry list of items.
22                  MR. ATKINS:  Keep in mind, I don't
23   know that the general council is going to go for an
24   overly broad meeting notice.  Unless I'm not
25   understanding what you're saying.
0236
 1                  MR. BRESNEN:  Well, what I'm
 2   suggesting is that you -- all that's required by
 3   the law is that you put people on reasonable notice
 4   of the subject matter of the discussion so they can
 5   be here to attend.  And I'm suggesting that the
 6   subject matter be your response to the Sunset
 7   Commission staff report and any recommendations
 8   that the Bingo Advisory Committee would like to
 9   make to the Lottery Commission and the Sunset
10   Commission regarding additional items for the
11   Sunset Commission to consider including in it's
12   final recommendations adopted in November.
13                  I think the whole world would be on
14   notice of what your subject matter was at that
15   point, and you won't have to get into having to
16   enumerate specific items.  It's just my suggestion.
17                  MS. MORRIS:  So I'd like to talk
18   about what he says.  And, as you know, I've been
19   asked to come here and be a resource for some of
20   the meetings and issues.  I do want to talk a
21   little bit.
22                  I agreed at the standard under the
23   Open Meetings Act of Notice, your agenda is
24   supposed to let the public know what you're about
25   to talk about, and you're not supposed to get off
0237
 1   your agenda.  It's not supposed to be so broad that
 2   literally you're getting notice that we're going to
 3   talk about anything and everything we possibly can
 4   just because we are people with more knowledge, or
 5   at least for the people in the BAC that are allowed
 6   to talk about it.
 7                  So I disagree that it can be so
 8   broad that it can be a wide open thing.  And I say
 9   that because, in the attorney general's handbook
10   that I talked about before and requested y'all just
11   to take a look at, they'll talk about when y'all
12   are specific and when you have a broad posting.
13   And when it is pretty obvious that it's so broad
14   that you were really talking about the specific
15   item that is of great interest to the community,
16   then you should have posted it specifically if you
17   knew it.
18                  And so as a compromise to the
19   concern, if you want to wide open it in the sense
20   of, we want to respond to the Sunset report, but
21   what if -- and this is the concern I think he's
22   saying -- what if, in the response to your Sunset
23   report, they didn't rank something, but you want to
24   talk about it because you want to tell the Sunset
25   people, with all respect, through the commissioners
0238
 1   you missed the boat.  I don't know if you really
 2   want to do that, but the point is, I think that's
 3   what she's saying.  And if that's what you want to
 4   say, I don't -- I have to -- I have to suggest to
 5   you that you have a meeting on your Sunset report,
 6   and don't roll in other subjects that could have
 7   been on the agenda today or could have a month from
 8   now.
 9                  MR. ATKINS:  Diane, let me ask this:
10   Given the way that Steve phrased it in the agency
11   self-evaluation report, the staff put forward what
12   we called revenue enhancements for bingo, such as
13   progressive bingo, satellite or linked bingo,
14   expansion or pull tab sales, et cetera.
15                  MS. MORRIS:  Exactly.  And so you're
16   posting if you reference that.  If you reference
17   the two documents or where you're going on that,
18   you give more notice to the world on where you
19   might be.
20                  MR. ATKINS:  But just the
21   self-evaluation report wouldn't fall under that.
22                  MS. MORRIS:  Well --
23                  MR. ATKINS:  Well, I mean --
24                  MS. MORRIS:  It's -- and the courts
25   will always say, I don't -- I do not expect any
0239
 1   court challenges, but the point is, the courts have
 2   this concept called fact, fact driven, fact
 3   determination, just factually, is it notice to the
 4   world?  Do people understand what you're talking
 5   about?  You can't use code words, nor can you say
 6   anything and everything we can discuss.  And so you
 7   can't be too broad, and you can't be too general.
 8                  But if you think that -- if we say,
 9   the item is a one item; it's not about everything
10   else that you wanted to get to today that people
11   wanted you to talk about.  It's the response to the
12   report of the Sunset Commission, and, you know,
13   and/or items in the self-evaluation report.  I
14   think you're giving at least a far more better
15   notice of what you're talking about.
16                  MR. BRESNEN:  Well, let me ask this:
17   Is the -- is the posting for today within the law?
18                  MS. MORRIS:  Yes, it is.
19                  MR. BRESNEN:  Well, good.  Then if
20   this body wanted to say, for example, as part of
21   the Sunset process involving the Texas Lottery
22   Commission, that they wanted to recommend that the
23   commission, the Lottery Commission, or they wanted
24   to go to the Sunset Commission and say include
25   progressive bingo in your recommendations.  It
0240
 1   seems to me that that would reasonably be within
 2   the Sunset process involving the Texas Lottery
 3   Commission, so I'll take the posting that's on this
 4   deal right here.
 5                  MS. MORRIS:  Well, and I don't agree
 6   with you, because I thought the posting was to
 7   receive your report, to discuss it and talk about
 8   it, and factually -- and this is what I kind of
 9   heard, we didn't get to talk about the progressive
10   yet; we didn't really get to make a decision yet,
11   but on the theory of responding to the Sunset
12   report, are we going to have a very substantive
13   discussion on progressive bingo?  And that's why he
14   and I are in a disagreement.
15                  MS. BRACKETT:  Okay.  Well, let's
16   ask what the committee's preference is.
17                  MR. PAVLOVSKY:  I'd just as soon
18   leave it off if we have to listen to all this
19   arguing.
20                  MS. BRACKETT:  Okay.  So are you
21   wanting to meet and just discuss the Sunset
22   Advisory Commission report and do that the day
23   before the Lottery Commission meeting and then
24   meet -- and then we can attend the Lottery
25   Commission meeting the next day on the 11th?
0241
 1                  MS. TAYLOR:  I have one concern
 2   about that which is the same one Steve raised.  If
 3   we aren't happy with what the Sunset report says,
 4   then the only thing we can discuss is, we like it
 5   or we don't like it.  But if we don't like it,
 6   where there's other things we should look at then
 7   and there, we're limiting ourselves to not even
 8   discussing those items.  And we're doing this so we
 9   can make a report the following day to the
10   commissioners, so what's the purpose of --
11                  MS. MORRIS:  My purpose of sitting
12   here is not to limit your discussions.  It was to
13   make sure your discussion is so well posted that
14   the public is on notice.  If you want to discuss
15   progressive bingo, as I understood it -- and
16   Billy's point is well taken -- the SAR lays out
17   revenue enhancements that include that in your
18   posting, so include the broadest -- you know, all
19   these areas, and as he said, referencing just the
20   areas made in the self-evaluation report of the
21   commission in relation to the Sunset report.
22                  I don't think the other gentleman
23   and I are fundamentally in disagreement.  I'm just
24   trying to keep the posting as close as possible.
25                  MR. BRESNEN:  I think we are.
0242
 1                  MR. PAVLOVSKY:  Here we go again.
 2   If your case were -- whatever -- legal, instead of
 3   saying review the Sunset Commission's report, that
 4   would not be adequate.  We need to list each one of
 5   these items individually in order to be legal.  And
 6   if what you're saying is true and accurate, legal
 7   and correct and all that, we shouldn't even be
 8   having this discussion because it's not on the
 9   agenda.
10                  MS. MORRIS:  Well, I don't agree
11   with you that you have to list every item on the
12   report.  It's on the web sites.
13                  MR. PAVLOVSKY:  Okay.  Then what the
14   gentleman said should apply.
15                  MR. MOORE:  Well, we're concerned
16   with what isn't in the report, I think.
17                  MR. BRESNEN:  Maybe you could make a
18   recommendation about how they could address what's
19   not in the report without having to go through a
20   long discussion here today about every item that
21   could be in the report.  Because I don't think
22   that's required, and that kind of stuff is clearly
23   not required.
24                  MS. MATTHEWS:  Well, why don't we
25   include everything that we might possibly discuss,
0243
 1   and if we don't have time, then we don't.
 2                  MR. PAVLOVSKY:  Good point.
 3                  MR. WHITTINGHAM:  Exactly.
 4                  MR. ATKINS:  Could you say that, to
 5   review the Sunset Commission staff report and
 6   recommendations by the BAC?
 7                  MR. MOORE:  Yeah, that would be
 8   great.
 9                  MS. TAYLOR:  Yeah, I like that.
10                  MS. MORRIS:  And, you know, I may be
11   the only one in the audience who is worried about
12   the people that aren't here.  The concept is, and
13   what caught my attention, was the statement that,
14   well, we need to talk about the progressive bingo
15   then.  And it's notice to the public when you want
16   to make decisions about your course or your
17   theories, your supportings, what you want to --
18   what you want to support, and it seems like these
19   are all very big areas.
20                  You were able to list it in this
21   agenda.  I went down the list of this agenda, and I
22   saw progressive bingo; I saw the different
23   categories of ideas you wanted, and I'm just saying
24   a general agenda that just says, a response, what
25   you're really thinking is, well, this is where
0244
 1   we're going to talk about the progressive bingo,
 2   and this is where you're going to say we all vote
 3   to agree, to recommend it.  It seems like that's a
 4   pretty big category for your public to be
 5   interested in.
 6                  MR. MOORE:  I know.  But, Diane, we
 7   haven't even looked at the thing yet.  I don't even
 8   know what's in there.  I haven't looked past the
 9   cover.
10                  MS. MORRIS:  And I'm trying to make
11   it as broad as possible with you, trying to come up
12   with other areas, to give the public fair notice
13   that, if they thought you were going to talk about
14   that report, then progressive bingo, or whatever
15   your stance on that is, is not there.
16                  MR. ATKINS:  I think that the staff
17   knows the desire of the committee, and I'll work
18   with Kim and Diane and whoever to work --
19                  MS. MORRIS:  Broad and as specific
20   as possible.
21                  MR. ATKINS:  -- on the notice today.
22   Diane, if we -- at any kind of issue or anything,
23   I'll be in contact with the Chair.
24                  MS. MORRIS:  I understand that you
25   want to talk about what's not in the report, and I
0245
 1   support this concept of, that's part of talking
 2   about the report.
 3                  MR. MOORE:  Okay.  Well, let's just
 4   keep it as broad as we can, and that would be
 5   great.
 6                  MS. BRACKETT:  Okay.  Well, we have
 7   a general consensus on that, and staff will help us
 8   out with that.
 9                  All right.  Is there any further
10   public comment right now?
11                  MR. ATKINS:  Well, I just wanted to
12   clarify one thing that was referenced or eluded to
13   several times, and that dealt with the short notice
14   that people got of this meeting and the agenda
15   items.  And I've got the copies of the submissions
16   that are on file with the Secretary of State's
17   office.
18                  For this meeting, the filing
19   deadline was August 15th.  Our first filing was
20   actually August 13th, and the one on August 13th
21   actually included items in addition to what
22   actually wound up on the meeting.  So, you know,
23   again, I just want to clarify that to let folks
24   know that I'm taking pretty strong objection to the
25   implication that notice wasn't provided regarding
0246
 1   this meeting or any of the items that were on
 2   there.
 3                  And I use that to follow up with,
 4   we've been trying to get these agendas set earlier
 5   so we can get information together and to you, and
 6   if we're able to do that and stick with the agenda
 7   items without having to delete one and refile
 8   another, it helps us quite a bit.
 9                  MS. BRACKETT:  Yeah.  We did do
10   that.  We were our own delayers, but it was posted.
11                  MR. MOORE:  Yeah.  And we're all a
12   bunch of rookies still.
13                  MR. ATKINS:  Not all of us.
14                  MS. BRACKETT:  I hate to bring this
15   up, but at the meeting on the 11th, can we set an
16   agenda for the next meeting?
17                  MR. ATKINS:  At the meeting on the
18   10th.
19                  MS. BRACKETT:  On the 10th.  I'm
20   sorry.  I'm ahead of myself.
21                  MR. ATKINS:  Yeah, you can do that.
22                  MR. PAVLOVSKY:  What time is that
23   meeting on the 10th?
24                  MS. BRACKETT:  At 1:00.  Is that all
25   right or should we make it 12:00?
0247
 1                  MR. MOORE:  I think it's -- like
 2   Billy said --
 3                  MR. ATKINS:  I'm not going to be
 4   here.
 5                  MS. BRACKETT:  Then we will be
 6   through lickety-split.
 7                  What I'm thinking, is four hours
 8   enough?  You know 1:00 to 5:00.  That's plenty,
 9   isn't it?
10                  MR. PAVLOVSKY:  Sure. I would think
11   so.
12                  MS. BRACKETT:  All right.  So the
13   next meeting will be on the 10th at 1:00 for the
14   purpose of discussing these and future agenda
15   items.  I'm sure that we'll have a lot of public
16   who has read this report by that date who will be
17   hearing.
18                  MR. PAVLOVSKY:  Are we going to also
19   discuss the -- limiting speaking time on a given
20   item?
21                  MS. BRACKETT:  I don't know if we
22   have to discuss that or if the Chair can just do
23   it.  Can the Chair just do it and we can just vote
24   on a time?
25                  MR. PAVLOVSKY:  Sure.
0248
 1                  MS. BRACKETT:  I'm sorry I didn't do
 2   that this time.  I really had it in my head to, but
 3   I didn't.  Nothing is intended to anybody, Steve.
 4   All right.  Now we need to consider our --
 5                  MR. ATKINS:  You want to consider
 6   that on the 10th?
 7                  MS. BRACKETT:  -- just the places,
 8   you know, the out-of-town meetings.  And what I
 9   would like to do is to appoint -- well, let me ask
10   Steve can I do this.  We're really excited about
11   the prospect of this, so we are plunging ahead on
12   our chances for that prospect.
13                  MR. ATKINS:  Just make it clear.
14                  MS. BRACKETT:  Okay.  The rule has
15   not been adopted, but we are plunging ahead.  We
16   are assuming and we are hoping that this rule will
17   be adopted that we can have a meeting outside of
18   Austin.  And so can we go ahead and put a group
19   together to be working on this?
20                  All right.  Suzanne has agreed to be
21   the chairman of this, and she will be asking people
22   to be on her committee.  And there will be people
23   who are not necessarily involved in the Bingo
24   Advisory Committee who will be doing this, and
25   they'll will be suggesting a -- and they'll be able
0249
 1   to do a lot research and finding out where in the
 2   city that's appropriate to meet; what's a city that
 3   people can get to easily that's more centrally
 4   located -- Lubbock and Odessa -- and that has the
 5   accommodations for a meeting, too, and in what
 6   format it will take on.
 7                  We will have a meeting portion, but
 8   it would be wonderful, probably, if we could have a
 9   convention type feel to it and have vendors and
10   have exhibits, and the bingo division, Lottery
11   Commission giveaway, the little lapel pins and
12   mouse pads and all sorts of good stuff.
13                  MR. ATKINS:  And I'm assuming since
14   you're -- since we're going to be doing that, that
15   we're gong to be involved, or at least kept
16   informed of this process.
17                  MS. TAYLOR:  Oh, yeah.
18                  MS. BRACKETT:  Suzanne -- she can't
19   keep a secret.  She'll let you know.
20                  MR. MOORE:  Hey, Virginia, back to
21   that meeting on the 10th.  Maybe we do need to do
22   it earlier, you know, because we got to come back
23   at 8:30 in the morning the next day, and you're
24   going to be preparing this because you'll be
25   presenting it.  You know, obviously, you're going
0250
 1   to need some time after we meet, in the afternoon
 2   on the 10th.
 3                  MS. TAYLOR:  With your laptop,
 4   Virginia.
 5                  MS. BRACKETT:  Well, I don't have a
 6   laptop, to put it bluntly.  But I thought this was
 7   a team effort.
 8                  MR. WHITTINGHAM:  10:00 a.m. would
 9   be fine.
10                  MS. BRACKETT:  So we can get into
11   town by 10:00?
12                  MS. MATTHEWS:  I can.
13                  MS. BRACKETT:  All right.  The time
14   has changed from 12:00 to 10:00 -- I mean, from
15   1:00 to 10:00 on the 10th.
16                  And this room is available for us to
17   meet in.  Is that correct?
18                  MR. ATKINS:  We will have to check.
19                  MS. BRACKETT:  Anyone have any
20   comments before we adjourn?
21                  MR. ATKINS:  The last one I had,
22   Madame Chair, in relation to item 19, I don't think
23   that this will actually apply to the meeting on the
24   11th, but I mentioned when I gave the presentation
25   to the commissioners at their Tuesday meeting
0251
 1   regarding the bingo statistics, they were very
 2   concerned about the continuing decline in bingo
 3   revenues, and the chairman of the Texas Lottery
 4   Commission, who is also the designated bingo
 5   representative, did ask that we actually work
 6   toward scheduling a joint meeting between the Bingo
 7   Advisory Committee and the members of the Texas
 8   Lottery Commission, so we will be contacting -- you
 9   know, it's fun enough to try and get a meeting date
10   for the nine of y'all, so we'll add three to that,
11   and be contacting you and getting that schedule.
12   I'm guessing probably sometime after the 11th.
13                  MS. BRACKETT:  All right.  So when
14   do we bring up agenda items for that, like things
15   that have come up today that we need to continue?
16   Do we bring that up after the meeting on the 11th?
17                  MS. TAYLOR:  At that meeting.
18                  MR. ATKINS:  I'll bring that up at
19   the 10th.
20                  MS. BRACKETT:  The 10th.  Okay.  I
21   have the 11th in my mind, so if I'm not here,
22   you'll now why.
23                  Well, Billy is going to be gone for
24   awhile.  How long are you going to be gone, Billy?
25   Three weeks?
0252
 1                  MR. ATKINS:  Just under three weeks,
 2   but I'll be thinking about all of y'all.
 3                  MS. BRACKETT:  Anyway, for the
 4   record, Billy is getting married, and he will be
 5   gone for three weeks, so we will be having to call
 6   on Worlanda, who showed up anyway, so we can talk
 7   to her.
 8                  Well, Billy, our best wishes to you.
 9                  MR. ATKINS:  Thank you.
10                  MS. BRACKETT:  Well, the meeting is
11   adjourned.
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0253
 1                REPORTER'S CERTIFICATION
 2   
 3   STATE OF TEXAS         )
 4   COUNTY OF TRAVIS       )
 5   
 6             I, KIMBERLYE A. FURR, Certified Shorthand
 7   Reporter for the State of Texas, do hereby certify
 8   that the above-captioned matter came on for hearing
 9   before the BINGO ADVISORY COMMITTEE as hereinafter
10   set out, that I did, in shorthand, report said
11   proceedings, and that the above and foregoing
12   typewritten pages contain a full, true, and correct
13   computer-aided transcription of my shorthand notes
14   taken on said occasion.
15   
16             Witness my hand on this the 3rd day of
17   August, 2002.
18   
19   
20                                                 
                   KIMBERLYE A. FURR
21                 Texas CSR No. 6997
                   Expiration Date:  12/31/03
22                 1609 Shoal Creek Boulevard
                   Suite 202
23                 Austin, Texas  78701
                   (512) 474-4363
24   
25   JOB NO. 020823KAF
0254
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