0001
 1   
 2   
 3   *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
 4   
 5                  BINGO ADVISORY COMMITTEE
 6                           MEETING
 7                      FEBRUARY 26, 2004
 8   
 9   *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
10   
11   
12   
13   
14             BE IT REMEMBERED that the BINGO ADVISORY
15   COMMITTEE meeting was held on the 26th day of February,
16   2004, at 10:00 a.m., before Kimberlye A. Furr, RPR, CSR
17   in and for the State of Texas, reported by machine
18   shorthand, at the offices of the Texas Lottery
19   Commission, 611 East 6th Street, Auditorium, Austin,
20   Texas, 78701, whereupon the following proceedings were
21   had:
22   
23   
24   
25   
0002
 1                         APPEARANCES
 2   
 3   Chairman:
 4              Ms. Virginia Brackett
 5   Charitable Bingo Operations Director:
 6             Mr. Billy Atkins
 7   Committee Members:
 8              Mr. Daniel Moore
 9              Mr. Larry Whittington
10              Ms. Suzanne Taylor
11              Ms. Patricia Greenfield
12              Mr. Mario Manio
13              Mr. Pete Pavlovsky
14              Mr. John (Jack) Dougherty
15   
16   
17   
18   
19   
20   
21   
22   
23   
24   
25   
0003
 1                            INDEX
 2   
 3   APPEARANCES ...................................       2
 4   
 5   AGENDA ITEMS
 6   Item Number 1 .................................       4
 7   Item Number 2 .................................       4
 8   Item Number 3 .................................       4
 9   Item Number 4 .................................       9
10   Item Number 5 .................................      24
11   Item Number 6 .................................      47
12   Item Number 7 .................................      48
13   Item Number 8 .................................      51
14   Item Number 9 .................................      72
15   Item Number 10 ................................      98
16   Item Number 11 ................................     100
17   Item Number 12 ................................     116
18   Item Number 13 ................................     126
19   Item Number 14 ................................     130
20   Item Number 15 ................................     135
21   
22   
23   
24   
25   
0004
 1                  CHAIR BRACKETT:  I'll ask for the
 2   approval of the minutes of the December 4th meeting.
 3   Are there any corrections or additions to those?
 4   They're on the web.
 5                  If there are no corrections or
 6   additions, then the minutes are approved as they were
 7   printed and published on the web site.
 8                  Item No. 3 is:  Report and possible
 9   discussion or action on an appointment of a nominating
10   committee to submit a slate of officers and/or new
11   members to the Bingo Advisory Committee and/or on a
12   term assignments for Bingo Advisory Committee members.
13                  Norma has a plan for terms.  We're going
14   to have a little Lottery drawing today.  Is that what
15   this is?
16                  MR. ATKINS:  Well, before you do that,
17   this is the last thing that we need to do in order to
18   fully implement one of the management recommendations
19   from the Sunset report, and we need to select terms for
20   the members so that membership is staggered where three
21   terms become eligible for nomination on February 1st of
22   every year.  And so one way that we have suggested
23   doing that is, Norma has nine slips of paper, three of
24   them are marked with a one, three are marked with a
25   two, and three are marked with a three, and so
0005
 1   depending on which slip is selected by someone, for
 2   example, Danny, if you selected one with a one, then
 3   your term initially would be February 1st, 2004 to
 4   February 1st, 2005, then effective February 1st, 2005,
 5   that term would be for a full three-year term, so that
 6   all of the terms would then be for a full three years
 7   with three terms becoming eligible on February 1st of
 8   every year.
 9                  Now, I don't know if you wanted to ask
10   for volunteers or if you just want to go forward with
11   the drawing.
12                  CHAIR BRACKETT:  Do we have any
13   volunteers who want to volunteer for the terms?
14                  I would like to volunteer for one year
15   simply because I'm old and I don't know how much longer
16   I can be as productive.  The bingo hall gets larger and
17   larger as I walk it.
18                  MR. MANIO:  I will also volunteer for a
19   one-year term for the same reason as Virginia.
20                  MR. PAVLOVSKY:  I'll volunteer for a
21   one-year term, not for one of those reasons.
22                  MR. ATKINS:  So, take out all of the
23   one-year terms.
24                  CHAIR BRACKETT:  While she's doing that,
25   I want to remind you, and I'm sorry I failed to do that
0006
 1   at the beginning, but if you want to speak today to be
 2   a witness, please fill out the witness affirmation
 3   form.  They're out in the reception area there.  And
 4   also I want to thank you for attending.  I know that a
 5   lot of you come a great distance, and we really
 6   appreciate it.
 7                  MS. GREENFIELD:  I would like to
 8   volunteer for a two-year term.
 9                  MR. ATKINS:  Wait.  We still have more
10   volunteers.  Patricia has volunteered for a two-year
11   term.
12                  CHAIR BRACKETT:  Any other volunteers?
13                  MR. MOORE:  I'll go for the two years.
14                  MS. TAYLOR:  You know, what, put me for
15   the other two years.
16                  MR. ATKINS:  So that means by default,
17   everyone else gets a three-year term, and that is
18   Larry, Jack, the vacant conductor/lessor position.
19                  MS. QUEZADA:  Who was the last two-year
20   term?
21                  CHAIR BRACKETT:  Suzanne, Danny, and
22   Patricia were the two-year terms.  Larry, Jack, and the
23   vacant conductor/lessor position are the three-year
24   terms.
25                  Thank you all for your help on that.
0007
 1                  MS. TAYLOR:  I was wondering, if for
 2   some reason one of the people that has volunteered for
 3   one of these terms leaves, does the incoming person
 4   take over the term that they would have had?
 5                  MR. ATKINS:  That's correct, Suzanne,
 6   they take over the unexpired term.  And the terms, as
 7   they are established, are associated with the position,
 8   so that way, people, as they come on, will know
 9   up-front what that term period is.
10                  CHAIR BRACKETT:  I'm just going to say,
11   thank you for the volunteers.  I think maybe this isn't
12   really like volunteering for the draft, that's for
13   sure.
14                  I want to appoint a nominating
15   committee, and I would like for Patricia Greenfield to
16   be chairman of that and Pete to represent the charities
17   on it and for Danny to serve on that committee.
18                  Is that all right with the three of you?
19                  Okay.  Thank you.
20                  And what you would be doing as a
21   nominating committee is nominating the chair and the
22   secretary and then new members from the applications of
23   people who do that.  Correct?
24                  MR. ATKINS:  We currently have one
25   vacancy, and if you look in your notebook, we have been
0008
 1   advertising that vacancy on the web site and on the
 2   Bingo Bulletin, it's for the conductor/lessor position,
 3   and we've also included in your notebook the three
 4   nominations that we've received so far.  And the staff
 5   will be happy to work with the nominating committee as
 6   they go forward.
 7                  CHAIR BRACKETT:  I had served on the
 8   last nominating committee.  It's really fun.  You get
 9   to call these people and talk to them.  It really is
10   interesting and it's fun.  I highly recommend the
11   personal contact with people on that.
12                  MS. GREENFIELD:  So we would be
13   reporting to you at the next meeting on that?
14                  CHAIR BRACKETT:  Yes.
15                  MR. MOORE:  Do we have a list of the
16   conductor/lessors in this state that we could possibly
17   contact these people or, you know, people that aren't
18   looking on the web site?  I have no idea where to start
19   with that.
20                  MR. ATKINS:  Yeah, we can provide you
21   with that list.
22                  MR. MOORE:  Okay.  Who would I talk to?
23                  MR. ATKINS:  Phil Sanderson.
24                  MS. GREENFIELD:  Danny, I had actually
25   gotten a list, I guess, in January.  I've already
0009
 1   contacted some people, so I can get with you on my list
 2   and tell you who I've already talked to.
 3                  MR. MOORE:  Great.
 4                  CHAIR BRACKETT:  Are there any other
 5   questions or details on this that we need to cover?
 6                  Are we ready to move on to Item No. 4?
 7   This is the consideration of and possible discussion
 8   and/or action on the use of debit card rule making.
 9                  Phil Sanderson.
10                  MR. SANDERSON:  Madame Chair, members,
11   for the record, Phil Sanderson, assistant director of
12   Charitable Bingo Operations Division.  It is probably
13   more of just a definitional-type rule on debit card
14   transactions.  We had a few questions, people calling
15   in about the use of debit cards.  There was not a
16   subcommittee formed for this particular rule through
17   the BAC.  It was just one that we were looking at the
18   uses and the practicality of the debit card.  For the
19   most part, it just defines what an ATM card is, a debit
20   card, a check card, and how they can be used, what a
21   personal identification number is, the use of a PIN
22   pad, and it's probably more for clarity to make sure
23   that someone does not take a credit card, which would
24   be a violation of the Bingo Enabling Act, to take an
25   actual credit card.
0010
 1                  Mr. Oldham, the attorney on this rule,
 2   is here to answer any questions and I can answer any
 3   questions that you might have.
 4                  MR. OLDHAM:  For the record, my name is
 5   Kevin Oldham.  I'm assistant general counsel here at
 6   the Lottery Commission.  Thank you for having me.
 7                  I've received some informal comment on
 8   this rule from the industry regarding credit cards and
 9   other issues, and we're taking those into
10   consideration, but I think Phil has laid this rule out
11   fairly well.  It's basically a definitional rule.  It
12   tries to capture changes made to the statute, those
13   being in, I guess, it's Texas Occupations Code
14   2001451B-1 and 2001458811, which those specifically
15   name debit card transactions.  I mean, the statute
16   doesn't say debit card transactions may be used for X,
17   Y, and Z, but the statute does say debit card
18   transactions could be an item of bingo expense if
19   necessary and reasonable and in the conduct of bingo.
20   So, with that, I'll be happy to answer any questions
21   you might have about this or receive any comment as we
22   move forward.
23                  MS. TAYLOR:  I have one comment on this.
24   I love the debit card thing.  I loved it several years
25   ago when we started talking about.  I have been some
0011
 1   places where I've used the debit card and they don't
 2   ask you to put a PIN in; instead, you actually sign as
 3   if it was a credit card, as if you're using your debit
 4   card.  Is there a reason why this requires that you use
 5   a PIN number instead of signing?
 6                  MR. SANDERSON:  To the best of my
 7   recollection, when we were researching this, we talked
 8   to several banks and companies that issue debit cards
 9   and check cards, and for the most part, they said that
10   the transaction, from what they told us, that if the
11   PIN number is not used, then it is considered a credit
12   card transaction.  Visa underwrites, for example, or
13   MasterCard will underwrite, the check cards or the
14   debit cards, and if you have a debit card, like an ATM
15   card, like Pulse, for example, those require a PIN
16   transaction if you're at HEB and you try to pay with
17   your Pulse card.  If you've got a check card, which is
18   issued by a credit card company, then those are
19   considered a debit card or a check card with the use of
20   the PIN.  If you don't use a PIN, then it's considered
21   a credit card transaction.
22                  MS. TAYLOR:  It still comes out of your
23   checking account, though.  I know Hobby Lobby is one
24   store that I always have to sign the paper because they
25   don't have the key pad, and it comes right out of my
0012
 1   checking account because I don't have a credit card
 2   with that bank.
 3                  MR. SANDERSON:  Like I said, you know,
 4   that's the information that we got from two or three
 5   banks in the San Antonio region that handle the check
 6   card and debit card transactions.
 7                  MR. OLDHAM:  Just to frame the issue, I
 8   think the way that this draft is written is to -- and
 9   correct me if I'm wrong, Phil -- but I think the way
10   this draft is written is to try and ensure that any
11   transaction that takes place actually is a debit card
12   transaction versus a credit card transaction.  And I
13   understand where you're coming from, that perhaps if
14   you have a check card issued by your bank and you go to
15   the convenience store or the grocery store and you're
16   just sliding it and you can mark it as a credit card or
17   a debit, I understand where you're coming from.  I just
18   think the way the rule is written now is to try and
19   differentiate as best as possible between those two
20   transactions, and this was one way in which to do that.
21                  CHAIR BRACKETT:  Any there any other
22   questions from the committee?
23                  MR. WHITTINGTON:  When it comes to the
24   debit cards, especially during a bingo session, what
25   basically is the way these things are going to be used?
0013
 1   People coming up in a line with a debit card and order
 2   the product, the bingo product, to play bingo?  Just
 3   like a grocery store, is something like that going to
 4   be the setup?  Because if that's going to be the setup,
 5   it's going to take a little longer.
 6                  MR. SANDERSON:  If you're asking me if
 7   that's the way it's -- I mean, it's up to the
 8   organizations whether or not they use debit cards.
 9   We're not requiring the use of them.  When it came up
10   several years ago, there was some discussion about
11   whether or not they could actually use debit cards
12   because of the time frame of when funds were deposited
13   and available for use by the organizations, and, you
14   know, the individuals said that -- apparently lobbied
15   for this legislation to allow debit cards to be used
16   and the funds from those to be deposited within 72
17   hours instead of the 24-hour requirement.
18                  It's strictly voluntary among the
19   organizations if they want to use them.  Like I said,
20   all we were doing with this rule was just trying to
21   come out with something that just laid out the general
22   frame work of what a debit card was, and that's it.
23                  MR. WHITTINGTON:  I can see that working
24   well if you don't have 200 people in line.  Okay?  But
25   I can see the customers getting very agitated as well
0014
 1   standing in line waiting for somebody to put their PIN,
 2   they put the wrong PIN in, they got to back and
 3   re-enter their PIN again, when these people in line
 4   say, hey, what's going on here?  So that's why we got
 5   the ATM's in our bingo hall.  They can go to the ATM
 6   and they can their money out.
 7                  MR. SANDERSON:  It's strictly up to the
 8   organization.  You know, in some cases, it may take
 9   less time to do a debit cards transaction than writing
10   a check.
11                  MS. TAYLOR:  When this was originally
12   brought up, Larry, it was because of all the hot checks
13   the Jordan Division receives.  If you take checks, you
14   get hot checks; there's no two ways around it.  We
15   said, at least this way it comes straight out of their
16   account; you don't have a hot-check fee, which somebody
17   has to take care of; you don't have to go to the
18   general account fund to round the money back up; and
19   you don't know for two weeks that that's a hot check.
20   It takes a good two weeks from the time that you
21   receive the check for you to even know, so in the mean
22   time, they continue to write checks in your hall, and,
23   before you know it, you've got hundreds of dollars of
24   checks from the same person, and the account was
25   closed, and the rest.  And the debit card gets rid of
0015
 1   all of that.  You know, you can get rid of checks with
 2   the debit card.
 3                  MR. WHITTINGTON:  Okay.  That makes
 4   sense.  We don't take checks.
 5                  MS. TAYLOR:  Because I've never set up a
 6   debit card type of transaction, we've never done this,
 7   so I don't know why some places do or don't have key
 8   pads.
 9                  MR. SANDERSON:  We can look into it.
10   There again, like I said, right now this is just being
11   presented to y'all.  The recommendation that we would
12   have would be that it move forward to the Commission
13   for proposal, and we can look at -- in between that
14   time, if you vote today to do that, in the commission
15   meeting it would be heard at, we can do a little
16   research on Frost Bank or something like that.
17                  MR. ATKINS:  And I was going to say, it
18   might also be beneficial if -- Suzanne, you have
19   knowledge or, you know, you can get information from
20   Frost Bank that contradicts what --
21                  MS. TAYLOR:  Yeah.  I just know some
22   places have a key pad and I put it in and other places
23   make me sign like it's a credit card, but it always
24   comes right out of my checking account because I don't
25   have a credit card account with this number on it.  I
0016
 1   think the reason it says Visa on it is because then
 2   people accept it.  I don't know why, but that was my
 3   only thought on that.  Maybe they're cheaper if you
 4   don't have a key pad; I don't know.
 5                  MR. SANDERSON:  We'll look into that.
 6                  CHAIR BRACKETT:  Charles Hutchins, would
 7   you like to make a comment?
 8                  MR. HUTCHINS:  Good morning.  My name is
 9   Charles Hutchins.  I'm from Dallas.  The one I have,
10   the copy I have, on the second page, line 28, it speaks
11   of the credit card function has to be disabled.  Well,
12   in your ATM's, that function is available.  Are we
13   saying that we're going to have to disable that
14   function in our ATM's in the bingo hall?
15                  MR. SANDERSON:  This rule only addresses
16   taking debit cards at the cashier's station.
17                  MR. HUTCHINS:  So it's strictly at the
18   cashier's station.  It's not at the ATM?
19                  MR. SANDERSON:  It has nothing to do
20   with ATM or anything.  If you have an ATM in your
21   building and they go over there to -- and they can use
22   credit cards, debit cards, whatever, in that ATM
23   because they're getting cash out of their account.
24   When it comes to the transaction of actually paying for
25   bingo paper and products, they're giving you a $20 bill
0017
 1   instead of a credit card or a debit card.
 2                  MR. HUTCHINS:  Okay.  I just want to be
 3   sure that that's not going to stretch out to all of us
 4   having to disable functions in our ATM's.
 5                  MR. SANDERSON:  No.  This is strictly
 6   just for at the point of sales station where the
 7   transaction of purchasing a bingo product takes place.
 8                  CHAIR BRACKETT:  Stephen Fenoglio.
 9                  MR. FENOGLIO:  Thank you, Madame Chair,
10   Committee Members.  My name is Stephen Fenoglio, and I
11   represent over 950 charitable bingo organizations.  I
12   have visited with staff with the following concerns and
13   they've pledged to work with us on that and I find
14   comfort in that.
15                  My comments are on subparagraph C, D,
16   and E of the proposed rules, which are found on page
17   two, lines 23 to 30.  It states, a credit card may not
18   be used to purchase or use bingo paper, bingo cards,
19   electronic bingo devices, or pulls, Subparagraph C.  I
20   don't think that's what the law is today; although,
21   there are provisions in the Bingo Enabling Act that do
22   place restrictions on those.  Under the Government Code
23   of Bingo Enabling Act 2001.451B, any bingo funds, other
24   than the funds from a debit cards, must be deposited
25   into the bingo account within 24 hours, so if I go to
0018
 1   Larry's hall, and let's assume Larry's hall has a
 2   credit card machine, and I purchase $40 worth of bingo
 3   product, that transaction is, I believe, legal today
 4   under a fair reading of the Bingo Enabling Act, but
 5   Larry's charity must have those bingo funds into the
 6   bingo account within 24 hours, otherwise he's in
 7   violation of 2001.451B.  Some credit card companies do
 8   wire those funds instantaneously; others do not.
 9                  My point is, if a charity has a
10   relationship with a credit card account and can get
11   those funds into the bingo account within that 24-hour
12   period, this rule should allow that to occur.  Now,
13   there's another caveat, and this is a caveat that this
14   use of debit card provision in House Bill 2519 also
15   recognizes, under Section 2001.458, you can only use
16   certain authorized -- you can only use bingo funds to
17   pay for certain authorized expenses.
18                  If you'll notice in Subparagraph 11, a
19   debit card expense that the merchant charges the
20   charity is now an authorized expense.  Under the Bingo
21   Enabling Act, if the merchant in Larry's hall's
22   situation charges, and it's usually a one to three
23   percent transaction fee, as you probably know, the
24   consumer never pays that; it's the merchant that
25   accepts the credit card as payment.  In this case, it
0019
 1   would be the charity that's conducting bingo at the
 2   time.  For purposes of this example, I'm calling it
 3   Larry's hall.  They would be charged between one and
 4   three percent, typically, of my $40 purchase, and that
 5   could be 40 cents.  That 40 cents, Larry cannot use
 6   bingo funds to pay for and the charity can't, and
 7   that's clear.
 8                  And this rule, you know, continues, I
 9   think, and that's probably why C is in there, but if
10   Larry has -- if the charity has other funds available
11   other than bingo to pay for that transaction, why would
12   the Commission want to prohibit that?  And I think this
13   is an area we can work with staff on to draft that.  I
14   don't want to be in a position where a charity either
15   intentionally or otherwise violates the deposit rule,
16   and I know that's a concern the staff has because I've
17   seen audits where charities have, on occasion, not
18   promptly deposited the funds as required under the
19   statute, and my comments are to try -- I'm not trying
20   to get around it.
21                  I also have seen charities occasionally
22   use bingo funds for not-approved purposes in the Bingo
23   Enabling Act, and I'm not trying to get around this
24   issue, but it seems to me, if a charity has thought
25   this out and can use a credit card and can make money
0020
 1   from accepting those credit cards even with the hurdles
 2   I've addressed, shouldn't the Commission encourage that
 3   type of transaction?  Some merchants today, 80 to
 4   90 percent of their revenues come in the form of credit
 5   card.  I am aware that some halls have explored and are
 6   ready to put in credit cards but have been concerned
 7   about some of these issues.
 8                  The next issue, and this is, again, in
 9   the form of just an observation, under Subparagraph D,
10   debit cards may only be accepted as payment for the
11   sale of the bingo product.  You could read that
12   logically to say you could not use a debit card to
13   purchase a dollar account item, and I know that's not
14   what y'all intended, and, so again, I think that's in
15   the comment -- the nature of a comment in the rule
16   making process.  I would file that comment; the staff
17   would respond; the Commissioners would respond.  That's
18   not our intent.  I'm just raising the issue.
19                  In Subparagraph E, the credit card key
20   function must be disabled before the PIN may be used
21   for a debit card transaction.  In some merchants, and
22   Suzanne has eluded to this, the ATM is actually a part
23   of the cashiering system, and, so again, if I wanted to
24   use a credit card to purchase a dollar item, maybe a
25   food service item, and I'm using it at the cashier, the
0021
 1   fact that they have to disable that is a huge problem
 2   for the hall, and I don't think that's what y'all
 3   intended to do with that.
 4                  MR. ATKINS:  Let me make sure I
 5   understand, Steve.  I thought I heard you say that that
 6   ATM is a part of the cashier station?
 7                  MR. FENOGLIO:  It can be, and it is in
 8   merchants today.  The ATM is connected as a part of the
 9   point of sale.  When I go to a Randall's and buy
10   groceries and I present my ATM card to pay and I say I
11   want an extra $20 and at Randall's I punch in my unique
12   number, and so -- and I'm not saying today, Billy, that
13   charities will be there with an ATM as a part of the
14   cashier, but if they -- if a sophisticated bingo hall
15   wants to mimic a Randall's transaction, then eventually
16   it will be a part of that point of sale, yes.
17                  MR. ATKINS:  Okay.  I guess I wasn't
18   aware that that was tied to an ATM.  I mean, I have the
19   same option when I use my Pulse card to get additional
20   cash back, but I've never viewed it as getting it from
21   an ATM; I viewed it as getting it from HEB.
22                  MR. FENOGLIO:  But the whole transaction
23   is going through the ATM.  You may have a big stand-up
24   ATM machine that we see in banks and, you know,
25   where -- and you'll see them in Randall's, too, they'll
0022
 1   stand up, but a part of that is also connected to the
 2   ATM in the back end, and, you know, I don't know if
 3   this rule would allow that to happen.  And, again, I'm
 4   not suggesting today or in the next six months that the
 5   charity will do that, but if it's a sophisticated
 6   hall -- and there are some halls, as you know, Billy,
 7   that you have under a different grandfather clause
 8   where they can have several halls within a common
 9   foundation basing, but not that many.  There weren't
10   even, you know, multiple locations within the same big
11   box, if you will.
12                  It's those type of locations where it
13   might be, you know, commercially reasonable to run that
14   ATM through the cashiering system in the point of sale.
15   You'll still have your accounting backup, but I
16   envision that that would happen, and perhaps fairly
17   rapidly, and I'd like for the rule to be flexible
18   enough that that could occur.  And, again, I think
19   that's in the comment of Phil's earlier comment, let's
20   talk to some merchants and figure out the best way to
21   do this, and that's all I'm trying to get to is that,
22   when you and I envision this happening in six months
23   from now when the big ATM's come in, let's think a
24   little bit further down the road and think, well, they
25   may be like a Randall's, if you will.
0023
 1                  My final comment is just -- and it's a
 2   comment I make all the time -- you've got a four-year
 3   recordkeeping requirement, and I just want to observe
 4   that every time there's a recordkeeping requirement,
 5   there's a cost associated with maintaining those
 6   records.  I understand why the Commission wants the
 7   four-year uniform rule on every recordkeeping
 8   requirement, but I just observe that every time.
 9                  As the legislature -- when the
10   legislature passes a statutory provision that directs
11   this agency to do certain things, there's a cost
12   involved and y'all do a regulatory note and sometimes
13   the regulatory note is very minimal and other times in
14   the case of when we want to combine an opinion, which
15   was passed in House Bill 2519, that was a fairly -- it
16   cost a lawyer, as I recall.  There was a lawyer or two
17   as a part of that cost.  I think it was $50,000 to
18   $80,000.  My only point on this is, there is a
19   regulatory cost involved with this.
20                  Other than that, I'd be happy to answer
21   any questions.  And I will be willing to work with the
22   staff.  If the BAC desires to report this on, there
23   will be, I believe, time to sit down with the staff.
24   Assuming the BAC voted today to report it, you'd be
25   looking at March before -- I think the next Commission
0024
 1   meeting is March 5, so I guess you're in late March or
 2   April time frame.
 3                  Okay.  I'll be happy to answer any
 4   questions, and thank you, Madam Chair.
 5                  CHAIR BRACKETT:  Does anyone have any
 6   questions?  Are you ready for the question?
 7                  The staff requests that the Bingo
 8   Advisory Committee recommend to the Texas Lottery
 9   Commission the proposed new Rule 16 TAC 402 debit cards
10   be published in the Texas Register for public comment.
11                  Are you ready to vote on this?  All
12   those in favor please say aye.
13                  Is anyone opposed?
14                  Item No. 5 is:  Consideration of and
15   possible discussion and/or action on a new rule
16   relating to unit accounting.
17                  MR. OLDHAM:  Madame's Chair, again, my
18   name is Kevin Oldham.  I'm assistant general counsel
19   for the Lottery Commission.  You have in your notebooks
20   a draft of the Unit Accounting Rule.  The last time
21   that you saw this rule, it was in several talking
22   points.  It didn't take long to form that as rules
23   normally do.  At the December 4th meeting, those
24   talking points were presented and there was a dialog
25   between members of the BAC and members of the industry
0025
 1   and staff and several points were raised.
 2   Specifically, it was noted that the rules should allow
 3   a conductor/lessor, which is also a member of a unit,
 4   to separate rental income from the gross receipts from
 5   the unit.  In addition, it was stated that the rule
 6   should reflect the intended House Bill 2519 by reducing
 7   the reporting requirements of licensees which make up a
 8   unit.  In addition, there was an issue on how unit
 9   accounting might affect the taxes and the status of
10   certain charities and on how they pulled their
11   resources and actually acted as a unit.  The working
12   group, including members of the BAC, met in January to
13   discuss some of these issues, and those are
14   encapsulated in the draft before you today.
15                  We'd be happy to answer any questions
16   you have, if you want to take public comment on this.
17                  MR. SANDERSON:  I would also like to
18   note that Danny Moore and Larry Whittington were the
19   two BAC members that served on the subcommittee
20   meetings and I believe Steve Bresnen and Steve Fenoglio
21   were the other two public members.
22                  CHAIR BRACKETT:  Are there any questions
23   from the committee?
24                  MR. DOUGHERTY:  Madame Chairman, I was
25   not present at the last two meetings, for which I
0026
 1   apologize, but I'm not quite sure what flash boards and
 2   blowers are.  Could you have someone just explain what
 3   blowers are?
 4                  CHAIR BRACKETT:  You play bingo; the
 5   blowers are what makes the ball come up.
 6                  MR. DOUGHERTY:  Oh.  Thank you.  And the
 7   flash boards involve the bingo game?
 8                  CHAIR BRACKETT:  Exactly.
 9                  MR. PAVLOVSKY:  I'm glad you asked that
10   because I didn't know either.
11                  CHAIR BRACKETT:  Does that cover that
12   issue?
13                  MR. DOUGHERTY:  Yes.
14                  MR. MOORE:  I just want to make a
15   comment on this.  I think that we've hashed this thing
16   pretty good.  The only thing that seems to be coming up
17   again is under G No. 1, that all distributions of net
18   proceeds of the unit shall be paid from the unit's
19   bingo account, the unit member's bank accounts.  It
20   seems like that's a little redundant, but I understand
21   there may be a purpose otherwise, but the -- as it's
22   stated here in House Bill -- well, it was stated during
23   the last meeting about House Bill 2519, we were trying
24   to reduce the requirements of licensees and the number
25   of accounts that they -- the issue with regard to
0027
 1   reporting requirements of licensees and the number of
 2   accounts that charitable bingo operations division is
 3   responsible for auditing.  It actually seems like we've
 4   created another account.
 5                  That's my comment on that.  I know some
 6   people have brought that up to me just recently.  I
 7   still feel like we need to move on with this rule at
 8   this point, and I'd like to get comments also from the
 9   group.
10                  MR. WHITTINGTON:  I have a comment on
11   this particular issue.  I think within the bingo halls
12   that I represent, when it comes to unit accounting,
13   we'll be out dealing with the IRS issues and this and
14   that, if everybody has the same bank account that they
15   got now, I think it would make it a lot more easier for
16   every organization doing their taxes just like they've
17   been doing them for years as well as one particular
18   conductor that's the head of that unit disbursing the
19   net proceeds to each one of these charities that's on
20   that unit.  It would make it a lot more easier.  We
21   wouldn't have to deal with IRS problems because they
22   could do their taxes the same way because they're
23   getting the same setup that they -- basically what they
24   got now because it's just under their unit form now and
25   it goes into the Texas Lottery Commission the same way
0028
 1   as the bingo, but on their unit separate.
 2                  MS. TAYLOR:  I have one question about
 3   it also.  If the funds go into the bingo bank account
 4   instead of a general account then that means the
 5   Lottery Commission, if they went to audit the charity,
 6   would only be auditing that bingo account since all
 7   disbursements would be coming out of there.  Does that
 8   mean they wouldn't be looking at the general account of
 9   the organization, instead they would just look at that
10   one bingo account?
11                  MR. SANDERSON:  If the proper and
12   adequate records are there for the distributions to
13   come out of the bingo account, for example, I guess, in
14   the rule for use of net proceeds that will be at the --
15   it's on the agenda for the Commission meeting next
16   week, one of the requirements is that the distributions
17   be made out of the bingo bank account and, if it is to
18   the general account, that they have sufficient
19   documentation at the time of that transaction to
20   justify what that expense was for or what it was going
21   for, and, so yes, that is the case that I feel like, in
22   general, that if the bingo account is operated and
23   records are maintained adequately out of that, then
24   that is correct, we would not really be auditing the
25   general account.
0029
 1                  MS. TAYLOR:  So, see, I mean, that -- to
 2   me, it really makes good sense.  If I was a charity, I
 3   would have a separate account set up so I didn't have
 4   to supply ledgers from my entire general account to
 5   you.  You would be limited to that one account and
 6   here's your receipts, and it really sounds easier to
 7   me.  I mean, I know what you're thinking over there,
 8   Steve, but it seems easier to me to go ahead and make
 9   all of disbursements from that one little account
10   because that's all you're going to be using it for, to
11   disburse those funds in an approved manner, so I always
12   said I would never put it in my general account because
13   I wouldn't want to hassle with an auditor with my
14   entire general account and all my records.
15                  MR. SANDERSON:  And on another note with
16   that, additionally, because of 2519, revising the
17   definition of charitable purposes, that now includes,
18   you know, other activities that are consistent with
19   their exemption, that the organizations now are
20   involved, and if you have -- like I said at the last
21   BAC meeting, if you have organizations in a unit that
22   are of multiple 501C type designations, the money
23   coming out of that one unit bank account may not
24   necessarily qualify as a distribution for all
25   organizations as a part of the unit, and then,
0030
 1   secondly, by the unit members keeping their bingo bank
 2   account, it still gives them the signature authority
 3   over the funds that come out of that for charitable
 4   purposes, and that way, if there's any audit and there
 5   is a distribution that's disallowed, then the use of
 6   proceeds for charitable is disallowed and not
 7   necessarily a bingo expense out of the unit account,
 8   then you know who's responsible for putting the money
 9   back in the accounts.
10                  MS. TAYLOR:  Well, you know, yeah, I
11   like this a lot better.  The problem I had with the
12   last rule was when all the funds had to come from the
13   unit's accounting except for this certain exemplar
14   invitation.  I thought that would be a real problem,
15   but this sounds just like -- to me, it would make it
16   really easy, so I really like this one a lot better.
17   And I like that I went from like nine pages to a page
18   and a half.
19                  CHAIR BRACKETT:  Okay.  We have some
20   people that would like to ask some questions or make
21   comments.  Sharon Ives.
22                  MS. IVES:  Madame Chair, I want to pass
23   at this time.  Steve Fenoglio will be giving my report.
24                  CHAIR BRACKETT:  Stephen, are you ready?
25                  MR. FENOGLIO:  For the record, my name
0031
 1   is Stephen Fenoglio.  I was up here earlier.  First,
 2   thank you, Billy and Phil and Kevin and others for
 3   working with the industry on this.  We have come a long
 4   way and we still have aways to go, and I agree with
 5   you, Suzanne and Larry, that going from nine pages or
 6   more down to a page and a half is a vast improvement.
 7   The only comment that my clients have is the kind of
 8   comment that Danny eluded to earlier, and that has to
 9   do with the provision under mandatory, the charities
10   must maintain their bingo bank account, and I would
11   suggest the solution to that is made in two places in
12   subparagraph one, all distributions of the net proceeds
13   of the unit may be paid from the unit's bingo account
14   to the unit member organization's bank account.  Each
15   unit member organization may then make its charitable
16   use of net proceeds from its bingo bank account.
17                  And here's why:  Not every charity is
18   the same; we all know that.  This rule is a one size
19   fits all, and if that's the case, then everyone here
20   would be dressed like I am.  I think I'm one of the
21   bigger members, so everyone would have to wear a 44
22   coat, and for Billy, I think it would be maybe a little
23   tight for him and certainly shorter for him because
24   he's taller, and it would engulf Patricia and Mario.
25   And here's the real issue, if you think about a small
0032
 1   charity who this rule would comport with because they
 2   get a limited amount of bingo funds, perhaps, and they
 3   write five checks for their distribution and there
 4   would be no real need for them to have a general fund
 5   account, so this rule would fit them.  Change the
 6   scenario, though, to some of the charities that receive
 7   bingo on I-35 at Braker Lane that Jack conducts, Family
 8   Elder Care is a $3.5 million a year revenue charity,
 9   and Virginia's charity in Lubbock is a sizable charity
10   as well, if you have to make the funds from the unit to
11   the bingo bank account, I know Family Elder Care
12   doesn't write 58 checks per month for the use of those
13   bingo funds and they wouldn't do that, and that's what
14   that -- but that's what that rule would require them
15   arguably to do.
16                  What happens is, if it's a $2,000 or
17   $6,000 monthly check, it comes from the current bingo
18   account and goes into their general fund, and again,
19   the general fund in any one month is going to have
20   $300,000 or more running through it.  Some of those
21   bingo proceeds are paid for the use for general
22   overhead; some of those funds may be used for staff
23   development; some of those funds may be used for
24   travel; and so, therefore, it doesn't make sense to
25   have it go from the unit bingo account to the charity
0033
 1   bingo account to the general fund, and I would suggest
 2   to you that you ought to give the charities the option.
 3   Because the reality is, and the Lottery Commission has
 4   audited the five charities at River City back in 2000,
 5   and the way all of those operate, they're larger
 6   charities, the staff had to look at their general fund
 7   accounts.  There's absolutely no way that that charity
 8   is going to write 58 check to cover the 58 different
 9   items that some of those bingo funds are covering.
10                  Let's talk about the cost.  And by the
11   way, some of the small charities may choose to take the
12   check from the bingo unit account and put it into their
13   general fund because they're always going to have a
14   general fund account.  The way the rule is drafted now,
15   they must, though, have that intermediate staff.  Most
16   of you, I'm sure, if you're involved with charities,
17   pay service charges for the maintenance of those
18   accounts, and the charities that I've seen, they run
19   between $10 and $30 a month.  If you'll assume for the
20   sake of argument that 200 of the halls moved to a unit
21   when all these issues are flushed out, you've typically
22   got five charities up to seven charities per year,
23   let's assume it's five charities, and they're each
24   paying $12 a month in service charge, that's $120,000 a
25   year that they would have to maintain all of those
0034
 1   bingo accounts.  Those funds are not funds that can be
 2   used for charitable purposes.
 3                  And by the way, those funds that they
 4   have to pay to maintain that account, they cannot use
 5   bingo funds to pay for that expense.  That's $120,000 a
 6   year in the hypothetical.  It may be higher; it may be
 7   lower, but it's a substantial chunk of change, and I
 8   can foresee a number of charities wanting to eliminate
 9   their existing bingo account when they go into a unit.
10   I recognize from the staff's position that it may be
11   easier, and probably will in certain instances, to have
12   to have that bingo account, the charities unique bingo
13   account, to audit, but this kind of goes back to, if
14   you're going to have regulations, you're going to have
15   costs and not everything is easy or free in life.
16                  And, again, for the River City
17   Charities, the staff is always going to have to audit.
18   If they want to know what those bingo proceeds were
19   used for, they're going to have to look at that general
20   fund account; there's just no two ways about it.  And I
21   would suggest to you that a lot of charities, not just
22   the big charities, are going to be in that same boat
23   because they're going to put that general fund or that
24   bingo fund money from the unit account to the bingo
25   account to the general fund account, and they
0035
 1   understand they've got to prove up to the Lottery
 2   Commission that those funds were used for charitable
 3   purposes.
 4                  A long story short, we've come a long
 5   way thanks to the staff in large part for that.  I
 6   would suggest make it voluntary or make it where they
 7   can either choose to maintain that general account or
 8   not, and let each charity make their own decision.
 9                  I'd be happy to answer any questions.
10                  MR. WHITTINGTON:  Steve, you were
11   talking about the cost of the bank account.  Don't they
12   pay for the bank account now?  It's the same cost.
13   Right?
14                  MR. FENOGLIO:  They do, yes.
15                  MR. WHITTINGTON:  It's going to be the
16   same cost in the future.  Right?
17                  MR. FENOGLIO:  If they choose to
18   maintain the account, but, Larry, if they choose not
19   to, then they've saved -- you know, if it's one
20   charity, they've saved $12 a month, that's $144 a year.
21   Now, $144 a year may not be a lot of money, but when
22   you take it statewide, it could add up to a significant
23   chunk of change.
24                  MR. WHITTINGTON:  Okay.  I understand
25   that.  And you said you wanted to add "may."
0036
 1                  MR. FENOGLIO:  Yes.
 2                  MR. WHITTINGTON:  Okay.  "May" would
 3   have to be defined, I'm sure, somewhere in some
 4   paragraph or something.  We need to define "may."
 5                  MR. FENOGLIO:  No.  I think you could
 6   look at just the Websters definition of "may," which is
 7   shall.
 8                  MR. WHITTINGTON:  I'm talking about in
 9   this rule because we're talking about two different
10   things now.  Charities "may" do something different.
11   Do you think that needs to be added what they may do or
12   what they can do.?
13                  MR. FENOGLIO:  No.  I think the word
14   right now is "shall."  You don't have to define what
15   "shall" means.  I think if you use the word, "may" be
16   paid from the unit's bingo account, then that's
17   satisfactory to say, it could be paid from the unit's
18   bingo account or not.
19                  MR. PAVLOVSKY:  "May" gives you on
20   option; "shall" does not.
21                  MR. WHITTINGTON:  I understand that.
22   I'm talking about "shall" is one; "may" is the option.
23                  MR. FENOGLIO:  Yes.
24                  MR. WHITTINGTON:  Okay.
25                  MR. FENOGLIO:  And then just one final
0037
 1   observation under H-2, and I think this is the case and
 2   I would file a comment to make sure in the rule making
 3   under the category of full disclosure, I think what
 4   this is trying to say is, if a charity coming into a
 5   unit who is in default, as long as that charity is in
 6   default, then the unit itself is in default.  I don't
 7   think, once the -- and that's what that's intended to
 8   address.  Because the unit, if it maintains its
 9   accounts and pays promptly, you're not suggesting
10   anything else by that.
11                  MR. SANDERSON:  I think the question
12   that I'm hearing is that -- or, the intent that we
13   looked at in this section here was, if you have five
14   organizations at a location and one of those
15   organizations was on the delinquent purchaser list
16   indicating that they were in default to a distributor
17   that once they formed that unit, that would cause the
18   unit to be on the delinquent purchaser list.  Once that
19   organization clears up their account and are no longer
20   delinquent, then the unit would come off the list, so
21   to speak.
22                  MR. FENOGLIO:  And likewise, then, if
23   the unit then became delinquent, then the unit would be
24   on the list.
25                  CHAIR BRACKETT:  Are there any questions
0038
 1   of Steve while he's close by?  If not, Charles
 2   Hutchins, do you have comments on this item?
 3                  MR. HUTCHINS:  Madame Chair, Steve
 4   Fenoglio covered them adequately.
 5                  CHAIR BRACKETT:  Okay.  Thank you.
 6                  MS. GREENFIELD:  May I make a comment?
 7                  CHAIR BRACKETT:  Yes.
 8                  MS. GREENFIELD:  I just want to make a
 9   comment that I like the way it reads with going into --
10   from the unit accounting into the bingo bank account.
11   I understand, Steve.  I like options; I like for the
12   charities to have options, so I think that having this
13   "shall" changed to "may" is good.  And most of the
14   charities that I work with they get their fees waived
15   at the bank just for being a 501C, so you might look
16   into that.
17                  MR. FENOGLIO:  Some banks will; some
18   banks won't.
19                  MS. GREENFIELD:  Thank you.  That's my
20   comment.
21                  MR. WHITTINGTON:  I'll second that
22   comment.
23                  CHAIR BRACKETT:  So what we're going to
24   be considering is approving is changing the word
25   "shall" to "May?"
0039
 1                  MR. MANIO:  In our last meeting, there
 2   was a question that was brought up relating to the IRS
 3   and how we portrayed the unit if it was formed.  Has
 4   there been any clarification on that or...
 5                  MR. SANDERSON:  As far as the formation
 6   of the unit, there has not really been any additional
 7   information from the IRS that we've attained.  What
 8   we've looked at in this unit accounting rule is trying
 9   to keep organizations -- you know, we didn't want to
10   put something in this rule that might jeopardize their
11   exempt status, and so we have done that through this
12   rule in itself.  That's not to say that, if you -- you
13   know, hopefully, if you follow everything that's in
14   here that you won't have some other area that might
15   cause you to be in trouble with the IRS, but we've
16   looked at it and we've talked to them.  Now, the
17   formation of the unit in and of itself is something
18   more that's going to be a little bit more different
19   when you're talking about attaining the DIN numbers,
20   payroll taxes, and, you know, those other areas, and
21   that is not addressed in this rule.
22                  MR. OLDHAM:  I would just point
23   everyone's attention to Subsection A of the rule, and
24   it basically sets out that the rule itself, you know,
25   has no applicability to any IRS regulation whatsoever,
0040
 1   so each organization, in whatever activity they
 2   undertook, would have to make sure on their own that
 3   they comply with IRS standards and regulations.
 4   Nothing in the rule can either be construed as a waiver
 5   or a grant under IRS tax regulations.
 6                  I think that goes to what you're talking
 7   about, Mario.  Am I correct?
 8                  MR. MANIO:  Yes, that's -- but the real
 9   question at the time was -- or, the stumbling block
10   right now, some charities are reluctant to go ino the
11   unit accounting because of the risk that the IRS might
12   come out with a different ruling on how the unit will
13   be treated.
14                  MR. OLDHAM:  I don't think that the
15   Commission could make a statement, you know, based on
16   the fact that if you do this, you're okay under IRS
17   regulations.  But I understand, at the last BAC
18   meeting, at least in the transcript, it was indicated
19   that some folks may be in the industry for seeking a
20   letter ruling from the IRS, and maybe that could be a
21   guideline that the licensees can go by.
22                  Steve, walked out, but I thought that he
23   was the one in the December 4th meeting who brought
24   that up.  I don't know if it was him that was seeking
25   the letter ruling.  It may have been someone else.  We
0041
 1   can go back and look at the transcript and find out who
 2   was seeking that.
 3                  CHAIR BRACKETT:  He can answer your
 4   question now, he's returned.
 5                  MR. FENOGLIO:  I'm sorry.  I stepped
 6   out.  I didn't hear the question.
 7                  MR. MANIO:  Steve, the question was
 8   dealing with the letter ruling that was discussed at
 9   the -- or, a request for a letter ruling that was
10   discussed at the last BAC meeting.
11                  MR. FENOGLIO:  Yes.  Well, any charity
12   can request one.  The filing fee with the IRS is about
13   $25,00.  Under our IRS law, in practice, whoever asks
14   for it, it's only binding and then official to that
15   organization, so it's -- and so, number one, if one
16   organization gets one it is not -- the IRS will not
17   view that as binding or as precedent for a different
18   group.
19                  The status is, we're still working on
20   it, for the request.  And there are, in my view, a
21   number of federal tax issues involved with unit
22   accounting including unemployment tax, worker's comp,
23   federal and state withholding issues, and depending
24   upon what the IRS says once the letter ruling is -- and
25   assuming that we ask all of the right questions and get
0042
 1   the right answers we want, then I think other charities
 2   would at least have a safe harbor amount, Mario, if the
 3   same set of facts that's laid out in this lengthy
 4   request, which will probably be 20 pages or more.
 5                  If those set of facts apply to the
 6   charities that -- the hall that you have an interest
 7   in, then I think you would have somewhat of a safe
 8   harbor, quote/unquote, to know that if you have the
 9   same set of facts and do the same sort of things that
10   the result would be, if the IRS comes looking, that
11   you're the charitable organizations that conduct at
12   your hall.  The problem, though, is under the
13   revenue -- the way the revenue ruling works is, if the
14   IRS later takes a different position, they'll only tell
15   the organizations that requested it and you might never
16   know that, in fact, they changed their position and
17   changed a crucial fact decision that affects how that
18   organization does its business.
19                  Now, if that were the case, then the IRS
20   would allow those charities that asked for the advisory
21   or a private letter ruling a reasonable time to change
22   their practice, but that's the other downside of this
23   is that, if you've done it, then it's only binding on
24   those organizations and it's a laborious process to get
25   all of the questions asked correctly.
0043
 1                  CHAIR BRACKETT:  And David Hinely, do
 2   you have a question?
 3                  MR. HINLEY:  David Hinely, Jetta
 4   Services, and I represent 33 different charities.
 5   We're very involved and interested in this unit
 6   accounting, and I don't want to overlap what Steve may
 7   have already covered, and I apologize for being late.
 8   I had to get my grandkids to school this morning.  Just
 9   so I don't -- he may have already got this one
10   answered, so I will move on to the next one if he has.
11   I did not understand the thinking and the reasoning of
12   why the charities in a unit would be required to have a
13   separate -- and maintain -- continuously maintain their
14   current bingo bank account.  Has that already been
15   answered?
16                  CHAIR BRACKETT:  Yes.
17                  MR. HINLEY:  Okay.  I'll ask
18   Mr. Fenoglio.
19                  Concerning the private letter ruling,
20   one would be wise to go that route if they wanted to
21   get into this.  We've been trying to answer --
22   establish all the questions for private letter ruling,
23   and we -- as Mr. Fenoglio said, it's a very lengthy
24   process and a very lengthy document.  We thought we had
25   it ready to submit and then discovered something else
0044
 1   came up, and so we're still not ready to submit that.
 2                  I guess, really, the main thing I was
 3   interested in is the bingo bank account.  I just
 4   absolutely do not understand why they would be required
 5   to maintain a bingo bank account, so I'll get that
 6   answer.  And we'll be glad to share with you any
 7   information we get on this private letter ruling, but
 8   as Steve has pointed out, that will only apply to the
 9   unit requesting that ruling, and it is a very expensive
10   process.
11                  CHAIR BRACKETT:  Let me ask you a
12   question.  You're saying that you have asked for a
13   private ruling?
14                  MR. HINLEY:  No, we have not.  We've
15   been in contact with the IRS.  We have been putting it
16   together and we've tried to think of all the things
17   that we needed to cover to be sure that we're -- when
18   we've got it done, we'll be perfect, and we're very
19   optimistic as to how we've styled this that we will get
20   a favorable ruling.  We think we can submit it today
21   and get a favorable ruling, but we're not sure we've
22   asked all of the questions yet, so we're just trying to
23   be sure that we've asked all of those questions.
24                  We've even changed the type of 501C
25   charity that we're using as our trustee to be able to
0045
 1   answer a different kind of a question, which has to do
 2   with the unit tax, so we want to be sure that we're
 3   getting an answer for that, also.  What were trying to
 4   do is style one that will apply to several of our bingo
 5   halls that we would be able to rely upon that for
 6   different circumstances, so we're trying to see what
 7   all the circumstances might be and get all of them
 8   covered in this one letter since it's such an expensive
 9   process.
10                  CHAIR BRACKETT:  And you will share that
11   information?
12                  MR. HINLEY:  Yes, when it's available.
13   You know, we've looked -- you know, you can go on the
14   Internet and you can search for all of those records
15   for the history and there is nothing like this ever
16   been done.  We found one thing that's similar, but it
17   doesn't even approach.  Out of all the records of
18   private letter rulings, there's nothing that's been
19   submitted like this.  We're breaking new ground.  That
20   happens all the time.
21                  Any questions?
22                  CHAIR BRACKETT:  Anyone have been any
23   questions of David?
24                  MR. HINLEY:  It's a complex process and
25   one needs to enter into it with their eyes open and be
0046
 1   very careful to be sure that you're covered all the
 2   bases before you get into it.  It's not that easy to
 3   get into it, but the benefits, I think, outweigh the
 4   getting started.
 5                  CHAIR BRACKETT:  Thank you.  I think
 6   we've heard from everyone who said they wanted to speak
 7   and had questions.  Are you ready for the question on
 8   this issue?
 9                  The staff requests that the Bingo
10   Advisory Committee recommend to the Texas Lottery
11   Commission that a proposed new rule 16402 unit
12   accounting be published in the Texas Registry for
13   public comment.
14                  MR. WHITTINGTON:  And change the word
15   should in that.
16                  MR. SANDERSON:  You can go ahead and
17   take the vote, but one of the things that I will say is
18   that the staff has, you know, we've looked at it and,
19   you know, there's another -- still a requirement in the
20   act that an organization maintain a bingo account.
21   And, like I said, we'll be glad to look at it and see
22   if there's any way to make that change from "shall" to
23   "may."  It may be that we keep "shall" in there, and if
24   you vote here to move forward with it, that we present
25   to the commission that, you know, there's that one
0047
 1   discrepancy that, you know, the staff has and the BAC
 2   wanted to change it to "may," and then we can address
 3   anything through public comment after that point.
 4                  CHAIR BRACKETT:  Is that all right?
 5                  MR. MOORE:  That's all right.
 6                  CHAIR BRACKETT:  Any other questions?
 7   Is there a second comment?  All in favor, please say
 8   aye.  Anyone opposed?  Thank you.
 9                  Let's take a very short break so that
10   our court reporter can have a break.  Let come back in
11   ten minutes, which would be 11:15.
12                  (A short break was taken.)
13                  CHAIR BRACKETT:  All right.  We'll call
14   back to order now.
15                  We are on Item No. 6 on the agenda,
16   which is:  Report and possible discussion on status of
17   rule making projects.
18                  And I'm going to ask for the assistance
19   of Billy Atkins on this item.
20                  MR. ATKINS:  Madame Chair, in terms of
21   the rules that, I guess, are currently pending, there
22   are the two rules that you've already taken action on
23   today, the unit accounting and the debit cards, which
24   will now move forward to the commission.  There are two
25   rules scheduled for the commission meeting on March
0048
 1   5th, which is previously considered, and that is the
 2   use of proceeds and the unit manager rule.
 3   Additionally, there are, I believe, two other rules
 4   that the BAC has already taken action on relating to
 5   temporary licenses and the notification of change to a
 6   license, those are still in legal being drafted and
 7   will be presented at a future commission meeting, if
 8   not the March meeting.  And that is essentially what
 9   the staff is aware of that would be involved in
10   relating to the implementation of House Bill 2519.
11                  There are three existing rules that we
12   believe require minor amendments in order to come into
13   compliance or to make them consistent with House Bill
14   2519.  For example, House Bill 402580 relating to bingo
15   reports, that needs to be amended to reference the due
16   date of the 25th versus the 15th, so there are
17   amendments like that.  That's currently what's pending
18                  CHAIR BRACKETT:  Do you have any
19   questions today on these items of what's pending or
20   anything that's pending?
21                  Then we'll move on to Item No. 7, which
22   is:  Report and possible discussion on calendar year
23   2003 4th quarter and/or calendar year 2003 bingo
24   financial information and statistics.
25                  And Terry Shankle will be working with
0049
 1   us on this.
 2                  MR. ATKINS:  And, members, Terri is
 3   available to answer any specific questions you have
 4   about any of the spreadsheets that you may have in your
 5   notebook.  As you can tell, 2003 was a very different
 6   year from years in the past, in that, we saw the first
 7   increase in total gross receipts in charitable bingo
 8   since I believe 1995 with the exception of a slight
 9   increase that occurred in the '97, '98 period, but
10   overall total gross receipts are up almost three
11   percent, of course, the biggest increase in gross
12   receipts are a result of pull tabs, which increased
13   almost $40 million in 2003 over 2002, and pull tab
14   sales at nearly $129 million are the highest that
15   they've been since 1995, and, of course, we attribute
16   that increase to the changes made in the pull tab rule
17   in the late 19 -- in late 2002 that allowed for a
18   greater variety in the pull tab tickets allowed.  There
19   was an increase in the total amount of prizes awarded
20   in 2003.  Again, we think that is driven by the pull
21   tab sales.  That increased was almost $17 million.
22   Charitable distributions decreased approximately
23   $2.1 million.  Expenses increased around $750,000,
24   while total attendance also decreased by almost $1
25   million.
0050
 1                  As I said, if you have any specific
 2   questions, Terry will be happy to try and answer those
 3   for you.
 4                  MR. PAVLOVSKY:   Terry, if I could, on
 5   the very top of the page under sales, regular,
 6   electronic, instant.  Is instant pull tabs?
 7                  MS. SHANKLE:  Yes, sir, it is.
 8                  CHAIR BRACKETT:  No other questions?
 9                  MR. WHITTINGTON:  We've got to get the
10   attendance up to really get the main thing up, which is
11   the proceeds that are going into the charities, and
12   that's -- the only way that is going to come through is
13   different forms of advertising, and that's one of the
14   focuses we have to definitely focus on next year and
15   this year.
16                  MS. TAYLOR:  Do you have any thoughts as
17   to why we have a decrease in the gross and a decrease
18   in the distribution?
19                  MR. SANDERSON:  I can answer that.  Bill
20   Sanderson, charitable bingo assistant director.  The
21   primary reason is because whenever -- one, the pull tab
22   sales did increase, but also prizes increased, which
23   leaves you with a lower net than previous.  The pull
24   tabs, the event tickets that have been authorized that
25   are being used, the payouts on those are for a lot
0051
 1   higher percentage than the previous versions of pull
 2   tabs.  When they had just the regular pull tabs, the
 3   payout percentage was around 68 to 72 percent, and most
 4   of these event tickets are paying out around
 5   80 percent, so it's going to cost less money.  Even
 6   those sales are going up, the prizes are going up at a
 7   little bit faster rate, so you got less the net.
 8                  CHAIR BRACKETT:  Any other comments or
 9   questions?  Okay.  Thank you.
10                  That brings us to Item No. 8 on the
11   agenda, which is:  Report and possible discussion on
12   the survey of bingo players.
13                  I would just like to make a comment
14   first and to thank Jack for getting this ball rolling
15   and the work that you did on it.  And I want to
16   comment, too, that when I got the results, I was so
17   shocked to find out I am a typical bingo player.  I'm a
18   64-year-old white female.
19                  MR. DOUGHERTY:  You look very different
20   and we love you for it.
21                  Do you want me to sort of start this
22   ball rolling for you?
23                  CHAIR BRACKETT:  Yes, sir.
24                  MR. DOUGHERTY:  Well, I want to say that
25   I certainly appreciate the staff's work on processing
0052
 1   over 3,000 survey reports.  They were all different
 2   and, yet, they provided a great insight of the
 3   demographics of the bingo players.  Previously, we
 4   didn't have anything like that, and so the board has
 5   done a great job, and the results are really surprising
 6   and, yet, may be understandable at the same time.  We
 7   all know that a lot of women play bingo.
 8                  Now, my effort is to go to the next
 9   level, and that is to do something to get all these
10   married 65-year-old beautiful women into the bingo
11   halls.  Now, there's a lot of them out there that don't
12   play bingo and they're not the only ones.  The younger
13   people are playing more bingo.  The times are such that
14   people want some diversification, so we've got to get
15   them in there, and there's two ways we can do that.
16                  The first way is to advertise.  That's a
17   bad word, I know, because advertising is expensive, and
18   I don't think the bingo parlors and I don't think the
19   Lottery Commission has done a whole lot towards putting
20   a lot of money into advertising, but I think, as a
21   start, we could encourage billboard advertising as a
22   very reasonable cost effective way to advertise.  We
23   can get a few strategic in-place billboards out there
24   that would get the word bingo to people's attention.
25   Media, newspaper, all those other type of
0053
 1   communications are very expensive, and how affective
 2   they are, I don't know.  Television may be very
 3   affective, but very expensive.
 4                  The second point of promotion is going
 5   to be money, and the prizes that we're offering people
 6   in the State of Texas are very small; they're limited
 7   by the legislation.  So that's something we as a
 8   committee and Pete and I, who is on my committee, want
 9   to work and to work up another survey to find out just
10   what it's going the take to get people to admit that
11   they will come and play bingo if we can get the prizes
12   high enough.
13                  Now, that's my goal.  Now, whether we
14   can do that by the next legislature, I don't know, but
15   I do think that we need to prepare another survey and
16   get down to this particular nitty-gritty question, what
17   will you do to -- what will get you to the bingo halls,
18   knowing that there's $20,000 $30,000, $40,000 prizes
19   out there, and a little advertisement to go with it.
20                  So that, in summary, is where I'm coming
21   from.  Pete and I are willing to hear anything that we
22   can to work on this survey.
23                  MS. MORRIS:  I have a comment here.  My
24   name is Diane Morris.  I'm the assistant general
25   counsel.  You know, I really didn't want to interrupt
0054
 1   you too much, but your survey is not about advertising
 2   or promotion, and I would really remind you all before
 3   you invite more discussion.  It may be that a future
 4   agenda item is about additional surveys, and then you
 5   can really talk about if you want to do surveys on
 6   advertising or promotions.  That's not what this survey
 7   was about, and with all respect, I sat very quietly.  I
 8   was hopping you would come back more and more to this
 9   very agenda item, but, sir, I'm going to have to cut
10   off the rest of your -- from basically trying to engage
11   with you on how better advertising could occur or
12   better promotions could occur, because that was not
13   this survey.
14                  MR. DOUGHERTY:  I realize that.
15                  MS. MORRIS:  The survey was, who is
16   playing bingo.  Regardless of who else you would like
17   to be playing, this was only, as I understood it, and
18   you weigh in, but this was only about who was playing
19   bingo, so I'm cutting you off.  I'm sorry.
20                  MR. DOUGHERTY:  Well, you have no
21   objection to a second survey, though?
22                  MS. MORRIS:  I think that would be an
23   additional agenda item.  This agenda was about this
24   survey.  Put it on your agenda item.  Somebody may have
25   other additional ideas that this survey itself brings
0055
 1   other concepts to mind, but, certainly, this agenda
 2   item is not about proposing and forming new surveys and
 3   going out and asking for new surveys to be done, so,
 4   yes, sir, I do have an objection to that continuation
 5   of the discussion.
 6                  There's room for you to ask the Chair to
 7   have an additional agenda item put on that agenda, we
 8   want to come ready for further ideas for different
 9   surveys.  And you may have nine other surveys even
10   suggested to you, and that would be on the agenda item.
11                  MR. DOUGHERTY:  I have no objection to
12   that.  I knew we weren't going to do it today.  I
13   certainly wanted to get that ball rolling.
14                  MR. ATKINS:  I think, Diane, it would be
15   appropriate under Item No. 11.
16                  MS. MORRIS:  Yeah, you're right, the
17   additional items.  That is correct.  It is correct
18   under that as well.  What additional items would you
19   like on your agenda so that the notice can be given so
20   other people can come forward on the survey ideas.
21                  MS. TAYLOR:  I do have one question
22   about the survey.  Did you do a percentage of how many
23   surveys you received back and how many were completed?
24   I just feel like the number, I mean personally looking
25   at these, that it's skewed from my hall because I think
0056
 1   there's a lot more Hispanics playing bingo in my hall,
 2   and so when I see this, I think how many -- I would
 3   like to know how many people -- I think -- I don't even
 4   know how to say this.  I just think that there's a lot
 5   of Hispanic older women that didn't complete the form,
 6   whether they couldn't read the form or didn't want to
 7   take the time to do the form or that it just wasn't
 8   something that they wanted to do.
 9                  MS. JAMBOR:  And that could be correct.
10   My name is Liz Jambor.  I'm the marketing research
11   manager for the Texas lottery.  And that could be
12   correct, and that's one of the things that I've made
13   note on this presentation and on the variations of the
14   studies that have been published, is that this is based
15   on self-report data, so everything -- it's -- we're
16   not -- we're not trying to prove that the sun rises in
17   the east and sets in the west.  It's more directional,
18   and, so yes, for your halls, it may be slightly
19   different, but on a statewide basis, it looks like what
20   we're presenting here.
21                  What I hope that people in the bingo
22   area take away from this are some of the findings that
23   are not the average player or are not what the average
24   person is doing.  Because when we get to the end of the
25   presentation, there are a couple of points that, in my
0057
 1   opinion, I think are very important as far as the
 2   number of days people play and the amount of money
 3   they're spending and the reasons that they're playing.
 4   Billy was very eloquent in saying, no, you're kidding
 5   me, when I said this is the average player, but I think
 6   it's the non-average player that's going to bring the
 7   money into bingo.  You've got your market set for your
 8   average.  It's now going after that non-average player,
 9   and I'm hoping that this presentation and this study
10   talks about those people.
11                  Now, prior to doing any future studies,
12   we have to go back to this one and figure out what
13   worked and what didn't, so that the next round, should
14   there be a next round, accounts for any problems in
15   data collection.
16                  MR. ATKINS:  And this is just a very
17   broad overview of the entire survey that Liz has put
18   together.  The entire survey is available on the web
19   site and includes a lot more detailed information that
20   organizations can use if they want to try and attract
21   that, I think as called it, that nontraditional player.
22                  CHAIR BRACKETT:  You can print it down
23   if you have enough paper.  And the color is beautiful.
24                  MS. JAMBOR:  I'd also like to say, and I
25   think it's an attribute to -- or, a compliment to the
0058
 1   bingo areas, that information from the study has also
 2   been presented in the Bingo Bulletin, the Bingo and
 3   Lottery sites, so it's nice that this information is
 4   getting out.  We also are in discussion with Bingo
 5   Manager to get this study published there, so it will
 6   get beyond this room and anybody who happens to go to
 7   the web site.
 8                  Okay.  Today we're going to present the
 9   Texas charitable bingo player's survey, demographics,
10   and participation for 2003.  The survey was developed,
11   as we have shared, in cooperation with Charitable
12   Bingo, Lottery Marketing Research, and the Bingo
13   Advisory Committee.  The questions focussed on
14   demographics and reasons for playing bingo.  Since
15   nothing of this nature has been done before, it was the
16   starting point, as we've discussed in the past.  We had
17   over 13,000 surveys distributed throughout Texas
18   between May and June of 2003 with over 3100 being
19   returned with useful data, and from a statistical
20   standpoint, this is a significant return.
21                  The return surveys represented the
22   classes and regions on a weighted basis for equitable
23   comparisons across the state.  We have five regions
24   within the state.  There are ten licensed classes that
25   we reduced down to three.  Ten licensed classes that we
0059
 1   reduced down to three for easier data manipulation, but
 2   those classes were still identified by gross receipts,
 3   and the reason that we did that is knowing that some
 4   regions have heavier play, some classes have heavier
 5   play, so we wanted to make sure that we accounted for
 6   those differences.
 7                  And as I said before, the data is based
 8   on self-report data provided by the bingo players
 9   willing to complete the survey, and so this information
10   is for directional use only, but it does provide a
11   benchmark of the first study completed on Texas
12   Charitable players.
13                  Now, as Virginia eloquently put, the
14   average player is female, Caucasian, married, over 65
15   years of age, has a minimum of a high school education,
16   is employed, and has an annual income of $10,000 to
17   $25,000 a year.
18                  CHAIR BRACKETT:  There's only one thing
19   on there I'm not, and that's married.
20                  MS. JAMBOR:  Now, I do want you to keep
21   this player in mind as we get towards the end of the
22   presentation when we talk about the non-average player.
23                  Who is playing bingo?  All of the
24   classes and regions were similar in description for the
25   average player, with the exception of region four,
0060
 1   which is San Antonio.  This region had a greater
 2   Hispanic representation in the data provided than the
 3   other regions.
 4                  MR. ATKINS:  I was just going to say, so
 5   I think that addresses your question, Suzanne, that
 6   there were more reported Hispanic players in your area.
 7                  MS. JAMBOR:  When we compare what we
 8   know about Charitable Bingo Players now to state
 9   demographics, we see that Charitable Bingo players are
10   slightly older than the general state population, it
11   skewed more females than the general population,
12   marital status is similar.  There's also a greater
13   percentage of nonemployed individuals, and I usually
14   use the term nonemployed in deference to homemakers out
15   there.  I do understand that they are very employed,
16   but as far as from a demographic measurement.  But the
17   nice thing is that the two groups were similar as in
18   not currently employed.  There was a slightly lower
19   average income compared to the statewide median income.
20   The ethnic makeup is fairly similar to the statewide
21   composition.  There were slightly fewer percentages of
22   college graduates and beyond from the statewide
23   representation.
24                  So now we want to look at what are these
25   average players participating in.  The average player
0061
 1   favors paper followed by pull tabs as a preferred bingo
 2   product or activity.  And this graph here shows the
 3   different activities that occur at bingo halls from the
 4   most favored on the left down to the least favored on
 5   the right, and so we have paper, pull tabs, and
 6   hand-helds as the top group.  The average bingo player
 7   also typically plays on Fridays and Sundays.  Now,
 8   there is play seven days a week, but these are the days
 9   of the highest participation for the average player.
10   Now, you can see here, we have play for seven days a
11   week.  Our greatest percentage is one or two days per
12   week.  The average player spends an average of $101 per
13   week, and, again, breaking the amount spent per week
14   from less than $10 to $500 and over, you can see how
15   those different groups break out.
16                  Then we wanted to know why did people
17   play Charitable Bingo.  We asked -- we gave a list of
18   different reasons why someone might play bingo, and the
19   top five reasons in order are, for entertainment; for
20   the enjoyment of playing bingo; for the chance to win
21   something; to socialize with friends; and to support
22   worthy causes, so it's nice to see that, in the area of
23   charitable bingo, people do acknowledge supporting
24   worthy causes as a reason for playing.
25                  There were, though, between some groups
0062
 1   some differences in their top reasons to play bingo.
 2   Support worthy causes was not noted in the top five
 3   reasons by persons under 30 years of age; those that
 4   reported themselves as single or other as far as
 5   marital status; persons with annual incomes of less
 6   $10,000, $25 to $40,000, or over $60,000 a year; less
 7   than a high school education; playing bingo five to six
 8   days per week; or spending between $100 and $199 per
 9   week.  So these groups were ones that did note support
10   worthy causes as a reason to play bingo.
11                  Like what I can win, which was not in
12   the top five for the average player, but did end up in
13   the top five for these groups, players under 50 years
14   of age; those reporting single and other as marital
15   status; those that were self-employed, students, or not
16   currently employed; those with annual incomes of less
17   than $10,000, $25,000 to $40,000, and over $60,000;
18   those with less than a high school education or post
19   grad school education; those playing five to six days
20   per week; and those spending more than $100 per week.
21   So you've got two significant groups here, one that is
22   noting support worthy causes and one that is noting
23   like what I can win.
24                  The other differences noted in the top
25   reasons to play bingo, players 18 to 21 years of age
0063
 1   were the only group to note socialize with family as a
 2   top reason for playing bingo, and players participating
 3   in bingo seven days per week were the only group to
 4   note a distraction as a top reason for playing bingo.
 5   There were also differences within and among the
 6   specifical demographic groups.  For example, males were
 7   more likely to be single and average age varied among
 8   employment groups.  The most notable distinction
 9   existed within the participation and spending groups.
10   And this is the point that I think is the strongest
11   part of this bit of information we got from these
12   players, those players would higher participation
13   rates, those playing more days a week, not the average
14   two days, but for players playing the five, six, seven
15   days a week, reported higher levels of education.
16   Those players with a higher average weekly spending
17   reported higher amounts of education, and those players
18   with higher average weekly spending reported higher
19   levels of income, and so what you've got are groups of
20   players who have the money that are willing to spend
21   the money playing bingo.
22                  So, in conclusion, on our first
23   preliminary benchmark survey of charitable bingo
24   players, we see that players come with two mindsets,
25   but they might not necessarily be mutually exclusive.
0064
 1   We have players that report that they want to win
 2   something as well as support Texas charities while
 3   playing bingo.  Which group to attract and how best to
 4   do that will be the challenge of the bingo halls and
 5   can be questioned in future studies.  So knowing -- if
 6   you're looking at your specific hall and you know,
 7   looking out among the players, that you've got the
 8   average group, yet, you know that that non-average
 9   player exists in your area, what can you do to attract
10   them?  What is it that they're wanting?  Is it more
11   socialization or the understanding that bingo is a
12   place for socialization?  Is it the understanding of
13   what bingo does support?  Is it the understanding of
14   what they're able to win while playing bingo?
15                  And, again, knowing that we're not going
16   to discuss this topic, but from a research standpoint,
17   any time you answer a question, you always have more to
18   come about, and so in future discussions, we can look
19   at this as a benchmark study of who the typical player
20   is and why they play.  Future studies may answer the
21   questions about the atypical or the non-average player.
22   They may answer questions about other attractions about
23   bingo not included on this current study, and future
24   studies will allow us to learn more about the players
25   of charitable bingo in Texas.
0065
 1                  If you have any questions, I'll be happy
 2   to answer them.
 3                  CHAIR BRACKETT:  Does anyone have any
 4   questions?
 5                  MR. DOUGHERTY:  Madame Chairman, back on
 6   page six where it shows a pie chart of the number of
 7   days per week playing bingo, what's interesting, if you
 8   add up the high count, which was six or seven days a
 9   week which added 18 percent, it means that 72 percent
10   of our players play all week compared to one-day
11   players, and I think that's significant too.  One-day
12   players don't really add a whole lot to the whole pot,
13   but a lot of players play a week, seven days.  A lot of
14   halls don't offer seven days, so, really, six days is
15   very common, and I think that's significant.
16                  MS. TAYLOR:  One other thing I noticed
17   during the discussion was that the players that played
18   the most and spent the most money were the players that
19   wanted the bigger prizes.
20                  MR. DOUGHERTY:  Absolutely.  We need to
21   work on that.  And there level of education because up
22   there, it's not like it's just poor little people that
23   are trying to make money; it's people with some
24   education and have some money to go out and play for
25   several reasons, they like to win something and they
0066
 1   also like to socialize.
 2                  If I may continue, I have sort of an ace
 3   in the whole to present to this group, something that
 4   hasn't been discussed, and I think it's very
 5   significant.  I read somewhere -- and this is
 6   unofficial, I think it was in the Bingo Bulletin a year
 7   or so ago -- that bingo is a life-extending occupation.
 8   And the study found that people that played bingo
 9   rather regularly, at least four or five times a week,
10   lived 15 percent longer than these other ones did, and
11   there's many reasons for that.  The stimulation of mind
12   to do mathematical interpretations of bingo numbers,
13   you've got to be fast; it keeps your mind accurate.
14                  It also physically gets people out
15   there, usually the older people to get up and get out
16   and do something which they may not do otherwise.
17   There's a lot of motivation there to get out and do it.
18   And the socializing, of course, you know, you do a lot
19   of that, and that's all very healthful.  So I just
20   wanted to get the word out that you live longer if you
21   play bingo.  We need to let people know that this is
22   a -- and it makes sense.  If you retire or have nothing
23   to do and you're just going to lay around and don't do
24   anything interesting, you're going to vegetate and die.
25   I happen to know about six people.
0067
 1                  MR. PAVLOVSKY:  I know some attorneys
 2   that need to play bingo.
 3                  MR. DOUGHERTY:  I can just name six
 4   people that I have been associated with that are all
 5   elderly.  Holly, she's 93 -- or, 92, I believe, just as
 6   happy as she can be, and she totally credits her
 7   getting around and getting out every day and driving
 8   her car to coming to play bingo, and I have many
 9   others.  It's wonderful to see these people out there.
10   Now, the ones I know, happen to be women.  Well, I do
11   know one male.  He lives out in Lakeway and drives in
12   all that way every day to play bingo, and that's what
13   keeps him going.  These are just small examples, and so
14   all these things are important.  I could go on and on.
15   Money.  Can I take my only example inference?  This
16   isn't necessarily bingo, but, I spend more time in
17   casinos than I do playing bingo.  You know why?
18   Because big money, big pots out there.  When I go to
19   Louisiana, I go at least once a month, I earn about
20   three or four thousand points on their card system, and
21   to get a point, I have to spend $5, so --
22                  MS. MORRIS:  Hello.  Hello.  Excuse me.
23   Excuse me.  Sir, I'm going to --
24                  MR. DOUGHERTY:  -- for every point that
25   I earn, it's $5, so I am putting through that --
0068
 1                  MS. MORRIS:  I'm going to point you back
 2   to your survey and bring you back here to your survey
 3   and ask you to please continue, but come on back to
 4   your survey.  That is what this agenda item is about.
 5                  MR. DOUGHERTY:  Well, I have a tendency
 6   to sort of --
 7                  MS. MORRIS:  That's all right, I have a
 8   tendency to listen.  Please come back to the survey.
 9   It may be that you want to talk about other things.
10                  Chairman, these can be items for future
11   agendas, but -- I'm sorry to be interrupting.
12                  CHAIR BRACKETT:  Oh, that's fine.  It's
13   your job to keep us going in the right direction.
14                  MR. PAVLOVSKY:  Madame Chairman, I have
15   a question.  On the page -- on page seven, why do
16   people play Charitable Bingo, do you have a breakdown,
17   a percentage of that?  I mean, what's the percentage?
18                  MS. JAMBOR:  I do, but not with me.  Not
19   with me.  It should be -- it should be in the study on
20   the web site, and if it's not, Pete, you just get ahold
21   of me and I'll make sure I get you those numbers for
22   every single response.
23                  MR. PAVLOVSKY:  I will.  Okay.  I
24   appreciate that.  I was just wondering what percentage
25   of people play bingo so that they might live longer.
0069
 1                  MS. JAMBOR:  That response was not on
 2   the list, and I don't -- in the other, where they go to
 3   put in something, I don't recall anybody writing that
 4   in.
 5                  MR. PAVLOVSKY:  Okay.
 6                  CHAIR BRACKETT:  I want to make a
 7   comment.  I think this is a wonderful survey, and I do
 8   not like to read surveys, but your presentation was
 9   very, very good and, of course, it's a very primary
10   interest of mine, too, but this is very, very useful
11   information and I really appreciate Jack's work on it
12   and sticking with it and the assistance with the work
13   that we got from the bingo division.
14                  Where do you see us going from here
15   besides using it to get people in the halls and using
16   it for information in other ways?
17                  MS. JAMBOR:  Well, I think what -- I
18   think the groups that worked on this initially can come
19   back together and put down the questions that weren't
20   answered, the questions that they initially had that
21   possibly weren't answered by this or the questions that
22   now come about because of this information.  I can --
23   and as I said before, we need to look at the way this
24   instrument was distributed before any others are put
25   out there.  May be there's another way to do that.  Get
0070
 1   input from the BAC as far as what questions they may
 2   have after reading this and seeing -- having a little
 3   bit more understanding of the bingo players, what else
 4   do they want to know.
 5                  MR. ATKINS:  I think another benefit
 6   would be, from this survey, is if in the future there's
 7   a decision to conduct other demographic surveys every
 8   two years, whatever, then at that time we'll be able to
 9   see if there are changes to those demographics to those
10   players.
11                  CHAIR BRACKETT:  And would the second
12   survey, if there were one, would it go to the same
13   region or would it be in a different region?
14                  MS. JAMBOR:  Well, it would still be
15   distributed across the state and rated by region and
16   class unless we did a region-specific survey.  I don't
17   at this point know why that would happen, but, you
18   know, you can't exclude it, but we would still use the
19   same methodology as far as rating the distribution so
20   that we got a good representation across the state.
21                  CHAIR BRACKETT:  Does anyone else have
22   any other questions or comments?
23                  MR. PAVLOVSKY:  Great job.  Thank you.
24                  CHAIR BRACKETT:  Yeah, it's a wonderful
25   job.  And I think what we have right now, you can
0071
 1   certainly start using and promoting your bingo
 2   operation.  And I was not -- I found your presentation
 3   much more interesting than my reading would be.
 4                  MR. PAVLOVSKY:  Very much so.
 5                  CHAIR BRACKETT:  Color makes a
 6   difference.
 7                  Are there any questions from anyone
 8   attending that would like to comment on this?
 9                  MR. DOUGHERTY:  Let's here from the
10   public.  What do you think about this one and future
11   surveys?
12                  MR. FENOGLIO:  For the record, my name
13   is Stephen Fenoglio.  I think it's a very valuable tool
14   and I would like to see the BAC pursue this with the
15   commission staff, and thanks to the commission staff
16   for all of their help.
17                  CHAIR BRACKETT:  Thank you, Stephen.
18                  Do we want to make a recommendation at
19   this time, Jack, that we pursue this further?
20                  MR. DOUGHERTY:  I would certainly
21   recommend that -- this isn't an action item.
22                  CHAIR BRACKETT:  This is not an action
23   item.
24                  MR. DOUGHERTY:  Well, I sure appreciate
25   what Norma and Liz have done.  Thank you very much.
0072
 1                  MS. MORRIS:  You're going to be able to
 2   come back on a future agenda item for future agenda
 3   issues.  And if you don't, I will remind you, so I'm
 4   going to come back to you, too.
 5                  MR. DOUGHERTY:  Thank you.  I know you
 6   will.
 7                  MS. MOO:  But it's not this item, sir.
 8                  CHAIR BRACKETT:  Okay.  We're at Item
 9   No. 9:  Report and possible discussion on the
10   activities of alternative styles of bingo games,
11   including internet gaming subcommittee.
12                  Danny is making this report.
13                  MR. MOORE:  Thank you.  This group, I
14   just met yesterday for the first time, and I want to
15   apologize right there.  This is part of our plan, and
16   it's obvious it just needs to be ongoing with the BAC
17   at all times.  I think the meetings need to be more
18   frequent.  It's obvious that bringing in event tickets
19   and seal cards, by looking back at this quarterly
20   report, of 40 percent impacts is -- well, over the last
21   year and getting our numbers back to where they were in
22   '96, that's a huge increase and probably saved a few
23   bingo halls here in the state.
24                   We need to keep looking for new things
25   in this industry and there are games out there that are
0073
 1   being used in other states.  We discussed yesterday a
 2   little bit about different ideas and forms of bingo
 3   games, whether it be link bingo, progressive bingo.
 4   There's actually a movement here in the state right
 5   now, it's a coalition of different sectors of bingo,
 6   and we're looking into IBC's we call them; they're
 7   instant bingo card minders.  For people that don't know
 8   what that is, it would basically give you the ability
 9   to play pull tabs on your electronic card-minding
10   devices.  We haven't really done any studies on that
11   yet, and Billy's staff has offered to help us in any
12   way with information they've gathered, whether it's on
13   progressives or this topic.
14                  We note that there may be a session
15   coming up here in the spring and this group is going to
16   try to plod on with this, and if anybody needs any
17   information, I can help with that.  We just need to
18   keep looking for alternatives here, folks.  It's the
19   only way we're going to stay in this business, and I
20   encourage you all to contact this subcommittee on this
21   topic
22                  MR. ATKINS:  I think in our meeting
23   yesterday, we kind of tried to break down some of the
24   tasks associated with it.  I know that Danny is
25   planning on going to Bingo World next week or the
0074
 1   following week?
 2                  MR. MOORE:  The 9th through the 11th.
 3                  MR. ATKINS:  -- the 9th through the
 4   11thm and so he has volunteered to gather every piece
 5   of information that he can, literature, et cetera, on
 6   alternative styles of play.  If I remember correctly,
 7   if I don't, I know I'll be corrected, Jaime McNally and
 8   Shayne Woodard, also members of the subcommittee,
 9   discussed that they could begin work on legislative
10   histories of past legislation that's been introduced in
11   terms of the bingo games, multi-hall bingo games, E
12   tabs, et cetera, and the staff, on our part, has begun
13   to compile information that we've been gathering on
14   these different types of games from other
15   jurisdictions, so we set a -- our next meeting day was
16   March 22nd.  March 22nd is when we'll come back
17   together and start collating all that information and
18   start asking some questions, you know, particularly in
19   jurisdictions where these items have been introduced,
20   how they fared, what difficulties, if any, that they
21   have, we can hear what successes do they have that we
22   can copy.
23                  Something that I just thought of after
24   that committee met yesterday is, I do think one thing
25   that we should be looking at is how can we ensure to
0075
 1   the best of our ability that the introduction of
 2   these -- any type of these games, should they be
 3   introduced, have a positive effect on charitable
 4   distributions.  Because, you know, like the question
 5   was asked, how can we have this substantial increase in
 6   gross receipts but a reduction in charitable
 7   distributions?  I know the committee will want to, like
 8   I say, make sure, where possible, that any of these
 9   additional forms of games would have that positive
10   impact.
11                  CHAIR BRACKETT:  Charles Hutchins, do
12   you want to make comments on this?
13                  MR. HUTCHINS:  My name is Charles
14   Hutchins, Dallas, Texas.  Yes, ma'am, please.
15                  We are in need of alternatives to the
16   normal of what we call the bingo games today, and the
17   event tabs have done well.  They have really been a God
18   send for a lot of people, but we need -- we need more.
19   If, if, and I say if, because I don't believe anyone
20   knows what will happen or never does, but should the
21   racetracks become a thing, well, then bingo is going to
22   take an awful hit.  If they get video lottery terminals
23   in the racetracks, bingo is going to take a hit, and I
24   don't think we should object to that.  The state needs
25   the funds.  I don't think we have a lot of problems
0076
 1   with that, but at the same time, we're going to have to
 2   have something to follow along the line to keep the
 3   bingo player in the hall instead of them down at the
 4   racetrack.  As Danny eluded to, I think these instant
 5   bingo card minders, I think there's a lot of people in
 6   this state in the bingo industry that have got together
 7   and decided that is probably our best bet, and that is
 8   what we're working for.  We're trying to set up the
 9   mechanisms by which to push for that, but we are going
10   to have to have something.  If they get video lottery
11   in the racetracks and bingo doesn't have some kind of
12   machine or something to help the bingo, then bingo will
13   become a thing of the past.  It's really going to take
14   a hit.  In the impacts I've seen, it says 13 or 14 or
15   15 percent or something, you know, I would say it would
16   probably be -- anywhere close to a racetrack is
17   probably going to be more than that.  It's probably
18   going to be anywhere into the 30 percent, so we really
19   need to take a look at it.  The bingo industry needs to
20   get together, get together with you guys, get together
21   with the commission down here, and work out some
22   language or something that everyone can agree on so
23   that we can go to the legislature and try to get things
24   summed up and keep us in the game.  That's my comment.
25                  CHAIR BRACKETT:  Thank you.  Keep in
0077
 1   contact with Danny.  And, then if you can contact
 2   Charles.
 3                  Bill -- I don't know how to pronounce
 4   your last name.  He has left the building, and so
 5   Stephen, it's your turn.
 6                  MR. FENOGLIO:  Thank you, Madame Chair.
 7   For the record, my name is Stephen Fenoglio.  I am
 8   handing out in response to some analysis we've started
 9   doing, and with the help of Danny Moore and others in
10   the industry and with the help of the commission staff
11   in looking at some updated bingo numbers, from looking
12   at -- and, of course, the commission has on its web
13   site the 20th annual reports.  We've obtained from the
14   commission updated numbers.  I'm sure the calendar year
15   2003 will be massaged somewhat.
16                  As you know, the quarterly reports were
17   due the 25th of January for the last quarter of '03,
18   but in trying to step back and look at the broader
19   picture of where bingo was and where it is, everyone
20   knows the glory day was in 1991 at the peak of bingo
21   when revenues were about $671 million.  As of '03,
22   that's down 16 percent, to $565 million, and the first
23   set of charts that have, that's the first page on gross
24   receipts, attendance is, likewise, down from 37 million
25   to 21 million, a significant drop.  And then you look
0078
 1   at some of, well, how has Texas done in those
 2   intervening years, and the data on the third page is --
 3   since this data that showed the population in Texas
 4   went from 17.3 million to 21.7 million, or about 25
 5   percent increase in population.
 6                  And then the other number that people
 7   who crunch numbers look at is, well, what's the per
 8   capita income, the available moneys that people spend
 9   for whatever, and you see those numbers from the same
10   period went from $17,450 a year to $28,500, or a
11   64 percent increase per capita, and that somewhat
12   ducktails with some of the other data that the staff
13   has presented in the past.  This state has gotten
14   wealthier and bingo has not, and we know that, but
15   these are the hard numbers.
16                  We've also done a chart on attendance by
17   quarter and then pull tab sales by quarter, and you can
18   see that -- and I'm sorry, back up just a minute -- the
19   electronic sales by quarter.  There was a shot in the
20   arm in bingo based on what the legislature did in '95
21   and the commission implementing that rule in '96 where
22   card-minding sales went up and they went up
23   dramatically and they plateaued, but that was an
24   important new revenue source for some people.  The
25   costs were upside down, but with any new technology,
0079
 1   there are going to be additional costs and
 2   unanticipated costs.  And then the point of that is,
 3   when you get new technology -- which is what Danny was
 4   talking about earlier, I believe -- you know, build it
 5   and they will come, and the industry built card
 6   minders.  Game Tech was the first company out of the
 7   box to get to the market and the customers came and
 8   they're still there.
 9                  And then you see the attendance by
10   quarter and how it has followed down -- flowed down;
11   although, there is an up tick, a very narrow up tick,
12   but an up tick nonetheless, when you look at the fourth
13   quarter of '02 to '03, as a promise of hope.  And,
14   certainly, the third quarter of '03 versus the third
15   quarter of '02 has come up.  That, in large part, we
16   believe, is helped by the different pull tab sales
17   products that were authorized in July of '02 with a new
18   rule that Billy Atkins and the industry and the
19   commission worked together to bring, and then we now
20   have new pull tab sales product.  Some of you heard
21   David Hinely's stories, true stores I might add, of
22   what some of those charity halls have been able to do,
23   and you see the last number is the pull tab -- or, the
24   last chart is the pull tab sales by quarter, and those
25   are some dramatic increases.  Again, if you build it,
0080
 1   they will come.
 2                  The other chart is a disturbing event,
 3   and this is from Comptroller Strayhorn's numbers on a
 4   fiscal note to a bill that Representative Flores had
 5   introduced in the 2003 session that would have
 6   authorized video lottery terminals, and you can see at
 7   the bottom of page three of five that the comptroller
 8   had estimated that there would be a loss of revenue on
 9   bingo prize fees of 11.8 percent, which y'all know if
10   prize fees go down 11.8, the revenues are going to go
11   down 11.8 percent, and 11.8 percent equates to roughly
12   to $50 million to $60 million a year, which would be a,
13   to put the best spin on it, a chaotic situation if you
14   have that type of a fall off.  We believe video lottery
15   terminals were implemented for the state without a
16   bingo product being offered for charitable bingo, and
17   we believe that's the instant bingo card minder that
18   Danny and others have talked about.  It is an issue.
19                  By the way, this Bingo Advisory
20   Committee took a position in 2002 in the Sunset process
21   to support, we called it either IBC or E-ticket
22   machines or E-tab machines, whereby, if you have a pull
23   tab product, it's on a video screen or it's on a card
24   minder that's already in the halls today.  Obviously,
25   it would have to have new legislation to authorize that
0081
 1   and new rules to do that.  We believe there's some
 2   incredible benefits, one of which is, we think the
 3   trend would be reversed with bingo and it would be a
 4   shot in the arm for bingo.  We also think from the
 5   auditing side, and having spent quite a bit of time,
 6   and perhaps more time than Billy wanted me to, with his
 7   staff writing rules and implementing some things, one
 8   of the common things that has come through is, you
 9   know, in the digital world, have a seamless accounting
10   of the moneys.
11                  And the beauty of a card minder, as
12   Billy knows, and we just wrote a new rule, is that all
13   of the numbers, all of the revenues, are recorded
14   through the card minder and it's instantaneous
15   reporting.  They can actually look at it online if they
16   so choose from Austin, Texas to see if there's any
17   funny business going on.  It makes it a lot easier to
18   count the moneys and make sure that the moneys are
19   properly accounted and credited to the account.
20                  The same can be true with an IBC, where
21   it's an instantaneous recognition by Austin.  It could
22   be, and I would hope it would be, Billy, that, if we
23   got this far, that those prize fees could be taken out
24   right at the point of sale, or point of redemption, if
25   you will, and escrowed into an account so that you
0082
 1   don't have all the audit issues of chasing some of
 2   those moneys and you always have a concern at some
 3   point, some charities have actually not escrowed their
 4   prize fee moneys appropriately, and there's been either
 5   accounting questions or licensing questions because not
 6   all the funds are put aside, but if you did it through
 7   an IBC, an electronic cash registry, if you will, those
 8   funds are already put aside into an account, a safe
 9   box, if you will.
10                  We're happy to be here.  We would like
11   for the committee to move as promptly as possible.
12   There is discussion in the newspaper about a special
13   session this spring where VLT's could be considered,
14   and we believe this new instant form of gaming
15   charitable bingo with IBC's would be a huge shot in the
16   arm for the industry.  And I'll be happy to answer any
17   questions.
18                  MR. DOUGHERTY:  Steve, as a matter of
19   definition on video lottery terminals, is that simply a
20   video buying of a lottery ticket or does it just have a
21   higher --
22                  MR. FENOGLIO:  Well, it is a purchase of
23   a lottery ticket.
24                  MS. MORRIS:  Mr. Fenoglio, I'm going to
25   interrupt you as well.  This is not about what else is
0083
 1   out there or defining that or having that discussion.
 2   I suspect that that was part of his presentation, but
 3   it's not now about trying to understand what a video
 4   lottery terminal is.  This is about bingo and bingo
 5   games.  The specific posting is bingo games.
 6                  MR. FENOGLIO:  Well, you could have an
 7   alternative style of bingo including a video lottery
 8   equivalent with VLT.  But, Jack, I'll be happy to talk
 9   about this after the meeting with you and answer those
10   questions.
11                  Certainly, for the IBC, the alternative
12   game, it would be a pull tab that would be a video
13   version sitting on a card-minder -- I'm sorry I didn't
14   bring one of the card-minders, but I know you've played
15   them and I know you know what they look like -- where
16   it could be digitally represented on the screen and you
17   would literally open digitally the doors of the
18   perforated tabs, if you will, and it would display a
19   winner or a loser.  They would all be pre-determined in
20   advance, winners and losers.  There would be a, quote,
21   virtual deal, if you will, just like the box of pull
22   tabs, or the deal of pull tabs, that Danny Moore
23   distributed.  They would be tested by the Lottery
24   Commission for graphics, approved symbols.  The Lottery
25   would have to verify that they are, in fact, randomly
0084
 1   placed in the virtual deal, and they would be, quote,
 2   opened or pulled open graphically on a video screen.
 3   It's similar to how you do a paper -- you play paper
 4   virtually on a card-minder where the machine daubs it
 5   when you hit in 12, which the number 12 is called, and
 6   it digitally, visually daubs the number 12 on all the
 7   cards that you have purchased that are sitting in the
 8   hand-held card-minding device for the session.
 9                  We think that if that does come to pass,
10   and we hope that it does, that it would be a huge shot
11   in the arm for charitable bingo and you would see a
12   dramatic reversal of this steady decline from -- and I
13   think the latest numbers are -- and I'm sure Mr. Atkins
14   has them at the top of his tongue or the top of his
15   head.  It used to be there were about 1900 licensed
16   charitable organizations.  I think there are about 1400
17   now, and so, you know, you see the numbers $671 million
18   to $565 million, it's a slow and steady decline, and
19   with a new product as the card minder did in '95, '96
20   time frame and the pull tab did, you could see a
21   dramatic reversal in the fortunes of charitable bingo.
22                  MS. TAYLOR:  Do you fell this would
23   bring in new customers?
24                  MR. FENOGLIO:  Absolutely.  I don't
25   think there would be any question that you would bring
0085
 1   in -- I mean, you know, you saw that when you
 2   instituted card-minders, there's a different class of
 3   customer who wants to play a card-minder than
 4   traditional paper, and you saw the same thing, I
 5   believe, I know I've seen it in halls and I think Dave
 6   Hinely may speak on this, but, with the new pull tab
 7   products, you saw a different -- and, certainly, some
 8   of the same customers play the new products because you
 9   saw a new increase of a different type of customer
10   coming in that door.  You know, there's a reason you
11   bring on a new product all the time.
12                  MR. ATKINS:  Well, could you talk a
13   little more about that, Steve, because I don't know
14   that we -- I don't know that we saw that in the
15   information submitted by organizations with the
16   introduction of card-minding devices.
17                  MR. FENOGLIO:  I have seen it in halls
18   where there's a younger class of player who plays --
19   and I see Suzanne nodding her head and Larry nodding
20   his head and Mario nodding his head -- you see a
21   younger class of player playing the card-minder than
22   plays paper, and that has to do somewhat with the
23   generational divide, if you will.
24                  MR. ATKINS:  And maybe I didn't ask my
25   question correctly or maybe I misunderstood your
0086
 1   question.  And you've noted it here, a continual
 2   decline in attendance.
 3                  MR. FENOGLIO:  Yes.
 4                  MR. ATKINS:  And, again, it was -- I
 5   think it was our understanding that, with the
 6   introduction of card-minding devices, one of the ways
 7   those card minding devices were sold is that you would
 8   see that decline stop, and I think we've seen it
 9   continue.  What do you think the pattern would be with
10   the introduction of the card-minding pull tabs?
11                  MR. FENOGLIO:  I think, number one,
12   you'll see a stop in the gradual rate of decline.  I
13   mean, if you keep the track that is represented in
14   graphs on page two on point, at some point you will be
15   presiding over a staff of zero because there's not
16   going to be anyone left, and so, in my way of thinking,
17   the first thing you do is stop the bleeding, if you
18   will, the hemorrhaging of loss of customer and loss of
19   revenue.
20                  And, by the way, it's important to note
21   that the per capita spend in bingo, I believe, if my
22   numbers are correct -- and you can do the math; I
23   didn't do -- well, I did it last night and I didn't
24   bring my notes -- I believe it was around $20 per
25   person spent in bingo; it's now about $26.  And, again,
0087
 1   the population of Texas has increased; we know that.
 2   The per capita income in Texas has increased; we know
 3   that.  Bingo revenues have gone down, but what the
 4   savvy bingo hall customers have done is squeeze more of
 5   that money from their player.  They've lost, in
 6   absolute terms, more players, but they've made some of
 7   that decline in what you would expect a gradual fall
 8   off to be by getting more money from customers.  Part
 9   of that is inflation; we know that.
10                  There's also a part, Billy, that I think
11   you can see where, because you brought a card-minder to
12   the table, and those were more expensive than the
13   equivalent paper product, people were willing to spend
14   more because that was an exciting, or more exciting,
15   way to play, and I think the same is true for the pull
16   tab.  You know, it's like the -- when my kids play
17   video games or they want a cell phone, now the way
18   AT&T, or whoever the manufacturer of a cell phone is,
19   they squeeze more money out of a customer because they
20   load it up with different features.  It's still a
21   mobile phone; it still calls from point A to point
22   paint B, but they get economies of sale, but they get
23   more dollar from the customer because they bring out a
24   new product.  I think that's what's crucial for bingo
25   is, we need another product to bring out -- to hold our
0088
 1   customer base, number one, and then, number two, to
 2   give them a new product and charge additional revenues
 3   for that, which equates to additional profits for
 4   charitable bingo.
 5                  MR. WHITTINGTON:  I also wanted to ask
 6   you:  Most of my computer players in my hall, which is
 7   quite a few, they really don't buy a lot of paper pull
 8   tabs because their mind is elevated to computerized
 9   more than anything, and at that point, I can see those
10   computer players buying pull tabs because the computer
11   puts them out on this instant -- the bingo product.
12   Okay?  I can see a big increase, as far as money spent,
13   through that computer player because we didn't have
14   this product in our hall because people play more pull
15   tabs.
16                  MS. TAYLOR:  I would hope that, if this
17   is going to be some type of game on the computer, that
18   maybe the people that aren't bingo players or think
19   they're too young to be a bingo player or too savvy or
20   too educated to be a bingo player, maybe they would
21   come in just to play the instant bingo card-minders and
22   might not necessarily want to play bingo, so I hope
23   that for every person in the doors is another dollar in
24   our pocket.  You know, we pay out the same amount
25   whether we have 100 people walk in our hall or if you
0089
 1   300 people walk in that hall.  We keep paying out the
 2   same amount of money and we have the same expenses with
 3   very little difference in the cost of the paper or the
 4   computer they play, or whatever.  I mean, we have all
 5   those fixed expenses, so we've got to get more people
 6   into these halls, and if this is what it takes to get
 7   them in, maybe then we could start advertising because
 8   we would have more money.
 9                  MR. FENOGLIO:  If you have more money,
10   then you have more to spend for advertising so you can
11   bring in more people to bring in more money, et cetera.
12   And I think that's the underlying premise of any new
13   product that comes to market is, you create an
14   excitement for it.
15                  MR. ATKINS:  And the position that I'm
16   working from is that, what I hear continuously from
17   organizations, using the examples of card-minders, is
18   that they were all promised that, once those devices
19   were installed, you know, there were just going to be
20   swarms of people coming into their halls and playing,
21   you know, these devices, and they haven't seen that
22   occur, so I know that, from our point of view as we
23   move forward on the subcommittee, you know, if
24   representations are made to us that, you know, for
25   whatever reason there's an anticipated increase, you
0090
 1   know, we're going to ask a lot of questions, you know,
 2   to try and get down to specifics, how those estimates
 3   are made.
 4                  MR. FENOGLIO:  And I think that's a fair
 5   question to ask.  I think the comptroller can help you
 6   with some of that data based on what they saw when they
 7   calculated the fiscal impact on a different side.
 8                  MR. WHITTINGTON:  But on the other hand,
 9   too, if you got these stationaries in place, or the
10   computers, like I said, you got to account that only a
11   certain amount of people can play them and that's going
12   to deter people in the facility bringing people in the
13   hall to them like we used to have it.  It actually hurt
14   us having 40 percent computer players versus paper
15   players.  That really hurt a lot of people coming in
16   because they came in and couldn't play because we had
17   capped out at 40 percent.
18                  MR. ATKINS:  Well, you raise a good
19   point, and this is something that the work group talked
20   about yesterday was the fact that, you know, that
21   40 percent came from, you know, groups of bingo
22   organizations that didn't want the devices at all, so,
23   you know, that was the compromise, was to put some type
24   of limitation on it.  And we discussed in the work
25   group yesterday that one of the things we also want to
0091
 1   spend time working on with all of these different
 2   items, whether it's progressive, pull tabs, or
 3   whatever, is, you know, anticipate those concerns from
 4   other organizations and address them up-front so that,
 5   you know, we can more fully provide, at least to the
 6   commission, a complete and total picture of these
 7   different alternatives.
 8                  You know, one just quick example is the
 9   progressive bingo game.  You know, I still don't know
10   that there's a consensus regarding the -- I think
11   everybody theoretically likes the idea of the
12   progressive bingo game, but I can't get any kind of
13   consensus with anyone as to whether or not the prize
14   limit should be limited or not.  Some organizations I
15   talked to -- well, some organizations I talked to, no,
16   they don't want it.  Now, again, that's something we
17   have to deal with is, you know, here's another
18   opportunity for organizations to make money, but there
19   are organizations out there that don't want it, so
20   we're going to have to deal with that.  There are other
21   organizations that want the prize limit capped as to
22   what it can grow to, and then there are other
23   organizations that don't want a cap, so we've just got
24   this broad spectrum of opinions, you know, from
25   everybody that I think this work group needs to spend
0092
 1   time taking into consideration and be aware of it and
 2   be prepared to answer some of it.
 3                  MR. WHITTINGTON:  So, the main thing is
 4   basically to -- on those organizations you're speaking
 5   about, they need to -- if they want to do it, they can.
 6   If they don't, hey, this is what it is, and I think we
 7   need more innovations out there.  I really think we got
 8   four hours to play for a charity per day and we're not
 9   utilizing that time at all, and I think an innovation
10   like the electronic pull tabs will give us those
11   complete four hours of people coming in and playing
12   those pull tabs.
13                  MR. FENOGLIO:  And, Billy, you do raise
14   a good point.  Because there was, within the industry,
15   in '95, when the card-minder issue arose in the
16   legislature, very much a fear that -- by the small
17   halls, if you will, the halls that pay -- the charities
18   pay $100, just say $800 your license fee versus the
19   much larger halls, that that product would be put --
20   the card-minder would be put in the big halls and to
21   the small halls' expense.  I don't think that's the
22   issue this time around.
23                  We have spent a number of hours with,
24   for example, Elks Lodge people who were one -- people
25   who were one of the groups -- I'm generalizing
0093
 1   somewhat -- but they were one of the groups who were
 2   very nervous about card-minders, but we don't have a
 3   full resolution yet, but we believe they're going to be
 4   in support of this.  The Veterans Post, for another
 5   one, and the Veterans Organization I have spoken with
 6   personally are excited about this idea because we
 7   believe the market will be a lot broader for
 8   card-minders since the market is already much more
 9   developed today than it was.  And I think Mr. Moore is
10   going to tell us, when he comes back from the world
11   games, that there are a lot of manufacturers out there
12   who are ready to come to the market.
13                  Be that as it may, we'll be happy to
14   work with you.  And to that extent, I had faxed both
15   you and Ms. Brackett back in December, I belive, or
16   maybe it was in November, a request to be notified of
17   the subcommittee on alternative gaming, and things get
18   lost, and I understand, and I'll follow that up, but I
19   would like to be notified.  I'd actually asked you to
20   be a part of the subcommittee, but I'm not sure I could
21   have handled it yesterday.  But if you want more
22   information and input from licensed organizations, I
23   represent a large number, I would be happy to give you
24   that and work with you and the committee members on
25   that.
0094
 1                  MR. ATKINS:  And I'll speak for me not
 2   the entire work group, but I know we would appreciate
 3   that information.  And the members of the work group,
 4   Steve, as you know, are on the web site with contact
 5   information for that.  I just want to make sure that --
 6   we've spent a lot of time talking about the E-tab
 7   machines, and I want to make sure that we all
 8   understand that, much like we did with the pull tab
 9   rule where we cast the broadest math that we could and
10   looked at everything out there that we use, this group
11   has an opportunity to do the same thing.
12                  THE WITNESS:  Thank you, Madame Chair
13   and members.
14                  CHAIR BRACKETT:  Thank you.
15                  Danny, are you chairman of this group or
16   is it --
17                  MS. TAYLOR:  Danny.
18                  CHAIR BRACKETT:  Suzanne has informed me
19   that you're chairman, so you'll be happy to add Steve
20   to your --
21                  MR. MOORE:  Okay.  She asked if I would
22   take over and I was happy to.
23                  MS. TAYLOR:  Danny has a lot more
24   opportunity and a lot more knowledge of where it needs
25   to go, so I'll be glad to assist him, but I think it
0095
 1   would be smarter to let him chair that group.
 2                  CHAIR BRACKETT:  Jane Thompson would
 3   like to comment on this same agenda item, No. 9.
 4                  MS. THOMPSON:  Jane Thompson with
 5   Thompson Allstate Bingo Supply.  I just want to add my
 6   name to the list to offer assistance to the work group.
 7   As a distributor and I've been working with the
 8   coalition to provide charitable bingo, and I see the
 9   importance in it.  I feel a sense of urgency on this
10   because of -- is March 22nd the next BAC meeting or is
11   that the next meeting of the work group?  I just want
12   to add my name to the list, and I'm happy to volunteer
13   my services as a distributor and give you any kind of
14   information you need.
15                  I think the IBC is a real important part
16   in our moving forward in the alternative style of
17   gaming, and I just want to be on record that it's very
18   important to me to try to get this information out and
19   let the industry know.  It's industry wide.  We're
20   trying to get everybody in the industry involved in
21   this IBC, the instant card-minding bingo device, so I'm
22   willing to help however, so call me if you need me.
23                  CHAIR BRACKETT:  Thank you.  You offer
24   is accepted.
25                  Any other comments on Item No. 9?  One
0096
 1   more.  I'm sorry.  I think you'd signed up.  Right?
 2                  MR. HEINLINE:  I don't think I signed
 3   up.
 4                  CHAIR BRACKETT:  No, but I'll add it in
 5   here.
 6                  MR. HEINLINE:  David Hinely.  I'm the
 7   representative of several charitable bingo conductors.
 8   I wanted to comment that the alternate styles of bingo
 9   are very important and I'm very glad that we're doing
10   that, and I wanted to offer -- to tell you that I would
11   be glad to help, too, with information because I do
12   have, I think, a lot of -- I'm a numbers person, so
13   I've got a lot of numbers that I think would be helpful
14   to you.  One of those is to demonstrate that, when we
15   get on alternate product, which we did do in 2002, and
16   we began to receive our products in October of 2002,
17   just that it would be helpful to know the effect that
18   they had.  I see in the report that we've handed out
19   today that our attendance has diminished, or declined,
20   once again almost five percent.  I do believe, though,
21   that if all of the charitable bingo conductors had been
22   able to implement the event tabs that were offered to
23   us in the same way that my star performers have done,
24   they wouldn't have had that, because in our particular
25   case, we actually increased attendance for the year
0097
 1   2003 over 2002 by 5.6 percent and we increased our
 2   revenue paid to the state in winners' fees by 76.57
 3   percent.  Our instant sales per session increased
 4   174.06 percent.
 5                  If that performance were able to be
 6   modeled by all of the charitable bingo conductors, the
 7   state would increase their revenue from what it
 8   received of $20,746,000 in the year 2003, it could have
 9   been $31,550,000, so it would be a tremendous change,
10   and so I think these would be helpful numbers.  One of
11   the problems with implementing, though, in this fashion
12   is it requires a tremendous effort with a sales staff
13   that can do this, and not everybody can do that, but as
14   we've been able to train some of them, we've got one
15   hall that's doing that, and another one that's coming
16   up close to it, a third hall that's coming up behind
17   them, and a fourth, so we're training them one at a
18   time to do that.
19                  That could be implemented in a lot
20   quicker fashion if they had the electronic digital way
21   of doing that because it wouldn't require the sales
22   staff that's understanding -- actually doing the
23   selling; the machine could sell it for them, so I think
24   that's a very appropriate thing to look at to increase
25   the bottom line, which is -- the main reason we're here
0098
 1   is to increase the charitable distribution, and we are
 2   able to do that by these kinds of increases, because in
 3   this particular hall, their increase was over a quarter
 4   of a million dollars in one year.
 5                  CHAIR BRACKETT:  Any questions?  Thank
 6   you.  I think that concludes Item No. 9.
 7                  And before we move on, I need to ask you
 8   and also our reporter, do you want to just continue to
 9   work and not take a lunch break and complete the
10   agenda?  What's the pleasure?
11                  MR. MOORE:  Keep on rolling.
12                  CHAIR BRACKETT:  All right.  We'll keep
13   on rolling.
14                  So that brings us to Item No. 10, and
15   I'm glad we agreed to go on because I've been seeing
16   you walking up and down the hall.
17                  MR. ATKINS:  If I could start real
18   quickly, madame Chair.  The Sunset bill for the Lottery
19   Commission didn't pass last session, so the agency is
20   up for review during this period, and that process has
21   started and we have put notification of that on our web
22   site and also in a special edition Bingo Bulletin that
23   we sent out to our licensees, and you have copies of
24   those in your notebook.
25                  You also have in your notebook the
0099
 1   Sunset Commission's review schedule for 2004, and they
 2   currently plan on conducting their review of the
 3   Lottery Commission about mid January through mid April.
 4   The agency held their entrance conference with the
 5   Sunset staff on January 22nd, and there have been
 6   several meetings with staff and -- agency staff and the
 7   Sunset staff since then.  The Sunset Commission is
 8   going to be conducting what they call a limited review,
 9   and that review will be limited to the eight items that
10   were the Sunset recommendations for 2002 and they will
11   be reviewing the appropriateness of those items.  And
12   no one is jumping up and down saying that I'm saying
13   that wrong, so I'm going to assume that's correct.
14                  You also have in your notebook the
15   Sunset Advisory Commission meeting schedule for 2004.
16   Currently, the Lottery Commission's public item is
17   scheduled for May 18th or 19th of 2004.  The Sunset
18   staff will have issued their report approximately a
19   month prior to that.  The Sunset Commission decision
20   meeting is currently scheduled for July 13th and 14th
21   of 2004.  We have provided to the Sunset staff a list
22   of all the current BAC members, so if you haven't yet,
23   you may be contacted by them.
24                  And also, just so you know, a lot of the
25   work that you have been doing up to this point has been
0100
 1   related to the implementation of many of the management
 2   recommendations that were contained in the Sunset
 3   report, so a lot of the rules that we've been working
 4   on, the revisions that we made to the BAC rule last
 5   year, the rules dealing with audit requirements, et
 6   cetera, are part of the staff's account to go ahead
 7   and, where possible, move forward on some of those
 8   management recommendations, working on them and getting
 9   them implemented.
10                  And that's really the report that I have
11   prepared.  I don't know if Ms. Trevino has anything to
12   add or if she's just available for any questions.
13                  MS. TREVINO:  Just for the record, I am
14   Nelda Trevino, the director of governmental affairs,
15   and I really don't have anything to add to what Billy
16   has reported on.  I'd be happy to answer any questions
17   that the committee might have.
18                  CHAIR BRACKETT:  Any questions?  Thank
19   you appreciate your time.
20                  MS. TREVINO:  You bet.
21                  CHAIR BRACKETT:  We're to Item No. 11,
22   which is:  Consideration of and possible discussion
23   and/or action on the Bingo Advisory Committee report to
24   the Texas Lottery Commission on the Texas bingo
25   industry.
0101
 1                  And I'd ask you now to bring items for
 2   this.  You're going to have to speak up and say what
 3   you want included in this report.
 4                  MR. ATKINS:  It may help, if I can,
 5   Madame Chair, this is one of the items that is on the
 6   Advisory Committee's work plan, a report to the
 7   commission, and it's also, I believe, contained in the
 8   BAC rule itself that the Advisory Committee will make a
 9   report to the commission on the status of the bingo
10   industry, and so I believe that is what, Madame Chair,
11   you're requesting of the members now, those items.
12                  CHAIR BRACKETT:  Item No. 1:  Comment on
13   improvement and status of the bingo industry.
14                  MR. ATKINS:  Yes, ma'am.
15                  CHAIR BRACKETT:  Now, this says that
16   the BAC will review and comment on charitable bingo
17   gross receipts, et cetera.  This is really a done thing
18   by the yearly -- or, the financial report and the
19   selling report that we've already considered in here.
20   Correct?  On the four quarters for 2003.
21                  MR. ATKINS:  I think you could submit
22   that.  I think there's an expectation from the
23   commission that there be a comment on it from the BAC.
24   Do you think it's good?  Do you think it's bad?  Why do
25   you think it's good?  Why do you think it's bad?
0102
 1                  CHAIR BRACKETT:  So what are your
 2   comments on that, on the report that we had, the
 3   financial report?
 4                  MS. TAYLOR:  I like the increase in the
 5   gross; however, I don't like the decrease in the
 6   charitable distribution.
 7                  MS. GREENFIELD:  I think the attendance
 8   figures are pretty disturbing.  We need to try to do
 9   something about attendance and bring that level up as
10   well as the alternative styles, combine those with the
11   IBC and other things that we're talking about.
12                  MR. MOORE:  Well, I think the most
13   dramatic thing is still the change in the instant gross
14   receipt -- or, the sales of instant bingo right now.  I
15   think it's been a big boost, and I think it needs to be
16   pointed out that it was a huge ordeal for us to take
17   on, and we got it to the charities and they've been
18   able to utilize it and make more money.
19                  MR. PAVLOVSKY:  I'll very much go along
20   with that, Danny.  I think we've got to continue making
21   changes.  We've got to improve it; we've got to do
22   something new and different, something more exciting.
23   Every time I go into a Stop & Rob out there, there's a
24   new lottery game.  That's exactly what the Lottery
25   Commission does.  We can't fall behind; we've got to
0103
 1   keep up by coming up with something new and different.
 2   If I had to pick out one thing in the report, it would
 3   be exactly that, the increase in the pull tabs.
 4                  CHAIR BRACKETT:  And then for future
 5   planning, you want to say go ahead and keep these new
 6   productions coming?
 7                  MR. PAVLOVSKY:  Absolutely.
 8                  CHAIR BRACKETT:  I have some written
 9   comments here that Patricia --
10                  MR. ATKINS:  Can I make one comment?
11                  CHAIR BRACKETT:  Certainly.
12                  MR. ATKINS:  Kind of along the lines
13   that you were talking about, Pete.  It might be
14   beneficial for the Advisory Committee to explore one
15   thing when you talk about the introduction of new
16   products and the impact they have because, as you'll
17   recall, the BAC also did a lot of work on the bingo
18   paper rules and provided for all kinds of additional
19   bingo paper, but we're still seeing some significant
20   decreases in that area.  The reason I raise that is
21   because it just runs counter to, you know, the general
22   conversation that we're having, that the introduction
23   of product in and of itself will, you know, bring about
24   increases.
25                  MR. PAVLOVSKY:  I totally agree with
0104
 1   that.  Nothing is guaranteed, but if you don't put it
 2   out there, you don't know whether you'll settle it or
 3   not.
 4                  MR. MOORE:  And I'll back that up and
 5   state that the new paper came in, but the problem with
 6   the new paper is that the majority of our bingo halls
 7   that pay out $2,500, it's hard to implement this new
 8   paper into the game structures that have already been
 9   set up.  I've seen them try it several times, and I
10   agree with Pete that, you know, sometimes you try
11   things that just don't work.  And that goes along with
12   what you were saying, but I'd have to say that I'd be
13   on the side of variety is the way to go, find out what
14   does work in bingo and what doesn't.
15                  MR. WHITTINGTON:  Just like on paper,
16   too, Billy, when you play a bingo game and you're
17   paying out the max for all daily, you got a cap on that
18   and you can't go no further, but with instant bingo,
19   whether it's electronic or just paper wise, you can
20   sell as many as you can and make as much money as you
21   can for the charities.  That's why this new innovation
22   we're talking about, we haven't changed it much and
23   it's already set, so we can sell as many pull tabs as
24   we can to make money.
25                  MR. ATKINS:  So are you saying the
0105
 1   introduction of different types of paper would have
 2   been more successful with the higher price cap?
 3                  MR. WHITTINGTON:  Yes, it would be.
 4   Because we can offer more than what I'm paying out now
 5   with this special paper, but we have never used it
 6   because we can't go no further.  We got our game set
 7   and can only give them a certain amount of ways per
 8   game and it's capped out at $2,500 per session, so we
 9   can't really use it to make a special deal, if you hit
10   this number, you'll win "X" amount of dollars, you
11   can't say that because it's capped out.  Now we pay out
12   the max daily, but the pull tabs, we can sell as many
13   as we can per day within an hour span time.  Like,
14   looking at the future, if we can get these electronic
15   pull tabs, we can sell them for the whole four hours,
16   and I think that would bring those people in for the
17   full four hours.
18                  MR. DOUGHERTY:  Madame Chairman, for my
19   own definition, what are -- when you're talking about
20   new paper, what are you talking about as compared to
21   old paper?
22                  MR. MOORE:  I guess I can answer that.
23   There's a -- manufacturer's can make the paper with a
24   pattern on it or they might have two numbers in one
25   space for each space on the card, that's called double
0106
 1   bingo and the player can daub either number.  It just
 2   plays the game a little differently.
 3                  MR. DOUGHERTY:  They do that like a --
 4                  MR. MOORE:  The problem is, we haven't
 5   been able to get our hands on them as much.  The
 6   vendors have been reluctant to make it, and it goes
 7   back to certain things.  I think if the demand was
 8   there, they'd make it, but the demand hasn't been
 9   there.  They're not willing to just warehouse the stuff
10   and hope that they can sell it, so that's been a
11   problem from my view point.
12                  MR. DOUGHERTY:  Thank you, Danny.
13                  MR. MANIO:  Excuse me, Virginia.
14                  CHAIR BRACKETT:  Go ahead.
15                  MR. MANIO:  I'd like to make a comment
16   about the attendance being disturbing, the trend, the
17   downward trend, and I think this is going back to
18   basics.  The electronic -- the IBC and all of these
19   technological innovations are well and good, but the
20   audience for these products are still coming from the
21   general population of bingo, and what I think we should
22   do is concentrate really on bingo and do something with
23   the basics in the bingo games themselves, and this will
24   bring the crowd which will, in turn, feed into the pull
25   tabs and IBC.
0107
 1                  CHAIR BRACKETT:  So continue to get them
 2   in?
 3                  MR. MANIO:  Well, I think we are
 4   neglecting bingo itself by focussing too much on this
 5   new technology, but people go to the bingo hall to play
 6   bingo, it just so happens that they buy pull tabs too
 7   or card-minding devices.
 8                  CHAIR BRACKETT:  So we need to continue
 9   these things but not neglect.  Is that it?
10                  UNIDENTIFIED SPEAKER:  Can I make a
11   comment?  Because that kind of brings us back to when
12   Billy was asking Steve about the attendance trends are
13   down, and I don't think things panned out the way we
14   thought they would when the card-minders actually came
15   in.  The trend did keep going down, and I tend to
16   believe that, because of the increase in card-minders
17   in all the halls -- and believe me, I sell plenty of
18   them -- that we may have lost some paper players
19   because of the card-minding devices, so I think that
20   did escalate, maybe, the attendance dropping; although,
21   it increased the player's spend is what I think
22   occurred here.
23                  That's my opinion looking at this thing
24   from a distributor's viewpoint.
25                  CHAIR BRACKETT:  So on a work plan, you
0108
 1   would say to continue to look at the paper?
 2                  MS. TAYLOR:  I would like to make one
 3   comment.  I wonder if there's some way on this
 4   attendance part if we could log the attendance with
 5   the -- you know, we know when we go back to '95 or '89,
 6   '90, when the Lottery came in, there was the dramatic
 7   drop in attendance.  Does the drop in attendance
 8   correspond with new items offered by the Lottery?  I
 9   don't play them, so I can't tell you.  When is the --
10   is it when you start having them more often, the
11   once-a-week drawings and the Harley scratch offs and
12   stuff?  Is there any correlation between the drops in
13   attendance, when our attendance drops, and new products
14   offered or, you know, more things to do with their
15   discretionary dollars?
16                  MR. ATKINS:  This is the age-old
17   question.  I know it's, you know, called the lottery's
18   fault, but you also have the introduction of the
19   pari-mutuel wagering in the state; you have the
20   introduction of high-stakes bingo on the Indian
21   reservations in surrounding states all along the
22   boarder; and you also have the introduction of casinos
23   all along the border as well for, you know, time
24   periods of casino games here in Texas, so on one hand,
25   yeah, I guess you can say that the decline, you know,
0109
 1   coincides with the introduction of new lottery games,
 2   but it's interesting to note that it also seems to be
 3   more significant with the introduction of these
 4   different types of gaming activities.
 5                  And, you know, I have -- I don't
 6   remember if it was you, Larry, or -- but I've had
 7   people in the past, you know, that are very upset that
 8   the buses for the casinos, you know, actually park in
 9   their parking lot and take, you know, players up to
10   Oklahoma, over in Louisiana.  I know Windstar is just
11   killing organizations in North Texas.
12                  MR. WHITTINGTON:  And basically what
13   you're saying is that the casinos and the games and the
14   slot machines, et cetera, is taking money out of our
15   pocket, and we can't see because we don't have nothing
16   comparable to it?
17                  MR. MOORE:  Because it's a compilation
18   of all of these things.
19                  MR. ATKINS:  It's a compilation of
20   everything.
21                  MR. WHITTINGTON:  Well, and everybody
22   got more innovations than we do that attracts these
23   people, so they're going to go to Windstar from Dallas,
24   and I guarantee you there's going to be 90 of Texas
25   people playing at Windstar, which is about 45 minutes
0110
 1   away from Dallas
 2                  MS. TAYLOR:  So the fact is, although
 3   the attendance continues to drop with the introduction
 4   of electronics, it could have dropped even more without
 5   the introduction of electronics?
 6                  MR. ATKINS:  That's possible.
 7                  MS. TAYLOR:  There's really no way to
 8   tell any of that.
 9                  MR. WHITTINGTON:  I think it would have
10   been more.  I think we would have lost more people if
11   we didn't have the card-minding devices.
12                  MR. PAVLOVSKY:  I know I'm not going to
13   get an answer to this, but we know all of this
14   information, so why, then, does it take so long to get
15   new games or new innovations, new exciting things for
16   bingo players, into the bingo halls to play a little
17   bit of bingo while they're spending their money on all
18   these other things as well?
19                  MR. MOORE:  Well, Pete, there's the
20   Bingo Enabling Act.
21                  MR. WHITTINGTON:  We try to overcome
22   that because that's the only way we're going to survive
23   because, number one, you're not going to tell me, if I
24   can drive 45 minutes and go to Windstar and make
25   something that I love to play, that I'm just coming
0111
 1   back to your bingo hall and playing the same old-age
 2   thing I've been playing for years.
 3                  MS. TAYLOR:  Remember, we did have the
 4   progressive for a moment until the "no expansion of
 5   gambling" took it away from us.
 6                  MR. MANIO:  Well, thank you for
 7   mentioning that.  I was just going to bring it up.  And
 8   just for clarification, when I spoke about bingo, I
 9   meant paper players as well as card-minding players,
10   but the fact is, the bingo that we play today, or the
11   prize money at least, has remained the same for
12   thousands of years, and it's so hard to compete with
13   the bingo in Oklahoma where they have $50,000 in
14   jackpot, and that's what I meant.  That's why we need
15   innovation, we can bring those people back to play
16   bingo and pull tabs will follow; IBC will follow.
17                  MR. WHITTINGTON:  And on top of that,
18   Billy, not only do those papers -- most of the bingo
19   halls can afford to advertise there, which is the bingo
20   paper.  The Freeport and the Oklahoma Reservations are
21   advertising their paper, as well, so we're dead there,
22   too; you know, we just can't afford it.
23                  MR. ATKINS:  Do you want that in the
24   report?
25                  MR. WHITTINGTON:  No.  But it's
0112
 1   definitely serious.  I mean, I look at my bingo paper,
 2   I say, come to Windstar, come here and play the slot
 3   machines versus bingo.
 4                  MS. TAYLOR:  But I do think advertising
 5   is a vicious cycle.  Advertising is the one expense
 6   that we can cut.  You can't cut the payroll or the
 7   paper or the electronics.  The only expense you can cut
 8   is advertising; however, advertising is the only thing
 9   that will get the players into our halls, so we're
10   caught in this downward spiral of cutting the
11   advertising; therefore, we cut our players, but we
12   can't afford to advertise.  You've got to pay the bill
13   when it comes.
14                  MR. WHITTINGTON:  I just want to see one
15   time -- I don't know if it's going to be in 2004 --
16   that the Texas Lottery Commission takes some of that
17   tax money, which is $20-plus million, whatever, and
18   spend about $3 million or $4 million on advertising for
19   bingo, that would be great, just one national
20   commercial for bingo.  Tag it on the end of the Texas
21   Lottery Commission and say, please support your local
22   charities, play bingo.  It would really help a lot
23                  MS. GREENFIELD:  I agree with you.  I
24   think that's what we need to work towards.  I'm sure
25   it's legislative, but if we could get some money for
0113
 1   the bingo division to advertise statewide for bingo.
 2                  MR. MANIO:  That would be a good --
 3                  MS. MORRIS:  I'm going to bring you back
 4   to your report.  Here, all this time I thought you were
 5   talking about what you wanted in your report, so let's
 6   get back to the report.  You didn't want any of the
 7   stuff that you were talking about in the report?  Well,
 8   let's look at the agenda and talk about what you want
 9   in the report.
10                  MS. GREENFIELD:  Can it be in the agenda
11   that we would like to have that on the work plan?  I
12   know that's part of our recommendation.
13                  MR. ATKINS:  You can under Item 12.
14                  MS. MORRIS:  You're not on Item No. 12,
15   yet ma'am.
16                  MR. WHITTINGTON:  Could we change to No.
17   12, please?
18                  MS. MORRIS:  Are you ready to take up
19   Item No. 12?  Are you done with getting your report --
20                  CHAIR BRACKETT:  I think we might need
21   to mention about that we looked at, you know, that
22   House Bill 2519 that contributed to a lot of the rules
23   for that.
24                  MR. ATKINS:  It contributed to the
25   implementation of the Sunset management report.
0114
 1                  CHAIR BRACKETT:  Okay.
 2                  MS. GREENFIELD:  There were some items
 3   that the commission requested that we address.  I hope
 4   I'm saying the right thing here and not on Item 12.
 5   There were two items that they asked us to investigate,
 6   one dealt with the internet bingo and alternate forums
 7   and the other one dealt with the smoking ordinance,
 8   they wanted us to investigate that.  I think it needs
 9   to be in the report that they were investigated and the
10   findings were brought forth and the internet gaming
11   alternative styles are still being looked at.
12                  MR. ATKINS:  That's being done?
13                  MS. GREENFIELD:  It's being done.
14                  MR. ATKINS:  Right.  But in terms of,
15   from the work plan, what's been done, as you mentioned,
16   there's a number of rules that have come forward that
17   the Advisory Committee worked on.  They have the -- the
18   Advisory Committee conducted review and made
19   recommendations on the Bingo Bulletin.  The Advisory
20   Committee has worked on the survey of bingo players,
21   and that's been completed.  They have done a review of
22   the web site and made recommendations on that, so I
23   think you can also include that in the report.
24                  MS. GREENFIELD:  Do we need to include
25   what we haven't accomplished?  Do we want a notation of
0115
 1   that?
 2                  MR. ATKINS:  I think it would just, you
 3   know, be best for the commission's benefit to mention
 4   those items remaining on the work plan.
 5                  MR. MOORE:  I mean, the review of the
 6   rules, we all spent a lot of time this past year in
 7   some capacity on that.  I mean, you know, the staff and
 8   the members of the BAC, we really put some time in
 9   outside of this room here.
10                  MR. PAVLOVSKY:  And the public members
11   as well on those committees.
12                  MR. MOORE:  Sure.
13                  MR. WHITTINGTON:  I guess what really
14   made it complete for us is, not only the BAC, like Pete
15   said, but we had a lot of public people involved with
16   understanding bingo as a whole and we all pulled it
17   together.
18                  MS. GREENFIELD:  What about possible
19   surveys that we need to include, that we would like to
20   have future surveys?
21                  CHAIR BRACKETT:  That would be under
22   Item 12.
23                  Is there anything else that you would
24   like to add under Item 11:  Consideration of and
25   possible discussion and/or action on the Bingo Advisory
0116
 1   Committee report to the Texas Lottery Commission?
 2                  MR. MANIO:  When is the deadline for
 3   this report?
 4                  MR. ATKINS:  I don't know that there's
 5   an exact deadline for it.  You know, it needs to be
 6   done annually and the work plan that you have now was
 7   adopted February 28th of 2003, so I would think some
 8   time after that.  It's not -- for example, it's not
 9   noticed on the March 5th commission meeting agenda.
10   The only thing that's noticed on that agenda is
11   Virginia's report to the commission on this meeting, so
12   it would be some time after March 5th.
13                  CHAIR BRACKETT:  Can we look through the
14   minutes and bring up things or do we have to have them
15   on record here?  The minutes are a record?
16                  MR. ATKINS:  The minutes are a record.
17                  CHAIR BRACKETT:  Okay.  All right.  Any
18   other comments?  Are you comfortable with that?
19                  All right.  We'll move on to Item
20   No. 12, which is:  Consideration of and possible
21   discussion and/or action on the Bingo Advisory
22   Committee work plan.
23                  MR. ATKINS:  I would suggest that the
24   place to start on that would be with those remaining
25   items.  Item No. 1, the comment on the bingo industry
0117
 1   needs to remain an annual activity; comment on proposed
 2   rules.  We would like to move forward with the Advisory
 3   Committee on a review of the operator training program
 4   because one of the things that the staff is working on
 5   is putting that program into a video format where we
 6   can provide it to organizations without them
 7   necessarily having to attend the training.  You know,
 8   an ongoing item would be number five, the study of
 9   alternative styles of play.
10                  This is the appropriate point, Jack, if
11   you want to discuss the possible future surveys.  We
12   would also like to work with the Advisory Committee on
13   the review of forms that are used in the division,
14   whether their application forms, quarterly reports, or
15   audit forms.  And also Item Number. 9, work with the
16   Advisory Committee on the review or revision of an
17   operations manual.
18                  CHAIR BRACKETT:  Now, there's a current
19   operations manual that needs to be revised.  Is that
20   correct?
21                  MR. ATKINS:  There's a current
22   operations manual that is actually referred to as the
23   audit forms manual, and that's the same document that,
24   I believe, was originally developed at TABC, The Texas
25   Alcohol and Beverage Commission, and came over.  It is
0118
 1   in need of some serious updating, and the staff would
 2   also like to expand what's covered in that pretty
 3   significantly and just provide a little more
 4   user-friendly format to organizations, information
 5   relating to the conduct of bingo in compliance with the
 6   act and rules.
 7                  CHAIR BRACKETT:  Review of the web site,
 8   so the plan for the current year, does that need to be
 9   continued or -- I don't know about that.
10                  MR. WHITTINGTON:  I think we should
11   always update that web site as much as we can for new
12   innovations and keep it with the times because we
13   can't, you know, be stalemate and leave it behind.  I
14   also think we need to keep working with Billy's staff
15   and the Bingo Advisory Committee together I think when
16   it comes to the Lottery.  By doing that, it just helps
17   us to keep forward and try and work our problems
18   between us and understand things when it comes to bingo
19   in Texas.
20                  MR. ATKINS:  Well, I think the question
21   is, Larry, given everything else on there that hadn't
22   been addressed, you know, do you want to conduct
23   another review of the web site this year or maybe wait
24   a year and do it or, you know, if you're going to keep
25   doing a lot of the same things over again, it may be a
0119
 1   little difficult to get to anything new.
 2                  MR. MANIO:  May I make a suggestion
 3   along that line?  I was on the subcommittee on the web
 4   site and we did a lot of work with Norma Quezada, and
 5   every since we submitted our recommendations, Norma has
 6   actually made improvements in our web site, so, along
 7   that line, I feel that it is probably not necessary to
 8   have one committee for the web site this year.  Maybe
 9   next year we have more time to do another review.
10                  MR. WHITTINGTON:  That's fine.
11                  CHAIR BRACKETT:  So you're saying leave
12   that on there or --
13                  MR. MANIO:  Leave it off.
14                  CHAIR BRACKETT:  Leave it off.  Okay.
15                  MR. MANIO:  The same thing goes for the
16   Bingo Bulletin.
17                  CHAIR BRACKETT:  Well, am I correct that
18   drastic changes have happened to the Bingo Bulletin
19   because of budget cuts?  It's no longer in color and
20   that type of thing.
21                  MR. ATKINS:  Well, it's no longer in
22   color because of budget cuts, yeah.
23                  CHAIR BRACKETT:  Okay.  And it's still
24   produced on the same schedule, the same number of times
25   per year.
0120
 1                  MR. ATKINS:  We've reduced the number of
 2   bulletins also.  We've gone from six to four.
 3                  CHAIR BRACKETT:  So that's pretty
 4   significant, six to four in a 12-month year, that's
 5   quite a difference.
 6                  Is that an ongoing thing or do we
 7   dismiss that and take that off?
 8                  MR. MANIO:  Are we still on the Bingo
 9   Bulletin?
10                  CHAIR BRACKETT:  Yes, the Bingo
11   Bulletin.
12                  MR. MANIO:  Yeah, I was going to make
13   the same remark that is applicable to the web site.
14   The Bingo Bulletin, the contents have changed along the
15   lines of the recommended, so perhaps it's not necessary
16   this year, but maybe next year we can do another
17   checkpoint.
18                  CHAIR BRACKETT:  Don't do it this year,
19   but don't forget it.  All right.  Anything else?
20                  MR. MOORE:  We selected subcommittees
21   for this.  I mean, if we walk away from here and if we
22   need to address the operator training program, I mean,
23   we need to get a subcommittee and look at this.  We
24   don't want to walk out of here and then wait three
25   months to address this again, I don't think.  Am I
0121
 1   wrong in assessing that?
 2                  MR. ATKINS:  No, you're not.  There are
 3   two things that I think are appropriate under this
 4   item, one, appointing subcommittees to eligible items
 5   and, two, discussing any items that the BAC would like
 6   to take back to the commission for inclusion on this
 7   year's work plan.
 8                  CHAIR BRACKETT:  So are we having
 9   volunteers right now?  Let's look at the issues, then.
10                  MR. MANIO:  We have two volunteers here,
11   Virginia.  We have two volunteers for the bingo forms
12   and the operations manual.
13                  CHAIR BRACKETT:  Okay.  Volunteers for
14   the bingo forms, those two volunteers are?
15                  MR. MANIO:  Patricia Greenfield and
16   Mario Manio.
17                  CHAIR BRACKETT:  Okay.  Comment on the
18   improvement and status of the bingo industry.
19                  Proposed rules, since that's ongoing,
20   that involves the whole --
21                  Review of the operator training program,
22   I will be happy to work on that.  Does anyone want to
23   work with me?
24                  MS. TAYLOR:  I will.
25                  CHAIR BRACKETT:  Suzanne Taylor with
0122
 1   work with me on that.
 2                  In one way, I kind of hate to see it go
 3   to a video because I always thought it was fun to be
 4   with a big group of operators at one place.
 5                  Review of the bingo forms, that has
 6   already been volunteered for by Patty and Mario.
 7   Review of the web site, we decided not to continue
 8   that.  Review or revise the operation manual, is that a
 9   continuing thing or have we --
10                  MR. ATKINS:  Also Patty and Mario.
11                  CHAIR BRACKETT:  Okay.  And then the new
12   things were the survey of the -- for prize increases.
13   Is that correct?
14                  MS. TAYLOR:  Future surveys.
15                  CHAIR BRACKETT:  Future surveys.  Okay.
16   So not necessarily in the upcoming year.
17                  MR. DOUGHERTY:  I'll do that.
18                  CHAIR BRACKETT:  Okay.  Pete, do you
19   want to work on that with Jack?
20                  MR. PAVLOVSKY:  Yes, ma'am.
21                  CHAIR BRACKETT:  Okay.  And then the
22   advertising issue, how to implement a program there.
23                  MR. WHITTINGTON:  I'll do it.
24                  CHAIR BRACKETT:  Okay.  Anyone else want
25   to work with Larry?  Danny?
0123
 1                  MR. MANIO:  I'll work with Larry.
 2                  CHAIR BRACKETT:  You'll work with him.
 3   Okay.  That makes sense, y'all are in the same town.
 4                  MR. WHITTINGTON:  Not really.
 5                  CHAIR BRACKETT:  Not really?
 6                  MR. WHITTINGTON:  He's about two miles
 7   away in another county.
 8                  CHAIR BRACKETT:  All right.  Well, thank
 9   you, that gets us going there.
10                  MR. ATKINS:  Now, you have two other
11   items in your notebook.  I think you addressed Jack's
12   issue of future surveys, but Mario has submitted one
13   dealing with bonds and you had one from Stephen
14   Fenoglio dealing with legislative initiatives.
15                  CHAIR BRACKETT:  All right.  So this
16   would come up as part of the work plan or legislative
17   initiatives or would it be an agenda item?
18                  MR. ATKINS:  What you are working on is
19   a proposed work plan to submit to the commissioners for
20   their approval, so you would be -- you're requesting
21   that they continue the items that we've discussed, such
22   as the annual report on the Bingo industry, comment on
23   proposed rules, review of the operator training
24   program.  You have proposed a new item dealing with
25   advertising and the other items contained in -- or,
0124
 1   submitted, one was for Mario dealing with bond
 2   requirements and the other was from Steve Fenoglio.
 3                  CHAIR BRACKETT:  And that's in your
 4   notebook.  So who would like to work with Stephen on
 5   new legislative initiatives?
 6                  MR. ATKINS:  I think before you start
 7   assigning people, you want to make sure that that's the
 8   direction the commission wants to go.
 9                  CHAIR BRACKETT:  Well, okay.  If that's
10   the direction the commissioners want us to go, then you
11   will be notified and activated for your volunteer
12   service there.
13                  MR. ATKINS:  And I should have spoken up
14   earlier, that would include the issue dealing with
15   advertising and bonds.  I think it's relatively safe to
16   say that, as part of this continuing program, you
17   formed these other work groups on -- as a result of
18   those still pending items.
19                  CHAIR BRACKETT:  Okay.  Well, it would
20   include the advertising issue and the prize increase,
21   too?
22                  MR. ATKINS:  If you wanted to include
23   the one on the prize increase, yeah.
24                  MS. TAYLOR:  Is the study of alternative
25   styles of bingo on this work pad somewhere?
0125
 1                  MR. MOORE:  It's Item 5.
 2                  MR. ATKINS:  Yeah.  The one in your
 3   notebook, Suzanne, is missing a page.  I think it's
 4   that extra page right there.
 5                  MS. TAYLOR:  Okay.
 6                  MR. ATKINS:  In the notebook, I think it
 7   goes from three to seven, but there was another page
 8   handed out.
 9                  On the work group that you formed with
10   Virginia and Suzanne, the review of the operator
11   training program, the staff representatives will be
12   Marshal McDade and Norma Quezada.  And I'll have to get
13   back with you on the other two, on the review of forms
14   and the operations manual.
15                  CHAIR BRACKETT:  Now, those are
16   separate, review of forms and operation manuals?
17                  MR. ATKINS:  Those are two separate
18   items, yes.
19                  MR. MANIO:  What about advertising, who
20   is the contact?  Billy, who will be the contact for
21   advertising in the commission?
22                  MR. ATKINS:  I don't know at this time.
23   Again, until the commission says yes, move forward, I
24   wouldn't even really think about it.
25                  MR. MANIO:  Okay.
0126
 1                  CHAIR BRACKETT:  Okay.  Is everybody
 2   comfortable with that?  I believe that concludes Item
 3   No. 11.
 4                  Okay.  Item No. 13:  Now we would like
 5   to have public comment.
 6                  MR. HUTCHINS:  My name is Charles
 7   Hutchins from Dallas, Texas.  I heard the words awhile
 8   ago "smoking ban."  There's been several of them that's
 9   came into the state, notably the one in Dallas.  I know
10   Larry is well informed on that.  They did just
11   basically destroy the charities in Dallas.  It cost
12   them thousands and thousands of dollars this past year.
13   I would like to see something -- and believe me, I
14   really don't know how to go through here and do it --
15   but we need to bring some kind of rule or play in and
16   get help from the commission, whatever we can do to try
17   to get bingo as something that is more or less taken
18   care of by the state, exempt from the cities being able
19   to come in and tell us what we can do as far as
20   smoking.
21                  I don't believe anyone has a problem
22   with a smoking or nonsmoking area.  You know, someone
23   proposed that we have a smoking area instead of a
24   nonsmoking area with the right filtrations and all such
25   systems, you know, and I don't believe there's any
0127
 1   bingo halls that have a problem with that.  I mean, you
 2   want to cater to everyone; you want to cater to the
 3   entire public out there, and there's people who really
 4   disdain people that smoke, and then, you know, it's on
 5   the other side, too.
 6                  We really need, you know, I think, as an
 7   industry, to look at this and try to come up with a
 8   reasonable something from somewhere so that we can
 9   control what the cities do to the bingo halls and the
10   charities, because that's who they actually ruin; they
11   actually ruin the charities.  Several of those have --
12   and being from Dallas, I'm one of those that's had a
13   lot of charities that's lost a lot of money, and it
14   needs to be addressed.  Like I say, I'm not, you know,
15   up to addressing it or knowing exactly how, but we do
16   need to address it and try to take care of that in some
17   way for the sake of the charities.
18                  CHAIR BRACKETT:  Let me get a point of
19   clarification on this, you are interested in having a
20   state law that would overrule a city ordinance?
21                  MR. HUTCHINS:  Well, state law always
22   overrules a city ordinance, but --
23                  CHAIR BRACKETT:  Regarding smoking?
24                  MR. HUTCHINS:  What I'm trying to say is
25   that bingo is a state-regulated activity; therefore,
0128
 1   you know, it seems the state would have -- or, through
 2   the commission or whatever, we could, you know, work
 3   out something to go through the legislative process and
 4   keep them from coming in and -- like I say, you know, I
 5   don't think anyone has a problem with separate smoking
 6   and nonsmoking areas, even down to having just a
 7   smoking area instead of the way it is now, where most
 8   places have a nonsmoking area.  But, you know, it
 9   should be a reasonable thing to work out.  I don't
10   understand why -- like the city of Dallas came in with
11   such a rule that would just destroy the charities and a
12   lot of other businesses, restaurants and everything
13   else up there.
14                  MS. MORRIS:  Well, I was just going to
15   say, of course, this isn't an agenda item, so you're
16   not going to deliberate amongst yourselves or through
17   him with each other.  You can clarify what the
18   questions are, but, in fact, your deliberation is to
19   put it on as an agenda item for next time.  He's
20   stating what he's saying to you, that's a public
21   comment.
22                  Chairman, I understood you were trying
23   to clarify what he was saying to you, but I'm going to
24   interrupt you, with all respect, and say, unless you're
25   trying to clarify, if you don't understand what he's
0129
 1   talking about, go ahead and ask if you don't understand
 2   it, but if you truly understand what he's talking
 3   about, then you are limited, put it on an agenda item
 4   and have a full discussion next time, but this is
 5   public comment.  It is an unnoticed item to start
 6   discussing smoking bans.
 7                  MR. WHITTINGTON:  I think it's a
 8   legislative issue and that's what we need to deal with
 9   Steve on legislative --
10                  MS. MORRIS:  With all respect, sir, your
11   deliberations, please, just take his comment, and you
12   can say next time what you think how this issue should
13   be viewed, that you believe whatever it is you think.
14                  MR. ATKINS:  The purpose of a public
15   comment agenda item is to allow people to come up and
16   say whatever they want, and that's it.  There's no
17   discussion; there's no action, unless, under the next
18   item, the committee says, let's put a smoking item on
19   the agenda.
20                  MR. HUTCHINS:  That would be my request,
21   then.
22                  MR. ATKINS:  Right.  Public comment,
23   that's it, just public comment.
24                  MR. HUTCHINS:  I would like to put it on
25   the BAC's agenda.
0130
 1                  CHAIR BRACKETT:  All right.
 2                  MR. HUTCHINS:  Thank you.
 3                  CHAIR BRACKETT:  Stephen, did you have
 4   anything else?  You're covered on all the items?
 5                  MR. FENOGLIO:  I want to go home, I'm
 6   not going to say anything.  Thank you, Madame Chair.
 7                  CHAIR BRACKETT:  Well, thank you.  We
 8   appreciate your participation.
 9                  Okay.  Let's consider future action on
10   future meetings.  We need to think about the date and
11   agenda items at this point.  It's not the last time you
12   can bring an agenda item, though; it can be submitted
13   by mail.  So, one would be -- how would we word this
14   about the smoking?
15                  MR. ATKINS:  Well, I'm not sure, and I
16   think what Larry was eluding to, which we couldn't
17   because it wasn't an item for deliberation, is the fact
18   that the Advisory Committee has done that.  I mean, I
19   guess we could include a review of the last work
20   group's recommendation.  And the Advisory Committee, as
21   I remember, adopted the work group's recommendations.
22   We could see if there's, you know, any change in the
23   Advisory Committee's position.
24                  CHAIR BRACKETT:  How do you feel about
25   that, Larry?  Do you think we need to --
0131
 1                  MR. WHITTINGTON:  Yes, I think we need
 2   to do it again.
 3                  CHAIR BRACKETT:  Okay.  So that will be
 4   one item, review the work group's recommendations.
 5                  MR. WHITTINGTON:  Can I say why?
 6   Because in 2002 and 2003, our two halls in Dallas,
 7   Texas lost $280,000 between the two years just because
 8   of it, and that's why we need to put this back on the
 9   agenda.
10                  CHAIR BRACKETT:  Who else knows that
11   they have an item now for the agenda?
12                  MR. DOUGHERTY:  Have we already included
13   the new survey?  That's already on the agenda.  Is that
14   right?
15                  MR. ATKINS:  Well, I think one of the
16   things we need to discuss is, I think it's the
17   commission's understanding that the work group -- that
18   the work plan is the agenda.  Those are the items that
19   they're seeking input on that, you know, we're trying
20   to identify what's going to be worked on, so, yeah, we
21   did discuss that, that survey.
22                  Now, in terms of the meeting date, I
23   think one of the things we need to keep in mind is
24   that, at least for the new agenda items, I don't think
25   this would apply to the existing items on the work
0132
 1   plan, but for those new items that have been discussed,
 2   before they can be considered, those would need to go
 3   before the commission for their consideration.  The
 4   reason I say that is because, if it's the committee's
 5   desire that those be on the next agenda, then the work
 6   plan would have to go to the commission beforehand, and
 7   it may not be until April, late March or April, until
 8   there's another commission hearing.  So, I just provide
 9   you that for planning purposes.
10                  CHAIR BRACKETT:  Okay.  I thought a
11   commission meeting was set.
12                  MR. ATKINS:  The commission meeting is
13   set for March 5th.  The only item -- and the discussion
14   and adoption of a work plan for the Advisory Committee
15   isn't on that agenda.
16                  CHAIR BRACKETT:  Okay.  Anything else at
17   this particular time?  Are there any ongoing reports
18   that we would just have as a matter of -- like from
19   Danny's group or any of the other groups?
20                  MR. MOORE:  I was concerned because that
21   page was left out of all of our books.  Now, part of
22   the work plan that will be presented to the commission
23   when she does this is the alternative styles of bingo?
24                  MR. ATKINS:  That's correct.
25                  MR. MOORE:  Okay.  Because I know we
0133
 1   said no on the web site.  Right?
 2                  MR. ATKINS:  And no on the Bingo
 3   Bulletin.
 4                  MR. MOORE:  Okay.  So those are the only
 5   two that really have been put off?
 6                  MR. ATKINS:  Yeah.
 7                  MR. MOORE:  And we're not going to set a
 8   date at this point for our next meeting?
 9                  CHAIR BRACKETT:  Yeah, I think we are
10   going to set a date.
11                  MR. MOORE:  Okay.  But we have to wait
12   until after the next commission meeting?
13                  MR. ATKINS:  You would have to wait
14   until after the next commission meeting not to address,
15   for example, alternative styles of bingo because I
16   think you can do that under the existing work plan.
17   There are four items, as I understand it, relating to
18   advertising, legislative issues, bond requirements or
19   prize increases.  Before you would want to address
20   those in an Advisory Committee meeting, you would want
21   to get -- you know, you would want to get approval from
22   the commission to include those on the work plan.  So
23   in terms of, you know, addressing any additional
24   proposed rules, the operator training program,
25   alternative styles of bingo, and other -- well, I think
0134
 1   you're going to want to clarify to the commission what
 2   type of survey you're thinking about doing, but the
 3   review of the forms or the review of the operations
 4   manuals, I think all of these are eligible items.
 5                  MR. MOORE:  Are they meeting every
 6   month?  I know they try to.
 7                  MR. ATKINS:  They try to.
 8                  MR. MOORE:  Okay.  So we're looking at
 9   March 5th, and they're meeting April -- so we can shoot
10   for maybe the last week in April.  I'm just -- we could
11   always change it, but I think that, you know, we don't
12   want to let too much time elapse here, that's my
13   feeling.
14                  CHAIR BRACKETT:  Okay.  So you want to
15   look at dates for setting our next meeting?  And I
16   think I heard the suggestion that toward the end of
17   April would be a real good time?
18                  MR. ATKINS:  The last Thursday in April
19   is the 29th.
20                  CHAIR BRACKETT:  Okay.  The last
21   Thursday in April is the 29th, and it's well past
22   Easter.  Is that a good time for everybody?  Is
23   10:00 still a good time?
24                  All right.  Then our next meeting will
25   be April the 29th at 10:00 a.m. in Austin.
0135
 1                  So, I feel like that we're ready to
 2   adjourn and I think everyone else feels that way, too.
 3   So the meeting is adjourned.  It is 1:35.
 4   
 5   
 6   
 7   
 8   
 9   
10   
11   
12   
13   
14   
15   
16   
17   
18   
19   
20   
21   
22   
23   
24   
25   
0136
 1                  REPORTER'S CERTIFICATION
 2   
 3   STATE OF TEXAS         )
 4   COUNTY OF TRAVIS       )
 5   
 6             I, KIMBERLYE A. FURR, Certified Shorthand
 7   Reporter for the State of Texas, do hereby certify that
 8   the above-captioned matter came on for hearing before
 9   the BINGO ADVISORY COMMITTEE as hereinafter set out,
10   that I did, in shorthand, report said proceedings, and
11   that the above and foregoing typewritten pages contain
12   a full, true, and correct computer-aided transcription
13   of my shorthand notes taken on said occasion.
14   
15             Witness my hand on this the 16th day of
16   March, 2004.
17   
18   
19                 _____________________________
                   KIMBERLYE A. FURR
20                 Texas CSR No. 6997
                   Expiration Date:  12/31/05
21                 Wright Watson Sten-tel
                   Firm Registration No. 225
22                 1801 North Lamar
                   Mezzanine Level
23                 Austin, Texas  78701
                   (512) 474-4363
24   
25   JOB NO. 040226KAF