0001 1 2 3 * * * * * * * * * * * * * * * * * 4 5 BINGO ADVISORY COMMITTEE 6 MEETING 7 8 DECEMBER 12, 2002 9 10 * * * * * * * * * * * * * * * * * 11 12 13 14 15 16 17 18 BE IT REMEMBERED that the BINGO ADVISORY 19 COMMITTEE meeting was held on the 12TH of DECEMBER, 20 2002, from 10:00 a.m. to 3:20 p.m., before Brenda J. 21 Wright, RPR, CSR in and for the State of Texas, 22 reported by machine shorthand, at the Offices of the 23 Texas Lottery Commission, 116 East Sixth Street, 24 Austin, Texas, whereupon the following proceedings 25 were had: 0002 1 APPEARANCES 2 3 Chairman: Ms. Virginia McCormick Brackett 4 5 Committee Members: Ms. Suzanne Taylor (Not Present) 6 Mr. Mario Manio Mr. Saleem Tawil (Not Present) 7 Mr. Pete Pavlovsky Mr. Larry Whittington 8 Mr. Daniel Moore Ms. Marilyn Matthews 9 10 Charitable Bingo Operations Director: Mr. Billy Atkins 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 INDEX 2 3 Appearances...................................... 2 4 AGENDA ITEMS 5 Item Number 1.................................... 4 6 Item Number 2.................................... 7 Item Number 3.................................... 10 7 Item Number 4.................................... 45 Item Number 5.................................... 7 8 Item Number 6.................................... 145 Item Number 7.................................... 94 9 Item Number 8.................................... 119 Item Number 9.................................... 121 10 Item Number 10................................... 128 Item Number 11................................... 134 11 Item Number 12................................... 135 Item Number 13................................... 137 12 Item Number 14................................... 141 Item Number 15................................... 142 13 169 Item Number 16................................... 173 14 15 Errata Sheet..................................... 174 Reporter's Certificate........................... 175 16 17 18 19 20 21 22 23 24 25 0004 1 December 12, 2002 09:38 2 CHAIR BRACKETT: It's about five after 10:05 3 10:00, and we do have a quorum, so we will call the 10:05 4 meeting to order. Some things I need to remind you of 10:05 5 is to -- for the committee members, the Bingo Advisory 10:05 6 Committee members, please have your microphone on when 10:05 7 you speak. The court reporter is having some problems 10:05 8 with that. And also -- I'm sorry. I've had a blank. 10:06 9 Tell your name? Was that the other 10:06 10 thing that I have already forgotten? 10:06 11 MS. KIPLIN: For the record, my name is 10:06 12 Kimberly Kiplin. I'm the General Counsel for the 10:06 13 Lottery Commission. And it would be helpful -- we're 10:06 14 making a record today, as we do on every one of your 10:06 15 meetings, and so there are a couple of ground rules. 10:06 16 One is, turn your microphone on, speak into the 10:06 17 microphone. Please do not interrupt people who are 10:06 18 talking. She can only pick up one voice at a time. 10:06 19 That will make a better record for you all to go back 10:06 20 to and refer to. 10:06 21 For those people that are within the 10:06 22 audience, please come to -- if the chairman requests, 10:06 23 because, of course, it's the Bingo Advisory 10:06 24 Committee's meeting, and if they're desiring of 10:06 25 hearing public testimony, please come to the table and 10:06 0005 1 identify who you are and who you represent into the 10:06 2 microphone. She can't -- it's very difficult for her 10:06 3 to pick it up from people who are standing up and just 10:07 4 making statements on the floor. I think those were 10:07 5 the items that we wanted to just kind of take care of 10:07 6 for an orderly meeting and transcript. 10:07 7 And I will say, Madam Chair, I 10:07 8 referenced that just a bit and I will say it again, 10:07 9 it's you all's Bingo Advisory Committee meeting. And 10:07 10 under the Open Meetings Act, what that means is that 10:07 11 you have to conduct it in the open and the public has 10:07 12 a right to be here and they have a right to see your 10:07 13 deliberations and your discussions, but they don't 10:07 14 have a right to participate in the meeting. That's a 10:07 15 decision that you all make, if you want to hear public 10:07 16 testimony. I think traditionally you have, but I'll 10:07 17 just make that available to you. 10:07 18 Does anybody have any questions 10:07 19 regarding open meetings issues? 10:07 20 CHAIR BRACKETT: Thank you. I want to 10:07 21 thank you for attending the meeting today. All of the 10:07 22 committee is here with some people having a pretty 10:07 23 good drive coming in, and all of the people who are 10:08 24 here in the audience, it's important for us to hear 10:08 25 from you. We also appreciate the staff, the Bingo 10:08 0006 1 staff and also the Lottery Commission staff who attend 10:08 2 the meeting. 10:08 3 We have -- Jack Dougherty is here with 10:08 4 us this morning. If you would -- if he would stand up 10:08 5 over there. We have visited with him. I remember at 10:08 6 the last meeting we considered his application for the 10:08 7 public member of the committee. So I think that's 10:08 8 farther down on the agenda and we'll talk to you again 10:08 9 later. 10:08 10 I want to express to the staff our 10:08 11 appreciation of getting the books to us. I received 10:08 12 mine on December 6th, which was Friday, which gave me 10:08 13 a lot more study time, as opposed to the last time 10:08 14 when we had a couple of days. And that really helps a 10:08 15 lot, Billy, and we want you to know how much we 10:08 16 appreciate that. 10:08 17 Did the rest of you get your books in 10:08 18 plenty of time to -- okay. Great. That's good. 10:08 19 Probably, we will be taking a lunch 10:09 20 break in the vicinity of 12:30. A lot depends on how 10:09 21 the business -- if there is a good break earlier in 10:09 22 the time, a good time to break, we will do it then. 10:09 23 But let's plan on 12:30 at this point. 10:09 24 I want to tell you that Suzanne Taylor 10:09 25 will not be here today, or neither will Saleem. They 10:09 0007 1 both had conflicts that they could not rearrange. But 10:09 2 we do have a quorum and we are ready to get started on 10:09 3 that. 10:09 4 The first order of business involves 10:09 5 the approval of the minutes of the November 21 10:09 6 meeting. Has anyone found anything that needs to be 10:09 7 corrected in those minutes? You have to get them off 10:09 8 the Internet. So I have found nothing at this -- do I 10:09 9 hear any suggestion for action on that? 10:10 10 MR. PAVLOVSKY: I move they be approved 10:10 11 as printed. 10:10 12 CHAIR BRACKETT: Okay. Since there are 10:10 13 no corrections and no additions, and we have them -- a 10:10 14 motion that we approve these. So they stand approved. 10:10 15 I would kind of like to take a -- take 10:10 16 the agenda a little bit out of order from what we 10:10 17 have -- what we have printed here and kind of group 10:10 18 some things together. Take three, four, seven, eight, 10:10 19 nine and ten together, but first take item number 10:10 20 five, which is the consideration of and possible 10:10 21 discussion on the action on the nomination to the 10:10 22 Bingo Advisory Commission. And that is Mr. Dougherty. 10:10 23 And, Billy, do you want to report on 10:11 24 your visiting with him? And actually, Billy and I 10:11 25 visited together with Mr. Dougherty on a conference 10:11 0008 1 call. 10:11 2 MR. ATKINS: Thank you, Madam Chairman. 10:11 3 At the last meeting of the Texas 10:11 4 Lottery Commission, the chair reported the actions by 10:11 5 the advisory committee regarding their recommendation 10:11 6 of Mr. Dougherty to serve in the unexpired term of 10:11 7 Ricky Thurman who, because of other commitments, had 10:11 8 to resign his position. And I believe the general 10:11 9 sense was -- from the Commission was, if anyone, 10:11 10 either the staff or the advisory committee had had the 10:11 11 opportunity to speak to Mr. Dougherty about the 10:11 12 advisory committee and his position on it. And I had 10:11 13 tried to reach Mr. Dougherty the evening before the 10:11 14 last commission meeting. He was out of town. He 10:11 15 returned my call the next day during the commission 10:12 16 meeting, but we did not have the opportunity to speak 10:12 17 then. So the Commission suggested that perhaps Tom 10:12 18 Clowe, the chair of the Texas Lottery Commission, as 10:12 19 well as the bingo -- the designated bingo 10:12 20 representative, who is in the audience with us today, 10:12 21 myself, and Virginia Brackett, meet with Mr. Dougherty 10:12 22 at some time, and then bring the issue back at the 10:12 23 next commission meeting. 10:12 24 Commissioner Clowe and I had the 10:12 25 opportunity to meet with Mr. Dougherty in person on 10:12 0009 1 December 3rd. He came in to the office and we 10:12 2 discussed his professional background as well as his 10:12 3 interest in bingo. And then, we were able to 10:12 4 conference in Virginia on the speaker phone, and she 10:12 5 also had the opportunity to talk to Mr. Dougherty 10:12 6 about the advisory committee -- the advisory 10:13 7 committee, its functions, and how it operates. And as 10:13 8 near as I can recall, after all those discussions, he 10:13 9 was still amenable to serving on the advisory 10:13 10 committee. 10:13 11 CHAIR BRACKETT: What I told him was to 10:13 12 be prepared for a lot of frustration. That we're not 10:13 13 an action-taking group, but are an advisory group. 10:13 14 And he seemed to take that in stride, so... 10:13 15 Is there any action needed on this 10:13 16 today? 10:13 17 MR. ATKINS: Not that I'm aware of. 10:13 18 CHAIR BRACKETT: I don't think there is 10:13 19 either. So it will be up to the Lottery Commission to 10:13 20 make the appointment. But we recommend that the 10:13 21 Lottery Commission takes the action. 10:13 22 MR. ATKINS: And I would just let you 10:13 23 know that it is an agenda item posted for tomorrow's 10:13 24 Lottery Commission meeting. 10:13 25 CHAIR BRACKETT: Let's move on to item 10:14 0010 1 number three, and Danny Moore has that. 10:14 2 MR. MOORE: Good morning. I think we 10:14 3 all have a handout in our brochures. Do we have them? 10:14 4 MR. ATKINS: Yes. 10:14 5 MR. MOORE: Okay. There weren't any 10:14 6 out on the table for the public today. 10:14 7 MR. BRESNEN: I've got some, Danny. 10:14 8 MR. ATKINS: Let me address that real 10:14 9 quickly. The information that you supply to the staff 10:14 10 for inclusion in the notebook, we assume you want in 10:14 11 the notebook. We're not automatically -- it goes back 10:14 12 to what Ms. Kiplin stated earlier. This is an 10:14 13 advisory committee meeting, and so we don't 10:14 14 automatically know, if someone submits information to 10:14 15 us for inclusion in the notebook, that they 10:14 16 necessarily want it distributed to the public. 10:14 17 MR. MOORE: Okay. 10:15 18 MR. ATKINS: So I just put that out for 10:15 19 future reference. 10:15 20 MR. MOORE: Okay. Great. 10:15 21 We've got two things here. The first 10:15 22 part of this, on authorized expenditures, is kind of a 10:15 23 synopsis on what's occurred over approximately the 10:15 24 last 15 months. Back in August of 2001, some 10:15 25 representatives, charitable bingo organizations, were 10:15 0011 1 trying to find out what they could spend their funds 10:15 2 on. There has been some discrepancies and, from what 10:15 3 I understand, it's somewhat been up to the auditor at 10:15 4 the time to decide which -- what items they could 10:15 5 spend them on, whether it was travel or different 10:15 6 items of that sort. 10:15 7 According to information submitted to 10:15 8 the Sunset Commission, violations by charities for 10:15 9 spending bingo proceeds for noncharitable purpose is 10:15 10 one of the largest areas of noncompliance. The staff 10:16 11 was requested, I believe, to look into this. It was 10:16 12 one of the items that came up on the Sunset report. I 10:16 13 know for the last year, I have seen many members of 10:16 14 this show -- members of the bingo community show up 10:16 15 and address this situation. Robert Young, on many 10:16 16 separate occasions. The concern is that the people 10:16 17 operating bingo want to know what they can spend their 10:16 18 money on. I think this rule -- actually, it's -- the 10:16 19 rules are so vague that I think the charities aren't 10:16 20 sure where to go with this. 10:16 21 I do have a couple of people here 10:16 22 today, Virginia, that would like to talk on this that 10:16 23 know the background on this subject better than I do, 10:16 24 obviously. But we do have some solutions here to 10:16 25 clarify the rule. I would like that to be part of our 10:17 0012 1 presentation to the staff. We do want to be a part of 10:17 2 the process. And this is -- Chairman Clowe asked us 10:17 3 to have some solutions. We've brought a few different 10:17 4 ideas here. I just would like that to be submitted to 10:17 5 them, and the staff can look through it, and if we can 10:17 6 be of any further help, we would be glad to. 10:17 7 CHAIR BRACKETT: What is the supporting 10:17 8 information that you passed out this morning? 10:17 9 MR. MOORE: Well, the first part of 10:17 10 this is just a synopsis, kind of, of what the other 10:17 11 part of this report is. This is actually -- 10:17 12 CHAIR BRACKETT: But it's on the 10:17 13 charitable -- 10:17 14 MR. MOORE: This is written in 10:17 15 legislative form, and it's just a draft, how that 10:17 16 different expenditures could be defined. 10:17 17 CHAIR BRACKETT: The reason I'm asking, 10:18 18 I don't think I have it. I have unit accounting, and 10:18 19 I don't think I have anything on allowable expenses. 10:18 20 MR. MOORE: Okay. I think I've got an 10:18 21 extra one. 10:18 22 CHAIR BRACKETT: Allowable charitable 10:18 23 distributions, I mean. 10:18 24 MR. MOORE: You don't have anything on 10:18 25 that? 10:18 0013 1 CHAIR BRACKETT: All right. I have it 10:18 2 now. So proceed, please. I'm sorry I interrupted 10:18 3 you. 10:18 4 MR. MOORE: Sure. Honestly, this -- 10:18 5 the analysis is on the last page, page two, actually, 10:18 6 and it goes through what the current statute says. 10:18 7 Subsection (c)(2) addresses specific types of 10:19 8 expenditures. In reality, I just -- there seems to me 10:19 9 there is infractions that are going on, and the 10:19 10 charities just aren't clear on what they can spend 10:19 11 their money on. And it seems that if this was 10:19 12 addressed, it would sure help them. I don't think 10:19 13 they intend to do anything wrong, but the guidelines 10:19 14 just aren't there to tell them where the money should 10:19 15 go. I'm just -- I wanted to present this. It's been 10:19 16 talked about for a long time. It seems like we -- as 10:19 17 you can see on our agenda today, we have three or four 10:19 18 other rules that we're discussing, and this is one 10:19 19 that has kind of been bantered about in this forum and 10:19 20 I think that it needs to be addressed. 10:19 21 Does anybody have anything to say, 10:20 22 because I do have -- I believe there are some people 10:20 23 here that want to speak on the subject today. 10:20 24 CHAIR BRACKETT: Okay. We have Dawn 10:20 25 Goldberg here who is with the Internal Revenue 10:20 0014 1 Service. 10:20 2 MR. ATKINS: Members, when this was 10:20 3 discussed at the last meeting, or requested, based on 10:20 4 the agenda, we offered to contact Dawn and have her 10:20 5 make a presentation to you regarding these issues 10:20 6 from, I guess, the Internal Revenue Service point of 10:20 7 view. And she has provided, members, to you a handout 10:20 8 for charitable -- for exempt organizations. 10:20 9 MS. GOLDBERG: Good morning. My name 10:20 10 is Dawn Goldberg. I work for the Internal Revenue 10:20 11 Service. Actually, I'm an exempt organization 10:20 12 specialist, which means my area of specialty is 10:20 13 working with exempt organizations. 10:20 14 Just to give you a little background. 10:21 15 Our definition of charity is not the same as what the 10:21 16 State views charity. In our information, when we go 10:21 17 out and do an audit, what we look at is the operation 10:21 18 of the organization. And we're looking at, what are 10:21 19 they doing that furthers their exempt purpose. Code 10:21 20 Section 501 talks about all the organizations that are 10:21 21 exempt. There are actually about 27 different types 10:21 22 of organizations that are exempt. For example, a 10:21 23 501(a) -- a 501(c)(2) is a title holding company. 10:21 24 That would be an organization where all they do is 10:21 25 hold title to a property. All the other exempt 10:21 0015 1 organizations funnel money through them to buy 10:21 2 property, to maintain property. That has no 10:21 3 charitable purpose at al. There are (c)(4)s, which 10:21 4 are -- basically, promote social welfare. That would 10:21 5 be like your community fairs. I don't know if Pecan 10:21 6 Street is exempt, but they were -- they do some 10:21 7 charitable work, but really the purpose of doing that 10:21 8 is to promote the community, social welfare. Also, 10:21 9 things like (c)(7)s, 501(c)(7) organizations, are 10:21 10 organizations that are like -- they're considered 10:22 11 social clubs. Those would be like your country clubs, 10:22 12 any kind of -- I don't know if y'all are involved in 10:22 13 clubs, but like mountain climbing clubs, any of those 10:22 14 clubs could be exempt under (c)(7). Well, obviously, 10:22 15 whatever they do is more for their members than for 10:22 16 the public charity, but these organizations may do 10:22 17 some charity. 10:22 18 What I have given you guys today, one 10:22 19 thing I've given you is Publication 557. It's inside 10:22 20 your handout. And in the last two pages of this, it 10:22 21 talks about the various types of organizations that 10:22 22 are exempt. Just because they're exempt does not make 10:22 23 them charitable. So a lot of people think, well, if 10:22 24 they receive an exemption letter from the IRS, they're 10:22 25 automatically charitable. That's not really true. 10:22 0016 1 They -- the only ones that we consider public 10:22 2 charities are the 501(c)(3)s. And those are the 10:22 3 religious, educational, charitable, scientific 10:22 4 literary, testing for public safety, foster national 10:22 5 or international amateur sports competition, or to 10:22 6 prevent cruelty to children and animal organizations. 10:22 7 The 501(c)(3), if an organization is exempt under 10:23 8 501(c)(3), we consider those public charities. They 10:23 9 are the largest groups of exempt organizations that we 10:23 10 have, and donations to those organizations are 10:23 11 deductible. Now, the activity -- some of the things I 10:23 12 gave you guys, I've given you a copy of the 10:23 13 regulation, 501(c)(3)(1), and it talks pretty much 10:23 14 what is considered to be a charitable activity. It 10:23 15 includes terms such as relief for the poor and 10:23 16 distressed, or the underprivileged, advancement of 10:23 17 religion, advancement of education or science, the 10:23 18 erection or maintenance of public buildings, 10:23 19 monuments, or works, lessening the burden of 10:23 20 government, and promotion of social welfare. 10:23 21 I've also given to you today in your 10:23 22 handout package on the right-hand side of your folder 10:23 23 some sections from our Internal Revenue manual. And 10:23 24 the reason why I did this, if you're looking to see 10:23 25 what organizations have to do to qualify to be exempt, 10:23 0017 1 the manual kind of gives you an idea of what they're 10:23 2 doing, what they should be doing. Some of it, like 10:23 3 the first handout I gave you is a 160-page document, 10:24 4 so I didn't print the whole document, I just gave you 10:24 5 the index. All of this information is available on 10:24 6 our website, which is the www.irs.gov, and there is a 10:24 7 link over to exempt organization or tax exempt 10:24 8 organizations. And you can pull this information. 10:24 9 All the manuals are public records. You can pull this 10:24 10 information up for your own use and review. 10:24 11 One of the handouts I gave you talked 10:24 12 about charitable, educational. It's the one that 10:24 13 talks about charitable organizations defined. And it 10:24 14 basically goes through and talks about, what is a 10:24 15 (c)(3), a 501(c)(3) organization. What do they do, 10:24 16 what do they operate, what kind of stuff should they 10:24 17 be doing as charitable. I know for your purposes, 10:24 18 there has been a lot of confusion as far as, some of 10:24 19 the organizations, like (c)(8)s and (c)(10), the 10:24 20 fraternal organizations, they're the ones we call the 10:24 21 animals. The Mooses, the Elks, the Redmen is in 10:24 22 there, the Eagles are in there. I kind of call the 10:25 23 whole category animals, but really what they are is a 10:25 24 fraternal organization. And their whole purpose is to 10:25 25 help their members, take care of their members, but 10:25 0018 1 they do actually perform some charitable work. So the 10:25 2 question is, if they're getting money in a bingo 10:25 3 account, is the money they're using to support the 10:25 4 general hall considered a charitable activity. For 10:25 5 our purposes, they can do that because all we're 10:25 6 concerned about is that they're using the money for 10:25 7 their exempt purpose, and their exempt purpose is to 10:25 8 take care of their members, provide a place for the 10:25 9 members to gather, et cetera, et cetera. For your 10:25 10 purposes, taking care of their own little group 10:25 11 doesn't really probably meet your definition of 10:25 12 charitable, but they actually do perform some 10:25 13 charitable work. 10:25 14 The other one that causes a lot of 10:25 15 problems are the (c)(19)s. And the (c)(19)s are your 10:25 16 veterans organizations. The problem comes about in 10:25 17 that (c)(19) organizations, 501(c)(19), the problem 10:25 18 comes about is the veterans organizations may or may 10:26 19 not receive contributions to them that are deductible. 10:26 20 For example, if they have more than 90 percent war 10:26 21 veterans, they would qualify to receive tax deductible 10:26 22 donations. Like we as individuals can make donations 10:26 23 to like a VFW because they meet that 90 percent 10:26 24 requirement. But other organizations exempt under 10:26 25 (c)(19) may not meet that 90 percent war veterans, 10:26 0019 1 because just to be a (c)(19) organization, you have to 10:26 2 have at least 75 percent of military or retired 10:26 3 military members. 10:26 4 But for charitable purpose, just 10:26 5 because they're exempt from us, does not necessarily 10:26 6 mean they're a charitable organization. And just 10:26 7 because they're exempt as a (c)(3), I told you guys a 10:26 8 (c)(3) organization, 501(c)(3) means that they are 10:26 9 actually supposed to be organized for religious, 10:26 10 education, charitable, et cetera. Just because 10:26 11 they're organized under that section does not 10:26 12 necessarily mean they're doing charitable work. For 10:26 13 example, let's say you guys founded an organization 10:26 14 where the only thing they were doing was playing 10:27 15 bingo. Well, playing bingo itself does not constitute 10:27 16 a charitable activity. They actually have to be doing 10:27 17 something with that money that relates to their 10:27 18 charitable activity, and they actually have to be 10:27 19 doing something. How is that? 10:27 20 It's kind of -- exempt organization law 10:27 21 is kind of confusing, but that's kind of it in a 10:27 22 nutshell. Do you guys have specific questions? 10:27 23 CHAIR BRACKETT: I would like to ask 10:27 24 you something. Okay. So an organization has been 10:27 25 ruled a charitable organization to qualify for a bingo 10:27 0020 1 license. Then they have made some money that they 10:27 2 want to donate. So what is the step they should take 10:27 3 to make sure that they're donating it to a charity 10:27 4 that qualifies for the donation? 10:27 5 MS. GOLDBERG: It depends on the type 10:27 6 of organization. If it's an organization -- 10:27 7 CHAIR BRACKETT: But what step can they 10:27 8 take to find this? Do they call you or do they look 10:27 9 at this circular or -- 10:27 10 MS. GOLDBERG: Well, they should be 10:27 11 able to look at the publication. And that's why I 10:27 12 gave you the Publication 557, because it actually 10:28 13 talks about what qualifies as an exempt -- a 10:28 14 charitable activity. In general, if they're donating 10:28 15 that money to a -- for example, let's say your 10:28 16 organization is taking money out of the bingo account 10:28 17 to give to the Girl Scouts. Well, the Girl Scouts are 10:28 18 an exempt organization under 501(c)(3). That would be 10:28 19 a charitable deduction, cut and dried. Does that kind 10:28 20 of answer the question? 10:28 21 CHAIR BRACKETT: Yes. I'm trying to 10:28 22 ask the question on behalf of the reason it came up. 10:28 23 I work for a nonprofit corporation. It's very easy 10:28 24 for me to show to people that we are a 501(c)(3). But 10:28 25 a lot of causes come up that people get approached 10:28 0021 1 for, and they need to know where they can go to find 10:28 2 out, is this going to be a legitimate bingo donation. 10:28 3 MS. GOLDBERG: So you're talking about 10:28 4 them donating to another -- how do they find out if an 10:28 5 organization is a registered exempt? If they go to 10:28 6 the IRS website, there is something called Publication 10:28 7 78. The same website as earlier, www.irs.gov, if they 10:28 8 go to the exempt organization link, Publication 78 10:29 9 lists all the charities that are recognized as being 10:29 10 public charities under 501(c)(3). 10:29 11 CHAIR BRACKETT: Okay. So what they 10:29 12 can do, the solution to the problem that -- and to 10:29 13 avoid problems when they -- when the auditor from the 10:29 14 Bingo Division comes, is to look on the Internet, or 10:29 15 to give their local Internal Revenue Service a call? 10:29 16 MS. GOLDBERG: Actually, the toll free 10:29 17 number, the 800 number, which is in your publication, 10:29 18 that also is a good source. It's 1-866-829-5500. 10:29 19 CHAIR BRACKETT: So they can get this 10:29 20 publication, 557, from their local Internal Revenue 10:29 21 Service office? 10:29 22 MS. GOLDBERG: Yes. Or download it 10:29 23 from the Internet. 10:29 24 CHAIR BRACKETT: Or download it from 10:29 25 the Internet. Okay. 10:29 0022 1 MR. WHITTINGTON: Could you answer a 10:29 2 question that Danny was talking about whether or 10:29 3 not -- what type of expenditures can a charity pay out 10:30 4 of their monies? 10:30 5 MS. GOLDBERG: Good question. 10:30 6 MR. WHITTINGTON: Could you do -- is 10:30 7 that a Lottery Commission deal? It's on the same 10:30 8 level as -- 10:30 9 MS. GOLDBERG: Sure. Well, it depends 10:30 10 on the organization. If the organization is like a 10:30 11 (c)(4), which is a social welfare organization, they 10:30 12 would need to show that money is going to charity, 10:30 13 like they would have to go to a (c)(3), or they would 10:30 14 have to show that that money is actually going to a 10:30 15 (c)(3) type organization. 501(c)(3) organization. If 10:30 16 it's a -- if, let's say, the Red Cross was playing 10:30 17 bingo here, and they're just moving the money out of 10:30 18 the bingo operating account into their general 10:30 19 operating account to pay for their travel expenses, 10:30 20 whatever, since they are recognized as a 501(c)(3), 10:30 21 all the activities that they perform -- to be a 10:30 22 501(c)(3), all the activities they perform have to be 10:30 23 exclusively related to the care -- that category 10:30 24 they're exempt under. So they're under already exempt 10:30 25 under -- as a charitable organization. All their 10:30 0023 1 activities, in theory, are supposed to be charitable 10:31 2 activities. 10:31 3 So let's say -- I think Danny mentioned 10:31 4 something about travel expenses. Let's say they're 10:31 5 taking money out of the lottery account to pay -- or 10:31 6 the bingo account to pay for their travel for their 10:31 7 exempt purpose. Well, if they're traveling to 10:31 8 Amarillo -- let's use the Red Cross. Let's say 10:31 9 they're traveling to Amarillo to help somebody who was 10:31 10 a tornado victim or something, that would be directly 10:31 11 related to their exempt purpose. 10:31 12 Does that kind of help? 10:31 13 MR. WHITTINGTON: Yeah. That's what I 10:31 14 think the meat of the course is, trying to find out 10:31 15 what monies can they spend. 10:31 16 MS. GOLDBERG: Correct. 10:31 17 MR. WHITTINGTON: And a lot of them 10:31 18 don't understand what they can spend it on. And I 10:31 19 guess that's basically what we're trying to get to, 10:31 20 what they can they spend it on and what can't they 10:31 21 spend it on. 10:31 22 MS. GOLDBERG: It depends on the type 10:31 23 of organization. And that's why I gave you all the 10:31 24 materials, so you guys can kind of look through it in 10:31 25 your free time. 10:31 0024 1 MR. WHITTINGTON: Okay. 10:31 2 CHAIR BRACKETT: Would you recommend 10:31 3 that charities that are playing bingo get this folder 10:31 4 of information? 10:31 5 MS. GOLDBERG: Well, I recommend -- I 10:32 6 recommend, at a minimum, they get the Publication 557. 10:32 7 And at a minimum, we actually -- the IRS works in 10:32 8 conjunction with Billy's folks on doing joint 10:32 9 presentations. Everybody who plays bingo has to come 10:32 10 in every couple of years. When they come in, we come 10:32 11 to those presentations as often as possible. We do 10:32 12 provide 557, we do go over a presentation with them, 10:32 13 telling them what they should be doing. And I think 10:32 14 it's usually pretty clear the information we provide 10:32 15 to them. And, of course, we always have questions and 10:32 16 answers afterwards. 10:32 17 CHAIR BRACKETT: Are there any other 10:32 18 questions or comments? 10:32 19 MR. ATKINS: I'm sorry. Dawn, could 10:32 20 you talk real quickly, I think there is information in 10:32 21 557 about the type of proof or documentation that the 10:32 22 IRS recommends organizations maintain supporting 10:32 23 charitable activities. 10:33 24 MS. GOLDBERG: Well, we don't really 10:33 25 tell them how to maintain their records. But we do 10:33 0025 1 have suggested guidelines. You know, a lot of it has 10:33 2 to do with internal control. We suggest, of course, 10:33 3 you keep your receipts, you keep something to show 10:33 4 your stated purpose. If you're giving something to 10:33 5 the Girl Scouts -- let's say, you're letting the 10:33 6 Girl Scouts use your swimming pool. You should have 10:33 7 something to show -- a letter or some kind of 10:33 8 agreement with them showing that this activity 10:33 9 occurred. If you have any receipts associated with 10:33 10 giving money to a charity, you should have your 10:33 11 canceled checks, your receipts, to show what the money 10:33 12 went to. 10:33 13 Is that what you're looking for, Billy? 10:33 14 Any other questions? 10:33 15 CHAIR BRACKETT: Danny, do you have a 10:33 16 suggested action on this or -- 10:33 17 MR. MOORE: No. I -- the reason this 10:33 18 was brought to me was that over the course of time now 10:33 19 we've talked about it, and really no action has been 10:33 20 taken. I think the staff is looking at it right now, 10:33 21 Billy. I don't know if that's on the A list or -- I 10:34 22 know it's something that you all have been talking 10:34 23 about. I know it was in the Sunset report. And I was 10:34 24 just curious where this is going to go from here. 10:34 25 MR. ATKINS: Well, first of all, I 10:34 0026 1 don't think I would agree with your statement that 10:34 2 nothing has been done on this before. Because in -- 10:34 3 and this might have been before your time on the 10:34 4 advisory committee, but back in August of 2001, there 10:34 5 were a series of rules proposed dealing with audit 10:34 6 issues. And some of those rules contained references 10:34 7 to expenses and charitable distributions. So I think 10:34 8 that that would have been a good starting point. 10:34 9 Unfortunately, that didn't go very far. But, no, 10:34 10 we've been looking at it. We know that folks in the 10:34 11 industry have been looking at it. And we think this 10:35 12 is the perfect time for the dialogue to start. 10:35 13 MR. MOORE: Okay. Yeah. And what is 10:35 14 here is just -- was provided from some people in the 10:35 15 public, part of the bingo community, Steve Bresnen and 10:35 16 a few other gentlemen. And, you know, we just want to 10:35 17 help if we can, so... 10:35 18 CHAIR BRACKETT: So what you have 10:35 19 submitted is a proposed draft rule to clarify what 10:35 20 expenditures? 10:35 21 MR. MOORE: Yes, ma'am. 10:35 22 CHAIR BRACKETT: And we propose this to 10:35 23 the Texas Lottery Commission? Is that correct, Billy? 10:35 24 Or is this for staff -- is it proposed for the staff 10:35 25 to work with and... 10:35 0027 1 MR. ATKINS: Yeah. I mean, just like 10:35 2 with the rules that we bring forward, you know, we 10:35 3 would look for an informal period for discussions to 10:35 4 take place on these, you know, much like we have the 10:35 5 first and second reading, so that there is a period of 10:36 6 time for folks to gather to discuss things informally 10:36 7 before they go to the Commission or vote it for 10:36 8 publication. So I would think that we would want to 10:36 9 treat this in a comparable manner. 10:36 10 MR. MOORE: Sure. 10:36 11 CHAIR BRACKETT: So what happens at 10:36 12 this point? 10:36 13 MR. ATKINS: Well, I would say, at this 10:36 14 point have you a number of speakers, but -- that want 10:36 15 to speak on this issue. I don't know if you want to 10:36 16 hear them now or if it's the desire, you know, of the 10:36 17 committee. One of the things that you could look at 10:36 18 doing is putting a work group together to start 10:36 19 addressing this issue. 10:36 20 CHAIR BRACKETT: It looks like we 10:36 21 have -- yeah, we have several speakers, about eight 10:36 22 speakers who would like to speak to number three. So 10:36 23 why don't you come forward and speak. And I would 10:37 24 like to limit you to five minutes. And if you're 10:37 25 repeating something that has already been said, please 10:37 0028 1 just indicate that you support the speaker number 10:37 2 so-and-so or the speaker by name. 10:37 3 Sharon Ives. 10:37 4 MS. IVES: Sure, I'll go first. I was 10:37 5 the one sitting in the audience looking around. 6 CHAIR BRACKETT: Well, ladies first, 10:37 7 Sharon. 10:37 8 MS. IVES: Good morning. My name is 10:37 9 Sharon Ives. That is I-v-e-s, with Fort Worth 10:37 10 Bookkeeping. And my company handles over 40 bingo 10:37 11 organizations and ten grandfathered lessors. And I 10:37 12 wanted to speak to you today on this issue, as far as 10:37 13 allowable expenses. I have 18-plus years bingo 10:37 14 experience here in Texas. I have sat through many 10:38 15 audits conducted by all the past and present State 10:38 16 overseeing agencies. When an organization writes a 10:38 17 check out of their general fund to pay for someone, 10:38 18 that's someone within their organization, to attend a 10:38 19 convention, which their attendance is mandatory in 10:38 20 accordance by their bylaws, why is the auditing 10:38 21 division disallowing this? As far as I know, in 10:38 22 accordance with federal law, the nonprofit 10:38 23 organizations must submit annually to the IRS a Form 10:38 24 990. I believe these same organizations must submit 10:38 25 some type of data to the IRS to maintain their 10:38 0029 1 exemption status. It seems to me that the guidelines 10:38 2 that the IRS sets forth to the organization should be 10:38 3 the same guidelines that should be allowed by the 10:39 4 Texas Lottery Commission Bingo Division. To me, this 10:39 5 would eliminate any confusion between the agencies and 10:39 6 allow the auditors to perform their audits in a 10:39 7 thorough manner. In other words, the general fund 10:39 8 expenses that are allowed by the IRS should be the 10:39 9 same for the Texas Lottery Commission Bingo Division, 10:39 10 and the same goes for the expenses that are 10:39 11 disallowed. 10:39 12 Do you have any questions, comments? 10:39 13 CHAIR BRACKETT: I don't think so. 10:39 14 Thank you. 10:39 15 MS. IVES: Thanks. 10:39 16 CHAIR BRACKETT: Are there other 10:39 17 speakers? Do you want to volunteer or -- do you want 10:39 18 me to call you by name? Jimmie Van. 10:39 19 MR. VAN: Good morning. My name is 10:40 20 Jimmie Van. I represent the North Texas Firemen's 10:40 21 Association. I agree wholeheartedly with what Sharon 10:40 22 has said. It's very difficult to keep two sets of 10:40 23 rules and regulations. The IRS allows a 501(c)(3) to 10:40 24 spend money for the furtherment of the organization, 10:40 25 within the law, yet those same laws don't apply to the 10:40 0030 1 bingo. Money that comes out of the bingo operation 10:40 2 and goes into our general funds really should be under 10:40 3 the same rules and regulations. It would not only 10:40 4 make our life better, it would make more profit 10:40 5 ultimately for the charity, but it would also make the 10:41 6 Lottery Commission and the auditors' job easier. 10:41 7 Is there any questions? Thank you for 10:41 8 your time. 10:41 9 CHAIR BRACKETT: Thank you. Don Webb. 10:41 10 MR. WEBB: Good morning. My name is 10:41 11 Don Webb and I'm with Am Vets, American Veterans, and 10:41 12 the Improved Order of Redmen. 10:41 13 I would agree with what Sharon had just 10:41 14 said previously, but also, I would like to bring up 10:41 15 the problem that -- we have our 4-H Clubs that we 10:41 16 donate to. What we do is help with the 4-H, the 10:41 17 groups, the kids along with the group. But one of the 10:41 18 expenditures that was questioned when we did it was 10:41 19 their banquet. We bought -- when they get ready to 10:41 20 have their banquet, they get -- like the Hill County, 10:41 21 Ellis County, they get together and they give out 10:42 22 their awards and they have their banquet. We donate 10:42 23 money to help them put on this banquet, and we donated 10:42 24 money to -- it was a barbecue, to have the barbecue 10:42 25 brought in, so that their -- for their dinner that 10:42 0031 1 night, their banquet. And there was some question 10:42 2 about it, about how that it was -- that that wasn't an 10:42 3 expenditure, you know, that it wasn't quite right for 10:42 4 that. And it would be the same that I would go is our 10:42 5 church camps, when we have our camps for the 4-Hers or 10:42 6 the church camps for the kids, that too you would make 10:42 7 out -- you give to the church for the camps, but if 10:42 8 you have an expenditure that says, maybe you're going 10:42 9 to coordinate -- get the buses, well, that brings a 10:42 10 question up with the auditor about, well, is this -- 10:42 11 is this a good expenditure or not. And that's where 10:42 12 we need to be clear. And we're in -- we're kind of in 10:42 13 the dark, too, because we don't know what it -- what 10:43 14 is clear and what's not. But that's basically what 10:43 15 we're trying to ask to clear it up. Thank you. 10:43 16 CHAIR BRACKETT: So really, what all of 10:43 17 us are seeking is to really understand what is an 10:43 18 authorized donation. 10:43 19 MR. WEBB: Yes. The authorized 10:43 20 donation -- 10:43 21 CHAIR BRACKETT: And we need to know it 10:43 22 before the auditor comes. 10:43 23 MR. WEBB: Exactly. Just like with our 10:43 24 IRS statements, we have an audit and everything else. 10:43 25 We've got our paperwork there. We've got the -- the 10:43 0032 1 cash register receipts or whatever from the hotel when 10:43 2 they go to different places. We've got it there and 10:43 3 that seems to be all right. But it's -- but, again, 10:43 4 with the laws, you know, at the Lottery Commission, it 10:43 5 seems to be different. It kind of juggles up and 10:43 6 down. You don't know what to do. 10:43 7 CHAIR BRACKETT: Are you paying the 10:43 8 expenses directly? 10:43 9 MR. WEBB: Out of the general fund when 10:43 10 they call for our -- you know, that the -- the 10:43 11 umbrella that you're under, like Am Vets, if they send 10:43 12 you a letter, tell you to send two representatives to 10:44 13 Tyler, to Texarkana, anywhere like that, that you have 10:44 14 to send to them, and that's what our post sends our 10:44 15 delegates there for. And they have a session there -- 10:44 16 we have -- most of the time, we have someone -- we 10:44 17 have asked for -- the Lottery Commission has been 10:44 18 there, and the IRS also, so to answer questions. 10:44 19 CHAIR BRACKETT: Okay. Thank you. 10:44 20 MR. WEBB: Thank you. 10:44 21 CHAIR BRACKETT: Mark McCafferty, are 10:44 22 you wanting to make a comment that's different from 10:44 23 what we've already heard? 10:44 24 MR. McCAFFERTY: No, ma'am. 10:44 25 CHAIR BRACKETT: Okay. Charles 10:44 0033 1 Williams. Dolores Oelfke. Or I'm mispronouncing that 10:44 2 last name. 10:44 3 MS. OELFKE: Oelfke. 10:44 4 CHAIR BRACKETT: Oelfke. I'm sorry. 10:44 5 Do you have anything different to add? So we seem to 10:44 6 all have the same problem. 10:45 7 Darleen Mashburn. I'm sorry. She said 10:45 8 she did not want to testify. 10:45 9 Okay. Steve Bresnen, we're down to 10:45 10 you, so... 10:45 11 MR. BRESNEN: Down to me? Down to me. 10:45 12 Ms. Brackett, you're always candid. 10:45 13 My name is Steve Bresnen. I represent 10:45 14 the Bingo Interest Group. I got involved in this in 10:45 15 August of 2000, because I think, at that point in 10:45 16 time, the effects of the stepped-up auditing level by 10:45 17 the Commission were beginning to be noticed in the 10:45 18 hinterlands, and a number of my clients and charities 10:45 19 within the halls of my clients began to call and said, 10:45 20 can we do this with our money. 10:45 21 One example was the convention expenses 10:45 22 for veterans groups. So I flip over to the statute, I 10:45 23 see there is an absence of rules on it, I flip over to 10:46 24 the statute and I see what is on your page as 10:46 25 (b)(1)(E), that -- which is right out the statute, 10:46 0034 1 that they're going to the conventions of the veterans 10:46 2 group, and I think it serves that purpose and I say it 10:46 3 looks fine to me. But the question has persisted 10:46 4 about whether those travel expenses are legitimate. 10:46 5 So I ask, in August of 2001, that we 10:46 6 start working on some rules on that. I wrote a letter 10:46 7 and asked a question about a specific series of 10:46 8 expenditures, and the Commission staff, following 10:46 9 their policy, indicated that they couldn't give 10:46 10 advisory opinions. So that didn't illuminate the 10:46 11 subject matter. Later, I believe the subject matter 10:46 12 was on the list of rules that Mr. Atkins came up with, 10:46 13 that he was proposing to address at a work plan. It 10:46 14 came up in the Sunset Commission staff report. It was 10:47 15 concurred in by this staff, this Commission, so forth. 10:47 16 I'm a good listener, having worked for 10:47 17 Bullock for a long time. And I heard what Chairman 10:47 18 Clowe said last time about bringing solutions, and I 10:47 19 decided that it was time to bring a solution on this 10:47 20 problem, because the problems persist. I'm really 10:47 21 glad that -- is it Dawn? Did Dawn leave? Okay. I'm 10:47 22 really glad that she came today because I think what 10:47 23 she said basically supports what we've tried to do in 10:47 24 this draft proposed rule. Recognizing that the 10:47 25 statute doesn't just say, you can do anything the IRS 10:47 0035 1 says you can do. What the statute says is what is in 10:47 2 A and B of this proposed rule. That verbatim out of 10:47 3 the statute. 10:47 4 In C, what we've tried to do is say, 10:47 5 whatever you're doing has to further one of those 10:47 6 statutory causes. The staff can't do anything about 10:48 7 the statute. They're as stuck with it as we are. So 10:48 8 clearly, what you're doing has to serve one of those 10:48 9 causes. I think she -- I don't want to 10:48 10 mischaracterize what she said, but I think she drew a 10:48 11 distinction between a charitable purpose and, say, 10:48 12 what the mammals, the Lions, the Elk, the Moose might 10:48 13 do to further the interests of their members within 10:48 14 the organization. And I think this maintains that 10:48 15 distinction. 10:48 16 On the other hand, it goes a step 10:48 17 further and invokes the rules for expenditures that 10:48 18 the IRS allows of the tax exempt organizations. The 10:48 19 reason we want to do that is, is because, you know, 10:48 20 you're going to be one of these things for several 10:48 21 years before you ever get a bingo license. That's the 10:48 22 first thing you learn about. You know about what you 10:48 23 can do. And there is a lot of publications, there is 10:48 24 a lot of references, in fact, pamphlet 557 is -- 10:48 25 informs a whole lot of what we've done here. In fact, 10:48 0036 1 most of what we've done here. And so you've got a 10:49 2 place to look at. I was really glad to hear her say 10:49 3 that you can pay for the trip to Amarillo to take care 10:49 4 of the tornado victims, because I think that's exactly 10:49 5 what this rule says. It furthers your purpose. 10:49 6 Clearly, relieving distress or suffering is one of 10:49 7 the -- is one of our state statutory purposes, and 10:49 8 then over in item -- on the second page, in item 10:49 9 (c)(2)(D), it talks about transportation, lodging and 10:49 10 related expenses. So if this rule were in place, and 10:49 11 there was to be a tornado in Amarillo, you would know 10:49 12 that by virtue of this rule, that consistent with 10:49 13 your -- the reasons you're granted tax exemption, 10:49 14 consistent with the purposes in the Texas statute, you 10:49 15 could go to Amarillo and hole up in a hotel and go out 10:49 16 there and clear debris or serve, you know, food to the 10:50 17 people in the shelter, or whatever you needed to do, 10:50 18 and you would be on -- you would know that you were on 10:50 19 solid ground. 10:50 20 On the other hand, we've also tried to 10:50 21 define, in item E, things that you can't do. You 10:50 22 can't do anything that's prohibited by law. Under the 10:50 23 Bingo Enabling Act, you can't go contribute your bingo 10:50 24 money to a political campaign. Under the -- under 10:50 25 other law, you know, you couldn't pay for a weekend in 10:50 0037 1 a brothel, because that's an illegal expenditure 10:50 2 anyway outside of Nevada. And by the way, speaking of 10:50 3 Nevada, back over on the first page, in item 10:50 4 (c)(1)(C), we've made it clear that the expenditure 10:50 5 has to be made in this state. That's a Texas 10:50 6 constitutional requirement. So we've gone -- we've 10:50 7 tried to be clear enough here to say what kinds of 10:50 8 things you can do to give you some guidance, without 10:51 9 putting a straightjacket on the charities. The data 10:51 10 are that over the last three years for which we have 10:51 11 complete numbers, there were something like 61 audit 10:51 12 violations. That was -- in the last year of that, I 10:51 13 think, which I think was '01, there were 30. In the 10:51 14 previous two years, there had been, I think, 14 and 10:51 15 17. So about 15. So those things have come up. They 10:51 16 certainly came onto our radar. It's certainly been 10:51 17 identified in numerous ways as a priority, and so we 10:51 18 wanted to bring a solution, that you can do 10:51 19 anything -- any type of expenditure that the IRS would 10:51 20 allow you under your exemption, providing it serves 10:51 21 one of the statutory purposes that it's made in this 10:51 22 state. And then I tried to give some examples. I've 10:51 23 noticed in other agencies' rules, and I don't know if 10:51 24 we have them in the bingo rules or not -- Billy, you 10:52 25 would know -- to give some examples. These may be 10:52 0038 1 more elaborate than they would use in other agencies' 10:52 2 rules, but I've tried to give a couple of examples. 10:52 3 To the extent that anything is not clear, this is -- 10:52 4 about 15 people have looked at this and given 10:52 5 suggestions. To the extent it's not clear, it could 10:52 6 certainly be improved on. I think if you guys would 10:52 7 treat this in a sort of a first reading like you would 10:52 8 on a rule that's coming up out of the agency staff, I 10:52 9 think that would be great. If you would get a work 10:52 10 group going on it and set some schedule to get to a 10:52 11 resolution, and then move it up to the Commission 10:52 12 level, that would be exactly the sort of participation 10:52 13 that we would be looking for. 10:52 14 I'll be happy to answer any questions. 10:52 15 MS. MATTHEWS: Page three, number two, 10:52 16 examples of prohibited expenditures. A conductor may 10:52 17 not use net proceeds to pay a licensed bingo 10:53 18 distributor's invoice for bingo equipment. Payment 10:53 19 for bingo equipment must be made from the bingo 10:53 20 account. 10:53 21 Could you clarify that. 10:53 22 MR. BRESNEN: Yes, ma'am. What we're 10:53 23 talking about here is how you can spend your net 10:53 24 proceeds from bingo. The -- the net -- that means 10:53 25 what you have taken it, and you've distributed it over 10:53 0039 1 to your general fund, what you can do with it once 10:53 2 it's in that account. And the law specifically says, 10:53 3 bingo equipment and supplies must be paid for from the 10:53 4 bingo account. 10:53 5 MS. MATTHEWS: Thank you. 10:53 6 MR. BRESNEN: Yes, ma'am. I guess it 10:53 7 wouldn't even be net proceeds at that point, because 10:53 8 you would be -- you wouldn't have paid your expenses 10:53 9 out of it yet. 10:53 10 CHAIR BRACKETT: Let me ask a question 10:53 11 of the group and of you, too, Steve. You suggested a 10:53 12 work group look at this? 10:53 13 MR. BRESNEN: Well, I'm just following 10:53 14 up on Billy's suggestion. I've been after a 10:53 15 stakeholder type process all along, so I'm not about 10:54 16 to go suggesting that you all ram this out of here 10:54 17 today. I think, you know, there is a lot of things -- 10:54 18 the staff is going to have questions. They've only 10:54 19 had a chance to see this for a few days. I've tried 10:54 20 to give some explanation, and then I've had about -- 10:54 21 oh, I'd say, about 15 people who have said, well, what 10:54 22 about this, what about that, and they've raised some 10:54 23 questions. And I imagine some other people will too. 10:54 24 That's the way -- essentially, you're legislating here 10:54 25 and that's what happens when you get a bunch of people 10:54 0040 1 looking at it. I would say this. I don't want a work 10:54 2 group to slow it down or stall it, because I think 10:54 3 it's a priority. It's been identified by this 10:54 4 commission, by Sunset Commission, the staff, and by 10:54 5 the community as a priority. But if there is a 10:54 6 workmanlike way to get there, and that includes a 10:54 7 working group of people, whether it's from the 10:54 8 advisory committee or some other, you know, group of 10:54 9 people, that's good. There is probably other kinds of 10:54 10 expenditures -- and, Billy, you may know -- you may be 10:54 11 aware of them, or the audit folks, that fall into an 10:55 12 area where you find particular controversy. And if 10:55 13 the Commission needs to decide on one side or the 10:55 14 other of those, you know, we may disagree on the 10:55 15 decision, but it needs to be done. People are 10:55 16 spending too much money, the Commission is spending 10:55 17 too much money policing something that's -- that could 10:55 18 be dealt with with clarity. 10:55 19 CHAIR BRACKETT: What was your question 10:55 20 to Billy? 10:55 21 MR. BRESNEN: I don't think I had one. 10:55 22 I'm just saying, it may be in a work group type -- or 10:55 23 stakeholder type environment, you may get examples 10:55 24 that are not treated in this or it wouldn't be clear 10:55 25 under what I've drafted here. 10:55 0041 1 CHAIR BRACKETT: Okay. So, Billy, I 10:55 2 have a question. Has any of the bingo staff had a 10:55 3 chance to work with this? 10:55 4 MR. ATKINS: We've had the chance to 10:55 5 review it. Yeah, Steve is correct. There were some 10:55 6 questions that -- that we had, and some areas that we 10:55 7 think would require further development. 10:56 8 CHAIR BRACKETT: Okay. So we need 10:56 9 somebody from the Bingo Advisory Committee who is 10:56 10 willing to work with your people on this. And, Danny, 10:56 11 do you want to continue to do this since you've gotten 10:56 12 it started? 10:56 13 MR. MOORE: Sure. But I'm going to 10:56 14 need some help from these people out here. This is 10:56 15 new to me, Virginia. I'm not even going to sugarcoat 10:56 16 it. You know, I'm not going to go at it by myself. I 10:56 17 don't know the tax laws, and I'm not going to step 10:56 18 into that and try to -- 10:56 19 CHAIR BRACKETT: Well, I think we would 10:56 20 leave that up to staff and their expert opinions. Are 10:56 21 you wanting an operator to work with you on it, too? 10:56 22 MR. MOORE: That would be helpful 10:56 23 probably. 10:56 24 CHAIR BRACKETT: Okay. Then we'll 10:56 25 appoint an operator to be working with you on this, 10:56 0042 1 Billy and staff. 10:56 2 MR. BRESNEN: That would be great. I'm 10:56 3 happy to participate or -- 10:56 4 CHAIR BRACKETT: And Steve and Danny 10:56 5 will continue, and we'll appoint an operator. 10:56 6 MR. ATKINS: And I would just add that 10:57 7 if there are others that want to be involved, if they 10:57 8 will let either Steve or myself know. 10:57 9 MR. BRESNEN: Let's let you be the 10:57 10 central point of communication. And I'll say right -- 10:57 11 is that okay? 10:57 12 MR. ATKINS: That's fine. But I don't 10:57 13 want to be responsible for picking or choosing, you 10:57 14 know, who is going to be -- 10:57 15 MR. BRESNEN: I understand. I 10:57 16 volunteer. If anybody else wants to volunteer -- 10:57 17 MR. ATKINS: If they'll let me know. 10:57 18 And they can either call me or write me. 10:57 19 CHAIR BRACKETT: Let me ask another 10:57 20 question. I said an operator. Maybe it shouldn't be 10:57 21 an operator. Maybe it should be someone, the business 10:57 22 manager, bookkeeper. Of course, many times the 10:57 23 operators are. So should it be an operator business 10:57 24 manager who deals with this? 10:57 25 MR. BRESNEN: I would suggest that you 10:57 0043 1 need some people involved that, number one, they need 10:57 2 to have a stake in it. So I think if you get somebody 10:57 3 from one of the veterans groups involved, because I 10:57 4 think this is one of the areas where the -- there is a 10:58 5 little bit of friction out there on some of these 10:58 6 expenditures, that would be good. I think it needs to 10:58 7 be the charities. I think, you know, they need to 10:58 8 know what they're spending their money on. They need 10:58 9 to be able to say, well, we did this. Would that be 10:58 10 okay. Because, you know, I mean, I've got a pretty 10:58 11 good handle on it, but you know, you brought up a 10:58 12 donation earlier that, you know, I wouldn't have had 10:58 13 any reason to know about that, so... 10:58 14 That would be my suggestion. 10:58 15 CHAIR BRACKETT: Okay. So we'll be 10:58 16 looking for a volunteer from the public who is a 10:58 17 business manager, an operator, someone with a stake in 10:58 18 and sees how the distributions go in and are credited. 10:58 19 MR. BRESNEN: Thank you. Y'all -- 10:58 20 CHAIR BRACKETT: And like Billy said, 10:58 21 we need for people to apply. And by applying, that 10:58 22 could be faxing a letter, calling, walking up to Billy 10:58 23 at any time or to anybody here on the advisory 10:58 24 committee, and we'll be happy to consider your name. 10:58 25 MR. BRESNEN: Can we sort of set some 10:59 0044 1 kind of general target for when we might get that 10:59 2 group together so we're working on -- 10:59 3 CHAIR BRACKETT: Definitely. What date 10:59 4 line do you suggest? 10:59 5 MR. BRESNEN: I think we're sitting 10:59 6 here on -- what is today? The 12th? I would be 10:59 7 surprised if we can get people together between now 10:59 8 and the end of the year, because of the holidays. 10:59 9 Fair enough? So I would say, sometime shortly after 10:59 10 the first of the year, we ought to get that group 10:59 11 together. 10:59 12 CHAIR BRACKETT: What is shortly after 10:59 13 the first of the year? 10:59 14 MR. BRESNEN: Well, I don't have a 10:59 15 calendar on me, so I don't know what the 1st, 2nd or 10:59 16 3rd fall on, but somewhere right around there. 10:59 17 MR. WHITTINGTON: The 2nd is on 10:59 18 Wednesday. 10:59 19 MR. ATKINS: I would say -- 10:59 20 MR. BRESNEN: My headache will be 10:59 21 cleared up by then. 10:59 22 CHAIR BRACKETT: Do you see why we say, 10:59 23 we finally got to Steve? 10:59 24 MR. ATKINS: The 1st is Wednesday, the 10:59 25 middle of the week, so I would say, the week of 10:59 0045 1 January 6th. Can we set that date? 10:59 2 MR. BRESNEN: That's fine. 11:00 3 CHAIR BRACKETT: Thank you. Danny, 11:00 4 thank you for attending to that and bringing us that 11:00 5 information. 11:00 6 Item number four is also yours, Danny. 11:00 7 MR. MOORE: All right. Unit 11:00 8 accounting. This is a fairly new term for everybody. 11:00 9 I think it sprung up out of a commission meeting. I 11:00 10 believe it was in October, if somebody can correct me. 11:00 11 This -- what we have here that's in our handout today, 11:00 12 Virginia, is some draft legislation that would amend 11:00 13 the Bingo Enabling Act to allow the use of unit 11:00 14 accounting by two or more licensed authorized 11:00 15 organizations conducting bingo in the same location. 11:00 16 What basically is here is kind of what it says on top, 11:00 17 draft legislation. It would define unit accounting, 11:00 18 go through some specific different things that would 11:01 19 allow for this in a location. This is something 11:01 20 that's been bantered about in the past, but not really 11:01 21 ever had a title before that commission meeting. And, 11:01 22 again, what we have here, and Chairman Clowe asked us 11:01 23 to come up with solutions, so I've been talking with 11:01 24 people in the general public and this was handed to me 11:01 25 a week ago. And it's in the format that would be -- 11:01 0046 1 it could turn into a bill. Now, obviously, draft is 11:01 2 the key word here. 11:01 3 From my experience in bingo over the 11:01 4 last few years, I notice that bingo halls, mainly 11:01 5 commercial halls, I see a lot of movement amongst 11:01 6 charities jumping around. The charities that might 11:01 7 play on a Friday or Saturday tend to have a better 11:01 8 deposit into their bingo accounts than the ones during 11:02 9 the week. That entails the hall to move a charity 11:02 10 from a Tuesday to maybe a Friday. They have to mail 11:02 11 in their license to get the changes or to -- I think 11:02 12 it can be a fax now. Anyway, it's a lot of movement. 11:02 13 It comes back to me as a distributor. I -- with 11:02 14 electronic bingo now, I have to let the manufacturer 11:02 15 know, they have to go out and change the charities 11:02 16 around. It becomes a billing problem for us. It sure 11:02 17 would be nice to deliver bingo supplies to a hall to 11:02 18 one account. That way the charities could use the 11:02 19 product in a continuing basis from session to session. 11:02 20 There are so many advantages to it right now. I've 11:02 21 actually witnessed in bingo halls where they -- they 11:02 22 will be selling pull tabs, a certain charity, for the 11:03 23 first session, and if they're not licensed for the 11:03 24 second session, they have to stop selling these tabs, 11:03 25 put them on the side. A lot of times they can't 11:03 0047 1 continue to sell them because of maybe the way the 11:03 2 winners have come out of the boxes. That usually ends 11:03 3 up back in a room, maybe throwing away a third or half 11:03 4 of the box. I think this would help eliminate that 11:03 5 problem. 11:03 6 There is a lot of times charities will 11:03 7 call us and they'll -- they don't have the right 11:03 8 product for their session. So we'll have to send 11:03 9 somebody out, credit that charity, rebill another 11:03 10 charity. There are so many bookkeeping things that go 11:03 11 on. And the more there is, the more chance there is 11:03 12 for human error. There are so many serial numbers we 11:03 13 have to keep track of. From an audit standpoint, I 11:03 14 can't see this but being a plus for the Commission. 11:03 15 The auditors would have one set of books to take care 11:04 16 of. I see a lot of upside to this. I'm glad it's 11:04 17 been brought up. I think -- I could see it being a 11:04 18 major transition, but I think, over a three to 11:04 19 six-month period, I think it would be a great thing 11:04 20 for bingo. So this is -- right here is basically just 11:04 21 how this could play out. Now, I -- again, this was 11:04 22 being presented to the staff. We wanted to get our 11:04 23 two cents in on this thing. You know, this isn't the 11:04 24 way it has to happen. This is just another solution. 11:04 25 So I will open it up to you guys if you 11:04 0048 1 have any input on this. And, if not, we can -- 11:04 2 CHAIR BRACKETT: I just have one point 11:04 3 I want to clarify. That it says, to amend the Bingo 11:04 4 Enabling Act to allow, which means you do not have to 11:04 5 do this. This is by choice that you choose to do this 11:04 6 unit accounting. 11:04 7 MR. MOORE: I believe that's correct. 11:05 8 I think that it's up to the hall if they want to go 11:05 9 this route. I can foresee where some wouldn't do it. 11:05 10 So I don't know if it would be a mandatory thing or 11:05 11 not. I think that's got to be discussed here, too, 11:05 12 today. 11:05 13 CHAIR BRACKETT: Whether -- 11:05 14 MR. MOORE: I don't have a preference 11:05 15 in that. I don't think you should -- I can see 11:05 16 situations where that might not work, and you may know 11:05 17 better from partaking in a commercial environment, and 11:05 18 Larry also. 11:05 19 MR. WHITTINGTON: My main things -- 11:05 20 CHAIR BRACKETT: Larry, have you 11:05 21 identified yourself? 11:05 22 MR. WHITTINGTON: Yes. My name is 11:05 23 Larry Whittington. The main thing in most of the 11:05 24 halls we've got is, we have a problem with sessions 11:05 25 mostly. One session is going to do better than the 11:05 0049 1 other on any particular day. And I have always 11:05 2 thought, if two charities is playing on a particular 11:05 3 day, and the Lottery Commission know they're playing 11:05 4 on that particular day, what is wrong with either 11:06 5 playing first or second session, either time that day, 11:06 6 as long as they play one of the sessions, whether it's 11:06 7 first or second. It would make it so much easier for 11:06 8 us to distribute the money, the proceeds, because one 11:06 9 session always does better than another session. 11:06 10 CHAIR BRACKETT: But you would still -- 11:06 11 the way I understand it, you would still have your 11:06 12 session, but the accounting would be -- 11:06 13 MR. WHITTINGTON: It would be the same 11:06 14 two charities playing that day, but one might play 11:06 15 first and one might play second. And it would be the 11:06 16 same accounting method, yes. But it would make it so 11:06 17 much easier, so if we do have to switch paper, that we 11:06 18 might play a gray second session and a blue first 11:06 19 session, we would have both papers in for the 11:06 20 charities to play either session on any particular 11:06 21 day. So it will make it a lot easier. 11:06 22 CHAIR BRACKETT: Okay. Let's hear from 11:06 23 the public. Jerry Stobaugh, East Plano Bingo. 11:06 24 MR. STOBAUGH: Hello. My name is 11:07 25 Jerry Stobaugh and I've worked in bingo since -- in 11:07 0050 1 East Plano Bingo, representing the five charities, 11:07 2 since 1988. And I've spent a lot of time on the 11:07 3 floor, and the unit accounting covers, in my opinion, 11:07 4 something that we really need. I have a charity that 11:07 5 plays on -- just for an example, a charity that plays 11:07 6 on Saturday, Monday and Tuesday. Saturday will not 11:07 7 carry Monday and Tuesday. You only have -- in our 11:07 8 hall. We have three really good days, Friday, 11:07 9 Saturday and Sunday. With unit accounting, it 11:07 10 wouldn't matter what day or what session they played. 11:07 11 All expenses would be shared by all the charities in 11:07 12 our hall. All proceeds would be distributed equally 11:07 13 among the charities. It would reduce -- I have two 11:08 14 charities that have two sets of inventories because 11:08 15 they play early one session and late the next session. 11:08 16 If all the -- I can do that with one inventory. If 11:08 17 one charity accidentally got the wrong pull tabs, as 11:08 18 Danny referred to while ago, it wouldn't hurt. I 11:08 19 wouldn't have to call and change the whole paper trail 11:08 20 so that we got the serial numbers right to the correct 11:08 21 charity. It would simplify that. 11:08 22 On behalf of the Lottery Commission, if 11:08 23 you wanted to come in at any time and see where my -- 11:08 24 audit my books, my paper there, it's very simple with 11:08 25 one charity with -- or with one -- not one charity, 11:08 0051 1 but one set of inventory. It's always there. But if 11:08 2 you come in and you look now, you've got five 11:08 3 charities, seven inventories, and it's a nightmare. 11:08 4 That could be reduced. That could be made so simple 11:08 5 for the bingo hall, for the accountants, for the 11:08 6 Lottery Commission, anyone involved in that. Myself, 11:09 7 looking at accounting, I get five paychecks at the end 11:09 8 of two weeks. I've got 16 employees. That's like 80 11:09 9 paychecks every two weeks that we have to write, and 11:09 10 that's just another thing. I -- I think it would be a 11:09 11 very, very good thing for bingo, all the way through, 11:09 12 from the operator, the guy on the floor, all the way 11:09 13 to the Lottery Commission. 11:09 14 Does anyone have any questions? 11:09 15 CHAIR BRACKETT: I just have one. This 11:09 16 proposal that is before us allows for all of these 11:09 17 things that you're talking about. Right? 11:09 18 MR. STOBAUGH: It could. There is 11:09 19 probably going to have to be some changes made. It's 11:09 20 a rough, what I have read, but yes, I think it could 11:09 21 make that happen. And it would -- we would have to 11:09 22 stop -- you know, we wouldn't have to be changing -- 11:09 23 like they said, moving charities around so that they 11:09 24 can survive. It simplifies a lot of things and, yes, 11:09 25 I do think that that proposal could make that happen. 11:09 0052 1 MR. WHITTINGTON: But as far as on the 11:10 2 pay, you're talking about checks and stuff, don't that 11:10 3 fall under the bingo association act, some type of 11:10 4 association act they've got going currently right now? 11:10 5 I think some bingo halls have got associations where 11:10 6 the main charity will pay all the bills for the 11:10 7 charities. 11:10 8 MR. STOBAUGH: Now, you're talking 11:10 9 about a charity hall. I manage, I work directly for 11:10 10 the charities of a lessor hall. I work for all five. 11:10 11 Now, you're speaking to me about something I don't 11:10 12 know. On the charity hall, where have you a father or 11:10 13 a parent charity, I don't know. I can't answer that 11:10 14 question. 11:10 15 MR. WHITTINGTON: Billy, don't they 11:10 16 have something like that? An association -- 11:10 17 MR. ATKINS: There is an association 11:10 18 license, but it's a license. 11:10 19 MR. WHITTINGTON: It's a license. 11:10 20 Okay. 11:10 21 MR. STOBAUGH: Okay. 11:10 22 CHAIR BRACKETT: Billy has some 11:10 23 comments he would make on this, or questions. 11:10 24 MR. ATKINS: You mentioned the 11:10 25 distributions being made equally among the 11:10 0053 1 organizations. 11:10 2 MR. STOBAUGH: Yes, sir. 11:10 3 MR. ATKINS: My reading -- and you may 11:10 4 not be able to answer this. But my reading is that 11:11 5 this proposed language would allow the organizations 11:11 6 at a hall to decide how much an organization got. 11:11 7 MR. STOBAUGH: Okay. I think the 11:11 8 reason that is written that way, like we play seven 11:11 9 days a week, which is 14 charities -- or 14 sessions. 11:11 10 That's not divisible evenly by any number of 11:11 11 charities. So if you did have a charity that only 11:11 12 played two sessions, then they would get that direct 11:11 13 percentage of the proceeds. They wouldn't get a -- 11:11 14 you know, as if they played three days. 11:11 15 CHAIR BRACKETT: So you prorate it by 11:11 16 number of sessions -- 11:11 17 MR. STOBAUGH: By number of sessions 11:11 18 that they get to play. Now, if you had a bingo hall 11:11 19 that only played six -- 12 sessions, six days, you 11:11 20 could do that with four charities pretty easily. Or 11:11 21 eight charities. I think it would be beneficial for 11:11 22 the industry if a bingo hall could have eight or nine 11:11 23 charities and divide it -- a small amount across the 11:12 24 board. And I think that's the reason they put that in 11:12 25 there the way they did. 11:12 0054 1 MR. ATKINS: Okay. But you wouldn't 11:12 2 envision if a location, you know, wanted to decide 11:12 3 that, you know, they're going to take a total amount, 11:12 4 divide it by five, and that's what everybody gets, do 11:12 5 you see something like that being authorized under 11:12 6 this? 11:12 7 MR. STOBAUGH: I guess that that could 11:12 8 happen, but I think there could be some stipulations 11:12 9 made if you had an odd number of charities, you know, 11:12 10 so you get a prorated -- you get your full, equal 11:12 11 share. That could be amended to that license. But 11:12 12 all expenditures and all expenses could be shared 11:12 13 pretty much equally on that from -- you know, if I 11:12 14 only play one night a week and your charity played 11:12 15 three nights, I don't want to absorb a third of all of 11:12 16 the expenses. But there again, I don't have a right 11:12 17 to a third of all the income either. 11:12 18 MR. ATKINS: Well, I'm not sure I'm 11:13 19 following you. One of the benefits that I have 11:13 20 understood people to be saying is that this would help 11:13 21 the organizations that don't play on the more popular 11:13 22 nights by allowing them to get more distributions. Am 11:13 23 I misunderstanding something or -- 11:13 24 MR. STOBAUGH: Well, a charity that 11:13 25 only plays -- let's just say, a charity that plays on 11:13 0055 1 Monday and Tuesday. 11:13 2 MR. ATKINS: Okay. 11:13 3 MR. STOBAUGH: Okay? In our hall, I 11:13 4 can't speak for other halls, in our hall, they're not 11:13 5 going to survive. They can't make any contribution. 11:13 6 They might not even make their expenses. Okay? But 11:13 7 by doing it to where they do get a share of the 11:13 8 proceeds from Saturday night or Friday night or Sunday 11:13 9 night, it can help carry those bad days. 11:13 10 MR. ATKINS: But you don't necessarily 11:13 11 imagine that it would be an equal share? 11:13 12 MR. STOBAUGH: I think it would be a 11:13 13 direct percentage of the nights they play in the bingo 11:14 14 hall. 11:14 15 MR. ATKINS: Okay. 11:14 16 MR. STOBAUGH: I do think that all 11:14 17 charities in my bingo hall would get proceeds each 11:14 18 quarter under this. 11:14 19 MR. ATKINS: And, again, I know that 11:14 20 this proposal addresses some ways to address, I guess, 11:14 21 violations or, you know, organizations that would 11:14 22 violate some provision of the Act or the rules. But I 11:14 23 guess I'm still not clear on how that would apply to 11:14 24 this new unit. And we -- if there -- you know, for 11:14 25 example, if there is going to be -- let me use this 11:14 0056 1 example. If there is going to be one quarterly report 11:14 2 filed for -- again, I'm going to go back to five, 11:14 3 because it's just an easy number for me to work with. 11:14 4 If there is one report filed for five organizations 11:14 5 that's filed late, who is responsible for that? All 11:14 6 five organizations? 11:15 7 MR. STOBAUGH: Yes, I would think so. 11:15 8 You say if they filed late? 11:15 9 MR. ATKINS: If the report was filed 11:15 10 late or if it wasn't filed at all. 11:15 11 MR. STOBAUGH: Yeah. I think that the 11:15 12 operators of the charities should get together and 11:15 13 make sure that things are done right. You have -- 11:15 14 instead of each charity standing alone, they need to 11:15 15 stand as a unit business that -- because it is. I 11:15 16 mean, it's got to work for everyone, and so I think 11:15 17 everybody needs to be -- in that case, needs to be 11:15 18 responsible for everything being filed at the proper 11:15 19 time. 11:15 20 MR. ATKINS: Well, what if we started 11:15 21 exploring the idea, if we had a -- a manager? Because 11:15 22 like you said, you get five paychecks from five 11:15 23 charities. What if we put you in charge? 11:15 24 MR. STOBAUGH: I would see to it that I 11:15 25 am doing my job. I mean, that's -- 11:15 0057 1 MR. ATKINS: And then if there was some 11:15 2 responsibility that fell under your purview, like 11:15 3 filing the report, for example. 11:15 4 MR. STOBAUGH: Right. 11:15 5 MR. ATKINS: And you didn't do it, it 11:16 6 would be your responsibility. 11:16 7 MR. STOBAUGH: Well, yes. Yeah. 11:16 8 MR. ATKINS: Yeah. 11:16 9 CHAIR BRACKETT: Would the -- having 11:16 10 the conductor, would that be a checkpoint that the 11:16 11 conductors can check with these managers and make sure 11:16 12 that these things have been done? 11:16 13 MR. ATKINS: I'm not sure I follow you. 11:16 14 CHAIR BRACKETT: As being a bingo 11:16 15 conductor for three sessions, then I'm going to be 11:16 16 checking up to see if he has gotten -- gotten the 11:16 17 reports filed and everything done in a timely manner, 11:16 18 financially. The quarterly reports in, all of these 11:16 19 things that you're quoting that you might get in 11:16 20 trouble over. 11:16 21 MR. ATKINS: Well, what -- 11:16 22 CHAIR BRACKETT: I'm just wondering if 11:16 23 that's already a built-in check point that we have. 11:16 24 MR. ATKINS: Well, what is already in 11:16 25 the Act is that each organization is responsible for 11:16 0058 1 their individual report. Now one of the things we're 11:16 2 discussing would be up to -- not up to, but 11:16 3 potentially five organizations filing one report. So, 11:17 4 you know, if we're going -- if there were problems 11:17 5 with that report, who would we look to? And one of 11:17 6 the suggestions we had is if you have -- if you go the 11:17 7 unit accounting route, where you're accounting for and 11:17 8 essentially operating a hall as a single unit, then 11:17 9 you would have a single manager or managers that is 11:17 10 responsible for those related activities. So if -- 11:17 11 you know, for example, if a report -- let's use your 11:17 12 hall. If -- if South Plains Children's Shelter was a 11:17 13 member of one of these unit accounting groups and you 11:17 14 had a gaming manager that was responsible for filing 11:17 15 your quarterly report, if that quarterly report wasn't 11:17 16 filed, we would reach to that gaming manager and we 11:18 17 would take whatever, you know, action against that 11:18 18 gaming manager for failing to file that report. 11:18 19 CHAIR BRACKETT: Okay. But as the 11:18 20 operator, I would be sure that that gaming manager 11:18 21 gets that report filed. 11:18 22 MR. STOBAUGH: I think that's what the 11:18 23 primary operator should be doing at this time anyway. 11:18 24 I mean, even as it is now, whoever is responsible for 11:18 25 getting that done, the primary operator should be 11:18 0059 1 seeing that that gets done. 11:18 2 MR. ATKINS: Well, I don't disagree, 11:18 3 and in a perfect world, all primary operators would be 11:18 4 doing that. But unfortunately, they don't. 11:18 5 MR. STOBAUGH: I understand. 11:18 6 MR. ATKINS: Okay. 11:18 7 MR. PAVLOVSKY: Jerry, how do you 11:18 8 determine what organization is playing on Friday and 11:18 9 Saturday, as opposed to Monday and Tuesday? 11:18 10 MR. STOBAUGH: That's the catcher right 11:18 11 now, how do you determine that. When I have a charity 11:18 12 that has three quarters that has not had any 11:19 13 contribution, I need to move them. All my charities 11:19 14 has got to make some money. 11:19 15 MR. PAVLOVSKY: Okay. Right now, 11:19 16 today, yesterday, how do you determine that? Who 11:19 17 is -- what is -- who is on first. What organization 11:19 18 played -- or plays on Saturday night? 11:19 19 MR. STOBAUGH: Saturday night, for the 11:19 20 second session, the VFW, Allen VFW. 11:19 21 MR. PAVLOVSKY: Okay. Who plays on 11:19 22 Monday night? 11:19 23 MR. STOBAUGH: Allen VFW. 24 MR. PAVLOVSKY: Who plays on Tuesday 25 night? 0060 1 MR. STOBAUGH: Allen VFW. And they're 11:19 2 in trouble. I've got to move them. 11:19 3 MR. PAVLOVSKY: All three -- that's the 11:19 4 same organization. 11:19 5 MR. STOBAUGH: Yeah. They play three 11:19 6 times a week. 11:19 7 MR. PAVLOVSKY: I didn't do real good 11:19 8 in math, but I don't understand that. How can -- how 11:19 9 can -- I just -- and again, I'm not a bingo manager, 11:19 10 for sure. Never will be now. But I don't understand 11:19 11 how you can make a unit there. And you've got five 11:20 12 organizations? 11:20 13 MR. STOBAUGH: Yes, sir. 11:20 14 MR. PAVLOVSKY: Five charities, and one 11:20 15 of them plays three days a week. And how many 11:20 16 sessions do you have again? 11:20 17 MR. STOBAUGH: I have 14 sessions. 11:20 18 Four of them play three days a week, one of them plays 11:20 19 two days a week. 11:20 20 MR. PAVLOVSKY: Okay. That makes a 11:20 21 little more sense. Okay. 11:20 22 MR. STOBAUGH: You've got your 11:20 23 Wednesday and Thursday that's marginal days. I have 11:20 24 one charity that only plays on Wednesday and Thursday, 25 and they do all right. They make a little 11:20 0061 1 contribution. It's Monday and Tuesday for us, and I 11:20 2 know every hall is different. Some halls say they 11:20 3 can't make a dime on Sunday. 11:20 4 MR. PAVLOVSKY: Well, the organizations 11:20 5 that are doing really, really good, what are they 11:20 6 going to say about shuffling them around? 11:20 7 MR. STOBAUGH: They've always -- they 11:20 8 understand it. You know, it works for -- all for one 11:20 9 and all for one in our application. And they -- so 11:20 10 far, you know, when I move people, I haven't had any 11:20 11 conflict. They understand if they start losing, I'll 11:21 12 do my best to make it work for everyone. This is a 11:21 13 problem that's really happened over the last 15, 18 11:21 14 months. It's gotten really hard. 11:21 15 MR. PAVLOVSKY: I can see how the unit 11:21 16 accounting as define here -- I'm sure it's got some 11:21 17 problems in it, Billy, but I can see how it could 11:21 18 really do a lot of good for both the operator and the 11:21 19 bingo staff. That's -- I understand it a little bit 11:21 20 better as far as the numbers now. I didn't realize 11:21 21 the same organization was doing more than one bingo 11:21 22 per week. But anyway, thank you. 11:21 23 MR. STOBAUGH: Thank you. 11:21 24 MR. WHITTINGTON: I think it should go 11:21 25 on a volunteer basis per hall. If they want to do it, 11:21 0062 1 they've got their choice to do it. 11:21 2 MR. STOBAUGH: I agree with that. I 11:21 3 don't think that the hall should force someone to do 11:21 4 it. But I think, in most cases, that you'll see 11:21 5 everyone go to it, because it does benefit the 11:21 6 charities. I do believe that. 11:22 7 MR. WHITTINGTON: In our case it would, 11:22 8 because we've got 25, so it would definitely help for 11:22 9 the hall. 11:22 10 MS. MATTHEWS: I would like to know how 11:22 11 this is different from the license that's available 11:22 12 now. 11:22 13 MR. ATKINS: The license that's 11:22 14 available now doesn't address any of the record 11:22 15 keeping, any of the bookkeeping requirements 11:22 16 whatsoever. All the license that's available now is 11:22 17 just that, a license. It allows a group of 11:22 18 organizations to -- to obtain a lessor's license. 11:22 19 Now, I guess, and I hadn't thought about it this, but 11:22 20 it's similar to the extent that that association then 11:22 21 just files one lessor quarterly return. But each of 11:22 22 the organizations that are members of that association 11:22 23 that are conducting bingo are still accounting for 11:22 24 their bingo-related activities individually, 11:22 25 separately. Yes, ma'am. 11:23 0063 1 CHAIR BRACKETT: Okay. Thank you. 11:23 2 MR. STOBAUGH: Thank you very much. 11:23 3 CHAIR BRACKETT: Stephen Fenoglio, is 11:23 4 he here? I'm sorry. I skipped over you last time. 11:23 5 We'll -- you just stay seated right 11:23 6 there. We'll take a little break. 11:23 7 (RECESS.) 11:23 8 CHAIR BRACKETT: Are you ready, Steve? 11:40 9 MR. FENOGLIO: I've been sitting here 11:40 10 patiently, Madam Chair. 11:40 11 My name is Stephen Fenoglio and I filed 11:40 12 an appearance slip. I represent over 950 charitable 11:40 13 and business organizations. 11:40 14 I would like to address and I did -- I 11:40 15 was one of the 15 or so who had some input into the 11:40 16 unit accounting proposal, and address a couple of 11:40 17 questions, starting with Ms. Matthews' concern and I 11:40 18 think Mr. Whittington. Under section 152 of the Bingo 11:40 19 Enabling Act, a group of charities can form an 11:40 20 association for the purpose of being a commercial 11:40 21 lessor. But they still have to keep under, just like 11:40 22 your charity does, separate books and records by each 11:40 23 charity for the conduct of bingo, including separate 11:41 24 bank accounts, separate invoices, et cetera. Now, 11:41 25 some associations take that step -- go a step further, 11:41 0064 1 including the River City Bingo hall here in Austin, 11:41 2 Texas, and some of you have heard me talk about that 11:41 3 before. I helped to create that hall. It's a group 11:41 4 of charities that I am very close to personally and 11:41 5 professionally. And the approach there is, in effect, 11:41 6 a unit accounting approach, in that the approach is 11:41 7 to -- to the extent consistent with law, to share 11:41 8 revenues and expenses. And it costs a great deal of 11:41 9 accounting time to do just that. And we do, like 11:41 10 other charitable organizations, substitute licenses in 11:41 11 and out or times in and out to levelize, if you will, 11:41 12 the bottom line for all five charities. There are 11:41 13 five charities that conduct there, a maximum of 14 11:41 14 sessions per week with additional special sessions. 11:42 15 And our approach has been, and this has been the case 11:42 16 for over ten years, and I say "our," the River City 11:42 17 Bingo charities, to share revenues and expenses to the 11:42 18 maximum extent allowed by law. So we don't get into 11:42 19 some of the frictions that Mr. Pavlovsky was 11:42 20 suggesting, and I'm sure you've seen them, where some 11:42 21 charities complain that they don't have the good time 11:42 22 and never have the opportunity, in their view, looking 11:42 23 at it from one charity's own narrow interests, we 11:42 24 never have the time to get the good time. 11:42 25 MR. PAVLOVSKY: Steve, it was just a 11:42 0065 1 question. Where I come from, we have one hall, one 11:42 2 game per week. That's it. 11:42 3 MR. FENOGLIO: Yeah, that's a lot 11:42 4 different. 11:42 5 MR. PAVLOVSKY: I mean, it's a whole 11:42 6 different world than the commercial end that y'all are 11:42 7 coming from. You know, we still play for fun and real 11:42 8 charity. Okay? But I could see how this could really 11:42 9 be a problem. 11:42 10 MR. FENOGLIO: And within the River 11:43 11 City Bingo, there is not a commercial lessor in the 11:43 12 true sense of the word any more. It is a charity-run 11:43 13 hall. That's the notion of the association, if you 11:43 14 will. But the unit accounting would far simplify the 11:43 15 accounting, the record keeping, the costs for that 11:43 16 charity -- for those group of charities. And I 11:43 17 represent a number of organizations across the 11:43 18 charitable conducting spectrum, from veterans 11:43 19 organizations, to the mammals groups, to specific 11:43 20 associations, charities, and I have yet to find anyone 11:43 21 who says, no, I don't want unit accounting. Everyone 11:43 22 says, yes, we would like to have that. I'm not sure 11:43 23 that all -- everyone would do it. But it's a nice 11:43 24 tool to have, if there is a -- a joint approach from 11:43 25 the charities that are going to conduct bingo. 11:43 0066 1 And to that extent, Mr. Atkins was 11:43 2 asking a question about subparagraph (d)(4), the equal 11:44 3 share notion, which is at the middle of page three, 11:44 4 whereby the charities would be allowed, consistent 11:44 5 with a rule that would be adopted by the Commission, 11:44 6 to participate in unit accounting at the same 11:44 7 location, to apportion the net proceeds according to 11:44 8 the decisions of the organization. And I can tell 11:44 9 you, Mr. Atkins, from the River City Bingo approach, 11:44 10 their view would be, we'll cut it five ways, 20 11:44 11 percent, even though one charity only conducts twice a 11:44 12 week, and the remaining four charities conduct three 11:44 13 times a week. And, quite frankly, that would be -- 11:44 14 quite frankly, that would be the approach River City 11:44 15 would take. Now, other halls might take a different 11:44 16 approach. And my suggestion would be no -- don't tie 11:44 17 that down certainly in some legislation or rulemaking, 11:44 18 but allow the charities to do what they think is best, 11:45 19 because different halls might approach it different 11:45 20 ways. 11:45 21 We hadn't thought of, Mr. Atkins, the 11:45 22 notion of a gaming manager, and I think that's a good 11:45 23 idea. If the charities don't want to always be on the 11:45 24 line -- ultimately they are, but always be on the 11:45 25 line, then make a gaming manager responsible, and that 11:45 0067 1 person's license could be revoked, consistent with 11:45 2 rules that would be adopted. 11:45 3 I think this is an idea whose time has 11:45 4 come, is far past time coming, and we would like to 11:45 5 see the Bingo Advisory Committee move forward with 11:45 6 this in a quick fashion. As probably know, Mr. Atkins 11:45 7 committed to the Sunset Advisory Commission to have a 11:45 8 recommendation on this soon, and we stand ready to 11:45 9 work with you. And if you're going to do an approach 11:45 10 like you've talked about, I would like to be included 11:46 11 on that, including, Mr. Atkins, the charitable 11:46 12 distribution issue. 11:46 13 I'll be happy to answer any questions. 11:46 14 MR. ATKINS: Just, Steve, if you'll 11:46 15 follow up with an e-mail or -- if you'll follow up 11:46 16 with me on an e-mail about those. 11:46 17 MR. FENOGLIO: Sure. 11:46 18 CHAIR BRACKETT: I wanted to ask you 11:46 19 one question. You referred to a gaming manager, and 11:46 20 you said something about his license could be revoked. 11:46 21 You meant that his license as what? 11:46 22 MR. FENOGLIO: As a gaming manager. 11:46 23 CHAIR BRACKETT: That would be a 11:46 24 licensed position? 11:46 25 MR. FENOGLIO: I think that is what the 11:46 0068 1 staff is looking at, yes, a new separate license. 11:46 2 And one other thing, Ms. Matthews, you 11:46 3 had mentioned earlier about, in one of the examples, 11:46 4 being able to pay for -- I wrote it down here. 11:46 5 MS. MATTHEWS: Bingo equipment. 11:46 6 MR. FENOGLIO: Yes. Bingo equipment. 11:46 7 Under 458 of the Bingo Enabling Act, 458 and 459, 11:46 8 charities must use funds from their bingo account to 11:47 9 pay for bingo equipment. It would be a violation of 11:47 10 the statute to even do that. And that's one of the 11:47 11 reasons -- we're just giving examples of the type of 11:47 12 prohibited expense. 11:47 13 MS. MATTHEWS: So they cannot be paid 11:47 14 out of the general fund account? 11:47 15 MR. FENOGLIO: That is correct. 11:47 16 MS. MATTHEWS: I would like to ask a 11:47 17 question about the unit accounting. It's been 11:47 18 suggested that this be voluntary. How are you going 11:47 19 to get organizations that are doing well to volunteer 11:47 20 to... 11:47 21 MR. FENOGLIO: Good question. Two 11:47 22 years ago, that was quite a friction in the halls when 11:47 23 there was one or two organizations that had great 11:47 24 times and would not agree to substitute out. The 11:47 25 environment is far different today. And the reality 11:47 0069 1 is, if you don't -- if they don't move toward sharing, 11:47 2 that charity with the bad time goes out of business. 11:48 3 You try to get another charity in, and once the 11:48 4 charity is in, if they're not smart enough to ask the 11:48 5 right questions before they go in, once they're in a 11:48 6 while, they realize, this is a losing game for me. 11:48 7 And what you'll find is, no other charity is going to 11:48 8 come in. Well, that base rent still remains the same. 11:48 9 If you don't have five or seven charities to share 11:48 10 that base rent -- and Larry is nodding his head in 11:48 11 agreement. He knows because he's had to deal with 11:48 12 this. If, you know, all of a sudden you have a -- 11:48 13 let's say, an 8,000 a dollar a month gross rental 11:48 14 payment that's spread out by session, and all of a 11:48 15 sudden on Mondays and Tuesdays, if that was the 11:48 16 example that's the bad time, and that's pretty well 11:48 17 the case statewide, all of a sudden no one is paying 11:48 18 rent at that time. Well, the landlord, not the 11:48 19 commercial lessor necessarily, but certainly the 11:48 20 landlord that owns that strip center where the bingo 11:48 21 hall is located says, I don't care. I'm getting 8,000 11:48 22 a month. So, charities, you've got to make it up. 11:48 23 And so that's why the good charities are going to look 11:49 24 at it and say, well, we had better share everything or 11:49 25 else if that charity that has the bad time doesn't see 11:49 0070 1 a benefit, then instead of four -- five organizations 11:49 2 equally paying rent, all of a sudden there are now 11:49 3 four organizations paying equally rent and it's more. 11:49 4 And, you know, and certain halls have had to close, 11:49 5 and part of the reason they've had to close has been 11:49 6 because of that friction that they couldn't reach 11:49 7 agreement on. Also, it has to do with just the 11:49 8 general downturn in bingo. But, you know, I don't 11:49 9 know that anyone wants to make it, Ms. Matthews, 11:49 10 mandatory, but I think there is a lot of jaw boning 11:49 11 that can go on, and a lot of charities are pretty 11:49 12 sophisticated about seeing, well, I would rather have 11:49 13 that great time, but if the hall doesn't succeed, 11:49 14 including everyone in the hall, I won't have 11:49 15 ultimately that great time with that great revenue 11:49 16 stream because now I've got to pay for other costs 11:49 17 that I didn't have to before. Thank you. 11:49 18 MR. PAVLOVSKY: I like your explanation 11:50 19 and I appreciate it. I think the manager thing could 11:50 20 be very much a plus. Like Billy mentioned while ago, 11:50 21 you know, if one organization doesn't follow the 11:50 22 rules, who does he come after? Who does Billy come 11:50 23 after? Well, the manager would be the person. And I 11:50 24 think that could make it real easy for the Bingo 11:50 25 Division. 11:50 0071 1 MR. FENOGLIO: And we also, in our 11:50 2 draft of the unit accounting concept, gave the 11:50 3 Commission the authority, in your rulemaking, to go 11:50 4 after the responsible party. I mean, it could be, for 11:50 5 example, in the five organizations, one of the 11:50 6 organizations just refuses to participate. Well, my 11:50 7 solution to that for the four organizations, the good 11:50 8 guys, if you will, that I would represent, I would 11:50 9 say, let's go ahead and file something, and we'll file 11:50 10 a letter with the Commission that says, this isn't 11:50 11 everything because we can't get the records from that 11:51 12 other organization. Now, the reality is, 11:51 13 Mr Pavlovsky, if you have a tight association 11:51 14 document, then those records are going to be kept by 11:51 15 the association, not by five separate charities and 11:51 16 you wouldn't -- if it was drafted tightly, you 11:51 17 wouldn't have -- or it would be a very rare 11:51 18 occurrence. I try never to say "never," but it would 11:51 19 be a very rare occurrence that you would have a 11:51 20 situation where one of the charities says, I'm not 11:51 21 going to file anything and you're not going to make me 11:51 22 and I'm not going to keep my records there where you 11:51 23 can get at them. 11:51 24 MS. MATTHEWS: And presumably the 11:51 25 gaming manager would be paid out of the bingo account? 11:51 0072 1 MR. FENOGLIO: Yes. I mean, River City 11:51 2 Bingo, I think we have a total of about 16 different 11:51 3 employees. Not all of them work every session, but 11:51 4 it -- it's a huge accounting deal to, if you pay every 11:51 5 two weeks, you've got a lot of checks to write. And 11:51 6 it would be so convenient to have just one check to 11:52 7 write for the, you know, 16 different employees as 11:52 8 opposed to five different checks potentially times 16 11:52 9 employees. 11:52 10 MR. ATKINS: Did you -- Steve, I'm 11:52 11 sorry. Did -- do you know if there is discussion in 11:52 12 this draft of the -- I'm trying to remember what you 11:52 13 called it. The association documentation? 11:52 14 MR. FENOGLIO: And what I was referring 11:52 15 to is, in the organizing documents that the 11:52 16 association would use if they went to a unit 11:52 17 accounting. No, it's not addressed in this language, 11:52 18 but I would advise any clients, for example, if a hall 11:52 19 wants to go to that, that they should have a written 11:52 20 agreement as to what is agreed to. And that's what 11:52 21 I'm calling colloquially an association document. I 11:52 22 don't think you want to put that in the statute, but 11:53 23 where the rubber meets the road effectively, 11:53 24 charitable organizations are going to have to do that, 11:53 25 I think. 11:53 0073 1 MR. ATKINS: Would you not even want to 11:53 2 put in there that they just have to have that 11:53 3 agreement? And I'm -- you know, I'm trying to get to, 11:53 4 a lot of the questions, at least in my mind, are still 11:53 5 centered around, you know, who is responsible for 11:53 6 what. And would that be a way to help address some of 11:53 7 that? 11:53 8 MR. FENOGLIO: What my fear would be, 11:53 9 Billy, and these are charitable organizations, not, 11:53 10 you know, necessarily sophisticated business 11:53 11 organizations who have the ability and money to hire 11:53 12 expensive talent to draft a document. My fear would 11:53 13 be, it would be so -- if you put it in, then if it's 11:53 14 not addressed in that association document, someone 11:53 15 says, well, you can't do that. And then all of a 11:53 16 sudden, you've got a 37-page agreement that the cost 11:54 17 goes through the roof on. I was helping some 11:54 18 charities negotiate a lease agreement, and the 11:54 19 agreement that we're working on is now a 38-page 11:54 20 document. And it covers everything, as you might 11:54 21 imagine, but it gets so complicated that charitable 11:54 22 organizations can't. I'm not saying that a charitable 11:54 23 organization, by the way, couldn't have an oral 11:54 24 agreement. I wouldn't -- I can think of very few 11:54 25 instances where I'd ever recommend that you have an 11:54 0074 1 oral agreement for something like this, but it's 11:54 2 possible that the charitable organizations have been 11:54 3 together for years and -- or it's just a very basic 11:54 4 agreement and they'll work things out as they come up. 11:54 5 I don't -- I'm not saying you shouldn't have it, but, 11:54 6 you know, how much detail are you going to put into 11:54 7 it? 11:54 8 MR. ATKINS: Yeah. And I just, you 11:54 9 know, for discussion purposes just throw it out there 11:54 10 because I hadn't thought of that type of documentation 11:54 11 before. 11:55 12 MR. WHITTINGTON: So, Steve, basically, 11:55 13 what you're talking about on -- when we talk about 11:55 14 unit accounting, we're talking about the supplies, 11:55 15 everything. So in other words, when we buy supplies, 11:55 16 the distributor always tells me, Larry, if you buy 11:55 17 more, we can get it cheaper. You can get a cheaper 11:55 18 price as far as shipping and et cetera. 11:55 19 MR. FENOGLIO: You bet. 11:55 20 MR. WHITTINGTON: So, basically, if we 11:55 21 buy paper, we can just buy it for all five charities, 11:55 22 and have a running total -- a log of who is using what 11:55 23 for that. 11:55 24 MR. FENOGLIO: Yes. 11:55 25 MR. WHITTINGTON: As well as -- well, 11:55 0075 1 pull tabs would have to be a little separate, because 11:55 2 I think each charity would have to their own serial 11:55 3 numbers coming from the distributor. 4 MR. FENOGLIO: I'm not sure -- it would 11:55 5 depend on how far you want to take the unit accounting 11:55 6 concept. And we've talked about that initially and we 11:55 7 never got to any agreement. I think you have to make 11:55 8 sure that the -- the consistent -- that the game is 11:55 9 fairly conducted, including a pull tab game, but I'm 11:55 10 not sure I would go so far as to say, each charity has 11:56 11 to keep their separate pull tab serial number. 11:56 12 MR. WHITTINGTON: They've just got to 11:56 13 notate what pull tabs they're using -- 11:56 14 MR. FENOGLIO: Yes. And they have to 11:56 15 do that today. 11:56 16 MR. WHITTINGTON: But I mean, unit 11:56 17 accounting, I think, is -- it would really -- we 11:56 18 mentioned trying to come up with ways to cut down on 11:56 19 paperwork. 11:56 20 MR. FENOGLIO: You bet. 11:56 21 MR. WHITTINGTON: Okay? And that is 11:56 22 probably one of the most major ways I've heard so far. 11:56 23 Cut down on everything. 11:56 24 MR. FENOGLIO: With five charities in a 11:56 25 hall, you're going to cut it down by a factor of close 11:56 0076 1 to 80 percent. And that includes Mr. Moore not having 11:56 2 to send out five different invoices, but just one. I 11:56 3 mean, it goes all ways. 11:56 4 MR. WHITTINGTON: And everybody 11:56 5 splitting -- everybody covers their part as far as, 11:56 6 okay, this is what we paid for supplies, all five 11:56 7 charities, this is what we paid, which makes it a lot 11:56 8 easier on everybody. 11:56 9 MR. FENOGLIO: Yes. Thank you, Madam 11:56 10 Chair, members. 11:57 11 CHAIR BRACKETT: I am sorry I 11:57 12 overlooked you the first time. 11:57 13 All right. Jerry Stobaugh on item 11:57 14 number four. He's from East Plano Bingo. 11:57 15 MR. STOBAUGH: I already spoke. 11:57 16 CHAIR BRACKETT: I'm sorry. I thought 11:57 17 you had. 11:57 18 Sharon Ives. 11:57 19 MS. IVES: Hi. My name is still Sharon 11:57 20 Ives with Fort Worth Bookkeeping. 11:57 21 What is unit accounting and how would 11:57 22 it benefit the bingo charities and the Bingo Division. 11:57 23 Currently, my office writes over 1,000 checks for the 11:57 24 five organizations within the same playing location 11:57 25 per quarter. This includes the same payroll on the 11:57 0077 1 bingo employees, paper distributor, utility companies, 11:57 2 the lessor, the bookkeeper, and advertising. Wouldn't 11:57 3 this be nice if each bingo location could operate as a 11:58 4 unit, only writing one check per expense. I believe 11:58 5 the advantages of unit accounting have been touched 11:58 6 upon already. It would increase efficiency, avoid 11:58 7 duplication, decreasing the amount of the daytime 11:58 8 change applications being sent down here, 11:58 9 flip-flopping the days and times to benefit all the 11:58 10 charities throughout the year. There would be no 11:58 11 changes in the bingo prize fees submitted quarterly to 11:58 12 the State, and the organization would receive an equal 11:58 13 amount of charity distribution. The auditing division 11:58 14 would be able to audit all the organizations at one 11:58 15 time, cutting their expenses. 11:58 16 CHAIR BRACKETT: Any questions? 11:58 17 MS. IVES: Thank you. 11:58 18 CHAIR BRACKETT: That's a nice new 11:58 19 point for the audit division. 11:59 20 Jimmie Van, do you have anything? 11:59 21 MR. VAN: It's been covered. 11:59 22 CHAIR BRACKETT: All right. Thank you. 11:59 23 I'm sorry. I need to show that 11:59 24 Jimmie Van is in support. 11:59 25 Steve Bresnen. 11:59 0078 1 MR. BRESNEN: Good to see you're back 11:59 2 down to me. 11:59 3 Steve Bresnen on behalf of the Bingo 11:59 4 Interest Group. Just real quickly, let me walk you 11:59 5 through what we tried to do in this draft. There is 11:59 6 basically two approaches that would authorize unit 11:59 7 accounting in this draft. The first one is to say to 11:59 8 the Commission, you can do this by rule. And then to 11:59 9 lay out a number of things that either may or shall be 11:59 10 addressed if they do a rule. The last thing is to say 11:59 11 that organizations -- this would be item number E 12:00 12 on -- it starts at the bottom of page three, on my 12:00 13 copy. That two or more organizations can come to the 12:00 14 Commission with their own proposal. And I think, 12:00 15 Billy, that might be kind of what I had in mind about 12:00 16 the association document sort of thing. That if they 12:00 17 might come to you with such a document to say, here is 12:00 18 how we're going to do it. Here is how we're going to 12:00 19 be responsible. What I would try to do is give y'all 12:00 20 the authority to approve that and/or -- either approve 12:00 21 it, reject it, or approve it subject to whatever 12:00 22 conditions need to be applied to address any of the 12:00 23 kind of considerations that we've been talking about 12:00 24 here. 12:00 25 Rather than try to address everything 12:00 0079 1 that might be addressed in a statute, what I've tried 12:00 2 to do, and the people that have collaborated with me 12:01 3 on this, is to grant lots of authority to the 12:01 4 Commission to address this by rule. You know, the 12:01 5 reason is, we're all thinking about it on our 12:01 6 day-to-day lives but -- I wish Chairman Clowe was 12:01 7 still hear to talk -- to hear me talk about his 12:01 8 experience one more time in the regulated trucking 12:01 9 industry. I used to work at the Comptroller's Office 12:01 10 for a long time, implementing and enforcing the tax 12:01 11 laws. I can assure you, and he worked in a regulated 12:01 12 trucking industry there was just lots and lots of 12:01 13 minutiae and the State was all fragmented up on what 12:01 14 you could do, and 99 percent of your time is spent 12:01 15 feeding the beast rather than doing what you set out 12:01 16 to do, which is to conduct bingo for charitable 12:01 17 purposes. I would venture to guess that there are 12:01 18 millions of dollars being spent in the aggregate 12:01 19 statewide every year to comply with this fragmented 12:01 20 system that's been put in place. I think the system 12:02 21 was put in place on a fragmented basis originally 12:02 22 because of a sort of an anti-gambling deal to sort of 12:02 23 fragment the market where one charity didn't dominate 12:02 24 in one area and give everybody a chance to get 12:02 25 involved. All very good reasons. I'm not quibbling 12:02 0080 1 with any of those. But in this day and time, in this 12:02 2 environment, with a 20 year-old bingo market, to 12:02 3 continue to impose the level of regulation and the 12:02 4 cost and then hit the charities for not enough money 12:02 5 getting to the charities is absurd. So I would like 12:02 6 to see us go forward with an approach that gives the 12:02 7 Bingo Division the authority to get this done. And I 12:02 8 think what we tried to do was highlight a number of 12:02 9 the issues that needed to addressed. There has been a 12:02 10 couple of things that have occurred to me since we 12:02 11 finished working on this draft, and that is, what 12:02 12 about people coming and going? What if a charity does 12:02 13 leave? Do they take some of their money with them? 12:03 14 What about their share of expenses that have yet to be 12:03 15 paid? That may need to be addressed somewhere. 12:03 16 The idea of who is responsible. I 12:03 17 think the gaming manager -- we may want to call it 12:03 18 something else if it's going to appear in statute or 12:03 19 be real vague about it. But I like that idea because, 12:03 20 in fact, it's what people are doing anyway. And it 12:03 21 gives you somebody to be accountable and have a 12:03 22 license. I think we need to be thinking about whether 12:03 23 that person is going to be personally responsible for 12:03 24 money that doesn't get sent in or a failure to 12:03 25 withhold a prize fee some night, or something like 12:03 0081 1 that. But, frankly, what you might do is make the 12:03 2 unit jointly and severally liable for compliance with 12:03 3 those things that they need to be in compliance with. 12:03 4 Paying their taxes, making the distribution, that kind 12:03 5 of thing. 12:03 6 On the -- this draft does not require 12:03 7 the Commission to do anything. If the Commission 12:04 8 doesn't want to have a rule, it doesn't have to have a 12:04 9 rule. We do say, if you're going to do a rule, you 12:04 10 must address the following things. It doesn't require 12:04 11 them to approve a proposal from any two organizations, 12:04 12 two or more, to do it. It just grants them the 12:04 13 authority to do it. So we can do this kind of fine 12:04 14 wiring that needs to be done and answer some of these 12:04 15 questions in a process like this, later on. But until 12:04 16 they have the authority to do it, it can't be done. 12:04 17 I personally believe that we can 12:04 18 deliver a lot of money to the bottom line of a lot of 12:04 19 charities in this state if we will all recognize that 12:04 20 the current system is a Rube Goldberg, cobbled 12:04 21 together, ugly artifice that needs to fall before the 12:04 22 entire industry falls. And I think this is something 12:04 23 tangible that could be done to eliminate a lot of 12:05 24 unnecessary cost. 12:05 25 I'll be glad to answer any questions 12:05 0082 1 about this. 12:05 2 MR. PAVLOVSKY: I have a comment as far 12:05 3 as your last statement, the dollars. I think it 12:05 4 would -- it would behoove this organization to make a 12:05 5 change to insert something in there about what you 12:05 6 project the extra -- how much extra money will be 12:05 7 going to charities. You could -- you know, the 12:05 8 accountant could do that, I believe. Again, I didn't 12:05 9 do good in math. But I think that -- I think that 12:05 10 will make a lot of difference. 12:05 11 MR. BRESNEN: Well, think about it. 12:05 12 Steve said that they're writing 80 checks every -- 12:05 13 they're writing 160 checks a month, where they 12:05 14 could -- 12:05 15 CHAIR BRACKETT: Steve, let me 12:05 16 interrupt you a minute. What would it -- the way I 12:05 17 see this, what we would need, those things would not 12:05 18 be part of this document, but they would be part of 12:05 19 the support material. Correct? 12:05 20 MR. BRESNEN: Yes, ma'am. 12:05 21 CHAIR BRACKETT: And the support 12:05 22 material will be in the minutes of this meeting that 12:06 23 we can go through and pick out. But also, if you 12:06 24 wanted to, at this point -- first, I think -- let me 12:06 25 get -- let me think this through. 12:06 0083 1 Do we need to take action on this, if 12:06 2 we support this or not and want to carry on with it, 12:06 3 and then list our reasons why, or are they already all 12:06 4 entered in the minutes already? 12:06 5 MR. BRESNEN: I think you've got a 12:06 6 pretty clear record. I would love to see y'all 12:06 7 support it, recommend it up to the Commission. This 12:06 8 is going to take legislative change to do it. So the 12:06 9 Commission would have to decide whether they wanted 12:06 10 that to be part of their legislative program. It 12:06 11 doesn't have to be this specific language, but I think 12:06 12 the way to get to the goal line on this is to grant 12:06 13 broad authority to the Commission and then come back 12:06 14 and address all these what-ifs and how-tose and all of 12:06 15 that. 12:06 16 As far as the voluntariness, I think 12:06 17 the economic circumstances are that the overwhelming 12:07 18 weight of -- and the sense of it will compel people to 12:07 19 do it. But we tried not to tie anybody's hands or 12:07 20 dictate to them exactly how it ought to be done in 12:07 21 the -- in this proposal. I do think it would be a 12:07 22 good idea, though, if we could figure out a way to get 12:07 23 some estimates of cost savings, because, again, this 12:07 24 would have to go to the legislature and it will be 12:07 25 incumbent upon people in the industry to go up there 12:07 0084 1 and say, here is what we think we can deliver to the 12:07 2 bottom line on this basis. 12:07 3 MR. WHITTINGTON: Well, I just think it 12:07 4 definitely will help as far as organizations folding 12:07 5 and giving their licenses up, and a Lottery Commission 12:07 6 wouldn't have to worry about that too much because 12:07 7 everybody would be on an even keel across the board. 12:07 8 And the landlords and the lessors will be a lot more 12:07 9 happy, too. 12:07 10 MR. BRESNEN: There is no doubt about 12:07 11 it. You know, right now they're processing -- there 12:07 12 is no doubt in my mind, from what people have told me, 12:07 13 the Commission is having to process a bunch of 12:08 14 amendments that are based strictly on the licensed 12:08 15 times in order to do this shuffle that's already been 12:08 16 described. And that seems to be working, but it's 12:08 17 expensive. And it's got to be costing the State 12:08 18 money. And that money could be better spent in other 12:08 19 areas. So I think that's a component that we could 12:08 20 get -- that we could follow up on your suggestion. 12:08 21 You know, maybe staff could help us with what numbers 12:08 22 of amendments -- or they won't know why every licensed 12:08 23 time amendment is being done, but there is a cost 12:08 24 associated with that. 12:08 25 MR. PAVLOVSKY: Well, just the 12:08 0085 1 accounting. When the -- the staff comes out to audit, 12:08 2 you know, instead of auditing five, you're going to 12:08 3 audited one. You know, I can do that kind of math. 12:08 4 That's an 80 percent saving in time for that staff 12:08 5 person. 12:08 6 MR. BRESNEN: That's right. And in 12:09 7 turn, you know, some of that may be overall savings, 12:09 8 some of it may a redirection of money to, you know, a 12:09 9 different priority. So I don't -- I think it would be 12:09 10 real really good if we could -- maybe, Madam Chair, 12:09 11 maybe a suggestion that I would make is that we get 12:09 12 some people together to figure out at least what the 12:09 13 components of cost savings would be, even if we don't 12:09 14 have the capability to quantify right now. But if we 12:09 15 could identify the various ways that money would be 12:09 16 saved. Danny and I had a discussion earlier today 12:09 17 about what he goes through in billing. And I'm sure 12:09 18 that the distributors would save money, and they can 12:09 19 opine about that. And agency would save money, and 12:09 20 Sharon Ives knows what the bookkeeping -- and David 12:09 21 Heinlein would know what the bookkeeping experience is 12:09 22 and so forth, and I think we could put together a 12:10 23 pretty nifty document that would say, you know, this 12:10 24 is what can be achieved. 12:10 25 I appreciate y'all having us on the 12:10 0086 1 agenda and bringing it up and working through it. 12:10 2 CHAIR BRACKETT: We appreciate you 12:10 3 coming and appreciate you sticking around until I call 12:10 4 on you, too. 12:10 5 MR. BRESNEN: Yes, ma'am. 12:10 6 CHAIR BRACKETT: All right. Thank you. 12:10 7 I would like for the advisory committee 12:10 8 to discuss where we go at this point with this 12:10 9 document. That we -- the consensus seems to be, and 12:10 10 do we want to pass this by consensus or do we want a 12:10 11 motion that we want to present this to the Lottery 12:10 12 Commission. And then, what are the things that we 12:10 13 want to be added to it, such as the components of cost 12:10 14 savings? 12:10 15 MR. PAVLOVSKY: I think one thing that 12:10 16 really should be added to it is the cost savings and 12:10 17 how that would trickle down to more money to 12:10 18 charities. And after all, that's the bottom line. 12:10 19 Now, I understand if Danny -- if it reduces -- and I'm 12:11 20 using him as an example. But if it reduces his 12:11 21 accounting even 50 percent, you know, how much of that 12:11 22 is going to be passed down to charities. You know, he 12:11 23 may or may not be able to pass some of those savings 12:11 24 down. 12:11 25 CHAIR BRACKETT: Okay. So the 12:11 0087 1 components of the cost would include the savings to 12:11 2 the Lottery Commission as well as to the increased 12:11 3 donations. 12:11 4 MR. PAVLOVSKY: Correct. 12:11 5 CHAIR BRACKETT: So we have that item 12:11 6 to include in there. What are the other items that we 12:11 7 want to add to this as support material? Now, there 12:11 8 are things in the transcript that the -- we'll have to 12:11 9 send this to staff to work on it. And there are 12:11 10 things in the transcript that they can certainly pick 12:11 11 up from there, but we want to be sure that everything 12:11 12 is considered. But now, this is not the closed door. 12:11 13 You can write a letter or you can send an e-mail. 12:11 14 Correct? With any ideas that you have? Anybody? 12:12 15 MR. ATKINS: Well, that's -- that's 12:12 16 what I was wondering about would be where we would go 12:12 17 from here. I think the Commission already has the 12:12 18 sense that there is general support for this. So the 12:12 19 Commission is to the point to where they're looking to 12:12 20 specifics. And I don't know that we have all of the 12:12 21 specifics available right now to present to them. So 12:12 22 I don't know if this is something else we need to get 12:12 23 together in a working group on. 12:12 24 MR. BRESNEN: Suits me fine. 12:12 25 MR. ATKINS: He's coming up to get on 12:12 0088 1 the record. 12:12 2 MR. BRESNEN: I think that's good. I 12:12 3 think it does need some more work, just like the other 12:12 4 deal. Steve Bresnen, I'm sorry again, on behalf of 12:12 5 the Bingo Interest Group. 12:12 6 I don't -- you know, Billy, I know 12:12 7 you're working on a study and you've made a commitment 12:12 8 about when you're going to come up with that, so I 12:13 9 don't want to set your time line for you. I know the 12:13 10 Commission has on the agenda tomorrow legislative 12:13 11 recommendations. I don't think we have -- I don't 12:13 12 think this document is one that I as a commissioner 12:13 13 would adopt tomorrow. But I'm wondering if it's 12:13 14 appropriate for them to say -- you know, give us the 12:13 15 authority to implement unit accounting and do it in a 12:13 16 broad way that doesn't sign onto every jot and tittle 12:13 17 of what we have cobbled together there. If there is, 12:13 18 I think that would be great. If we have to wait until 12:13 19 you're finished with your study in January, then 12:13 20 that's fine, too. But I want to be sure we are timely 12:13 21 as far as legislative action, and I would love to be 12:13 22 able to get the Commission, you know, in gear and 12:13 23 engaged on it, because I think it's hugely important. 12:13 24 MR. ATKINS: And I was telling the 12:13 25 Chair earlier. I think the Commission is aware that 12:13 0089 1 there is general support for this concept and I think 12:13 2 they're starting to look more to the specifics. So I 12:14 3 think you're right. I don't know if tomorrow -- you 12:14 4 know, just the statement, again, we support unit 12:14 5 accounting, is really going to add anything to them. 12:14 6 But I do think what would be more meaningful for the 12:14 7 Commissioners is maybe, under Virginia's report, the 12:14 8 fact that this discussion did take place and some of, 12:14 9 I guess, the different parameters, you know, that were 12:14 10 discussed as far as record keeping requirements, et 12:14 11 cetera, et cetera, and that we're working to get all 12:14 12 of that included into one final recommendation that 12:14 13 could be made tomorrow. 12:14 14 MR. BRESNEN: That's fine by me. I 12:14 15 really appreciate the attention everybody is giving to 12:14 16 this. I think we need to move Heaven and earth to get 12:14 17 it done this time. 12:14 18 MR. ATKINS: Well, I think folks have 12:14 19 already done some work on it, so I would hope that 90 12:14 20 percent, 95 percent of what we would have to do would 12:15 21 be just to -- 12:15 22 MR. BRESNEN: Put it together. 12:15 23 MR. ATKINS: Yeah, put it together. 12:15 24 MR. BRESNEN: Great. Well, I'll help 12:15 25 in any way I can. I won't be able to be here 12:15 0090 1 tomorrow, but after that I'll help in any way I can. 12:15 2 MR. ATKINS: Great. 12:15 3 MR. BRESNEN: Thanks. 12:15 4 CHAIR BRACKETT: The procedure that I 12:15 5 would like to take now, if this is okay with the 12:15 6 group, is to say that we, with general consensus, 12:15 7 support the unit accounting theory with a lot of 12:15 8 enthusiasm. We do want to see a finished document, 12:15 9 and that we know a lot of people want to work on this, 12:15 10 but the way to let us know about this is to send an 12:15 11 e-mail to Billy. Is that correct? And that includes 12:15 12 people on the advisory committee as well as people in 12:15 13 the public, people who are out there and you've 12:15 14 experienced this and you see the dollars that can be 12:15 15 saved, and how the charity -- and this is the big 12:15 16 thing. How the donations to charities can increase 12:15 17 through this. We will need, though, real 12:16 18 documentation on this. It can't just be, I think 12:16 19 it'll happen. We've got to have some real figures on 12:16 20 it. 12:16 21 MR. WHITTINGTON: Larry Whittington. 12:16 22 Danny, could I -- I want to ask you a 12:16 23 question. We order from our distributor, probably 12:16 24 once a week, different charities order different 12:16 25 things at different times. Okay? If we order -- if 12:16 0091 1 this new unit accounting is adopted, when we order, if 12:16 2 we order in bulk, do that save us more money for our 12:16 3 five charities, at one time? 12:16 4 MR. MOORE: Not necessarily. I 12:16 5 couldn't even answer that right now. I'd really have 12:16 6 to think about -- because the savings really are going 12:16 7 to be on the accounting side. It's the same amount of 12:16 8 product that's going to be sold in the location. It's 12:16 9 not like we're going to have this great increase in 12:16 10 attendance at bingo halls over this subject. So it 12:16 11 really is an accounting measure that's going to change 12:17 12 here, I think. I don't see any increase or decrease 12:17 13 in inventory being used just because of unit 12:17 14 accounting. 12:17 15 MR. WHITTINGTON: I'm saying, when you 12:17 16 order in bulk, though, I mean, like so many pounds -- 12:17 17 I mean, I've heard that if you order so many pounds, 12:17 18 you can save money in shipping, different things like 12:17 19 that. 12:17 20 MR. MOORE: I really can't answer that, 12:17 21 Larry, honestly. 12:17 22 MR. WHITTINGTON: Because that's one of 12:17 23 the things I think need to be -- because we ask that 12:17 24 question all the time, and they tell us, if you order 12:17 25 so much, you can save so many dollars at one time. 12:17 0092 1 MR. ATKINS: Well, then I think it's 12:17 2 fair, Larry, for the advisory committee, you know, to 12:17 3 ask Danny to either check with other distributors or 12:17 4 whatever to get that information. But I at the same 12:17 5 time agree with him, that I see the biggest benefit to 12:17 6 this being in terms of efficiencies and increased 12:17 7 efficiencies. And that is always hardest to quantify. 12:17 8 But we'll look at it. 12:17 9 MR. MOORE: Yeah. I would be happy to 12:18 10 discuss it with other distributors and to see what we 12:18 11 really do think it would do on the financial side. 12:18 12 CHAIR BRACKETT: Danny, are you willing 12:18 13 to work as the coordinator of this group and pull it 12:18 14 together and be sure that gets accomplished? 12:18 15 MR. MOORE: Yeah, that's fine. 12:18 16 CHAIR BRACKETT: What is a good 12:18 17 deadline for this? I know it needs to be in January. 12:18 18 What is a good time to say that you all have met and 12:18 19 have a recommendation back? 12:18 20 MR. MOORE: I don't know. Billy, do 12:18 21 you have a deadline for -- 12:18 22 MR. ATKINS: Well, the other one that 12:18 23 we had set was for the group to be formed by no later 12:18 24 than January 6th, so if we can set something 12:18 25 comparable. 12:18 0093 1 CHAIR BRACKETT: So anyone who is 12:18 2 interested needs to have contacted you no later than 12:18 3 January 6th. Is that correct? And then if the 12:18 4 first -- then I would say, if the first meeting, then, 12:18 5 could be that second week of the 13th of January. Not 12:19 6 necessarily on the 13th, just that week. And Danny 12:19 7 Moore could be responsible for setting that exact 12:19 8 meeting time. 12:19 9 MR. MOORE: And that's a meeting 12:19 10 outside of this group here. Correct? 12:19 11 CHAIR BRACKETT: Correct. It's a work 12:19 12 group. 12:19 13 MR. ATKINS: I'm sorry. I thought you 12:19 14 were talking about for the advisory committee. 12:19 15 CHAIR BRACKETT: No, not for the 12:19 16 advisory committee. 12:19 17 MR. ATKINS: Sure. 12:19 18 CHAIR BRACKETT: So is that clear, 12:19 19 then, to everyone what we're -- the action we're 12:19 20 taking on this and how we're carrying through and 12:19 21 going to come up with a finished product or a 12:19 22 document, finished document ready to present on to the 12:19 23 Commissioners? 12:19 24 All right, then. It's 12:20 and why 12:19 25 don't we take a break. And when we come back, we will 12:19 0094 1 cover items eight, nine and ten. 12:19 2 MR. ATKINS: A break or lunch? 12:20 3 CHAIR BRACKETT: This is lunch. I'm 12:20 4 sorry. For one hour. 12:20 5 (LUNCH RECESS) 13:20 6 CHAIR BRACKETT: All right. We'll call 13:22 7 the meeting back to order. And we're getting back to 13:22 8 order, I think, about 1:20, 1:22. The agenda item is 13:22 9 number seven, which has to -- which is consideration 13:22 10 and possible discussion and/or action on progressive 13:22 11 bingo. And Mario. 13:22 12 MR. MANIO: Thank you. This is not a 13:22 13 new issue. House Bill Number 3087 was presented to 13:22 14 the 76th legislature in 1999. The -- it -- well, it 13:22 15 never got out of the licensing and administrative 13:23 16 procedures committee. Then a second try was done in 13:23 17 2001, the 77th legislature, House Bill Number 2119. 13:23 18 It was actually enacted by the legislature, but 13:23 19 progressive bingo was vetoed by the Governor. 13:23 20 So the question before us is, should we 13:23 21 try a third time to get progressive bingo enacted and 13:23 22 signed by the Governor. And there are several reasons 13:23 23 why we should not do that -- or why we should do that. 13:23 24 I'm sorry. And if you will remember, about two months 13:23 25 ago, bingo got a shot in the arm with the introduction 13:23 0095 1 of the new types of pull tabs, the event tickets, and 13:23 2 we just saw an increase in sales and an increase in 13:23 3 deposits. But two and a half months after the 13:24 4 introduction, we are already seeing a plateau in the 13:24 5 sales and deposits due to the event tickets. 13:24 6 Hopefully, this will continue at that level for a few 13:24 7 more months, but like any new thing or new technology, 13:24 8 it will probably wane sometime down the road, by which 13:24 9 time, bingo will need a second shot in the arm. Could 13:24 10 progressive bingo be the answer? Well, it could be 13:24 11 one of the answers, but there are other options like 13:24 12 linked bingo. The advantage of progressive bingo is 13:24 13 that it can be set up rather easily in a hall, one 13:24 14 bingo hall after another, as opposed to linked bingo, 13:24 15 where you need to link up multiple bingo halls and 13:24 16 hook them up to a central system. So it will take a 13:24 17 little bit more time and a little bit more investment 13:25 18 to implement. 13:25 19 Now, the -- the bill that was enacted 13:25 20 in 19 -- in 2001, recommended an initial prize of 750, 13:25 21 and a maximum increase of no more than 500 dollars to 13:25 22 the -- to the progressive jackpot. That bill did not 13:25 23 put a maximum cap on the size of the jackpot. If we 13:25 24 are going to present this again to the Commission for 13:25 25 recommendation to the legislature, there are several 13:25 0096 1 recommendations that I would like to be considered. 13:25 2 And one of them would be, to change the initial prize 13:25 3 from 750 to possibly 5,000 dollars. We can retain the 13:25 4 maximum increment of 500 dollars, and probably put a 13:25 5 cap of 20,000 on the size of the jackpot. The 13:25 6 consolation prize can be no more than 500 dollars. 13:26 7 The old bill put a limit of 250 dollars on the 13:26 8 consolation prize. 13:26 9 Now, there are some disturbing 13:26 10 information that were included in the bill that was 13:26 11 enacted in 2001. And let us cite a couple of those. 13:26 12 And it is in the -- I don't know if you have the 13:26 13 handouts with you, but I know the committee members 13:26 14 do. It's towards the end -- the Legislative Budget 13:26 15 Board, under the fiscal analysis, it will be in the -- 13:26 16 at the bottom half. And it is a -- it's -- this is a 13:26 17 statement that probably came from the research stuff 13:26 18 of the House member or Senator, and it says that more 13:26 19 players could be expected as prizes increased, but 13:27 20 unlike the situation with lottery, the share of the 13:27 21 population participating in bingo games and the amount 13:27 22 spent for bingo would not be expected to change 13:27 23 significantly in response to larger bingo prizes. And 13:27 24 it continued to say that this estimate was based on 13:27 25 the experience of four other states with progressive 13:27 0097 1 bingo games. 13:27 2 So the question in my mind right now 13:27 3 is, would this be a true assessment of the progressive 13:27 4 bingo market in the state of Texas, and I don't have 13:27 5 an answer. If this is true for the state of Texas, 13:27 6 it's probably not worthwhile pursuing progressive 13:27 7 bingo. 13:27 8 The other concern that I would like to 13:27 9 present for deliberation is, this bill was vetoed by 13:27 10 the Governor. There is no guarantee that even if this 13:28 11 passed through the forthcoming legislature, that the 13:28 12 Governor will sign this into a bill. So if we will 13:28 13 pursue this, we need to give the Governor a better 13:28 14 reason for approving -- for signing the bill. 13:28 15 So those are my comments and 13:28 16 observations about the progressive bingo. And the 13:28 17 question is, if I may, Billy, is, where does the 13:28 18 Commission stand on the issue of progressive bingo? 13:28 19 If you are at liberty to answer that question. 13:28 20 MR. ATKINS: Sure, I am. The 13:28 21 Commission doesn't take a position on legislation. It 13:28 22 never has. To the best of my knowledge, it never 13:28 23 will. We have put forward and raised as 13:28 24 possibilities, as we're directed by the legislature, 13:28 25 in our legislative appropriation request and our 13:28 0098 1 Strategic Plan, and in the self-evaluation report, 13:29 2 we've identified items such as progressive bingo games 13:29 3 as activities that are authorized in other states that 13:29 4 the legislature may want to consider. 13:29 5 MR. MANIO: The other recommendation 13:29 6 that I would make, if we are going to pursue 13:29 7 progressive bingo, is to let progressive bingo be 13:29 8 governed by unit accounting. So instead of managing 13:29 9 five -- one different jackpot for each charity, we 13:29 10 will only manage one jackpot for a group of four or 13:29 11 five or six charities. Again, that will lessen the 13:29 12 administrative load for the gaming monitor, if I may 13:29 13 use that term. 13:29 14 And with that, what do we need to do 13:29 15 to -- 13:30 16 CHAIR BRACKETT: I need -- I want you 13:30 17 to repeat for my benefit, and I hope I'm not the only 13:30 18 one that didn't get my notes right. You made like 13:30 19 four points that you wanted -- or several points that 13:30 20 you felt like. Number one was -- well, just briefly, 13:30 21 what was number one? 13:30 22 MR. MANIO: Number one was to make an 13:30 23 adjustment in the initial prize and put a cap on the 13:30 24 jackpot. 13:30 25 CHAIR BRACKETT: Okay. 13:30 0099 1 MR. MANIO: And the amounts that I 13:30 2 suggested would be an initial prize of 5,000, 13:30 3 increments of no more than 500 dollars, for instance, 13:30 4 and a cap of 20,000 dollars, and a consolation prize 13:30 5 of 250. 13:30 6 CHAIR BRACKETT: A cap of 20,000? 13:30 7 MR. MANIO: 20,000 dollars maximum 13:30 8 jackpot. 13:30 9 CHAIR BRACKETT: Okay. And consolation 13:30 10 of 250? 13:30 11 MR. MANIO: 250. If the jackpot is not 13:30 12 won in that day, that's the amount that will be won. 13:31 13 The second suggestion that I made about 13:31 14 this is that -- pertains to unit accounting. 13:31 15 CHAIR BRACKETT: Okay. 13:31 16 MR. MANIO: And the others are just 13:31 17 comments, like Governor's veto. 13:31 18 CHAIR BRACKETT: Okay. Any other 13:31 19 members who have questions of Mario before we -- do we 13:31 20 have anyone who would like to speak to this? 13:31 21 MS. MATTHEWS: Well, I have a little 13:31 22 bit to say. I called Representative Haggerty's office 13:31 23 and asked if he was going to present this bill again, 13:31 24 and was told that they hadn't decided yet, and to call 13:31 25 back in January and they would let me know if they 13:31 0100 1 were going to present this bill again. Now, you're 13:31 2 suggesting higher limits. I wonder if the reason that 13:31 3 this was capped at 750 and 500 originally was because 13:31 4 that was what would be more palatable to the Governor 13:32 5 and anybody that would not -- might take exception to 13:32 6 5,000 dollars. 13:32 7 MR. MANIO: Right. That is definitely 13:32 8 an issue, because if you will read the document signed 13:32 9 by the Governor, his main objection to progressive 13:32 10 bingo is that it will encourage gambling. Now, 13:32 11 regarding the 5,000 dollars, one argument that can be 13:32 12 put forward in favor of a higher jackpot is that we 13:32 13 are competing with the Indian bingo halls. Those of 13:32 14 us in north Texas and in west Texas, we are competing 13:32 15 with the bingo halls in Oklahoma and New Mexico. And 13:32 16 those bingo halls are attracting people because of big 13:32 17 jackpots. They can pay up to fifty, 70,000 in their 13:32 18 progressive games. That's the kind of competition 13:32 19 that we're facing in north Texas. And if it's going 13:33 20 to be only a thousand or 750, it's not attractive 13:33 21 enough to prevent our customers from going to 13:33 22 Oklahoma. 13:33 23 MR. PAVLOVSKY: I agree with that 13:33 24 mentality, Mario. We have the same problem on the 13:33 25 east side of Texas, you know. As we were talking 13:33 0101 1 earlier, the buses run all the way from Victoria all 13:33 2 the way up, going to Louisiana. They either go to the 13:33 3 boats or they go to Coushatta, and those folks spend a 13:33 4 lot of money advertising in the Houston media market, 13:33 5 and they're making their money back. I mean, they're 13:33 6 business people. They wouldn't be doing it if they 13:33 7 wasn't making money. And there is a lot of 13:33 8 entertainment dollar leaving this state that could 13:33 9 stay here if we would keep up with what people want. 13:33 10 And I think -- and it has been compared before in 13:33 11 these meetings, the Lottery does the same thing. 13:33 12 They're constantly having new games out there. And if 13:34 13 bingo is going to survive, we're going to have to do 13:34 14 the same thing. It's going to have to be competitive 13:34 15 with our neighbors across the state line, to some 13:34 16 degree. You know, I'm not saying that we need to 13:34 17 legalize gambling, because that's not going to fly yet 13:34 18 anyway, but I think we need to keep up in the bingo 13:34 19 world. 13:34 20 MS. MATTHEWS: Well, the linked bingo 13:34 21 would be much bigger pots, provided there were enough 13:34 22 halls participating. And from what those gentlemen 13:34 23 told us last time, there is no cost, at least there is 13:34 24 no up-front cost to the charities. 13:34 25 MR. WHITTINGTON: But still, a 13:34 0102 1 progressive something would have to be passed before 13:34 2 we can do linked bingo. 13:34 3 MS. MATTHEWS: The thing that seems to 13:34 4 me is the most sellable to the Governor is the 13:34 5 revenues to the state. I mean, they're guessing at 13:35 6 the revenues here, but it seems to me 1,374,000, I 13:35 7 guess that's not a lot as the budget is concerned, but 13:35 8 it sounds like a lot to me. 13:35 9 MR. MANIO: Yes, it does. And that's 13:35 10 based on 750 initial jackpot amount. If we raised to 13:35 11 5,000, that number that can be multiplied two or three 13:35 12 times. 13:35 13 MS. MATTHEWS: The other positive thing 13:35 14 is the -- 50 percent of this comes back to the local 13:35 15 governments. For whatever good that is, but -- it 13:35 16 says, the Comptroller estimates a gain to local 13:35 17 governments of 1.2 million. 13:35 18 CHAIR BRACKETT: Based on the smaller 13:35 19 pots. 13:35 20 MS. MATTHEWS: Yeah. 13:35 21 CHAIR BRACKETT: Any other comments 13:35 22 from... 13:35 23 Okay. Ed Branom, would you like to 13:36 24 speak? Is he in here? Danny Hays? We'll go back to 13:36 25 Ed if he -- unless he has run. 13:36 0103 1 MR. BRANOM: I'm sorry. I'm Ed Branom, 13:36 2 and I just kind of want to give you a little spin on 13:36 3 what I think about progressive bingo. We've talked 13:36 4 about it and talked about it, and I think everybody -- 13:36 5 at least I assume everybody is fairly well in accord 13:36 6 on it. But in the interim weeks that -- since we've 13:36 7 talked about it last, I've talked to a lot of people 13:36 8 in the industry about it. Quite frankly, I don't find 13:36 9 anyone that is violently opposed. We have different 13:37 10 views, but I think the consensus of opinion is that it 13:37 11 will work for bingo and it will generate income for 13:37 12 the charities, and it will bring new players into the 13:37 13 bingo hall. And that's exactly what we want it to do. 13:37 14 I hope it's not a fairy tale, and I don't really 13:37 15 believe it is because, quite frankly, I don't pretend 13:37 16 to be a connoisseur of the gambling industry, but I do 13:37 17 know a lot about it. And one of the things that 13:37 18 always works is progressive jackpots of some sort. I, 13:37 19 quite frankly, think that we need to do it on a 13:37 20 charity-by-charity basis. I think it needs to be 13:37 21 moderate. I think the amount of money that we move 13:37 22 forward needs to be moderate. We're not giving away 13:37 23 any more money, we're not asking for any more prize 13:37 24 money, and yet the reality of it is, and we all are 13:38 25 aware of it, but the reality is, we're giving away the 13:38 0104 1 same prize money we gave away 20 years ago. And with 13:38 2 inflation, we're probably giving away 25 or 30 percent 13:38 3 of real dollars that we gave away in 1982, which does 13:38 4 not make us competitive with anybody. We need 13:38 5 something like this progressive game to get the 13:38 6 excitement back into the game and to bring us more 13:38 7 players. What I had envisioned, in my mind anyway, is 13:38 8 that each charity would have their own progressive and 13:38 9 if, hypothetically, you had seven charities playing in 13:38 10 a given bingo hall, you would have seven progressive 13:38 11 games working simultaneously. So the possibilities 13:38 12 are very good that you would have some progressive 13:38 13 that either could be won or ready to be won all the 13:38 14 time. This doesn't -- does allow that the competition 13:38 15 to be within the bingo instead of bingos all across 13:39 16 the city. If you have separate bingos vying for the 13:39 17 same jackpot prize, what you'll end up doing is moving 13:39 18 your players from one bingo hall to the other. It 13:39 19 accomplishes nothing, really. With the progressives 13:39 20 within the bingo and having a lot of them, it will be 13:39 21 something very, very positive for each and every bingo 13:39 22 hall. It really wouldn't make a lot of difference if 13:39 23 you're a small bingo hall that's only giving away 13:39 24 1,250 dollars a session, or you're a larger bingo hall 13:39 25 giving away 2500, the effect is the same. In my mind, 13:39 0105 1 I was thinking that we would probably move something 13:39 2 in the area of 250 dollars forward until it reached a 13:39 3 pot of a maximum of maybe 2500 dollars. That's very 13:39 4 moderate. Everybody that I've talked to tells me that 13:39 5 I'm too cheap, but I don't think so. Let's just 13:40 6 say -- let me give you a hypothetical situation. 13:40 7 Let's just say you have a prize that's normally 750 13:40 8 dollars, you give away 500 of it, because of the 13:40 9 numbering schedule and move 250 dollars forward. At 13:40 10 some point, maybe ten games -- ten sessions later, you 13:40 11 give away the 2500 dollars, plus the 1750 that you 13:40 12 have left, you give away 4250 dollars in that 13:40 13 particular day. I can promise you, you'll have a full 13:40 14 house. These things work. They work very well. 13:40 15 They're not violating any laws of how much money you 13:40 16 can give away, although I would like to see us raise 13:40 17 the money that we can give away on the per session 13:40 18 from the 2500 dollars. That's not the issue at this 13:40 19 point. The issue is, how do you make your games more 13:40 20 exciting for your players. At these bingo halls, it's 13:40 21 not exciting. We've already seen some excitement 13:41 22 already from the new pull tab games. I think 13:41 23 everybody will tell you the same if you ask them. Are 13:41 24 you seeing some excitement in your bingo hall as a 13:41 25 result of them, and the answer is, yes. It's not 13:41 0106 1 going to get us over the hump, but it will help us. 13:41 2 If we can get enough small things going in our bingo 13:41 3 halls to attract the people, we will get bingo turned 13:41 4 around until it's profitable for all the charities. 13:41 5 Am I making any sense? 13:41 6 Anybody have a question? I know 13:41 7 everybody has got a different take on this thing, but 13:41 8 I think we all agree that we need to do it. 13:41 9 CHAIR BRACKETT: Mario, do you have any 13:41 10 questions or -- 13:41 11 MR. MANIO: No. 13:41 12 MR. BRANOM: I don't want to take away 13:41 13 from your thoughts there, Mario. I really think, 13:41 14 though, if you have a large progressive in each bingo 13:41 15 hall, then your players are going to move from bingo 13:41 16 hall to bingo hall. So one night you're going to have 13:42 17 300 people and the next night you're going to have 50, 13:42 18 depending on where the pot is, and it will destroy 13:42 19 you. You have got to have these progressives within 13:42 20 the bingo hall itself, and the more you have working, 13:42 21 the better off you are. 13:42 22 Okay. That's my take. Thank you. 13:42 23 MR. ATKINS: Ed, can I ask you a 13:42 24 question? 13:42 25 MR. BRANOM: Yes, sir. 13:42 0107 1 MR. ATKINS: Now, how is it that 13:42 2 progressive would destroy a hall if fluctuations in 13:42 3 the attendance occurred? 13:42 4 MR. BRANOM: I think that if you had 13:42 5 one jackpot for the whole bingo, so that you had a 13:42 6 daily move forward or however you construct it. As 13:42 7 that pot grows, and if it's a large pot, let's just 13:42 8 say 20,000 dollars, if those pots start to hit or 13:42 9 start to get close to hit, the people are going to 13:42 10 migrate to the bigger prize money. Natural 13:42 11 phenomenon. So you're going to have -- if yours hit 13:43 12 yesterday and you're back at ground zero and the guy 13:43 13 down the street got a pot that's 18,000 dollars for a 13:43 14 max of 20, he's going to get the business. It's just 13:43 15 human nature. 13:43 16 MR. ATKINS: I understand that. But 13:43 17 I'm trying to figure out, the actual information that 13:43 18 you have, we've raised that question with regulators 13:43 19 in other jurisdictions where they have progressive 13:43 20 games, and they have said, yes, there is -- there are 13:43 21 definitely -- they call them jackpot chasers, and 13:43 22 there are definitely jackpot chasers, but what they've 13:43 23 discovered is that over a given period of time, that 13:43 24 it actually evens out. 13:43 25 MR. BRANOM: That's probably true. 13:43 0108 1 That's probably true. But you've got this yo-yo 13:43 2 effect that makes it very difficult to pay your bills 13:43 3 today, or this week, depending on how long it takes 13:43 4 that pot to get there. If it's a long, drawn-out 13:43 5 process, if it takes six months to get to where you 13:44 6 want to get, then as the tide tilts, as it were, you 13:44 7 are going to be on the short end of the stick. My 13:44 8 contention is that if you have a lot more smaller 13:44 9 jackpots going, you'll have the clientele that will 13:44 10 stay with you. Your customer base will stay with you. 13:44 11 And the idea is not to pull bingo players out of each 13:44 12 other's bingo hall, but the idea is to pull in new 13:44 13 bingo players. And they will come if the money is 13:44 14 there. When we raised our -- if we're going to get 13:44 15 into that issue, and I know you're not, but if we 13:44 16 could just raise our prize money some, it would help 13:44 17 us. Now, there are some small bingo operations that 13:44 18 disagree with that, I know. But that's -- that's my 13:44 19 opinion and it's worth one vote. Thank you. 13:44 20 MR. WHITTINGTON: That's what it was -- 13:44 21 and bringing up on the next agenda item about prize 13:44 22 money being raised a little bit, and that would help 13:45 23 us out. 13:45 24 CHAIR BRACKETT: Thank you. Charles 13:45 25 Hutchings. 13:45 0109 1 MR. HUTCHINGS: Good afternoon. 13:45 2 Charles Hutchings. 13:45 3 On this progressive, I think Ed nailed 13:45 4 down part it. The each one of the organizations does 13:45 5 need a progressive game of its -- of its own as we 13:45 6 speak. In other words, if you have five charities in 13:45 7 the hall, you need five progressive games. And each 13:45 8 charity would play theirs whichever day they play. 13:45 9 That would give two shots per day. You would be able 13:45 10 to advertise. You know, if you're running 10,000 13:45 11 dollars as a max, why then you would be advertise in 13:45 12 the paper somewhere that you could possibly win 20,000 13:45 13 dollars a day there. This is how I believe that new 13:46 14 players would be brought in. The chasing? I think if 13:46 15 each hall -- each charity has their own, I think that 13:46 16 will take care of most of that chase problem. I don't 13:46 17 believe that -- you know, if both of them got hit at 13:46 18 the same time, then you could pull a switch on the 13:46 19 charities so that you at least have one 10,000 every 13:46 20 day to play. It -- I just think that it will help us 13:46 21 tremendously, and especially advertising to bring in 13:46 22 the players that we aren't getting now. And to bring 13:46 23 back some of those that have left. 13:46 24 CHAIR BRACKETT: So what you're 13:46 25 proposing is that there be progressive games in one 13:46 0110 1 day's license and time that touch on more than one 13:46 2 bingo hall, at different times? 13:46 3 MR. HUTCHINGS: Well, what I'm 13:46 4 proposing is that each charity -- you have five 13:46 5 charities in the hall. Each one of them have a 13:47 6 jackpot game running all at the same time. 13:47 7 CHAIR BRACKETT: Okay. 13:47 8 MR. HUTCHINGS: Therefore, you could 13:47 9 play a jackpot game on the first session, a jackpot 13:47 10 game on the second session, and therefore you could -- 13:47 11 you know, even with just a 10,000 dollar cap, you 13:47 12 could put large numbers in the paper. It would give 13:47 13 you something to advertise with. As of right now, 13:47 14 it's just -- you just don't have nothing -- not -- 13:47 15 nothing to put in the paper. As an example, one of 13:47 16 the halls that I'm connected with ran an ad in the 13:47 17 paper, put a coupon in, bring this coupon for a dollar 13:47 18 off or whatever it was. The ad was three or four 13:47 19 hundred, they got two coupons. You just have nothing 13:47 20 to offer. We need something to offer. 13:47 21 CHAIR BRACKETT: Do you have any 13:47 22 questions of Mr. Hutchings? 13:47 23 MS. MATTHEWS: Well, if you had each 13:47 24 charity playing, wouldn't you have to stagger the 13:47 25 start so that they wouldn't all win at the same time? 13:48 0111 1 MR. HUTCHINGS: Well, in jackpot games, 13:48 2 that's not a high probability of them all winning at 13:48 3 the same time. Somebody is going to get somewhere and 13:48 4 that's going to stagger it. It will just naturally 13:48 5 stagger itself, I do believe. I don't believe that, 13:48 6 you know, you can even set it up to where they could 13:48 7 all hit at the same time. For the nature of the 13:48 8 progressive game, it would mean that you were playing 13:48 9 a blackout and 50 numbers. One of them is going to 13:48 10 hit eventually, so then that one would go down, but 13:48 11 the other one would still be there on that same day. 13:48 12 CHAIR BRACKETT: Any other questions? 13:48 13 Okay. Thank you. 13:48 14 MR. HUTCHINGS: I would like to make -- 13:48 15 and I heard Ms. Matthews talking about the linked 13:48 16 deal. That linked deal that was in here the other 13:48 17 day, of course, maybe I -- they were hedging around 13:48 18 about the percentages so much that I was never quite 13:49 19 certain what they were saying. But when I sat down 13:49 20 and tried to think about just what they said, it seems 13:49 21 like to me that they were going to take about 15 13:49 22 percent off the top in order to manage and run that 13:49 23 operation. And that -- you know, that's the last 13:49 24 thing we need is to send 15 percent of something else 13:49 25 out like we do electronics. Thank you. 13:49 0112 1 CHAIR BRACKETT: Before we go any 13:49 2 farther, Billy has an introduction to make. 13:49 3 MR. ATKINS: Members, I did -- wanted 13:49 4 to -- you've actually met him before, but I wanted to 13:49 5 introduce again Gary Grief who is now the acting 13:49 6 executive director of the Texas Lottery Commission. 13:49 7 You had an opportunity to meet Gary in the past when 13:49 8 he was the operations director and served as the 13:49 9 agency's chair for the -- for our Sunset efforts. And 13:49 10 I just wanted for you to take a moment to recognize 13:49 11 Gary. He has been very supportive of the Bingo 13:49 12 Division and our efforts, and as his schedule has 13:50 13 allowed, he was here for part of our last meeting, was 13:50 14 in briefly this morning, and he is here now, and I 13:50 15 just wanted to thank him for his attendance. 13:50 16 CHAIR BRACKETT: Thank you, Gary. 13:50 17 Anybody want to ask him anything before he leaves? 13:50 18 You can't leave until we go. 13:50 19 MR. MANIO: Just an observation. It 13:50 20 seems to me that there is a consensus that we need 13:50 21 progressive bingo, and there is differences now in 13:50 22 approach or implementation. One jackpot per charity, 13:50 23 one jackpot per unit accounting, and we can probably 13:50 24 find a middle way in there. Like two jackpots, one 13:50 25 for the first session and one for the second session 13:50 0113 1 instead of one per charity, and that would be the 13:50 2 proper -- they go in everything. Just an idea that we 13:50 3 might be able to consider when looking for the 13:50 4 methodology. 13:51 5 CHAIR BRACKETT: So what you're saying 13:51 6 is that it's a good idea and we want to stick with the 13:51 7 idea, but just a lot of different good ways to do it. 13:51 8 A lot of good methods. 13:51 9 MR. MANIO: On implementation, yes, 13:51 10 there are a lot of good ideas that came out today. 13:51 11 CHAIR BRACKETT: Okay. Danny Hays for 13:51 12 the Rowlett Needy Children's Fund. Do you have -- can 13:51 13 you speak to this methodology that we're speaking of? 13:51 14 MR. HAYS: Hi. I'm Danny Hays with the 13:51 15 Rowlett Needy Children's Fund. The bingo hall I'm 13:51 16 associated with is in the northeast Texas area from 13:51 17 Dallas. And on any given day, we watch anywhere from 13:51 18 five to 12 bus loads of bingo customers leaving to go 13:51 19 to Oklahoma to where they do have progressive bingo. 13:51 20 So they can advertise and they do advertise in our 13:51 21 local papers. And as was said previous in the other 13:52 22 speakers, that we have nothing to offer as far as 13:52 23 competition. And we are stagnated at the fact that 13:52 24 we've had the same ceiling cap of 2500 dollars a 13:52 25 session since, when? 1980 or so. It's -- the players 13:52 0114 1 themselves, they haven't -- it's a fantasy of hitting 13:52 2 the big one, just like as a lottery player does. You 13:52 3 know, they buy that ticket, they're hoping for the big 13:52 4 one. And with a little bit of competition like with 13:52 5 what we have over there, we're stagnated. 13:52 6 In our halls, we play a form of 13:52 7 progressive bingo already. We start off with the 13:52 8 jackpot on a game within so many numbers, at 300 13:52 9 dollars. After the 20th number, if it hasn't hit, the 13:52 10 pot drops down to a hundred dollars. And on certain 13:53 11 games, we offered at our halls two chances of 500 13:53 12 dollars on a session, one within ten numbers, one 13:53 13 within 12 numbers. When that game isn't hit, it drops 13:53 14 down to a hundred. On this extra game alone, we sell 13:53 15 an extra 50 to a hundred dollars worth of card sales, 13:53 16 just for that one chance of winning that one game. 13:53 17 And that's just on a 500-dollar game. And a boost in 13:53 18 the arm, as Mario said, if this extra boost, you know, 13:53 19 of -- we've got a jackpot game on the board for five 13:53 20 or 10,000 dollars, it is going to be more money for my 13:53 21 charity and more money that we're able to keep in 13:53 22 Texas. And that's -- for me and for what we noticed, 13:53 23 the buses leaving for Oklahoma or Louisiana, we would 13:53 24 like to keep some of that money in Texas. I would 13:54 25 like it for my charity. Thank you. 13:54 0115 1 MR. ATKINS: Can I -- the game you're 13:54 2 playing now, you start out at 300, and then what 13:54 3 increment do you build to? 13:54 4 MR. HAYS: No. That's the top point. 13:54 5 Like we'll have a lucky seven game with -- you know, 13:54 6 if you bingo within seven numbers, you'll win 300 13:54 7 dollars. After the seventh number, the prize just 13:54 8 drops to a hundred dollars. 13:54 9 MR. ATKINS: Okay. And then the next 13:54 10 game or -- like that starts back at 300? 13:54 11 MR. HAYS: Right. 13:54 12 MR. ATKINS: So you don't have a game 13:54 13 now where, say, you start off at 300, if you bingo 13:54 14 within seven numbers, and then the next game, you 13:54 15 know, is maybe 350 if you bingo within eight numbers 13:54 16 or -- you don't have a progressive game where the pot 13:54 17 grows up to 750 with a -- okay. I'm sorry. I 13:54 18 misunderstood. 13:55 19 MR. HAYS: No. 13:55 20 MR. ATKINS: Okay. Thank you. 13:55 21 MR. MOORE: Can I make a comment? Kind 13:55 22 of expanding on what Billy was just trying to get at 13:55 23 there. We don't really have to go outside of this 13:55 24 state to see this go on. There is many VFWs and 13:55 25 American Legions that don't pay out 2500 dollars right 13:55 0116 1 now that do start games at 200 dollars, and they roll 13:55 2 it up 50 bucks at a time, and I can tell you, if we 13:55 3 walked into those places and you talked to those 13:55 4 people in those halls, those crowds build with that 13:55 5 pot. And, you know, it may only get to 500 bucks, but 13:55 6 it really does bring in ten, 15, 20 more people, even 13:55 7 on those instances. And those games exist right now 13:55 8 in this state. 13:55 9 MR. WHITTINGTON: I agree with Ed about 13:55 10 the 2500 max per charity, running it up to that. 13:55 11 Because I think the problem is, if we shoot too high, 13:56 12 you've got realize we're in Texas. If it shoots too 13:56 13 high, it might get vetoed again. And if we just stick 13:56 14 to a minimum amount of money where it's not too high, 13:56 15 2500 per charity sounds real good. That's a lot 13:56 16 compared to what we're giving away now. If we give 13:56 17 away 2500 dollars, I guarantee the bingo halls would 13:56 18 be full. We definitely would draw a lot more people 13:56 19 that way. And I think it probably would be a lot more 13:56 20 feasible for the Governor to look at this and say, 13:56 21 okay. This looks reasonable for Texas here. Because 13:56 22 we are in Texas. You've just got to realize that. 13:56 23 CHAIR BRACKETT: We're down to Steve 13:56 24 Bresnen. Is he in here? He is out? Okay. 13:56 25 MS. IVES: Temporarily. 13:56 0117 1 CHAIR BRACKETT: All right. Well, that 13:56 2 is the end of the people who had signed up to speak 13:56 3 for number seven. 13:56 4 What is the action that we want to take 13:56 5 at this point on this recommendation? 13:57 6 MR. WHITTINGTON: I think we should try 13:57 7 to amend some type of cap amount, what we can start 13:57 8 and where we should cap it out at, and make it 13:57 9 reasonable for us to discuss and present in some way, 13:57 10 shape or form. 13:57 11 CHAIR BRACKETT: Billy, at this time, 13:57 12 can we recommend to the Commissioners that -- or can 13:57 13 we tell them we want to submit a progressive bingo 13:57 14 proposal to be reconsidered that won't be the same as 13:57 15 was in the past, and then -- that's going to delay it 13:57 16 if we have to consider -- come back together and 13:57 17 consider what it is we want to -- what kind of figures 13:57 18 we want in there. Correct? 13:58 19 Are we ready to come up with figures 13:58 20 that we want to suggest? 13:58 21 MR. ATKINS: The committee is free to 13:58 22 take whatever action it wants to. I think I'll just 13:58 23 let you know, I get a kind of a sense of frustration 13:58 24 from the Commissioners on these types of items, which 13:58 25 they feel have already been reviewed. They've 13:58 0118 1 considered these items, they've been -- they've come 13:58 2 before the Advisory Committee before, they've come 13:58 3 before the Sunset Commission before. So I'm kind of 13:58 4 at a loss, Virginia, to really recommend anything for 13:58 5 the advisory committee to do. Unless you just want to 13:58 6 specify to them that the conversation took place and 13:59 7 there was a wide range of options offered or opinions 13:59 8 expressed in terms of what the cap should or shouldn't 13:59 9 be, et cetera. But -- 13:59 10 CHAIR BRACKETT: And this could be 13:59 11 something that Mario could get rolling through his 13:59 12 elected representatives? 13:59 13 MR. ATKINS: If he wants to do that as 13:59 14 an individual. 13:59 15 CHAIR BRACKETT: That's what I meant. 13:59 16 Certainly as an individual. And I think you have -- 13:59 17 you've gotten a feel of things and you know how 13:59 18 people -- there is a lot of interest in it. So what 13:59 19 people will have to do is to remember your name and 13:59 20 address and come forward when you're needing them. 13:59 21 Correct? 13:59 22 MR. MANIO: Yes. 13:59 23 MR. ATKINS: All of which is available 13:59 24 on our website. 13:59 25 CHAIR BRACKETT: Yes. And another 13:59 0119 1 place -- this is a totally aside, but another place to 14:00 2 look for these supporting speakers is the minutes that 14:00 3 are on the website, too. And let me tell you, those 14:00 4 minutes tell you everything -- every word that is 14:00 5 said, every pause that's paused, every bit of bad 14:00 6 grammar, everything. It's all right there for you. 14:00 7 And it's a wonderful resource to pull, and things that 14:00 8 you can quote. This is recorded and this is how 14:00 9 people feel about progressive bingo. So Mario, thank 14:00 10 you for your work on that. 14:00 11 MR. MANIO: Thank you. 14:00 12 CHAIR BRACKETT: I always lose my 14:00 13 agenda here. 14:00 14 Item number eight is also going to be 14:00 15 presented by Mario. It's consideration and possible 14:00 16 discussion and/or action on repeal of the sales tax on 14:00 17 bingo paper pull tabs and rent to the card-minding 14:00 18 devices. 14:00 19 MR. MANIO: Like the progressive bingo, 14:00 20 this is an old issue. That's a Senate Bill 1033 in 14:00 21 the 76th legislature. And the history of that bill 14:01 22 is, it was pending -- it was left pending with the 14:01 23 finance committee. I guess the reason it was not 14:01 24 moved forward was the downside of this bill was the 14:01 25 loss of revenue for the state. That's the same as 14:01 0120 1 taxes. So if we're going to try again, we need to 14:01 2 offer something to offset the loss of revenue. Now, 14:01 3 if we package this bill together with the progressive 14:01 4 bingo, then we have the offsetting revenue. 14:01 5 The document on the Budget Board says 14:01 6 that the loss -- the projected loss of revenue amounts 14:01 7 to 174,000 dollars a year. Progressive bingo, the 14:01 8 five percent prize on winnings, we have covered that 14:01 9 with -- you know, several times over. So that's all 14:02 10 that I would like to mention about this. Again, if we 14:02 11 want to push this through or encourage or make a 14:02 12 recommendation to push it through, that would be our 14:02 13 justification, bundle it up with the progressive 14:02 14 bingo. 14:02 15 CHAIR BRACKETT: All right. We have 14:02 16 one person who would like to speak to this. And 14:02 17 Ed Branom. 14:02 18 But, again, this would be something 14:02 19 that you would be doing on your own that you can -- 14:02 20 not as a -- not as the Bingo Advisory Committee. 14:02 21 UNIDENTIFIED SPEAKER: He has left the 14:02 22 building. 14:02 23 CHAIR BRACKETT: Okay. Ed left the 14:02 24 building. Do you know how to contact him if you want 14:02 25 to talk to him about that? All right. 14:02 0121 1 Are there any other -- anyone else who 14:03 2 would like to comment on that? Do you have a feel for 14:03 3 that, Mario? 14:03 4 MR. MANIO: Yes. Thank you. 14:03 5 CHAIR BRACKETT: Okay. We'll go on to 14:03 6 item number nine, which is consideration of and 14:03 7 possible discussion and/or action on the elimination 14:03 8 of the five percent prize fee. 14:03 9 MR. MANIO: Yes. There is a -- a 14:03 10 printing error in here which makes a lot of 14:03 11 difference. This is consideration of and possible 14:03 12 discussion and/or action on elimination of five 14:03 13 percent fee on winnings of five dollars or less. That 14:03 14 makes a lot of difference. 14:03 15 CHAIR BRACKETT: Yeah. 14:03 16 MR. MANIO: House Bill 3234, 77th 14:03 17 legislature. And, again, it was left pending in the 14:03 18 committee. I -- for the same reason as the -- the 14:03 19 elimination of the sales tax, it's a loss of revenue 14:03 20 to the state. So like the previous one, if we want to 14:04 21 push this forward, we need to offer something to 14:04 22 offset the possible loss of revenue. And that option 14:04 23 is already available to us right now. It's the new 14:04 24 pull tabs bingo. 14:04 25 I do have some numbers. This is just 14:04 0122 1 numbers, but based on the daily reports from one bingo 14:04 2 hall. But in this -- in this report, we can -- we can 14:04 3 see -- well, let me see. Let me pass this on to -- I 14:04 4 don't have enough for the public, but this will be 14:05 5 part of the proceedings of the committee. And what I 14:05 6 have in here is instant bingo average sales and 14:05 7 deposits, and this is just for one bingo hall in north 14:05 8 Dallas. And I have the numbers every week, from the 14:05 9 first of January up to -- up to last week, showing 14:05 10 what is the average sales per session from pull tabs, 14:05 11 and the average deposit per session from pull tabs. 14:05 12 And on the first page, the numbers are 1,000 dollars 14:05 13 or below, average sales, and the average deposit is 14:05 14 approximately around 300. On the second page, we have 14:05 15 the remaining weeks of this year that -- from October 14:05 16 and November up to about last -- up to last week. And 14:05 17 the numbers are showing something like 1,300, 1,700, 14:05 18 1,800 in sales, per session of pull tabs, and the 14:05 19 deposits is 446, 480, 500, 510. So that is an 14:06 20 increase of about, oh, over 200 dollars, in deposits 14:06 21 from pull tabs ever since we started -- or this bingo 14:06 22 hall start selling the event tickets. Actually, the 14:06 23 averages are right here. From January to September 14:06 24 28th, the average sales is 874 dollars per session, 14:06 25 and the average deposit is 295. And the averages 14:06 0123 1 since we -- the new tabs were sold, is 1,623 dollars 14:06 2 per session, and 492 dollars in deposits. 14:06 3 The next is just a graph, graphical 14:06 4 presentation of the numbers that were in the table. 14:06 5 And can you see in here the dramatic increase in sales 14:06 6 and deposits, before and after the new pull tabs. 14:07 7 Then on the last page, this is a -- an analysis of the 14:07 8 prize fees before and after the introduction of the 14:07 9 new pull tabs. And I'm showing here an average -- 14:07 10 this is an average per month of total prize fees paid 14:07 11 for -- per charity, is -- oh, I'm sorry. Total 14:07 12 prize -- oh, yes. This is an analysis only for one 14:07 13 charity. The total prize fees paid per month is 2,014 14:07 14 dollars, the bingo prize fee is an average of 1,625, 14:07 15 and the pull tab prize fee is 389 dollars. And after 14:07 16 the introduction of the new pull tabs, the prize fees 14:07 17 went up to 2,356, the bingo prize fee remains the 14:08 18 same, 1,625, and now the prize fee from pull tabs is 14:08 19 731. So that's an increase of 341 dollars over the 14:08 20 period before the new -- the introduction of the new 14:08 21 pull tabs. 14:08 22 This 341 dollars is more than 14:08 23 sufficient to offset the possible loss of revenue from 14:08 24 eliminating the five percent prize fees on five 14:08 25 dollars or less winnings. 14:08 0124 1 Now, this is only for one bingo hall 14:08 2 and one organization. I do not have access to the 14:08 3 statewide numbers, and I do not claim that this is 14:08 4 a -- representative of the cross section of the state. 14:08 5 But, however, a similar analysis can be done 14:08 6 statewide, and I will not be surprised if the same 14:08 7 conclusion can be reached. 14:08 8 CHAIR BRACKETT: Any questions? 14:09 9 Lee Davis wanted to comment on item 14:09 10 number nine, the five percent prize fee. 14:09 11 MR. DAVIS: Yes, Madam Chairman. I'm 14:09 12 not sure I checked the right box. I meant to say that 14:09 13 I am -- 14:09 14 CHAIR BRACKETT: Well, you wanted -- 14:09 15 you checked against. 14:09 16 MR. DAVIS: Well, I'll just explain it. 14:09 17 I'm not sure if a change -- if it needs to be changed. 14:09 18 If you would, I would appreciate it. 14:09 19 My name is Lee Davis. I'm from Fort 14:09 20 Worth, representing the Fireman's Relief Association. 14:09 21 Former fire fighter for 25 years. We've been playing 14:09 22 bingo since '89, and when we first started playing 14:09 23 bingo, we had pull tabs in our bingo hall. And it 14:09 24 went over real well, but people -- you understand it's 14:09 25 a fast game. The thing that's slowing the game down 14:09 0125 1 is, if you win a dollar prize, you have to pay the 14:10 2 nickel or you have to get in line to collect your 95 14:10 3 cents. That has really been a problem. I'm for 14:10 4 eliminating the five percent prize fee on anything 14:10 5 under five dollars or less. I can understand why the 14:10 6 state would want to have revenue off the larger 14:10 7 prizes, and that would be okay. But let me give you a 14:10 8 good example. The other day at the bingo hall, we had 14:10 9 a patron come in and sit that had just been at the 14:10 10 grocery store. Bought them a brand new scratch-off 14:10 11 and won five dollars. They didn't have to pay any 14:10 12 type of fee. And they wanted to know, what do y'all 14:10 13 do with that five percent? Well, we didn't make the 14:10 14 rule up and it does affect bingo. Maybe the Lottery 14:10 15 Commission could tax their dollar scratch-offs and 14:10 16 their five-dollar scratch-offs if they're really 17 needing the nickels and dimes that much. I mean, it's 14:10 18 just not fair for bingo. Bingo was here before the 14:10 19 Lottery, and it has been a problem. 14:11 20 That's all I have. Is there any 14:11 21 questions? 14:11 22 Thank you very much. 14:11 23 CHAIR BRACKETT: Thank you. Any other 14:11 24 comments on this? 14:11 25 Well, this is also, Mario, in that same 14:11 0126 1 category. We continue the work with this. You know 14:11 2 you do have the support, and you can look in the 14:11 3 minutes and find people. And, Billy, were you wanting 14:11 4 to say something? 14:11 5 MR. ATKINS: I did for purposes of 14:11 6 history. This is an item that the committee may want 14:11 7 to take some action on to the extent that when it was 14:11 8 previously considered by an advisory committee, there 14:11 9 was testimony from the public to increase that 14:11 10 exemption amount from prizes of five dollars or less 14:11 11 to prizes of 50 dollars or less. And, of course, that 14:11 12 correspondingly raised the negative fiscal impact that 14:12 13 the bill had. So if it's actually the -- the 14:12 14 committee's recommendation that, you know, if there is 14:12 15 any legislation filed along this, that it be the 14:12 16 five-dollar level, you might actually want to take 14:12 17 that action on this item. And I just -- again, I just 14:12 18 say that away again for purposes of history. And I 14:12 19 guess the last official action that an advisory 14:12 20 committee had taken would be to increase that 14:12 21 exemption amount to 50 dollars or less. 14:12 22 CHAIR BRACKETT: And that would 14:12 23 probably seem more painless to the law makers and they 14:12 24 might really be very, very interested in that. That's 14:12 25 a real good positive approach, Billy, to do that. 14:12 0127 1 So do you want any opinions on that, or 14:12 2 do you want to just roll with that? 14:12 3 MR. MANIO: Well, I'm just happy to 14:12 4 hear that there is an option to increase it to 50 14:13 5 dollars. This is really a problem -- 14:13 6 MR. ATKINS: Wait a minute. Let me try 14:13 7 and explain myself. I was not suggesting that you 14:13 8 increase it to 50 dollars. I was trying to tell you 14:13 9 that the last action an advisory committee took was to 14:13 10 increase it to 50 dollars. 14:13 11 MR. MANIO: Right. 14:13 12 MR. ATKINS: And so what I'm trying to 14:13 13 get across is, if there is actually a position that 14:13 14 the committee is taking, you may want to specify that 14:13 15 clearly, either through a motion or a statement of 14:13 16 some sort. 14:13 17 MR. MANIO: Thank you for the 14:13 18 clarification, Bill. And I wasn't aware of that 14:13 19 historical anecdote. Anyway, this is -- 14:13 20 CHAIR BRACKETT: I think you just made 14:13 21 another historical anecdote. 14:13 22 MR. MANIO: But that sounds like a very 14:13 23 good idea. And I would like to make a motion to that 14:13 24 effect. Raise it to 50 dollars. 14:14 25 CHAIR BRACKETT: Well, I don't know. 14:14 0128 1 I'll not real sure we needed a motion on that. It 14:14 2 would just be how you would present it. 14:14 3 MR. MANIO: Okay. 14:14 4 CHAIR BRACKETT: Is that -- are you 14:14 5 comfortable with that? Because I really think that 14:14 6 would be better, since we are not in -- since we 14:14 7 cannot take a position on it. 14:14 8 All right, Mario. Item number ten, 14:14 9 consideration of and possible discussion and/or action 14:14 10 on repeal of the 40 percent cap on card-minding 14:14 11 devices. Number ten. 14:14 12 MR. ATKINS: Did you discuss item 14:14 13 number eight? 14:14 14 CHAIR BRACKETT: Yes. 14:14 15 MR. ATKINS: Okay. I'm -- 14:14 16 CHAIR BRACKETT: The sales tax. 14:14 17 MR. MANIO: That's the one that I 14:14 18 suggested that we bundle with progressive bingo to 14:15 19 offset the potential loss in revenue. 14:15 20 MR. ATKINS: Okay. You're correct. 14:15 21 I'm sorry. 14:15 22 MR. MANIO: The 40 percent cap on use 14:15 23 of card-minding devices. I really have no idea why 14:15 24 this became part of the statute, the 40 percent limit 14:15 25 on the number of -- let me call it computers, because 14:15 0129 1 that's how it is known in bingo halls. 40 percent -- 14:15 2 the number of computers that can be sold in a bingo 14:15 3 hall cannot exceed more than 40 percent of the average 14:15 4 for the previous two quarters' attendance. 14:15 5 An emotional issue because over the 14:15 6 last three meetings of the committee, we have heard 14:15 7 people from both camps speak or imply their opposition 14:15 8 or support of this issue. My suggestion, for 14:16 9 consideration of the committee, is to remove the cap, 14:16 10 this 40 percent cap, for several reasons. The first 14:16 11 reason is, this is impossible to enforce. The Lottery 14:16 12 Commission does not have enough manpower to monitor 14:16 13 every single hall and make sure that they are within 14:16 14 the limit of the law. So enforceability is an issue. 14:16 15 The second issue is from the business 14:16 16 point of view. And that matters like this, including 14:16 17 pricing, should probably better be left to the -- to 14:16 18 the market forces. Let the market forces determine, 14:16 19 do we want paper or do we want computers. Do we want 14:16 20 to buy this at two dollars or at one dollars or at 14:17 21 three dollars. Rather than legislating a limit or, 14:17 22 you know, regulating prices through legislation. That 14:17 23 is the issue that I would like to put forward for 14:17 24 deliberation, as we would like to get ideas on how we 14:17 25 can proceed on this issue in here. 14:17 0130 1 MR. PAVLOVSKY: Can we get a 14:17 2 clarification possibly from our historian on why the 14:17 3 40 percent was in there, Billy? 14:17 4 MR. ATKINS: I can't, Pete, provide 14:17 5 anything more than was provided at the last committee 14:17 6 meeting. And just in general terms, there were 14:17 7 concerns raised when card-minding devices were first 14:17 8 introduced, that these devices would somehow take over 14:17 9 bingo halls. And some of the organizations conducting 14:17 10 the bingo wanted limits put on the number of 14:17 11 card-minding devices that could be used. Originally 14:17 12 in the statute, the devices were limited to 30 14:18 13 percent. I'm going to ask Roy Gabrillo, who is the 14:18 14 senior audit manager, to come up and help walk me 14:18 15 through the history. Hopefully, he'll recall it 14:18 16 better than I do. 14:18 17 MR. GABRILLO: Roy Gabrillo, senior 18 audit manager, Charitable Bingo Division. 14:18 19 I think originally it was 30 percent of 14:18 20 paper sales is what the cap -- in other words, the 14:18 21 sales from card-minders was limited to 30 percent of 14:18 22 paper sales. 14:18 23 MR. ATKINS: That's correct. Roy is 14:18 24 correct. And that was very difficult for lots of 14:18 25 organizations to track and monitor, so in the 14:18 0131 1 subsequent session, this proposal was put forward. 14:18 2 And I guess the -- the feeling at the time was that 14:18 3 this would be easier for organizations to be in 14:18 4 compliance with. But I don't know if we've found that 14:18 5 to be the case. But that's -- that's how it came 14:18 6 about and why it came about, as best as I'm able to 14:19 7 recall. Thank you, Roy. 14:19 8 MR. WHITTINGTON: You know, Billy, plus 14:19 9 on -- back then, three or four years ago, the 14:19 10 attendance was so high, 40 percent would take up most 14:19 11 of the computers. The daytime, the attendance is so 14:19 12 low, you've got the same amount of computers and 14:19 13 people want to play on them, they go way past their 40 14:19 14 percent because the attendance is so low, versus the 14:19 15 paper. That's what is happening in the day time. On 14:19 16 that 40 percent, when people come in, if they don't 14:19 17 buy computers, you can't really hardly pay -- you 14:19 18 really can't hardly make your payouts, because the 14:19 19 attendance is so low and people want to play 14:19 20 computers. And when they do, you can't reach that 14:19 21 2500 to make that payout now. Back three years ago, 14:19 22 we had 200 people. Now we've got 110. And we've got 14:19 23 the same amount of computers, so more people are 14:19 24 playing computers. And we encourage them because that 14:19 25 give us a bigger ticket to help make that daily 14:19 0132 1 payout, which is 2500 dollars per session. And that's 14:20 2 why it's so hard to really stay under that 40 percent 14:20 3 sometimes, because it's a lot to make the payouts 14:20 4 without it. 14:20 5 CHAIR BRACKETT: Steve, I'm sorry I 14:20 6 skipped over you. I think you were out of the room 14:20 7 and I didn't see you. So we're speaking now to number 14:20 8 ten, repeal of the 40 percent cap. 14:20 9 MR. FENOGLIO: Thank you, Madam Chair. 14:20 10 I was in the room, but y'all were doing such a good 14:20 11 job on the last two -- 14:20 12 CHAIR BRACKETT: Well, I'm very 14:20 13 nearsighted, so I didn't see you. I'm sorry. 14:20 14 MR. FENOGLIO: My clients support the 14:20 15 repeal of the 40 percent rule for the reasons that 14:20 16 have previously been offered. I do believe y'all have 14:20 17 already voted for that in a previous meeting. And we 14:20 18 supported the other two agenda items that Mr. Manio 14:20 19 brought. 14:20 20 Be happy to answer any questions. 14:20 21 CHAIR BRACKETT: All right. And you 14:20 22 could be a resource for Mario when he is putting this 14:20 23 together for the -- 14:20 24 MR. FENOGLIO: Yes. 14:20 25 CHAIR BRACKETT: If he needs it. He 14:20 0133 1 might not need it. But you have a lot of charities 14:21 2 that could work with him. 14:21 3 MR. FENOGLIO: Yes. Thank you. 14:21 4 CHAIR BRACKETT: Okay. Charles 14:21 5 Hutchings. 14:21 6 MR. HUTCHINGS: No comment. 14:21 7 CHAIR BRACKETT: Okay. Ed Branom. Is 14:21 8 he still in the room? 14:21 9 Okay. Thank you. 14:21 10 Okay. Mario, how do you feel about 14:21 11 these things? Do you know where you're going with 14:21 12 them and -- and where to find people? 14:21 13 MR. MANIO: Yes. I believe I can get 14:21 14 Steve's number from someone who -- a player? 14:21 15 MR. FENOGLIO: Yes. 14:21 16 CHAIR BRACKETT: All right. I have -- 14:21 17 you turned in a witness sheet earlier. Correct? 14:21 18 MR. VAN: Yes, ma'am, I did. 19 Jimmie Van, North Texas Firemen's 14:21 20 Association. Again, good afternoon. Thank you for 14:21 21 letting me be here. 14:22 22 I have something I would like to add 14:22 23 about this item about the 40 percent cap. This is a 14:22 24 true experience, my secretary. Her and her daddy play 14:22 25 bingo quite frequently. And he is nearly blind, has a 14:22 0134 1 hard time seeing, but he enjoys playing bingo, and 14:22 2 they do this as a family thing. They went to a bingo 14:22 3 hall one day and there were computers left, but 14:22 4 because they had come to that cap, they said that they 14:22 5 wouldn't be able to sell him a computer. And although 14:22 6 she plays paper, he couldn't do it, and they refused 14:22 7 to do that, and so neither one of them played bingo 14:22 8 that day. So who won? I think that this is 14:22 9 interesting. I've been around the world once and 14:22 10 through Texas twice, and I can't figure out what the 14:22 11 purpose of this would be. This doesn't make sense. 14:23 12 We're trying to bring money in for the charities. We 14:23 13 should never turn anybody away. If they have money 14:23 14 and they want to play, I think that they should. And 14:23 15 that's my feeling. I'm really for this idea of doing 14:23 16 away with this cap. 14:23 17 CHAIR BRACKETT: Okay. If there is no 14:23 18 further comment, we'll move on to item number 11, 14:23 19 which is consideration of and possible discussion 14:23 20 and/or action or amendment to 16 TAC 402.555. And 14:23 21 this is the second reading of this. 14:23 22 MR. ATKINS: And, again, Madam 14:23 23 Chairman, we would ask that the second reading be 14:23 24 passed. We're still receiving comments and have 14:23 25 indications that there are individuals that would like 14:23 0135 1 to submit additional comments. I do know that Jamie 14:23 2 McNally is in the audience, and I don't know if he 14:24 3 wants to make comments now. He has submitted written 14:24 4 comments in the past. And Mario has also submitted 14:24 5 comments, and we're just needing some time to review 14:24 6 those before we bring those back. 14:24 7 CHAIR BRACKETT: Steve Bresnen 14:24 8 indicated that he had comments, but he is no longer 14:24 9 here. And so we will pass on number 11, to number 12, 14:24 10 which is the second reading of 402.545. And that is 14:24 11 also -- this is in regard to the conduct of bingo 14:24 12 games for commercial lessors and/or proposed new rule 14:24 13 relating to bonds. 14:24 14 MR. ATKINS: Yes, ma'am. There was -- 14:24 15 if you'll recall, at the last meeting, the last 14:24 16 advisory committee in November, we did receive a 14:24 17 comment on this rule relating to the play of pull tab 14:24 18 bingo tickets. Staff had proposed language that would 14:24 19 delete the requirement that an organization conduct 14:25 20 regular bingo in order to be eligible to sell pull-tab 14:25 21 tickets. There was comments from members of the 14:25 22 audience as well as, I believe, by some of the 14:25 23 advisory committee members relating to this. 14:25 24 Discussion ensued and a possible compromise included 14:25 25 allowing organizations that conduct bingo under a 14:25 0136 1 temporary license to just be authorized to sell pull 14:25 2 tabs without having to conduct regular bingo, also. 14:25 3 And based on those comments, those are the only 14:25 4 changes to this specific rule. 14:25 5 MR. MOORE: Billy, what is the intent 14:25 6 of that? 14:25 7 MR. ATKINS: What is -- what is the 14:25 8 intent -- 14:25 9 MR. MOORE: What is the intent of the 14:26 10 temporary license? Is it for the temporary license, 14:26 11 they would use it during -- 14:26 12 MR. ATKINS: That's how it originally 14:26 13 came to our attention, Danny, is that we would get 14:26 14 calls from organizations -- and I think the example I 14:26 15 used last time were churches who would hold, say, 14:26 16 festivals over a two or three-day period, and they 14:26 17 didn't necessarily want to conduct bingo, but either 14:26 18 members of their church or someone that they knew of 14:26 19 were aware of pull tabs and they thought that that 14:26 20 might be a viable fund-raising option for them during 14:26 21 that period. 14:26 22 MR. MOORE: Okay. I thought it might 14:26 23 have been something like that, but I just -- 14:26 24 MR. ATKINS: Yeah. That's how it first 14:26 25 came to our attention. And as we got through the 14:26 0137 1 process and we got to thinking about it, we were 14:26 2 having a hard time, I guess, coming up with a 14:26 3 justification of, you know, having the requirement 14:26 4 anyway, and so that's why we had proposed deleting it. 14:26 5 But, again, there were comments from members of the 14:27 6 public that -- questioning whether or not that would 14:27 7 authorize an organization to get a license -- a 14:27 8 regular annual license and just sell pull tabs. And 14:27 9 conceivably it could. 14:27 10 MR. MOORE: Right. Okay. 14:27 11 CHAIR BRACKETT: Are there any other 14:27 12 questions or comments on this? 14:27 13 All right. Then the next is the second 14:27 14 reading of the new rule -- 14:27 15 MR. ATKINS: I'm sorry. And on the 14:27 16 bond rule, there were no -- that's also under item 12. 14:27 17 There were no changes? 14:27 18 CHAIR BRACKETT: No changes. 14:27 19 MR. ATKINS: Yes, ma'am. 14:27 20 CHAIR BRACKETT: All right. Then the 14:27 21 second reading regarding the new rule relating to 14:27 22 general licensing provisions, which is item number 13. 14:27 23 MR. ATKINS: There were two changes 14:27 24 made to this rule, members, as a result of comments 14:27 25 received at the last advisory committee meeting. The 14:28 0138 1 first deals with section A. A member of the advisory 14:28 2 committee felt that the language was confusing and 14:28 3 could be considered to apply only to organizations -- 14:28 4 to the charitable organizations conducting bingo. The 14:28 5 intend of this rule is to apply to all applications, 14:28 6 so there was a change to the first sentence in A to 14:28 7 read, any person who intends to make an application 14:28 8 for a license to engage in a bingo-related activity 14:28 9 shall apply to the Commission for a license. 14:28 10 The other comment was over on page -- I 14:28 11 believe it's page three, item O, dealing with 14:28 12 fingerprint cards. There were comments from those in 14:28 13 attendance at the last advisory committee meeting that 14:28 14 that could be construed to mean that anyone on a bingo 14:28 15 license would be required to submit fingerprint cards, 14:29 16 and we've added -- or we've tried to come up with 14:29 17 clarification language to specify that it's 14:29 18 individuals associated with distributors, SSP, 14:29 19 manufacturers, or those who are located out of state. 14:29 20 CHAIR BRACKETT: Okay. 14:29 21 John Yovanovitch. 14:29 22 MR. YOVANOVITCH: My comments were just 14:29 23 addressed. Mr. Atkins just addressed them. 14:29 24 CHAIR BRACKETT: All right. Anyone 14:29 25 else? No one else is on that, so are there any 14:29 0139 1 questions? 14:29 2 MS. IVES: No. Me. 14:29 3 CHAIR BRACKETT: Let me see where I put 4 you. You had every number listed, I think. I think 14:30 5 you're okay. 14:30 6 MS. IVES: I'm like, don't forget about 14:30 7 me after all this. 14:30 8 I believe Billy did touch bases on my 14:30 9 comments at the first reading on this proposed rule on 14:30 10 paragraph O. And if I'm still reading this right, 14:30 11 it's only for persons listed on a bingo application 14:30 12 that are an out-of-state resident. If that's the 14:30 13 meaning of this paragraph, then I would not have any 14:30 14 problems with it. 14:30 15 I did have a comment -- I don't know 14:30 16 why I didn't pick it up the last time. On paragraph 14:30 17 J, talking about, an organization may withdraw an 14:30 18 application at any time. And this is on the 14:30 19 application process. I would like to add something on 14:30 20 there to the effect that when an organization -- I 14:30 21 can't even talk today. When an organization withdraws 14:30 22 their application at any time, the license fee and/or 14:31 23 bond fee will be returned. That was not addressed in 14:31 24 that paragraph. I just hate to see an organization 14:31 25 submit a 2500 dollar license fee and a 1200 dollar 14:31 0140 1 bond fee and then have to wait six months or whatever 14:31 2 to get that returned. But then on the other hand, I 14:31 3 thought perhaps that might be part of the application 14:31 4 period. But for clarity purposes, I think it would be 14:31 5 better to be listed in an additional sentence. 14:31 6 That's all I have. 14:31 7 MR. ATKINS: Okay. And Bruce Miner, 14:31 8 the licensing supervisor, is taking note of that. 14:31 9 That may, Sharon -- those are good comments. I'm 14:31 10 thinking they may be addressed in another rule, but 14:31 11 we'll check with that. 14:31 12 MS. IVES: Okay. Great. 14:31 13 That's all I had. Thank you. 14:31 14 CHAIR BRACKETT: Thank you, Sharon. 14:31 15 Let me ask your pleasure. We need to 14:32 16 go back to number six, consideration and possible 14:32 17 discussion on a work plan. 14:32 18 MR. ATKINS: I'm sorry, Madam Chair. 14:32 19 Before you do that. We would now like to take those 14:32 20 with the changes that have been discussed to the 14:32 21 Commission for them to publish in the Texas Register. 14:32 22 It won't be at this commission meeting, but at a 14:32 23 subsequent one. 14:32 24 CHAIR BRACKETT: Right. 14:32 25 MR. ATKINS: Okay. Thank you. 14:32 0141 1 CHAIR BRACKETT: Yes. So do we have 14:32 2 that in the minutes? 14:32 3 I'm sorry. I was just making an 14:32 4 assumption that that would be in there. 14:32 5 What I want to ask your pleasure on. 14:32 6 Do you want to hear any public comment before we work 14:32 7 on the item number six? Public comment is item number 14:32 8 14. While we have some public here, let's go ahead 14:33 9 and do item number 14. How about that? And then go 14:33 10 back to six and just see. 14:33 11 On item number 14, are there any public 14:33 12 comment? Something that I would like to relay, which 14:33 13 was discussed briefly at the last meeting, but this is 14:33 14 all new information that continues to come to me, on 14:33 15 how exciting the new types of pull tabs are. And how 14:33 16 that -- but that we can't stop here. This is what 14:33 17 everyone says. This is wonderful, but don't stop 14:33 18 here. Please continue with new games, which is a lot 14:33 19 of what we've been encouraged with today. 14:33 20 Also, a comment that on -- on some of 14:33 21 the manufacturing of the consecutive serial numbers 14:33 22 being required, that that would certainly be an 14:33 23 increase of production costs. 14:34 24 Does anyone else have anything that 14:34 25 they've heard from their -- anyone, they would like to 14:34 0142 1 share? 14:34 2 Were you going to say something? I 14:34 3 thought I heard somebody say something. 14:34 4 I will also go ahead and report for 14:34 5 Suzanne Taylor on the meeting to be held outside of 14:34 6 Austin. The group -- 14:34 7 MR. ATKINS: This is number 15. 14:34 8 CHAIR BRACKETT: Number 15, I'm sorry. 14:34 9 The group has agreed, the planning group, that it will 14:34 10 be in San Antonio. That the date will be April. The 14:34 11 exact location in San Antonio is not decided upon yet, 14:34 12 but it will be at a bingo hall in San Antonio, and 14:34 13 that the exact date in April has not yet been decided. 14:34 14 One reason for choosing April is that it's not quite 14:34 15 so hot in April as it is in later months when you're 14:35 16 in San Antonio. Also, distributors and manufacturers 14:35 17 will be given an opportunity to set up displays and 14:35 18 demonstrations, and we certainly hope that the 14:35 19 Lottery -- Bingo Division of the Lottery Commission 14:35 20 will set up things, too, and have -- it can be a great 14:35 21 P.R. position for them. The reason for San Antonio 14:35 22 being chosen was the accessibility of the city by air 14:35 23 and land travel and the availability of facilities. 14:35 24 If you have any further questions about 14:35 25 that, you can direct them to Suzanne. You have her 14:35 0143 1 telephone number. 14:35 2 MR. ATKINS: I would like to make a 14:35 3 comment. The holding of a meeting outside the city of 14:35 4 Austin is contingent on the adoption of the amendments 14:35 5 to the charitable bingo administrative rule, which 14:35 6 hasn't occurred yet. I think it can occur by April. 14:36 7 I just want it clearly understood on the record that 14:36 8 it's contingent on that. 14:36 9 CHAIR BRACKETT: Okay. The planning 14:36 10 committee was working with the idea that all of this 14:36 11 had been approved. If -- do you see a problem with 14:36 12 this adoption if there -- are you suggesting that they 14:36 13 look at a later date than April? 14:36 14 MR. ATKINS: No. I'm not even 14:36 15 suggesting that they look at a later date than April. 14:36 16 I just want to make sure that everybody knows and 14:36 17 because I'm not going to and I can't speak on behalf 14:36 18 of the Commissioners. But I mean, we just don't know 14:36 19 what can happen. And so, you know, for whatever 14:36 20 reason, it could be that that rule -- the rule could 14:36 21 even have been adopted but not be effective by the 14:36 22 time that occurs. So, you know, I would just like 14:37 23 everybody to be aware that there is going to be some 14:37 24 timing involved to it, depending on when the rule is 14:37 25 finally adopted. 14:37 0144 1 CHAIR BRACKETT: All right. So how 14:37 2 will we know that? Where do we know where to look for 14:37 3 this? 14:37 4 MR. ATKINS: Well, it's adopted, it's 14:37 5 posted on the Commission meeting agendas. It's not on 14:37 6 the agenda for tomorrow, I don't believe. I don't 14:37 7 recall. There is -- 14:37 8 CHAIR BRACKETT: I thought it was 14:37 9 approved like a year ago. I thought it was approved 14:37 10 like last summer at the latest? 14:37 11 MR. ATKINS: There was never an 14:37 12 approval for it. You know, in the past, the advisory 14:37 13 committee had recommended to the Commission that the 14:37 14 rule be adopted to allow for meetings outside of 14:37 15 Austin. And there was a period of time when the 14:37 16 Commission, for whatever reasons they had, was not 14:37 17 receptive to that idea. The advisory committee 14:38 18 revisited it, they came back to the Commission with 14:38 19 additional information, and they changed their minds 14:38 20 in terms of, you know, being amenable to consideration 14:38 21 of a change to rule. So it's not that the Commission 14:38 22 approved the change in the rule. They approved going 14:38 23 forward with those proposed amendments to the rule. 14:38 24 CHAIR BRACKETT: So how can we find out 14:38 25 where we stand on this? 14:38 0145 1 MR. ATKINS: You can check the 14:38 2 Commission meeting agendas and, again, when that rule 14:38 3 is up for final adoption -- 14:38 4 CHAIR BRACKETT: So you're saying it 14:38 5 has not been on an agenda yet? 14:38 6 MR. ATKINS: It has not been on an 7 agenda to be finally adopted. They have posted it for 14:38 8 publication in the Texas Register. 14:38 9 CHAIR BRACKETT: Okay. 14:38 10 MR. ATKINS: It is -- I guess you could 14:38 11 classify it, it's on its last step. If that helps. 14:38 12 CHAIR BRACKETT: Okay. I just thought 14:39 13 it was farther along than that. 14:39 14 I think I've messed us up on the agenda 14:39 15 because I did take up that places, and that was under 14:39 16 agenda item number 15, which also includes meeting 14:39 17 dates and items to be considered at future meetings. 14:39 18 And I was wanting to go back to item number six and 14:39 19 talk about a work plan. 14:39 20 So do we have to finish item number 15 14:39 21 before I can -- 14:39 22 MR. ATKINS: I don't think so. 14:39 23 CHAIR BRACKETT: Okay. We'll go back 14:39 24 to item number six, then, and consider a work plan for 14:39 25 the Bingo Advisory Committee. 14:39 0146 1 In looking at the minutes of the last 14:39 2 meeting, Commissioner Clowe suggested that we have a 14:39 3 work plan, that we need a plan of action, a work plan, 14:40 4 and that it needs to be beneficial to the bingo 14:40 5 industry and be something that is doable and that can 14:40 6 become productive. And it shouldn't be just where 14:40 7 we're just expressing a need, but express the need and 14:40 8 give a suggested action on these things. And the 14:40 9 thing that we can do most effectively is to advise the 14:40 10 Texas Lottery Commission. We need a purpose beyond 14:40 11 what is just intended and industry association 14:40 12 discussion. So what kind -- what do you view as part 14:40 13 of our work plan? We need to brainstorm some ideas. 14:40 14 MR. ATKINS: Virginia, could I make a 14:40 15 comment before you start -- 14:40 16 CHAIR BRACKETT: Sure. 14:40 17 MR. ATKINS: -- this process? I want 14:40 18 to -- I want to provide the advisory committee with as 14:40 19 much flexibility as y'all want as you work on this. 14:40 20 But I do want to let you know that the staff has been 14:41 21 having conversations with the Commissioners regarding 14:41 22 the effectiveness of the advisory committee in terms 14:41 23 of the amount of staff time that's spent preparing for 14:41 24 and taking part in the committee meetings, as well as 14:41 25 the final work product. And I think that Commissioner 14:41 0147 1 Clowe, at the last meeting, was pretty clear in what 14:41 2 at least his expectations as a single member of the 14:41 3 Lottery Commission were. And based on his comments 14:41 4 and, actually, your response, Marilyn, to him, as well 14:41 5 as the fact that I went back to my own staff, you 14:41 6 know, and said, I'm at a loss as to what to do. You 14:41 7 should be happy to know that my staff took me to task 14:41 8 for it pretty thoroughly. And specifically, I want to 14:41 9 mention Norma Casada, who is audit manager for our 14:42 10 Odessa and Austin regions, and if you don't know 14:42 11 Norma, I suggest that you get to know her, because 14:42 12 I've asked her and she's agreed to help us through 14:42 13 this process. 14:42 14 But what we've done, Marilyn, I don't 14:42 15 know if you recall, but after Commissioner Clowe's 14:42 16 comments, you thanked him for his comments and I think 14:42 17 you explained that that helped you have a framework as 14:42 18 to what was expected of you, et cetera. And that's 14:42 19 the question that Norma came back to me and she said, 14:42 20 well, what have you told the advisory committee? What 14:42 21 has the advisory been told as far as what the 14:42 22 expectations are, et cetera, and I had to admit that 14:42 23 there was very little, I think, formally that had been 14:42 24 provided. And I think a lot of you as members of 14:42 25 charitable organizations that deal with boards, et 14:42 0148 1 cetera, I think that you would agree that it's fair 14:42 2 for there to be that type of expectation as to, you 14:42 3 know, if I'm going to serve on this board, what do you 14:43 4 want from me. 14:43 5 So we've done some considerable 14:43 6 research in the area of both for the nonprofit sector 14:43 7 as well as in the business community in terms of 14:43 8 advisory boards, advisory committees, and things that 14:43 9 you can do to help make them more effective. And so 14:43 10 Norma is working on putting some documents together 14:43 11 that we'll be able to provide to all of you that we 14:43 12 think will help, you know, clarify what -- you know, 14:43 13 how you can better serve on the advisory committee. 14:43 14 And also, that we can take to the Commissioners in 14:43 15 terms of what we think can help improve the advisory 14:43 16 committee. I feel like there is a near unanimous 14:43 17 feeling among everybody, staff, the Commissioners, the 14:43 18 industry, that there is a need for some type of body 14:43 19 like this. But the -- you know, we want to be very 14:43 20 clear that the work product that we're getting from 14:44 21 the committee is one with an industry-wide vision or 14:44 22 an industry-wide goal, not one that is, you know, 14:44 23 specific to any individuals or segments of the 14:44 24 industry. 14:44 25 So given that, we think that your work 14:44 0149 1 today on developing a work plan will be very 14:44 2 beneficial to us as we go through this process, 14:44 3 because that will be one of the things that we'll be 14:44 4 recommending to the Commissioners, and I think the 14:44 5 timing is perfect, also, since we're starting the 14:44 6 beginning of the year, we can lay out a program for 14:44 7 the coming year and -- with an expectation that at the 14:44 8 end of the year, we will have some type of work 14:44 9 product to show for it. So I just lay that out for 14:44 10 you so that you'll know kind of what the staff is 14:44 11 working on, and that we're very interested, as y'all 14:44 12 go through this process, in what you would propose for 14:45 13 the coming year. 14:45 14 MR. MOORE: When will we receive the 14:45 15 guidelines and whatever she is working on right now? 14:45 16 MR. ATKINS: We're hoping to make our 14:45 17 recommendation to the Commissioners in January. And, 14:45 18 again, this is -- you know, you're not my advisory 14:45 19 committee. You're the Commission's advisory 14:45 20 committee. So we're going to take it through them 14:45 21 and, you know, they may have additional comments or 14:45 22 whatever. But we're hoping to have our proposal to 14:45 23 them for January. 14:45 24 MR. MOORE: Okay. 14:45 25 CHAIR BRACKETT: Where do you want to 14:45 0150 1 go from there? 14:45 2 MR. WHITTINGTON: Well, at the last 14:45 3 meeting, Suzanne and I were supposed to have been 14:45 4 working on an advertising work plan for the coming 14:45 5 future, and talk about some things. 14:45 6 CHAIR BRACKETT: Which she has been 14:46 7 gathering some information. 14:46 8 MR. WHITTINGTON: Me, too. 9 CHAIR BRACKETT: And she has found that 14:46 10 there are some affordable -- what's the term that they 14:46 11 use in media? No. Affordable venues. Especially 14:46 12 some of the cables that go out to Lubbock, you know, 14:46 13 go out farther than just the city that they're in. 14:46 14 But anyway, that's -- I need to throw that in, just to 14:46 15 share some information she asked me to share with you. 14:46 16 One thing I -- especially with being a 14:46 17 legislative year, I feel like we've really got to have 14:46 18 a listening ear, and each one of us as individuals 14:46 19 we're going to have to work. How are we going to be a 14:46 20 listening ear to the industry. Not to our players 14:46 21 complaining because -- I mean, there are two types of 14:46 22 listening ears you have. One is to take care of the 14:46 23 immediate need of this player who doesn't like the 14:46 24 table where they are or their computer is doing 14:46 25 something, or whatever is happening with them. And 14:47 0151 1 then also, too, what are the needs in the industry 14:47 2 that we need to be making sure that they know where to 14:47 3 go with those needs, which is, of course, their 14:47 4 elected officials, if it's a matter of getting 14:47 5 legislation changed, some of the things they bring to 14:47 6 us are. And so that's something, too. And the way 14:47 7 you can find out about that is to call Billy and ask 14:47 8 him and he will tell you. Is that a -- 14:47 9 MR. ATKINS: I'm sorry. What will I 14:47 10 tell them? 14:47 11 CHAIR BRACKETT: If something is a rule 14:47 12 change or a statute change, or just something they 14:47 13 need to change in their hall, you know. 14:47 14 MR. ATKINS: And we can also provide 14:47 15 the members with the -- if you don't already have it, 14:47 16 the Web site information for the Texas Legislative 14:47 17 Council. And so you can on your own as individuals 14:47 18 monitor that for any legislation that's filed that may 14:47 19 affect bingo. 14:48 20 CHAIR BRACKETT: Okay. Danny, where 14:48 21 does your industry need it? 14:48 22 MR. MOORE: Well, I think we've all got 14:48 23 our hands full. I mean, you have these three or four 14:48 24 issues. Actually, we talked about six things today, I 14:48 25 think, that -- it's all legislative now. We can talk 14:48 0152 1 about it all we want right here, but it's got to be 14:48 2 done over at the capitol at this point. And, you 14:48 3 know, that's where my focus is going to be, really 14:48 4 outside of this group and letting people know what 14:48 5 we're doing and what we need to do. We've already 14:48 6 talked about it here. Now it's time for us to take 14:48 7 action outside of this group. That's how I feel about 14:48 8 it right now. 14:48 9 As far as a work plan, you know, I 14:49 10 think -- I can see where the staff gets -- or Chairman 14:49 11 Clowe gets fed up with us bringing up the same things 14:49 12 over and over. We really need to take care of things 14:49 13 outside of here sometimes. And I think Billy has 14:49 14 probably reiterated that to us several time. This is 14:49 15 time for action. This is time to contact your 14:49 16 district representatives, and if you want something 14:49 17 done, that's what we need to do. And that's more of a 14:49 18 grass roots effort inside of this committee. You 14:49 19 know, I -- you just handed me two things to do before 14:49 20 January 6th already, so I'm going to work on those two 14:49 21 subjects myself. 14:49 22 CHAIR BRACKETT: I did? 14:49 23 MR. MOORE: Yeah. 14:50 24 CHAIR BRACKETT: Okay. So what you're 14:50 25 saying is, is that we need to get the action items and 14:50 0153 1 get them where they need to be. Is that correct? 14:50 2 MR. MOORE: Yes. 14:50 3 MR. WHITTINGTON: And just like 14:50 4 Commissioner Clowe said, we need to stick with what we 14:50 5 can do within the Bingo Advisory Committee, through 14:50 6 Billy, through the Texas Lottery Commissioners on 14:50 7 subjects that we can basically control here, instead 14:50 8 of dealing with the legislation. We need to know 14:50 9 right away what is legislation and what is not so we 14:50 10 can deal with what's not. And I think that's what 14:50 11 Billy is basically talking about. We can deal with 14:50 12 those, that's what's not. But when they are, we 14:50 13 can't. And we need to know, we can't do that kind 14:50 14 of -- we've got to wait. We can talk about Bingo 14:50 15 Advisory Committee issues as far as within the house, 14:50 16 which is here with Billy and the Commission. We need 14:50 17 to know which topics not to go into. And I think that 14:50 18 will help us a lot. 14:51 19 CHAIR BRACKETT: Well, what the 14:51 20 Enabling Act says, which as Mr. Clowe suggested that 14:51 21 we go back to, it says the committee may advise the 14:51 22 Commissioners on the needs and problems of the state's 14:51 23 bingo industry, comment on the rules involving bingo 14:51 24 during their development and before final adoption, 14:51 25 unless an emergency requires immediate action by the 14:51 0154 1 Commission. And then report annually on the 14:51 2 committee's activities and perform other duties as 14:51 3 determined by the Commission. 14:51 4 MS. MATTHEWS: Well, isn't that our 14:51 5 work plan? 14:51 6 CHAIR BRACKETT: Yeah, that's a work 14:51 7 plan. It really is. Those are all action sentences. 14:51 8 It really is a work plan. 14:51 9 MR. WHITTINGTON: And I'm sure Billy 14:51 10 ain't going to have no problem telling us, no, we 14:51 11 can't talk about that. 14:51 12 MR. ATKINS: It's not that I'd be 14:51 13 telling you, no, you can't talk about that. I would 14:51 14 be encouraging you to consider issues -- again, it 14:51 15 goes back to what Commissioner Clowe says. That you 14:52 16 can take to the Commissioners that they can evaluate 14:52 17 and, if necessary, act on. And, you know, for 14:52 18 example, I think one of the things that we want to -- 14:52 19 that we're probably going to want to propose is 14:52 20 something that we've been thinking about, and that is, 14:52 21 a severe lack, not just in Texas, but industry-wide, 14:52 22 on accurate demographic information as it relates to, 14:52 23 for example, bingo players. If you take the Lottery, 14:52 24 if you take any casino, if you take, you know, 14:52 25 essentially, any business that's in sales, they 14:52 0155 1 usually do a lot of work finding out who their 14:52 2 customer is and, you know, what it is their customer 14:52 3 likes. And we have searched high and low on the 14:52 4 Internet, in academia, everywhere we can, on that kind 14:53 5 of quantifiable demographic information on bingo 14:53 6 players. And we can't find it. You know, we can find 14:53 7 a lot of approximations, we can find a lot of abouts, 14:53 8 we can find a lot of, we thinks, but we can't find 14:53 9 anything, you know, that says, in this state, in this 14:53 10 city, in this hall, anything, the average bingo 14:53 11 players is X number of males, X number of females, 14:53 12 age, income groups, plays this often, et cetera. So 14:53 13 one of the things we would like to work with is the 14:53 14 advisory committee on putting, you know, that kind of 14:53 15 survey information together and then coming up with a 14:53 16 way, through the advisory committee, to get buy-in 14:53 17 from other bingo licensees on helping complete that 14:53 18 survey so that we can have that information. You 14:54 19 know, if one of the -- if one of the consistent 14:54 20 statements that is going to come forward to this 14:54 21 advisory committee time and time again is, we're 14:54 22 dying, we're losing our players, then one of the first 14:54 23 questions I think you should ask is, why, and who are 14:54 24 those players. And, you know, why are we losing them. 14:54 25 Is there a certain type of player that we're losing. 14:54 0156 1 And we can include in -- as we go through this 14:54 2 process, you know, we can think about including in 14:54 3 the -- in the survey, talking to bingo players 14:54 4 currently, trying to find out a way of -- if they're 14:54 5 going to high stakes bingo games in other states. 14:54 6 MR. WHITTINGTON: You know, what we 14:54 7 have created really, we encourage people to play 14:54 8 bingo, we create a person who love a game of chance, 14:55 9 and they're going to play any game of chance that 14:55 10 they're around. If they like that game of chance more 14:55 11 than bingo, they're going to play it more. That's 14:55 12 what we created, we created people who, hey, this is a 14:55 13 game of chance. I like this. 14:55 14 CHAIR BRACKETT: We need to 14:55 15 scientifically gather that. And something that, along 14:55 16 that line, that keeps bothering me, I guess it's an 14:55 17 opinion as far as players, we keep talking about 14:55 18 everybody is old that plays bingo. No, they're not, 14:55 19 at my hall. But some nights they are, but other 14:55 20 nights they're not. So I just kind of -- you know, we 14:55 21 really do need to know. And if we know that, then 14:55 22 we'll know how to advertise effectively. 14:55 23 MR. ATKINS: That's right. 14:55 24 CHAIR BRACKETT: And we'll know how to 14:55 25 do everything effectively. Do we need wheelchair 14:55 0157 1 ramps or do we need, you know, skateboard ramps. That 14:55 2 will make a difference. 14:55 3 MR. ATKINS: You raise an interesting 14:55 4 point because, you know, that's been -- the total 14:55 5 figures that we get show attendance going down, but no 14:55 6 one has ever told us definitively that -- why it's 14:56 7 going down. You know, we hear all kind of figures. 14:56 8 We hear that it's going down because bingo players are 14:56 9 dying off, like you say, at a rate greater than 14:56 10 they're being replaced. We hear that, you know, it's 14:56 11 not that we're actually losing bingo players. We have 14:56 12 the same core number of bingo players, it's just that 14:56 13 they're playing less frequently. Which is it? Maybe 14:56 14 both. It may be a combination of both, but the 14:56 15 situation is, we don't know. And without knowing 14:56 16 that, it's hard to make a sound decision. 14:56 17 CHAIR BRACKETT: And what does the 14:56 18 economy play in that. This is, after all, 14:56 19 discretionary dollars. 14:56 20 MR. WHITTINGTON: The dollar amount. 14:56 21 MS. MATTHEWS: So what we would have to 14:56 22 come up with is some type of survey that we could ask 14:56 23 our bingo players to address. 14:56 24 MR. ATKINS: We need to develop a 14:56 25 survey instrument, and then I think we need to work on 14:56 0158 1 the means through which to best distribute that 14:57 2 instrument to make sure that we get an unbiased 14:57 3 response while, at the same time, getting enough 14:57 4 responses to be statistically valid. 14:57 5 MR. WHITTINGTON: Well, here is -- I 14:57 6 walk up to a customer of mine, they say, I'm going to 14:57 7 play bingo today, but I'm going to play the game room 14:57 8 tomorrow. And they used to play every day, so I lost 14:57 9 him for three days out of that week already. And it's 14:57 10 happening like that. Different -- oh, I'm going to 14:57 11 buy some lottery tickets today. I'm not going to 14:57 12 play. I'll play tomorrow. You know, it's just that 14:57 13 their dollar is so tight now compared to what it used 14:57 14 to be, and they focus on one thing. 14:57 15 CHAIR BRACKETT: That's one known 14:57 16 factor. We need to get the other factors, too. So 14:57 17 who develops these surveys and how expensive are they? 14:57 18 Now, there are probably some people who would want to 14:57 19 do a dissertation on this, but we don't want to wait 14:57 20 for a dissertation to be done. We want it now. 14:57 21 MR. ATKINS: Sure. And I'm thinking 14:57 22 that we can use, you know, either our in-house 14:57 23 statistician to assist us with the development of the 14:58 24 instrument. She has helped us in the past when we 14:58 25 tried to do some surveys, but didn't necessarily -- 14:58 0159 1 you know, we didn't get that great a response on. So 14:58 2 we can ask her for her assistance. And, again, I 14:58 3 think part of what we would be looking for assistance 14:59 4 on the advisory committee on is -- you know, in this 14:59 5 state, the way bingo is structured, there is just so 14:59 6 much that you could survey on. You know, a player at 14:59 7 Larry's hall is, I'm sure, not exactly the same as the 14:59 8 player at your hall, Pete. 14:59 9 MR. PAVLOVSKY: No way. 14:59 10 MR. ATKINS: So we have to look at all 14:59 11 those different factors and all those different 14:59 12 variables. And there is just -- there is -- something 14:59 13 that I have been struggling with, you know, 14:59 14 personally, and it was discussed some during the 14:59 15 conversation today, and I don't know how we would fit 14:59 16 it into the survey or even if we could fit it into a 14:59 17 survey. It may be a separate item for the advisory 14:59 18 committee to take under consideration in this work 14:59 19 plan is, from an economic point of view, I think it 14:59 20 would be beneficial if we could find out, when we talk 14:59 21 in terms of raising prize limits, as to what the prize 14:59 22 limit needs to be raised to in order to get a 14:59 23 noticeable increase in attendance. Now, you know, 14:59 24 unfortunately, the way the reporting structure is set 14:59 25 up now, there is not really any way, you know, to 14:59 0160 1 determine, when the prize limit was increased from 500 14:59 2 dollars to 750 dollars, since that information is 15:00 3 reported as a total figure, you know, there is no way 15:00 4 to determine from quarterly reports or whatever if 15:00 5 that had any kind of impact. So one of the things we 15:00 6 may want to look at is the current reporting structure 15:00 7 and if we need to tweak that any in terms to make the 15:00 8 information that's currently reported by organizations 15:00 9 more beneficial for you, for the staff, and for the 15:00 10 Commission in its decision making process. 15:00 11 MR. WHITTINGTON: And Billy what is so 15:00 12 stagnant about my bingo halls, I have got a girl 15:00 13 there, having her going around -- there is two game 15:00 14 rooms close to our bingo halls that we play on today, 15:00 15 and I just wanted to just count some of our regular 15:00 16 players that is in those game rooms while we're 15:00 17 playing bingo. And it's amazing how many heavy 15:00 18 hitters that is going to play two computers and paper, 15:00 19 okay, that's in those game rooms. They just love to 15:00 20 just play the games and we don't have -- we're missing 15:01 21 200 dollars a day per person. So you know, it's -- it 15:01 22 hurts a lot. But she's been doing that for three 15:01 23 weeks and it's been about ten to 20 customers over 15:01 24 there every day that's in them game rooms. 15:01 25 CHAIR BRACKETT: So you're thinking 15:01 0161 1 that perhaps the quarterly report could be an 15:01 2 instrument for -- if we do things to tell them, these 15:01 3 people attended, this was the income, these were the 15:01 4 expenses, and this is what is left over, that type of 15:01 5 thing? 15:01 6 MR. ATKINS: Yeah. I was just going to 15:01 7 say, I would just like for us to look -- 15:01 8 CHAIR BRACKETT: To look at the 15:01 9 possibility -- 15:01 10 MR. ATKINS: -- at the quarterly report 15:01 11 and see if it can't be structured in a way that the 15:01 12 information, again, is more -- is more telling, I 15:01 13 guess. 15:01 14 CHAIR BRACKETT: Okay. 15:01 15 MR. ATKINS: You know, really, as it is 15:01 16 now, you can get averages from those figures. But, 15:01 17 for instance, there is nothing to definitively show, 15:02 18 as we were talking about today, that in fact a 15:02 19 Saturday is better than a Monday. You know, everybody 15:02 20 knows it intuitively, but you know, for 15:02 21 decision-making purposes, whether you're at the 15:02 22 capitol or even, you know -- even if our Commissioners 15:02 23 know it intuitively, I think they're going to want to 15:02 24 see that hard data. You know, they're business 15:02 25 people, that's what they look to. So for your 15:02 0162 1 purposes, for their purposes, for everybody's 15:02 2 purposes, I think if we can increase, you know, the 15:02 3 meaning to the data we get, I think that will help as 15:02 4 we go through this process. 15:02 5 MR. WHITTINGTON: Well, just like he 15:02 6 was saying, Friday and Saturday and Sundays is his 15:02 7 best days in East Plano, and I'm -- what? Five miles 15:02 8 from him? I can't say -- my Wednesdays are better 15:02 9 than Saturdays. My Mondays are better than Sundays, a 15:02 10 lot of times, so I can't pinpoint any day. 15:02 11 CHAIR BRACKETT: And we have that 15:02 12 information on our daily reports. We all know that. 15:02 13 We're not guessing. We have it written down. 15:03 14 MR. ATKINS: Uh-huh. 15:03 15 CHAIR BRACKETT: And so that would 15:03 16 be -- that's another easy thing. 15:03 17 Now, Billy, we still can't do coupons 15:03 18 for things? Like if we get people to go out and get 15:03 19 this information, we can't give them a coupon and give 15:03 20 them five dollars off on their buy-in or anything? 15:03 21 MR. GABRILLO: Roy Gabrillo, senior 15:03 22 audit manager. 15:03 23 I don't see a problem with it, as long 15:03 24 as the records are maintained that -- you know, that 15:03 25 you sold -- if you can only sell your -- or your 15:03 0163 1 normal buy-in is 20 dollars, say, for instance, but 15:03 2 someone comes in with a coupon, as long as you keep 15:03 3 those coupons with the records, so they -- in the 15:03 4 process of an audit, if we have to do some kind of a 15:04 5 paper deficient analysis, and getting an average to 15:04 6 arrive at an average price for your buy-in, we could 15:04 7 take those into consideration. Without that 15:04 8 documentation, it's going to be assumed that 15:04 9 everything was sold at 20 dollars and not at a reduced 15:04 10 price. 15:04 11 CHAIR BRACKETT: Okay. So you would 15:04 12 have to have money plus the coupon to equal what -- 15:04 13 MR. GABRILLO: Right. Exactly. As 15:04 14 long as the coupons are maintained with the daily cash 15:04 15 reports, or not necessarily with the daily cash 15:04 16 reports, but somehow maintained that, you know, all 15:04 17 these coupons were redeemed at a particular occasion, 15:04 18 that will work. 15:04 19 CHAIR BRACKETT: Okay. 15:04 20 MR. WHITTINGTON: Could I ask you a 15:04 21 question? We have -- we used to have a dart game. 15:04 22 And we would throw a dart, and if hit somebody's name 15:04 23 on a board or something, and that allows them to get a 15:04 24 penny now -- 15:04 25 MR. ATKINS: Larry, how is this 15:05 0164 1 under -- 15:05 2 MR. WHITTINGTON: Well, I'm just asking 15:05 3 because we was on that subject about -- 15:05 4 MR. ATKINS: As it related to surveys 15:05 5 and the upcoming work plan. 15:05 6 MR. WHITTINGTON: Well, they was 15:05 7 talking about discounts at the hall, so that's why I 15:05 8 mentioned that. I was just wanting to know, is that 15:05 9 okay? 15:05 10 MR. ATKINS: Why don't you follow up 15:05 11 with Roy after the meeting. Okay? 15:05 12 MR. MOORE: Hey, Virginia, should we 15:05 13 incorporate into the survey -- I mean, if you're going 15:05 14 to ask players why they're not playing, what would 15:05 15 make them play more often, you know, I don't know if 15:05 16 that could be incorporated into that. Would that be 15:05 17 getting too far off line? 15:05 18 MR. ATKINS: No. It's not that you're 15:05 19 getting too far off line. I'm getting looks from the 15:05 20 attorney, and we may be talking about the specifics of 15:05 21 one of the elements of the work plan too much, and we 15:05 22 need to get back to the broader -- 15:05 23 MR. PAVLOVSKY: What about if the 15:05 24 members of this committee, and anyone else that may 15:05 25 want to submit questions that may be on this 15:05 0165 1 questionnaire, you know, to y'all, Billy. Would that 15:06 2 help? 15:06 3 MR. ATKINS: Sorry? 15:06 4 MR. PAVLOVSKY: Any question that we 15:06 5 can think of that may go on -- or that they think 15:06 6 should go on the questionnaire. 15:06 7 CHAIR BRACKETT: Well, I would advise 15:06 8 you to start -- you know, this is our work plan. Keep 15:06 9 this in your head. When you're in the car, write down 15:06 10 these little notes. I have to write it down or I'll 15:06 11 forget it by the time I park. 15:06 12 MR. ATKINS: You write while you're 15:06 13 driving? 15:06 14 MR. PAVLOVSKY: It's either that or 15:06 15 talk on the phone. 15:06 16 CHAIR BRACKETT: And I drive better 15:06 17 than I write, so that's -- a lot of times I can't read 15:06 18 it. I have to get someone else to read it for me. 15:06 19 But anyway, just keep it on your mind, and these 15:06 20 things will pop into your head at the most inopportune 15:06 21 time, but it will be the most important thought. And 15:06 22 then we will compile it and then let Billy's expert 15:06 23 take it and see if it's of any value. But remember, 15:06 24 any time on a survey, it has to be something that can 15:06 25 be answered simply, or else it's of no value. It's 15:06 0166 1 been a long time since I've done a survey. What else 15:07 2 are the characteristics of a survey. But anyway, that 15:07 3 doesn't matter. We can turn -- or the experts can 15:07 4 turn what you have written into how it needs to be. 15:07 5 MR. MANIO: Related to what we are 15:07 6 talking about, I just handed Billy a document. These 15:07 7 are numbers from my bingo hall. And all of these 15:07 8 numbers came from the daily cash report. 15:07 9 CHAIR BRACKETT: Yeah. 15:07 10 MR. MANIO: There is a lot of things we 15:07 11 can learn. I'm just compiling these -- it's just -- I 15:07 12 set out the spreadsheet on the list, the daily entry 15:07 13 from the daily cash report, and you can generate 15:07 14 information like this. 15:07 15 CHAIR BRACKETT: This is good 15:07 16 information. We have a lot of good information in our 15:07 17 daily reports. 15:07 18 MR. MANIO: I prepared this as a 15:07 19 supporting argument for not fixing the prize of 15:08 20 electronic cards, but it came in handy while we were 15:08 21 discussing this survey thing. And you see, our Monday 15:08 22 and Tuesday in here, this is an all-paper night, and 15:08 23 look at our attendance. Over 200. 15:08 24 MR. ATKINS: I really think we would be 15:08 25 better off if we moved on from the specifics of the 15:08 0167 1 survey to other elements in the work plan. 15:08 2 CHAIR BRACKETT: But we have agreed 15:08 3 that we would work on the survey. 15:08 4 MR. ATKINS: Yes. 15:08 5 CHAIR BRACKETT: I think, too, 15:08 6 considered in our work plan would be the meeting 15:08 7 outside of the city, if that does work out in -- what 15:08 8 were you saying? That you hadn't gotten back on that? 15:08 9 To meet outside of the city, the approval? 15:08 10 MR. ATKINS: The adopted rule. 15:08 11 CHAIR BRACKETT: The adopted rule for 15:08 12 one meeting a year. Okay. It's now coming to me. So 15:09 13 we just need to -- once that is done, continue or 15:09 14 proceed with that. 15:09 15 Any suggestions on anything you are 15:09 16 aware of that -- from listening to your employees and 15:09 17 your customers on anything training-wise or anything 15:09 18 of that type? I think the training consistently gets 15:09 19 high ratings, doesn't it, Billy? 15:09 20 MR. ATKINS: Yes, ma'am. 15:09 21 CHAIR BRACKETT: The regional 15:09 22 trainings. 15:09 23 MR. ATKINS: I think 95 percent. 15:09 24 MR. GABRILLO: Right around that area, 15:09 25 from excellent to good. 15:09 0168 1 MR. ATKINS: Good to excellent. But it 15:09 2 would -- I think it's a perfectly legitimate duty for 15:09 3 this advisory committee to meet with the staff at 15:10 4 least once during the year, review the program in 15:10 5 total, and offer any suggestions to it. Because we do 15:10 6 that -- we do that ourselves, reviewing the entire 15:10 7 program, in an attempt to keep it -- to keep it fresh, 15:10 8 to keep it a little new, and we would love to have the 15:10 9 committee's input on it. 15:10 10 CHAIR BRACKETT: Are you referring to 11 the training -- 15:10 12 MR. ATKINS: The operator training 15:10 13 program. 15:10 14 CHAIR BRACKETT: Okay. You know what I 15:10 15 think people like about it best is being together. 15:10 16 The operators for the different halls, they have a 15:10 17 good time. 15:10 18 MR. ATKINS: I know the thing they like 15:10 19 the least is that we don't provide doughnuts. 15:10 20 MR. WHITTINGTON: I'm going to have to 15:10 21 leave. 15:10 22 CHAIR BRACKETT: Okay. Thank you. So 15:10 23 Larry is having to leave. It's about 3:10. Okay. I 15:11 24 really think we've concluded. This is the only thing 15:11 25 we're working on is the plan. Any other suggestions? 15:11 0169 1 Any other operations that you think that might be good 15:11 2 for us to review on a yearly basis? Anybody? 15:11 3 Okay. Well, at this point, these will 15:11 4 be the items that we will consider in a work plan, but 15:11 5 this is not written in concrete and it can be added 15:11 6 to, but we don't want to make it more than we can 15:11 7 handle. And since we don't meet monthly, that kind of 15:11 8 makes it hard. 15:11 9 And we should consider going on to the 15:11 10 last item. We do need to consider another meeting 15:11 11 date. Do we have a concern that we need to meet 15:12 12 before the legislature is in session? Or meet 15:12 13 after -- or would it be better to meet in February? 15:12 14 Any feelings on any of this? 15:12 15 MR. MANIO: When does the session 15:12 16 start? 15:12 17 CHAIR BRACKETT: The 21st? I don't 15:12 18 remember. 15:12 19 MR. ATKINS: January 14th. 15:12 20 CHAIR BRACKETT: January 14th. When is 15:12 21 the inauguration? The 22nd? 15:12 22 MR. ATKINS: That I don't know. 15:12 23 CHAIR BRACKETT: Of course, the 15:12 24 Governor doesn't have much to do with the session. 15:12 25 Okay. So it starts January 14th is when the session 15:12 0170 1 starts. 15:12 2 MR. MANIO: We've got to meet before 15:12 3 the session. 15:12 4 CHAIR BRACKETT: Well, I really don't 15:13 5 think -- this is my feeling. I really don't feel that 15:13 6 we need to do that. We covered a lot of things today, 15:13 7 and anything that anybody would like to do as an 15:13 8 individual and include the members of the advisory 15:13 9 committee on their list for them to take individual 15:13 10 action, that would certainly be an option that we 15:13 11 could take. Am I the only one feeling this way? 15:13 12 Okay. Y'all have got to come up with some ideas. 15:13 13 What is a good time to meet? 15:13 14 MS. MATTHEWS: Well, is there any value 15:13 15 in meeting in February to discuss any possible actions 15:13 16 that individuals have taken in regards to the things 15:13 17 we have discussed today? 15:13 18 CHAIR BRACKETT: Meeting in February? 15:13 19 Is that what you said? I think that February might be 15:13 20 a better time to meet as opposed to March, if we think 15:14 21 that the -- are we going to know then if we're going 15:14 22 to be able to have that meeting in April in San 15:14 23 Antonio? When will we know if that rule was adopted? 15:14 24 MR. ATKINS: You know, I'm thinking it 15:14 25 will be done by then, but I just -- I can't make a 15:14 0171 1 commitment for the Commissioners. 15:14 2 CHAIR BRACKETT: You're thinking it 15:14 3 will be done by February or March? 15:14 4 MR. ATKINS: The adoption? 15:14 5 CHAIR BRACKETT: Adoption of the rule. 15:14 6 MR. ATKINS: I'm thinking that they 15:14 7 could adopt it probably by February. 15:14 8 CHAIR BRACKETT: The reason I'm wanting 15:14 9 to know is, you know, if we can't work on that meeting 15:14 10 outside the city until that is adopted, then I feel 15:14 11 like we don't need to meet until it's adopted. But I 15:14 12 would like to leave today with a meeting planned, 15:14 13 whether it's February or March. 15:14 14 MR. ATKINS: And you weren't looking 15:15 15 at -- then I would look at the -- probably the first 15:15 16 week in February. And not so much because of a 15:15 17 potential meeting date in April, but there are going 15:15 18 to be work groups that are supposed to be formed by 15:15 19 January 6th on the unit accounting issue and the 15:15 20 expenses and distribution, and I was assuming that the 15:15 21 committee would have wanted whatever was the result of 15:15 22 those work groups to come back to it. So, you know, 15:15 23 for those reasons, I was thinking -- we just lost a 15:15 24 quorum. 15:15 25 MR. BENNETT: Yes. We're down to four. 15:15 0172 1 MR. ATKINS: Oh, he's coming back? 15:16 2 I'm sorry. What do you do when you 15:16 3 lose a quorum? 15:16 4 MR. BENNETT: You can discuss, you just 15:16 5 cannot take action. 15:16 6 MR. ATKINS: Okay. So I would suggest 15:16 7 either the last week in January or the first week in 15:16 8 February. 15:16 9 MS. MATTHEWS: The last week in January 15:16 10 is better for me. I won't be able to make February, 15:16 11 March or April. But I might be able to make the end 15:16 12 of January. 15:16 13 CHAIR BRACKETT: Well, let's consider 15:16 14 January 30th until we get our -- get Pete back. Y'all 15:16 15 can be pondering that. 15:16 16 MR. MOORE: What's that? A Thursday? 15:16 17 CHAIR BRACKETT: It's the last Thursday 15:16 18 of the month is the 30th. 15:16 19 MS. MATTHEWS: When is the next 15:16 20 Commissioners meeting? Don't they normally meet just 15:16 21 before their meeting? Is that already set? 15:16 22 MR. ATKINS: Not for January. Their 15:17 23 next meeting is tomorrow. I don't know -- I think 15:17 24 these past several months it's just worked out that 15:17 25 way. I don't think there has been a concentrated 15:17 0173 1 effort on anybody's part to see to it that that 15:17 2 occurs, but they are -- like y'all, they set their 15:17 3 meetings, the next meeting at the end of their present 15:17 4 meeting. 15:17 5 You walked out of the room and shut 15:17 6 everything down. Can you meet on January 30th, 2003? 15:17 7 MR. PAVLOVSKY: Thank you, Billy. 15:18 8 Yeah, I can. 15:18 9 CHAIR BRACKETT: Okay. Then we'll meet 15:18 10 on Thursday, January 30th. And we'll bid good-bye to 15:18 11 Marilyn at that meeting. She will come out of her 15:18 12 hole April 15th or thereabouts. All right. Is there 15:18 13 anything else we can add on to any of this? All 15:18 14 right. How do you feel about it? Do you feel like 15:18 15 everything is looking okay? All right. Also, we have 15:18 16 a long road ahead of us. Are you feeling that way, 15:18 17 too? 15:18 18 MR. PAVLOVSKY: Very. 15:18 19 CHAIR BRACKETT: Very long, very hard. 15:18 20 All right, then. The meeting will adjourn. It's 3:20 15:18 21 in the afternoon. 15:18 22 23 24 25 0174 1 AMENDMENT SHEET 2 BINGO ADVISORY COMMITTEE MEETING - DECEMBER 12, 2002 3 4 Page/Line Correction Reason for Correction 5 ______________________________________________________ 6 ______________________________________________________ 7 ______________________________________________________ 8 ______________________________________________________ 9 ______________________________________________________ 10 ______________________________________________________ 11 ______________________________________________________ 12 ______________________________________________________ 13 ______________________________________________________ 14 ______________________________________________________ 15 ______________________________________________________ 16 ______________________________________________________ 17 ______________________________________________________ 18 ______________________________________________________ 19 ______________________________________________________ 20 ______________________________________________________ 21 ______________________________________________________ 22 ______________________________________________________ 23 ______________________________________________________ 24 ______________________________________________________ 25 ______________________________________________________ 0175 1 REPORTER'S CERTIFICATION 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, BRENDA J. WRIGHT, Certified Shorthand 7 Reporter for the State of Texas, do hereby certify 8 that the above-captioned matter came on for hearing 9 before the TEXAS LOTTERY COMMISSION CHARITABLE BINGO 10 DIVISION as hereinafter set out, that I did, in 11 shorthand, report said proceedings, and that the above 12 and foregoing typewritten pages contain a full, true, 13 and correct computer-aided transcription of my 14 shorthand notes taken on said occasion. 15 Witness my hand on this the 28TH day of 16 DECEMBER, 2002. 17 18 19 20 21 BRENDA J. WRIGHT, RPR, 22 Texas CSR No. 1780 Expiration Date: 12-31-04 23 1609 Shoal Creek Boulevard, Suite 202 Austin, Texas 78701 24 (512) 474-4363 25 JOB NO. 021212BJW