0001 1 * * * * * * * * * * * * * * * * * 2 3 BINGO ADVISORY COMMITTEE 4 MEETING 5 6 7 NOVEMBER 2, 2005 8 9 * * * * * * * * * * * * * * * * * 10 11 12 13 14 15 16 17 BE IT REMEMBERED that the BINGO ADVISORY 18 COMMITTEE meeting was held on the 2ND of NOVEMBER, 19 2005, from 10:00 a.m. to 12:10 p.m., before Brenda J. 20 Wright, RPR, CSR in and for the State of Texas, 21 reported by machine shorthand, at the Offices of the 22 Texas Lottery Commission, 116 East Sixth Street, 23 Austin, Texas, whereupon the following proceedings 24 were had: 25 0002 1 APPEARANCES 2 3 Chairperson: Ms. Suzanne Taylor 4 (Corpus Christi, Commercial Lessor) 5 Committee Members: Mr. Mario Manio 6 (Garland, Commercial Lessor) 7 Ms. Rosalie Lopez (Odessa, Charity) 8 Mr. Larry Whittington 9 (Dallas, Charity) 10 Mr. Daniel Moore (Houston, Manufacturer/Distributor) 11 Ms. Kimberly Rogers 12 (San Antonio, Conductor Lessor) 13 Mr. Thomas "Tom" Weekley (McAllen, Charity) 14 Mr. John "Jack" Dougherty 15 (Austin, General Public) 16 Charitable Bingo Operations Director: 17 Mr. Billy Atkins 18 19 20 21 22 23 24 25 0003 1 INDEX - November 2, 2005 2 PAGE 3 Appearances.................................... 2 4 5 AGENDA ITEMS 6 Item Number 1.................................. 5 The Bingo Advisory Committee will call the 7 meeting to order 8 Item Number 2.................................. 5 Consideration of and possible discussion and/or 9 action on the minutes of the August 3, 2005 Bingo Advisory Committee meeting 10 Item Number 3.................................. 5 11 Report and possible discussion on rulemaking pertaining to progressive bingo games 12 Item Number 4.................................. 18 13 Report and possible discussion and/or action regarding a Nominations Committee and recommendations 14 to the Texas Lottery Commission for filling vacant Bingo Advisory Committee positions 15 Item Number 5.................................. 24 16 Report and possible discussion on electronic filing ability for quarterly reports 17 Item Number 6.................................. 35 18 Report and possible discussion on public service announcements 19 Item Number 7.................................. 48 20 Report and possible discussion on a bingo caller of the year program 21 Item Number 8.................................. 52 22 Report and possible discussion on the implementation of the Enforcement Process Review recommendations 23 24 25 0004 1 INDEX - CONTINUED - November 2, 2005 2 PAGE 3 Item Number 9.................................. 54 4 Report, possible discussion and/or action relating to the work group designated to develop 5 recommendations for the Bingo Advisory Committee annual report 6 Item Number 10................................. 69 7 Report, possible discussion and/or action on the Bingo Operations Manual 8 Item Number 11................................. 78 9 Report on the activities of the Charitable Bingo Operations Division 10 Item Number 12................................. 79 11 Public comment 12 Item Number 13................................. 80 Consideration of and possible action on future 13 Bingo Advisory Committee meeting dates and/or items to be considered for future meetings 14 Item Number 14................................. 87 15 Adjournment 16 Amendment Sheet................................ 88 17 Reporter's Certificate......................... 89 18 19 20 21 22 23 24 25 0005 1 NOVEMBER 2, 2005 2 CHAIR TAYLOR: Good morning. It's 3 about 10:03, so I would like to call the meeting to 4 order. We do have a quorum. 5 Item number two on the agenda is 6 consideration of and possible consideration and/or 7 action on the minutes of the August 3rd, 2005, Bingo 8 Advisory Committee meeting. 9 Are there any changes to the minutes as 10 posted? Is there a motion to approve? Mario, was 11 that a motion? 12 MR. DOUGHERTY: I'll -- I'll approve 13 the minutes. 14 CHAIR TAYLOR: A second? 15 MR. MANIO: I second. 16 CHAIR TAYLOR: All in favor? Aye. All 17 opposed? None. 18 Item number three, report and possible 19 discussion on rulemaking pertaining to progressive 20 bingo games. 21 We'll recognize Billy Atkins. 22 MR. ATKINS: Thank you, Madam Chair, 23 Members. This item is on here to facilitate some 24 discussion by the BAC on the possibility of the 25 development of a rule relating to a progressive bingo 0006 1 game that's conducted within the current prize 2 restrictions contained in the Bingo Enabling Act. And 3 just real quickly, if I could give you some background 4 as to how this thought process kind of came about. I 5 think most of you know that, in 2002, new 6 administrative rules were adopted relating to event 7 style pull-tab tickets, and we've seen some pretty 8 significant increases in pull-tab sales, we think, as 9 a result of that rule. In 2002, pull-tab sales were 10 88 million dollars. In 2003, they were 129 million 11 dollars. In 2004, they were 173 million dollars. For 12 the first two quarters of this year, they're just over 13 111 million dollars. 14 So shortly after the pull-tab rule was 15 adopted, we began work on the paper rule. And, again, 16 we solicited information from the industry and 17 suggestions from, particularly, manufacturers on 18 different types of paper that they produced and 19 manufactured for the conduct of regular bingo games. 20 And that rule, 402.301, was adopted, but we haven't 21 really seen similar types of changes in sales for 22 regular bingo as we have for pull-tab bingo. In 2002, 23 regular bingo sales included was -- I'm sorry -- was 24 468 million dollars. And these figures are including 25 both regular card sales as well as electronic sales. 0007 1 In 2003, they were 445 million dollars. 2004, they 2 were 430 million dollars. And for the first two 3 quarters of this year, they're just at 209 million 4 dollars. So the staff has been kicking around some 5 ideas that might feasibly generate some additional 6 interest in existing regular bingo games. 7 And so the first thing we thought of 8 was a progressive bingo game. And what I had included 9 in your notebook are three pieces of legislation that 10 have been considered by the legislature in the past, 11 relating to a progressive bingo game. Now, something 12 that is specific about each of those pieces of 13 legislation is that they exempt a progressive bingo 14 game from the existing prize limitations of 750 15 dollars per game, 2500 dollars per occasion. 16 What we would be proposing for 17 consideration and what we're asking for today is, of 18 course, input from the Advisory Committee, as well as 19 anyone that may be interested in working with staff on 20 the development of this type of rule, is a rule that 21 would further clarify the idea of a progressive bingo 22 game, staying within the current prize limitations, 23 again, of 750 dollars per game, 2500 dollars per 24 occasion. 25 Now, of course, we think this will 0008 1 probably have the most impact and biggest benefit for 2 a lot of the smaller organizations that may only offer 3 prizes of 25, 50 dollars per game. It would give them 4 a new type of game that they could offer. 5 So as we did some more of our research, 6 we went back to the paper rule -- again, that's 7 402.301 -- and we were reminded that, in the back of 8 that rule, Section 8, there is actually a reference to 9 style of play -- style of play of regular bingo games. 10 And it lists a variety of -- of different games. So 11 one of the things that we are proposing as a means to, 12 you know, possibly generate interest in or awareness 13 of bingo games, is that maybe that language in 14 Section 8 of 402.301 be pulled out and put into its 15 own rule dealing with style of play, and where 16 necessary, expand on those different types of games in 17 there so that all the organizations across the street 18 will have access to that through the administrative 19 rule. 20 Again, also, something that we would 21 be, you know, seeking through this process is, if 22 there are other commonly-played bingo games that 23 aren't currently contained in this rule, because one 24 of the things that we have found anecdotally, 25 particularly through our audit staff, is they notice 0009 1 differences from region to region in the type of games 2 that are played. You know, part of that may be 3 because the organizations just aren't aware of these 4 other types of games, or it could be that it's 5 something that just isn't of interest to the players 6 in that area. But we would like to explore it further 7 and, you know, get something memorialized in a rule so 8 that it will be available to licensees, this idea of 9 other types of games that they could conduct and -- 10 and offer at their bingo occasions. 11 So that, very quickly, is just a 12 summary of how this idea kind of came about, some of 13 the ideas that we had. Again, as we have started to 14 do with our rulemaking process, Sandy Joseph, 15 Assistant General Counsel, would be leading this 16 process. And as the memo in your notebook says, at 17 this point, what we would really like to do is, one, 18 solicit input from the BAC members, as well as if 19 there are any members of the BAC or the public that 20 would be interested in working on this, the 21 development of this rule, with Sandy. 22 CHAIR TAYLOR: So at this time are any 23 of the BAC members interested in serving on this work 24 group? 25 MS. LOPEZ: Sure, I will. 0010 1 CHAIR TAYLOR: Any other one besides 2 Rosie? 3 MR. MOORE: Yeah, I would be 4 interested. Sure. 5 CHAIR TAYLOR: So that's Rosie and 6 Danny. Anybody else? 7 MR. MANIO: Yes, I would be. 8 CHAIR TAYLOR: Mario. Okay. And 9 anybody from the general public interested? Joe, are 10 you interested? 11 MR. GARCIA: Yes. 12 CHAIR TAYLOR: Joe Garcia. Okay. At 13 this time this work group will be comprised of these 14 four people, along with the Lottery staff. 15 And before I forget, I would like to 16 recognize Commissioner Cox. Thank you for attending. 17 COMMISSIONER COX: Sorry I'm late. 18 CHAIR TAYLOR: No problem. Thank you 19 for being here. We really appreciate it. 20 Any other discussion on this work 21 group? Sandy, will you be putting together a time or 22 a date when the group is going to meet? 23 MS. JOSEPH: Yes. Yeah. I'll -- I'll 24 be contacting everyone. 25 CHAIR TAYLOR: Okay. So Sandy will 0011 1 arrange that with everybody. 2 Joe, did you want a public comment? 3 MR. GARCIA: Yes. I just, first of 4 all, want to commend Billy for bringing this -- 5 CHAIR TAYLOR: Could you say who you 6 are. 7 MR. GARCIA: Yes. My name is 8 Joe Garcia, and I'm here on behalf of Trend Gaming, 9 who is a distributor of -- of bingo equipment. 10 We're very interested in progressive 11 bingo. We've been pretty proactive in the 12 legislature, trying to pass some format. And I think 13 over the course of the last six years there has been 14 different formats, and trying to sell the idea to the 15 legislature has been somewhat difficult, given the 16 confusion that comes along with other gaming 17 activities, such as video slots, E-tabs. The 18 legislature becomes very leery. What I think this -- 19 this -- the promulgation of rules would do is -- is 20 will allow the legislature -- or allow the Commission 21 to look at some of the questions that the 22 legislative -- okay. I'm sorry. Turn the button on. 23 Pretty elementary. 24 One of the things that I think would be 25 very helpful to the legislature is -- is -- is 0012 1 addressing some of the questions that are asked. In 2 particular, who holds the money, how is the money 3 transferred, who pays, how many days after the prize 4 is won does people collect the money. And I think 5 that going through the promulgation of rules and 6 having that discussion with the charities, the 7 industry, will -- will answer some of those questions. 8 And we will be, again, going before the legislature in 9 '07 and trying to push a progressive bingo, and a -- a 10 very simple progressive bingo game, that all it does 11 is exempts the limits and puts a cap of 100,000 12 dollars. We think that, in explaining to some of the 13 members that, you know, we can already -- we can 14 already play a progressive game, but it's -- it's 15 restricted to certain limits as -- as proposed -- as 16 required by statute, that it makes it a little more 17 difficult. But I think if we can sit -- gather, get 18 some information, try to promulgate rules based on the 19 existing limits, and say, we're already doing this and 20 these are the rules that govern the progressive game, 21 then we can go to the legislature and say, all we 22 really want to do is raise the limits. And so we 23 think this would be a good starting ground to do some 24 work, like I say, addressing some of the questions 25 that the legislature has. So I look forward to 0013 1 serving and -- and -- and working with the staff and 2 with you all to answer some of those questions that 3 the members of the legislature have. 4 MR. MOORE: I've got a question, Joe. 5 This -- there was -- there has been three bills over 6 the last three sessions or four sessions, and they're 7 all pretty similar. I mean, they're all inside the 8 guidelines that we have set out. What would you do 9 differently? 10 MR. GARCIA: Well, I think some of 11 those bills try to address some of the questions that 12 the members have in terms of, okay, who holds the 13 money; is the -- is the person bonded; can you play a 14 multi-jurisdictional -- a multi-jurisdictional. In 15 other words, can the state of Texas play with the 16 state of California in a progressive game, or can we 17 do a -- a regional progressive game. Can we do a 18 statewide progressive game. Can we do, let's say, 19 three halls progressive game. Time frames -- I think 20 progressive games have come forth in -- in -- in 21 several formats. The first one I was involved with 22 was satellite bingo, and, obviously, that basically 23 was a -- a satellite feed that was -- that was 24 signaling out a progressive bingo game at a specific 25 time frame. Well, with the size of Texas, some of the 0014 1 questions -- do you have two games; do you have one 2 game. So the -- the legislation kind of goes through 3 various variations, and the last one we decided to 4 advocate for was for a -- just a basic, simple 5 progressive game that exempts the limits. And then we 6 would allow the Lottery Commission, given rulemaking 7 authority, to answer all the questions about regional, 8 statewide, multi-jurisdictional, that kind of thing. 9 Sort of simple, with a lot of authority to the -- to 10 the Bingo -- to the Lottery Commission. 11 MR. MOORE: So you're -- because you're 12 kind of talking about satellite, this -- this bill 13 here that I'm looking at, basically, is for one 14 location -- that they put in our books here, and 15 you're not looking at it -- 16 MR. GARCIA: Which bill was it? 17 MR. MOORE: Is there anything about 18 satellite in here? I didn't think I saw anything. 19 MR. ATKINS: No. The only -- no. The 20 only thing that we would be proposing under the rule 21 is a single progressive bingo game conducted by a 22 single organization at a single location. 23 MR. MOORE: Right. 24 MR. ATKINS: I think Joe is talking 25 about other concepts that would require legislative 0015 1 change. 2 MR. GARCIA: Right. 3 MR. ATKINS: It's our understanding at 4 this point that just a straight progressive bingo game 5 that's within the current prize limitation wouldn't 6 require any statutory -- any additional statutory 7 authority. 8 MR. MOORE: Right. And I -- I believe 9 if you go to some of these little VFWs, American 10 Legions do have progressive games that are within the 11 2500 dollars. They may pay out 1500 a session, but 12 they -- they cap it at a grand or whatever, going up 13 50 dollars a week or something like. 14 MR. ATKINS: Well, since a single prize 15 is limited to 750 dollars, we would hope that they're 16 not awarding a 1,000 dollar prize. 17 MR. MOORE: That's true. You're right. 18 You're right. I'm sorry. 19 MR. ATKINS: But that's a prize -- 20 that's a prime example of why we think there is a need 21 for a rule. And two other things that I wanted to 22 mention. One, you know, this group has had a work 23 group -- The BAC has had a work group looking at 24 alternative forms of bingo, and progressive is one of 25 the things that they've studied and recommended. But, 0016 1 again, something else that our auditors find when 2 they're out in the field, again, particularly with 3 these smaller organizations, is questions from the 4 organizations -- what else can we do. And so, you 5 know, the auditors may -- yeah, Danny is right. There 6 are some groups that are playing a form of a 7 progressive bingo game. But then there are others 8 that just aren't aware of it, just don't know it 9 exists. And so the auditors -- you know, the auditors 10 may, you know, throw the concept out, but then what it 11 does is it winds up generating a lot of questions from 12 the organizations. We think, having it all captured 13 in one place available to them, is a step towards, you 14 know, enabling them to better manage their games. 15 CHAIR TAYLOR: It's -- if I understand 16 what you're saying, Joe, you feel that the rule would 17 be a good thing because it gives a starting point to 18 point at the legislators? 19 MR. GARCIA: Exactly. If we can -- I 20 can go to legislators and say, there is already a rule 21 in place that allows progressive bingo games, and all 22 we would want to do is lift the cap. And that's -- 23 you know, that's an easier sell than trying to sell 24 the whole -- well, it's a new game that's -- hasn't 25 been played and we -- hasn't been thought out. But 0017 1 if -- if -- if some of the -- the specifics can be 2 thought out and -- and put in -- in rule format, as 3 Billy is suggesting, I think that just helps us at the 4 legislature sell the idea about lifting the cap. 5 CHAIR TAYLOR: Thank you. 6 MR. GARCIA: Thank you. 7 CHAIR TAYLOR: Is there any other 8 comment on this subject? 9 MR. WHITTINGTON: I would like to say 10 something about that. Look at the single charity. 11 Only one single charity can run a -- any type of 12 progressive game. Whatever you got in unit -- unit 13 accounting, and all the charities are basically 14 playing together in one day on -- on this. 15 CHAIR TAYLOR: Well, I -- I wouldn't 16 misspeak, but I would think unit accounting has to do 17 with the bookkeeping portion, not the fact that each 18 charity is licensed for its own individual time. So 19 they're -- they -- each charity would cap it at their 20 own 2500 a session. But -- 21 MR. ATKINS: That's -- that's exactly 22 what I was going to say. Even with unit accounting, 23 the individual organizations are responsible for their 24 individual games. 25 MR. WHITTINGTON: Okay. Good. Okay. 0018 1 CHAIR TAYLOR: Good morning, Larry. 2 Okay. Then we'll go on to item number 3 four, report and possible discussion and/or action 4 regarding a Nominations Committee and recommendations 5 to the Texas Lottery Commission for filling vacant 6 Bingo Advisory Committee positions. 7 We've got Billy and Kimberly listed on 8 this item. 9 MR. ATKINS: How do you want to start? 10 Do you want me to start? 11 MS. ROGERS: Sure. 12 MR. ATKINS: Okay. 13 MS. ROGERS: Go ahead. 14 MR. ATKINS: This item originally, 15 members, when it was put on your agenda and in your 16 notebook, dealt with the positions that are becoming 17 vacant in February of -- of 2006. We wanted to start 18 earlier on soliciting nominations and getting those 19 nominations to the subcommittee for their review and 20 interview. So we began several months ago -- we began 21 in September putting together some time lines. We've 22 been in contact with Kimberly, and we have also 23 provided you some updates, Madam Chair, on the actions 24 that we've been taking. And that's outlined in the 25 memo that's included in your notebook. Specifically, 0019 1 some of the items that we would like to get done 2 today -- one is just a clarification as to who will be 3 serving on the Nominations Committee for the February 4 2006 positions. The last reference we could find in 5 transcripts was in the January 2 -- January 26th, 6 2005, meeting, where Kimberly referenced herself, 7 Danny Moore, and Pete Pavlovsky as serving on the 8 committee. Of course, Pete is no longer here. Danny 9 is one of the positions that will be coming up. And 10 so we would think, for appearance sake, it might not 11 be good to have someone whose position is coming up 12 serving on the committee. So, one, we would ask for a 13 clarification as to who will be working with Kimberly, 14 if she continues to serve in that role, on the 15 February 2006 nominations, and also, just solicit any 16 other suggestions on ways to solicit nominations for 17 the upcoming positions. I do believe that we have -- 18 since this memo was done, I believe we have received 19 three -- 20 MS. ROGERS: Three. 21 MR. ATKINS: -- nominations. So that's 22 one item. Another item that still needs to be 23 addressed is the one with Mario's position, and the 24 fact that the individual previously recommended by the 25 advisory committee turned out to not be eligible, and 0020 1 he subsequently asked that his name be withdrawn. So 2 there is a total -- in terms of Mario's position, 3 there is a commercial lessor position. There is 4 Suzanne's commercial lessor position, which will 5 expire in February of '06, and Danny's 6 manufacturer/distributor position, which will also 7 expire in February of 2006. 8 MS. ROGERS: Right. Well, I would say, 9 addressing -- going back, Mario's position has been 10 over with for the time being, you know, for quite some 11 time. We didn't receive any nominations. Now we have 12 received two commercial lessors and one distributor. 13 But I would ask that Danny would still be in with me 14 to fill Mario's position. Would that be possible? 15 And then we form a new committee to fill Suzanne and 16 Danny's position, which I would still chair. But 17 those two commercial lessor positions that we have, we 18 can interview them and see if we can fill Mario's 19 position with one of those. 20 CHAIR TAYLOR: I personally think the 21 only problem with that, Kim, is I think we need to 22 establish a new committee today, because at the next 23 meeting probably we would need to be making 24 recommendations on people to fill my position and 25 Danny's position. 0021 1 MS. ROGERS: That's fine. That's fine. 2 Make a new committee -- 3 CHAIR TAYLOR: So I do think, yeah, 4 that your two positions, that's fine. So that you can 5 just do the -- all of them at one time. 6 MS. ROGERS: All of them at one time. 7 That's fine, too. 8 Is there -- is it -- I have a question 9 for Billy. Is it possible to find out if the 10 applicant is eligible -- thank you for that word -- 11 eligible for the position prior to sending it to me? 12 Or to the -- or to the work group? 13 MR. ATKINS: What we'll do is, we'll 14 attempt to do that at the same time. 15 MS. ROGERS: Okay. Okay. 16 MR. ATKINS: Because, again, we still 17 want to get those to you as soon as we can, but at the 18 same time, yeah, we can begin that process internally. 19 It would -- 20 MS. ROGERS: Because I hate to get the 21 Commissioners and then we -- 22 MR. ATKINS: Right. The -- the problem 23 that we're going to face is, I don't think it would be 24 feasible for us to do the full background that's 25 required on every applicant, or that's required on 0022 1 the -- the actual members. But we could do a 2 preliminary, which would at least avoid the situation, 3 hopefully, that we had with Mr. Stoolfire. 4 MS. ROGERS: Right. Like on these two 5 positions, you can only be -- you know, there are 6 certain guidelines that right off the bat you have to 7 meet. So -- 8 MR. ATKINS: That's correct. 9 MS. ROGERS: Okay. That would be 10 wonderful. I -- I would still volunteer to chair the 11 Nomination Committee. 12 CHAIR TAYLOR: Anybody else who would 13 like to serve with Kim? 14 MR. WEEKLEY: I'll go ahead. 15 CHAIR TAYLOR: Tom. 16 MR. WHITTINGTON: Are y'all going to 17 resubmit your applications again, you two? 18 CHAIR TAYLOR: Okay. Kim is going to 19 chair it, Tom, and we need one other person. Who 20 else? Larry, were you willing to serve on this 21 committee? 22 MR. WHITTINGTON: Yes. 23 CHAIR TAYLOR: Thank you. That will be 24 the three-member committee. Kim will chair it. So at 25 the next meeting, then, you will come forward with 0023 1 recommendations to fill Mario's position, my position, 2 and Danny's position, we hope. 3 MR. WHITTINGTON: I got -- I got three 4 recommendations already, and I'm looking at them. 5 MR. ATKINS: And, again, just, you 6 know, for the record, we did that first round of 7 soliciting nominations and didn't receive a lot. 8 Subsequent to that, we've gone back. We still have it 9 posted on the Web site. We still have -- have put 10 notices in the Bingo Bulletin. What we did this time, 11 since it was a somewhat smaller group that we were 12 seeking nominations from, we did a direct mail piece 13 to all commercial license, commercial lessors, and 14 manufacturers and distributors, sent notification to 15 them. 16 MS. ROGERS: And I would commend the 17 Lottery for doing that because when you opened up your 18 quarterlies, that little orange paper was right there. 19 And it apparently got the attention of some people 20 because we got three applications. So it was a good 21 job. 22 MR. ATKINS: And we, again, just for 23 the committee's information, have included a copy of 24 the time line that we've been discussing with 25 Kimberly, in your notebook. 0024 1 CHAIR TAYLOR: Any other discussion on 2 this topic? 3 Before we move on, I was hoping that we 4 would see Worlanda because I'm just guessing that it 5 was her initiative to add these tabs to the book, 6 which is totally awesome. It -- it's making using the 7 book so, so easy, that we would really, really like to 8 express our thanks to her for this. 9 MR. ATKINS: We probably want to 10 include these mini tabs in the future if we have some 11 extra ones. 12 CHAIR TAYLOR: There are some extra. 13 But it really makes using the notebook very, very 14 simple. And we all really appreciate it. 15 Item number five, report and possible 16 discussion on electronic filing ability for the 17 quarterly reports. Terry Shankle. 18 MS. SHANKLE: Good morning. 19 Members, as you know, the division has 20 been working hard to improve access to necessary 21 information, as well as improving the means of 22 complying with regulatory processes, for example, the 23 development of the Bingo Services Center, that went 24 live September 1st, 2005, and the ongoing development 25 of our forms into interactive pdf format. This is the 0025 1 next step. 2 Since the fourth quarter of 2003, 3 manufacturers and distributors have had the 4 opportunity to file their quarterly report 5 electronically. Beginning with the first quarter of 6 2006, conductors, lessors, and units may use the 7 electronic format to file their quarterly reports. 8 Also at this time, the Automated Forms Manual, 9 currently available on the Charitable Bingo Web site, 10 will be modified to include the capability of 11 electronic filing. At that time you will have two 12 options to file electronically -- a stand-alone 13 quarterly report, as you see here, or the quarterly 14 report that will be included as part of the Automated 15 Forms Manual. Your handouts include copies of all 16 presentation slides so that you may refer back if need 17 be. 18 And now it is my pleasure to 19 demonstrate the simplicity of the conductor, lessor, 20 and unit electronic quarterly report forms. 21 First, I would like to refer you to the 22 instruction page. It has been developed as a referral 23 and assistance tool to complete the Texas conductors 24 quarterly report that is part of the electronic 25 notebook. You'll notice, as we go through the 0026 1 demonstration, when you type in the taxpayer number, 2 organization name, and select the quarter, which in 3 this case we selected the first quarter of 2006, the 4 information automatically populates to the quarterly 5 report, schedule A, and payment coupon. When a 6 conductor is typing in the number of occasions and 7 accidentally types in more than two digits or more 8 than the number 52, a pop-up box will appear with an 9 error message that says, please enter a number between 10 zero and 52. This was done in order to help reduce 11 inadvertent omissions in -- I'm sorry. In order to 12 help reduce inadvertent omissions, all fields require 13 some value to be entered, even if zero. As you can 14 see, the form is interactive and is programmed to 15 total the figures, making it mathematically correct, 16 which as mentioned earlier, will help save the 17 conductor from receiving an adjustment letter due to 18 addition errors. If you were using the Automated 19 Forms Manual, you would only have to fill out five 20 fields to complete the form since the data is 21 accumulated on a daily or weekly basis. Those five 22 lines are line 14, rental income received; line 15, 23 approved loans; line 16, bingo interest earned; line 24 17, value of merchandise prizes donated; and line 36, 25 previous proceeds undistributed from the prior 0027 1 quarter. We're going to skip to line 38, which is 2 blank and cannot be manually entered. 3 For purposes of our demonstration, we 4 will assign amounts to the different classifications 5 on schedule A. On lines one and two -- I'm sorry. On 6 lines one and two of schedule A, the totals have been 7 calculated and populated to the line 38 of the 8 quarterly report. This was designed to help the 9 organization from making an error when transferring 10 charitable distribution figures between one form -- 11 between the two forms. The quarterly report and 12 schedule A are now complete. On line nine of the 13 quarterly report, the organization had a total of 14 $113,293 in prizes awarded. Let's tab over to the 15 payment coupon and note that that amount is on line 16 1A, again, helping the organization stay error free. 17 Now let's go back to the quarterly 18 report. If this organization was a conductor lessor, 19 line 14 would show rental income received. We'll type 20 in 25,000 dollars on line 14 and then tab back to the 21 payment coupon and see that the 25,000 dollars was 22 populated onto line 7A. Also note that prize fees, 23 line 6A, and 12A, rental tax, are added for a combined 24 total on line 13A. The preparer would type in their 25 name, phone number, and date, and would then print out 0028 1 the coupon, sign it, attach the check, and drop it in 2 the mail. The prize fee and/or rental tax payment has 3 to be postmarked on or before the 25th to be 4 considered as timely paid. 5 The next step will be to save the file 6 as an Excel file and name the file. This is how we 7 recommend you name the files. Begin with a C for 8 conductor, no space, taxpayer number, then space and 9 the two-digit year and quarter, as shown here. And 10 finally, by the due date, the organization will mail 11 the file to us at bingo.reports@lottery.state.tx.us. 12 The subject line should include QR for quarterly 13 report and C for conductor, L for lessor, and U for 14 unit. The taxpayer or unit number is shown here. 15 Attach the file and send it. If you are going to send 16 more than one attachment, please make note in the 17 subject line, such as quarterly -- QR multiple 18 reports. Be aware, however, when you are attaching 19 multiple files, that there may be attachment size 20 restrictions. 21 For the lessor quarterly report, it is 22 a single page without either a start page or a payment 23 coupon. When completing the lessor report, the 24 taxpayer number will be entered, along with the 25 lessor's name, location name, and reporting period, 0029 1 which will be selected. The numeric amount of the 2 rental income received will be entered, and then the 3 receipts due will automatically be calculated in 4 dollars and cents. Again, you may refer at any time 5 to the instructions to complete the Texas bingo 6 lessor's quarterly report. The preparer will type in 7 their name, phone number, date, and print the return 8 and sign it, and, again, drop it in the mail, along 9 with the rental tax check, on or before the due date. 10 The naming convention for the lessor will be the same 11 as the conductor, with the exception of using L for 12 lessor. If a lessor has multiple locations, we would 13 recommend you naming the file with an L, the taxpayer 14 number, underscore, and one through however many 15 locations you are filing for. For example, the first 16 file, as shown here, would be L, the taxpayer number, 17 underscore 1. The second location would be named L, 18 taxpayer number, and underscore. And you just 19 continue like that. 20 The unit data -- data fields are 21 identical to those that we just entered on the 22 conductor report, so I won't go through those steps. 23 The difference between the conductor file and the unit 24 is the unit file contains schedule B. For 25 presentation purposes, we filled in the names, the 0030 1 taxpayer numbers, and amount transferred to each unit 2 member. If you need more lines, you may click on the 3 drop-down box and select the number of members that 4 you have in your unit, and the number of rows will 5 automatically be added for you. 6 Rick, let's scroll down to the bottom 7 of schedule B. The total amount transferred to the 8 unit members has been totaled on line four and is now 9 on line 38 of the quarterly report. 10 Let's go back to the top of schedule B. 11 The code on the left-hand side identifies each 12 particular unit member. We'll press the view button 13 for member number one, and it brings up the unit 14 member report. On line one, the amount transferred 15 from the unit on schedule B was populated into that 16 line. The naming convention and e-mailing procedure 17 is identical to that of a conductor and lessor, with 18 the exception of U, for unit, in the file name. 19 There is a remaining issue to work 20 through on the electronic filing of the unit report, 21 and I would appreciate BAC members volunteering to 22 work with me to finalize the implementation of the 23 electronic file within the next two weeks. The issue 24 is, Charitable Bingo Administrative Rule 402.502(d)(2) 25 requires each member of a unit to file their own 0031 1 member quarterly report. With the rule in mind, there 2 are two options we've identified so far. Option one 3 would be to leave the unit electronic filing package 4 just as we have demonstrated, requiring the designated 5 agent or trustee to be responsible for filing the unit 6 member reports. Or option two would be to add a 7 button on schedule B that would indicate the 8 designated agent or trustee would not be responsible 9 for filing the unit member quarterly report. In 10 option two, all that would be filed electronically 11 would be the unit report and schedule B. Each unit 12 member would be required to file their quarterly 13 report and schedule A. 14 This is the conclusion of our 15 presentation on the electronic filing of the 16 conductor, lessor, and unit reports. As accounting 17 services manager, I am very excited to offer this 18 service to our licensees. And at this time I will be 19 happy to answer any questions that you may have. 20 MR. DOUGHERTY: Terry? 21 MS. SHANKLE: Yes, sir. 22 MR. DOUGHERTY: If you haven't already 23 said so, are -- these are software programs that will 24 be sent to all bingo halls now or pretty soon? 25 MS. SHANKLE: Where you will find them 0032 1 will be on the Internet, on the Charitable Bingo Web 2 site. Under the forms -- quick forms, you can pull 3 down accounting, and those forms, the Automated Forms 4 Manual and the stand-alone form for conductor, lessor, 5 and unit will also be there. 6 MR. ATKINS: It will require 7 individuals to have their own copy of Excel. That's 8 the -- that's the software this is written in. But 9 the workbooks, et cetera, are all -- are available on 10 our Web site for downloading. 11 MR. DOUGHERTY: Thank you. 12 MR. MANIO: Terry, would you clarify 13 once again what needs to be resolved in the next two 14 weeks? 15 MS. SHANKLE: The issue of option one 16 and option two, whether we're going to continue to 17 include the unit member reports or if we place a 18 button on schedule B that says, the designated agent 19 or trustee for that unit will not be responsible for 20 filing those, that the unit members would be in charge 21 of filing theirs -- theirs on a quarterly basis and 22 filling out schedule A. 23 MS. LOPEZ: So basically you're still 24 wanting to determine whether each organization is 25 still responsible for filing their own report, even 0033 1 though they're a unit? Is that -- 2 MS. SHANKLE: And they are -- yes. 3 MR. MOORE: Terry, so are the charities 4 right now, do they have to -- I'm sorry. Do the 5 charities in a unit -- the unit files a quarterly 6 report and the charities do, or not? 7 MS. SHANKLE: That is correct. 8 MR. MOORE: They -- they do? 9 MS. SHANKLE: Yes. 10 MR. MOORE: Okay. So we're trying to 11 determine if the agent can do that for them? 12 MS. SHANKLE: Well, Danny, in some 13 cases, now, I don't know if -- if the unit sends them 14 out, they fill them out, and send them back in. We 15 get them as a package in a lot of cases. Or we'll 16 receive the unit -- unit report, along with 17 schedule B, and then we'll have the different unit 18 members come in. So we do receive them both ways. 19 MR. MOORE: So you prefer to require 20 them to do -- do them one way or the other? 21 MS. SHANKLE: That would be what we 22 would discuss. 23 MR. MOORE: Yeah. 24 CHAIR TAYLOR: So anybody wanting to 25 serve on this work group? 0034 1 MS. SHANKLE: And it won't be a lengthy 2 work group. 3 CHAIR TAYLOR: I'll serve on it with 4 you. 5 MS. SHANKLE: Okay, Suzanne. 6 CHAIR TAYLOR: Kim, did you want to 7 also? 8 MS. ROGERS: Yeah. I'll serve on it. 9 MS. SHANKLE: Okay. Great. I'll be in 10 touch with you by the end of this week. 11 MR. FENOGLIO: Madam Chair? 12 CHAIR TAYLOR: Yes, sir. 13 MR. FENOGLIO: For the record, my name 14 is Stephen Fenoglio. I did not intend to speak on 15 this issue, but I'm a little concerned that there is a 16 provision -- and I'm sorry -- I didn't listen to the 17 entire presentation, but I'm concerned there may be a 18 provision in the -- in the unit agreement that we 19 wrote that may conflict with what the staff wants to 20 do. And I would like to be added to the group because 21 I would hate that we go down this road and end up with 22 a work product that might be contrary to the 23 provisions of the unit agreement. 24 And I'll give you a -- an appearance 25 slip, Madam Chairman. 0035 1 CHAIR TAYLOR: Thank you. 2 Okay. So this work group will be 3 myself, Kim, and Steve Fenoglio. 4 MR. WHITTINGTON: Plus, I was listening 5 that either -- either showing the schedule B or leave 6 it both ways like it is now, but it's going to be both 7 ways regardless if you go to schedule B because people 8 are filing separate anyway because they're not a unit. 9 So it's going to be both ways anyway for a long time 10 because everybody is not a unit anyway. 11 CHAIR TAYLOR: Any other discussion on 12 this topic? 13 If not, we'll move on to item number 14 six, report and possible discussion on public service 15 announcements. Bobby Heith. 16 MR. HEITH: Good morning, Madam Chair 17 and Committee Members. I came to you at a prior 18 meeting and talked to you about the possibility of 19 producing a public service announcement, and at that 20 time, I wanted your input from the beginning. 21 Did I say my name for the record? My 22 name is Bobby Heith, and I'm the Director of Media 23 Relations at the Texas Lottery Commission. 24 I've thought, since then, that it might 25 be better if we could produce something that y'all 0036 1 could see visually, to know that what we're capable of 2 doing. We have two fine staff members in Philip 3 Bates, who is with us here today, and Glenn Hill that 4 can produce these. And I thought maybe if y'all could 5 see what we've put together so far, then we could go 6 out for -- for suggestions, comments. I've been in 7 contact with Rosie through e-mail, and she's going to 8 also send a tape that might help in that. 9 I'll -- I'll review a little bit about 10 the process on public service announcements. We have 11 drawings for the Texas Lottery Commission six nights a 12 week. We buy a block of satellite time to put those 13 things up -- to put the drawings up on satellite, and 14 then media sources can pull them down to use them. If 15 they want to -- to show the drawings live or if they 16 just want to pull the slate down with the numbers, 17 they can report that during a newscast. However, in 18 these blocks of satellite time, we have what we refer 19 to as dead air time, meaning there is nothing, because 20 there -- it's 15-minute blocks. The drawings don't 21 take that long. However, on Tuesdays and Friday 22 nights, when we have the Mega Millions drawing, it 23 draws -- it runs a little longer. And so what we do 24 is, we send out a media advisory the day before to 25 these media outlets and tell them what we're going to 0037 1 have available to them during the satellite time, give 2 them the coordinates, and then they can either pull it 3 down, record it, and play it at a time, usually when 4 they don't have time sold for advertising, they may 5 fill in. It may be 2:30 in the morning. In fact, a 6 lot of the times when they play our public service 7 announcements or our video news releases, it is in, 8 you know, early morning hours. However, you never 9 know who may see that or how it may be used. And -- 10 and we then get a report that will show if it has 11 indeed played and at what time it played and where it 12 played. 13 So what I would like to do now is to 14 play the three spots that -- again, that -- that 15 Philip and Glenn have put together for y'all. And 16 then if you have any comments today, great. If you 17 have any comments or anything you think that you would 18 like to see, you can contact me either by telephone or 19 by e-mail. 20 Also, in the production of this, we had 21 thought that this would be a good starting place, and 22 we could build on this for future public service 23 announcements. We may even want to -- to run the next 24 one and show a nonprofit that has benefited from 25 charitable bingo. And so just to give y'all some kind 0038 1 of ideas about what we were thinking. So if Philip 2 will play this now, y'all can look at it. And then 3 we'll -- I'll answer any questions. 4 We do have sound. 5 MR. ATKINS: Since we're -- while we're 6 waiting for them to get the audio working, two things 7 I might point out. There is no voice-over on any of 8 these. There is music, but there is no voice-over. 9 So that would be something else that I think Bobby and 10 his staff would be seeking comment on. And then also 11 I'll just let you know -- I'll just let you know 12 beforehand. I did show these to Commissioner Clowe 13 earlier in the week, and he asked that this committee 14 consider the music that they've -- they've used for 15 this. It was just -- his opinion, he thought it 16 sounded too serious. So I'll just -- I told him I 17 would -- I would pass that along. 18 MR. HEITH: We're having some technical 19 problems with the sound. 20 MS. LOPEZ: Did you receive the tape I 21 sent you? 22 MR. HEITH: I have not. 23 MS. LOPEZ: I sent that out. 24 MR. HEITH: Okay. It -- it -- it may 25 be in the building. 0039 1 And if -- if we cannot get the sound, 2 something we can do is make a copy for anybody that 3 would like one, if that's all right with Billy, and 4 send it to y'all, and y'all could play it on your own 5 and look at it. For some reason we're just not 6 getting any sound out of this. 7 MS. LOPEZ: I like the visuals already. 8 Those are really good. 9 MR. HEITH: Yeah. It -- it's -- I -- I 10 probably brag on Glenn and Philip too much, but they 11 do -- they do really good work. They just produced 12 something for a beneficiary campaign for the Lottery 13 side, and it really turned out well. They really do 14 good work. 15 MR. WHITTINGTON: Could this be put on 16 any link where you could go on the Internet and click 17 on it, and look at it? 18 MR. HEITH: Yeah. Sure could. We 19 could video stream. 20 MR. WHITTINGTON: That would be better. 21 MR. HEITH: That would probably be an 22 IT issue. 23 Well, we've done -- we're not going to 24 get any sound. 25 MR. ATKINS: Could we try it on this? 0040 1 MR. HEITH: And that would be something 2 I would have to scope -- scope -- 3 MR. WHITTINGTON: Even more so than 4 sending it out, the videos. 5 MR. DOUGHERTY: Was that spot one we 6 saw only? 7 MR. HEITH: Yeah. That was the first 8 one. And there are just some little differences. 9 Billy and I had reviewed it earlier, and he wanted to 10 make a couple of little changes, so we left the 11 original the way it was, and then we made some 12 changes. One thing that we -- Billy wanted -- and I 13 think it was a great idea -- at the end to give the 14 Web's -- Web address so you could go in there and, you 15 know, look for a location of a bingo game and things 16 like that. But, again, we thought, with this one, 17 it -- it's kind of a springboard effect so that the 18 next one, if -- if it becomes popular, we can -- we 19 could go and actually go out and either show a bingo 20 hall, and -- which we have footage of, obviously, but 21 also to -- to maybe go out and pick a nonprofit that's 22 benefited from charitable bingo and show that side of 23 the story as well, so... 24 MR. ATKINS: Members, we're going to 25 put it back in the video player. You'll be able to 0041 1 see the video but apparently not hear the audio. And 2 essentially, the difference between the three is 3 really just the placement of some of the graphics in 4 terms of distribution, prizes awarded, et cetera. 5 There are three, but we can't get that to project on 6 here. 7 (The videos were played.) 8 MR. HEITH: Well, I apologize for the 9 delay, but that gives you an idea of what we can do, 10 and, again, look forward to any comments that y'all 11 may have or recommendations. Again, Rosie is sending 12 a tape from the -- some -- an ad that she has. And we 13 can adjust that. Of course, we're working within a 14 time constraint of about 30 seconds, and sometimes 15 it's really hard to tell the whole story in 30 16 seconds. However, I think they did a pretty good job 17 here. So any questions or any comments or anything 18 that you have, I -- I would be more than happy to 19 listen to you and sit down with -- with Glenn and 20 Philip and see what we can do. 21 MS. LOPEZ: Obviously, this is all to 22 be translated, and the wording would be translated 23 into Spanish. Right? 24 MR. HEITH: We can do that. We do have 25 Leticia Vasquez, who is our Spanish language 0042 1 specialist, and she can do that. And that's one 2 suggestion that I was hoping to -- 3 MS. ROGERS: So it will be speaking -- 4 someone will be talking? 5 MR. HEITH: We can have that. 6 MS. ROGERS: Okay. 7 MS. HEITH: In this particular case, we 8 didn't put a voice-over. On a lot of our PSAs we do, 9 and it really comes across well. In fact, that was 10 one of the things I said, do we -- would we like a 11 voice-over on this particular -- and I think we can 12 do -- we can have one as is, we can have one, 13 obviously, in Spanish, and -- and then one a 14 voice-over as well. 15 MS. ROGERS: I would just like to 16 say -- I have a comment. It's beautiful. I love -- I 17 love the graphics and everything. My only suggestion 18 in the future was -- is when you shoot someone playing 19 bingo, be sure it's someone who is having a little bit 20 more of a smile on their face. She looks like she's 21 really -- she looks like me if I ever play bingo. I 22 am really intent, and you want to keep it light and 23 having fun, because people want -- it is serious. 24 Bingo is serious to a lot of people, but it also needs 25 to be -- 0043 1 MR. HEITH: Be great to see someone 2 winning, too. 3 MS. ROGERS: Exactly. Exactly. 4 MR. ATKINS: If you know where those 5 people are, I know -- I know they would be -- they 6 would be happy to shoot them. But in -- you know, we 7 had several rolls of film that they've shot at, you 8 know, bingo halls throughout the year -- and 9 throughout the years, and they're -- you know, they're 10 looking very serious. 11 MS. ROGERS: I know we -- we are 12 notorious for having people who bring bells, stand up 13 and holler, and they dance around when they win. I 14 mean, it -- it's really got to be -- and I always say 15 that when I walk in there. If you're not having 16 fun -- you know, come on. You can be serious, but you 17 need -- you still need to have fun because you want to 18 win. You can have both. 19 MR. WHITTINGTON: Well, what I wanted 20 to say, Robert, I am so happy to see us start a visual 21 because bingo has needed this for a long time. And 22 this is definitely a start, and -- and I know it can't 23 do nothing but help the charities. 24 MR. HEITH: That's why we're here, and, 25 again, we're -- 0044 1 MR. WHITTINGTON: But I'm telling you. 2 I've been here about three or four years, and this is 3 a start, and I think it's great. I've been talking 4 about this from day one. And I want to commend you. 5 MR. HEITH: Appreciate it. Of course, 6 I -- I -- again, I probably brag on these two. At 7 least one of them is here today. Of course, I don't 8 know how much I'm going to brag on him now since the 9 sound didn't work, but I'm not sure who -- if that was 10 his fault. 11 MR. WHITTINGTON: Well, believe it or 12 not, I enjoyed it without the sound. I think it was 13 better -- 14 MR. HEITH: I think they do a great 15 job. 16 MR. WHITTINGTON: -- because it makes 17 you look. And I think without the sound was a lot 18 better than the sound. 19 CHAIR TAYLOR: I -- I disagree with you 20 there, because I've found that we have a lot of 21 customers -- putting it in Spanish is great, but what 22 I have noted is, most of our customers, they can't 23 read English, can't read Spanish either. So I think 24 that's why you need -- you need the voice-over, 25 because there is an awful lot of people that are not 0045 1 going to be able to read what you've got written up 2 there. 3 MR. HEITH: Well, I thought it would be 4 helpful for y'all to see exactly what we can do today 5 publication-wise and maybe get some ideas going. 6 CHAIR TAYLOR: It's nice. It's real 7 nice. We like it. 8 MR. WHITTINGTON: I was just commenting 9 on what -- the voice -- I mean, no sound and sound. 10 MR. DOUGHERTY: I have a suggestion. 11 Are you going to be modifying or changing or is that 12 it? 13 MR. HEITH: That's not the final 14 product -- 15 MR. DOUGHERTY: Okay. Just wondering. 16 MR. HEITH: -- and that's why I brought 17 it today for suggestions from y'all, if y'all could 18 see anything that y'all want to add. And I think 19 we've got some good start on that today. 20 MR. DOUGHERTY: Well, I -- I was going 21 to suggest that since it is charitable bingo and it 22 involves money, if you could have a clip showing 23 somebody being paid several hundred dollars, laying it 24 on the table, because that's the way they pay. And 25 that would be just -- well, there is money being paid 0046 1 out. 2 CHAIR TAYLOR: I agree. 3 MS. ROGERS: I totally agree with that. 4 MR. HEITH: And we do -- and I -- and I 5 understand that we have some lottery video or footage 6 where it actually shows a winner at a convenience 7 store collecting the money. 8 MR. DOUGHERTY: Convenience store? 9 MR. HEITH: Well, at a -- a retailer. 10 I believe -- I believe it was the lottery side. 11 MS. ROGERS: For the lottery, not for 12 bingo. 13 MR. HEITH: Lottery. Not bingo, the 14 lottery side. 15 CHAIR TAYLOR: What is your e-mail 16 address? I'll send you a commercial and -- in our 17 commercial, I know there's somebody winning money and 18 smiling. 19 MR. HEITH: Okay. It's Robert.Heith, 20 H-e-i-t-h, at lottery.state.tx.us. 21 CHAIR TAYLOR: I'll send you one. 22 MR. MANIO: Bobby, may I offer this to 23 you? 24 MR. HEITH: Sure. 25 MR. MANIO: There might be some images 0047 1 in there that you might be able to look at. 2 MR. HEITH: Okay. And I -- and -- and, 3 again, I highly recommend that -- Rosie is sending me 4 a video -- that if y'all have anything to send that 5 would -- could be useful, please send it. 6 MR. WHITTINGTON: Just let me say, like 7 you look at any casino commercials, I mean, it's all 8 about winning. People are up there winning money. 9 It's all about that. And I think that's -- that's 10 basically what they're -- they're hitting on, on that 11 because -- because I would rather see that than 12 somebody just standing there playing. 13 MR. HEITH: Okay. 14 MS. ROGERS: It's more exciting -- 15 winning -- 16 MR. WHITTINGTON: That's when it gets 17 exciting. That's when it will put a smile on their 18 face. So get -- that's the time. 19 MS. ROGERS: That's why they play 20 bingo. That's why they play. 21 MR. WHITTINGTON: That's when you see 22 them happy. 23 MR. HEITH: All right. Thank y'all 24 very much. 25 CHAIR TAYLOR: Thank you. You could 0048 1 have seen us winning at your bingo hall, Larry. 2 MR. WHITTINGTON: I heard -- I heard 3 about that. She didn't even call me. They split it 4 in -- thirds, huh? She didn't give me the fourth. 5 CHAIR TAYLOR: We split it in thirds. 6 Okay. We -- we love it. We love the 7 public service announcements. And now if we can get a 8 long roll, that would be even better. And are these 9 going to be made available to the organizations so we 10 can try and take them locally and get them PSAs? 11 MR. ATKINS: Yeah. 12 MR. HEITH: We can do that. 13 CHAIR TAYLOR: Terrific. Any other 14 comment on this item? 15 Item number seven, report and possible 16 discussion on a bingo caller of the year program. 17 Billy Atkins. 18 MR. ATKINS: Members, we've included in 19 the notebook some information just for your 20 consideration and discussion. Some of the news 21 articles that we have posted on the bingo Web site 22 over the past several months have been from the United 23 Kingdom, and they've been discussing what they're 24 referring to as the bingo caller of the year 25 competition that they have. So we've included several 0049 1 of those articles. And what that led us to do is to 2 call and follow up with the National Bingo Game 3 Association in the United Kingdom, and they actually 4 sent us some information. That's the last -- last 5 item under number seven, about the competition, how it 6 works, et cetera. But, again, what we had noticed is 7 that this is something that has at least generated 8 media attention in the United Kingdom. It's 9 something, again, that we just wanted to put forward 10 to the Advisory Committee if this is something that 11 they would like to follow up with, if they think it's 12 anything that they think would translate over here. 13 Again, just another means to potentially generate, 14 again, either interest in or awareness of charitable 15 bingo in Texas. 16 CHAIR TAYLOR: I like it. Anything 17 generating media attention is great. 18 MR. ATKINS: Well, I don't think -- 19 again, I don't know that it's -- it's anything 20 that the -- that the Lottery Commission can do. I 21 think, you know, what we would be looking for is -- 22 from the Advisory Committee, is a means, you know, for 23 this to occur. I know the chairman has talked about 24 it in the past that, you know, benefit he believes 25 from bingo having some sort of association. You know, 0050 1 again, if something like that existed, this 2 potentially could be something that they could 3 sponsor. 4 CHAIR TAYLOR: So are we looking to put 5 together a work group to look into this? 6 MR. ATKINS: I think it's -- I think 7 it's the will of the committee, however they would 8 like to proceed on it. 9 CHAIR TAYLOR: Committee, how do you 10 want to proceed on this? Mario? 11 MR. MANIO: I am out of ideas. Well, 12 my initial reaction to this is, this is positive. 13 Anything that we can use between now and 2007 as we 14 get geared up for the legislation is welcome. 15 However, this is going to be a big, big organizational 16 undertaking if we want to do it for the whole state. 17 The other option is, we can do it regionally, like 18 North Dallas, North Texas, South Texas, Houston. But 19 the -- the initial activity of organizing this is 20 going to be enormous. 21 MS. ROGERS: I would be willing to 22 serve on a committee and assist -- help someone, 23 because I have a lot of ideas. 24 CHAIR TAYLOR: Rosie, were you going to 25 chair that committee? 0051 1 MS. LOPEZ: Would I like to chair the 2 committee? Of course. 3 CHAIR TAYLOR: Okay. We've got Rosie 4 chairing the committee. Kim is going to serve on 5 that. Any other members wanting to serve on the 6 committee? 7 MR. MANIO: I would serve with those on 8 my term. 9 CHAIR TAYLOR: Great. 10 MS. ROGERS: Suzanne still has some 11 time. 12 CHAIR TAYLOR: Rosie, Kim, Mario. Any 13 public members wanting to serve on this committee? 14 Then, maybe we'll leave it that you three can rope in 15 additional help outside of the committee. 16 MR. MOORE: I'm a member of an 17 association in Houston, you know, Carol Fontenot's 18 group. I can't even think of the name of it right 19 now. The Advocates. But -- 20 CHAIR TAYLOR: Charity Advocates? 21 MR. MOORE: Yeah, that's it. I'll 22 contact them for y'all and see if I can -- see if 23 they're interested in doing something in that area. 24 MR. MANIO: Is that an organization of 25 charities? 0052 1 CHAIR TAYLOR: Texas Charity Advocates. 2 They've been here and spoke to us before. 3 MR. MANIO: Oh, okay. 4 CHAIR TAYLOR: Okay. Any other 5 discussion on this topic? I love the idea, and I did 6 read the way they put it together, and how it's more 7 or less -- they had it by areas, and then each area 8 sent their representative. And I think it's a great 9 publicity stunt, and we need all the publicity we can 10 get. I think that this is something that could be a 11 lot of fun for us to do. So I look forward to hearing 12 from the committee at the next meeting. 13 Okay. Item number eight, report and 14 possible discussion on the implementation of the 15 Enforcement Process Review recommendations. Sandy 16 Joseph. 17 MS. JOSEPH: Good morning, Members. 18 Again, my name is Sandy Joseph. Is that on? Can you 19 tell? 20 All right. Sandy Joseph, Assistant 21 General Counsel. I wanted to -- 22 MR. ATKINS: Pull it closer to you. 23 MS. JOSEPH: I wanted to give you a 24 brief report on the status of implementation of the 25 Enforcement Process Review recommendations. I 0053 1 initially gave you a report on the activities and the 2 results of -- of efforts of the Enforcement Process 3 Review team last May. And I wanted to update you on 4 where the staff is on implementing those 5 recommendations. 6 To date, of the 31 recommendations that 7 were approved, 14 have been implemented, six to nine 8 are targeted and expected to be completed by the end 9 of the year, five are awaiting development by our 10 information resources staff. I think, as in all 11 organizations, they are in very high demand, have a 12 number of other competing demands. 13 The remaining recommendations are in 14 the initial to mid-development stage. But we are 15 making, I think, very good progress on implementing 16 these. As you may recall, the purpose was to increase 17 the effectiveness and efficiency of the enforcement 18 process. Most of the recommendations did involve 19 internal measures that we could take to be more 20 efficient, to communicate better with -- among 21 ourselves. And we are making good progress on those. 22 If you have any questions about 23 specific recommendations at any time, I'll be happy to 24 answer those, or give me a call at any time. Are 25 there any questions? 0054 1 CHAIR TAYLOR: One -- one question for 2 you, Sandy. 31 have been approved? Is that what you 3 said, or -- 4 MS. JOSEPH: Yes. 31 were approved for 5 implementation. 6 CHAIR TAYLOR: Okay. 7 MS. JOSEPH: 14 have been implemented. 8 Any other questions? Thank you. 9 CHAIR TAYLOR: Thank you. Any other 10 discussion? 11 Steve, you have this down on your 12 Witness Affirmation Form. Did you want to speak? 13 MR. FENOGLIO: I think I'll pass, Madam 14 Chair, and then visit with Sandy about this matter 15 privately. I don't want to take up y'all's time. 16 Thanks. 17 CHAIR TAYLOR: Thank you. 18 Item number nine, report, possible 19 discussion and/or action relating to the work group 20 designated to development recommendations for the 21 Bingo Advisory Committee annual report. 22 Kimberly put this report together for 23 us. Several members had input on it. And she put it 24 all together, so she's going to present that. 25 MS. ROGERS: Thank you, Suzanne. A few 0055 1 of us worked together to go through different items 2 and speak about how it has been affected over the past 3 year, 2003 compared to 2004. And do you want to do 4 where we each speak of what we put together? 5 CHAIR TAYLOR: That's fine. 6 MS. ROGERS: Okay. Gross receipts was 7 done by Suzanne, and she'll speak on that one. 8 CHAIR TAYLOR: The gross receipts have 9 been improved because of increased instant bingo sales 10 due to event ticket sales. Gross receipts increased 11 from 577,322,501 in 2003 to 610,853,172 million in 12 2004, resulting in an increase in gross receipts of 13 33,530,671 dollars. Instant bingo increased from 130 14 thousand -- excuse me -- 130,139,508 to 175,978,198 15 during the same period, providing for an increase in 16 instant ticket sales of 45,000 -- 45,835,690 dollars, 17 which accounted for approximately 136 percent of the 18 total increase in gross receipts from 2003 to 2004. 19 What we were trying to show, we -- the 20 committee itself had looked at the number -- had 21 looked at this and felt that this is why bingo had 22 improved, so then we tried to put actual figures to 23 prove our assumptions. So once we actually put the 24 figures in, our assumptions proved to be correct 25 because 136 percent of the increase in gross receipts 0056 1 was due to the increase in the instant ticket sales. 2 Additional improvements could be achieved by changing 3 games to include progressive bingo, linked satellite 4 bingo, and instant bingo cardminders, and allowing 5 instant bingo sales only in halls conducting bingo 6 games was also recommended. There is also a chart 7 that shows this, but what it's actually showing is 8 that all of -- all of the increase in gross receipts 9 came from the instant bingo sales. 10 MS. ROGERS: Thank you. Thank you, 11 Suzanne. The next would be charitable distributions. 12 MR. ATKINS: Kimberly? 13 MS. ROGERS: Yes. 14 MR. ATKINS: Before we go on, I had a 15 question about the gross receipts figure you have for 16 2004. 17 MS. ROGERS: Yes. 18 MR. ATKINS: Of 610 million point 8. 19 And I'm showing 604.2. 20 CHAIR TAYLOR: I'm -- I just took 21 this -- I -- we -- I just finished changing this 22 figure. I took it off of the information on the 23 Lottery Web site to make a graph to go with this. So 24 when -- 25 MS. ROGERS: Maybe there were some -- 0057 1 CHAIR TAYLOR: I used the Excel -- 2 MR. ATKINS: Well, that's the -- 3 CHAIR TAYLOR: -- came up with. 4 MR. ATKINS: From the bingo services 5 site? 6 CHAIR TAYLOR: Yes. Yes. 7 MR. ATKINS: Okay. I'm looking at the 8 same thing, right now. 9 MS. ROGERS: Maybe -- and there were 10 some amendments, possibly? 11 MR. ATKINS: There -- I wouldn't think 12 there would be -- 13 MS. ROGERS: That's a heck of a lot. 14 MR. ATKINS: Yeah. That's -- I don't 15 think there would be six million dollars worth. 16 CHAIR TAYLOR: What did you get -- in 17 the 2003, did you come up with the same number? 18 MR. ATKINS: Let me look real quick. 19 2003, for all four quarters, I'm -- I'm 20 showing 575.3. 21 CHAIR TAYLOR: Yeah. We're off just a 22 bit there, too, so... 23 MR. ATKINS: But -- yeah, 604. 24 CHAIR TAYLOR: So we'll change this to 25 "approximate gross receipts." 0058 1 MS. ROGERS: Okay. Next would be 2 charitable distributions, which I did myself. 3 Charitable distributions have gone up slightly over 4 the past year. In 2003, distributions were 5 29,885,167. In 2004, they rose slightly to 6 30,059,500. This increase is due to larger sales in 7 the event tabs. Overall, the distribution amount has 8 been decreasing over the years since 1991. This 9 decrease is due to organizations operating less bingo 10 games, the increased cost of instant bingo, increased 11 payouts in event tickets compared to instant tickets, 12 i.e., most instant bingo tickets pay out approximately 13 65 percent, and your event tickets pay out 75 percent. 14 Also, this is due to lower attendance. The lower 15 attendance caused many organizations to use some 16 income from instant bingo sales to help pay the 17 2500-dollar prize for bingo games. And once again, 18 the recommendation was for improvement to include -- 19 improving the gross revenue by increasing savvy 20 customer, by offering larger prizes through 21 progressive games, once again, and multi -- multi-hall 22 bingo, linked satellite bingo, and instant bingo 23 cardminders. So the same thing, that we need to -- 24 the same thing we did for event tabs, the -- the 25 suggestion would be to do to regular bingo, which I 0059 1 think we're starting to make a step towards. And 2 there is also a chart on there, which I pulled my 3 figures also from our handy little report that we get 4 now on the Web site. 5 And number three would be expenses, and 6 Mario did expenses. 7 MR. MANIO: The three major items of 8 expenses incurred by a conductor are payroll, rent 9 paid to the lessor, and lease to -- for electronic 10 equipment. In this portion of the report, we -- we're 11 just focusing on two of those, namely, the rent and 12 the lease for electronic equipment. There are three 13 charts if you -- attached to this report. The first 14 one is a chart showing both aggregate expenses for the 15 whole state or for all -- or for all conductors from 16 1994 to 2004, and, generally, there is a downward 17 trend. For example, the -- the expenses peaked at 18 about 140 million in 1990 -- 95. And in 2004, we are 19 at the 120 million mark. So there has been a decline 20 in aggregate expenses, and the reason for that is 21 there is also a decline in the -- in the number of 22 licenses in force. You know, it's been declining 23 since 1999. So, naturally, the -- the total expenses 24 would tend to go with the decline in the number of 25 licenses. 0060 1 However, the more meaningful statistics 2 would be expenses or -- or expenses at the conductor 3 level. And that we have seen increase a little bit. 4 For example, the -- the average rent per conductor 5 is -- went up from 25,000 in -- 25,045 dollars in year 6 2000 to 27,357 in 2004. So that is an increase in 7 rental paid of 2,302 per year. But broken down at the 8 session level, that's only about $14.82 per session 9 increase in rent. 10 Electronic sales, likewise, showed -- 11 showed a decline from a peak of about -- well, what -- 12 what we have -- what we're showing in here is rent -- 13 electronic rent -- I'm sorry -- equipment rental as -- 14 as a percent of gross sales for -- for computer -- 15 handheld -- computers and handheld equipment. In 16 1996, it's about 30 percent of gross revenue, down to 17 about 14 percent in 2004. So, again, there is a 18 steady decline in rental. And that is consistent with 19 new technology. You know, at -- at first deployment, 20 there would be a higher cost involved trying -- you 21 know, the manufacturers trying to regain part of the 22 cost of developing those equipment. But as the years 23 go by, there would be (inaudible), there would be 24 pressures from competition. And so it's been going 25 down, 2004. 0061 1 In conclusion, conductors are managing 2 expenses fairly well. Any -- an increase in 3 charitable distribution, therefore, will have to come 4 from revenue enhancement, or -- well, which is -- 5 which we -- we can relate to improving attendance, 6 because attendance remains to be the key in our 7 business. 8 MS. ROGERS: Thank you, Mario. Thank 9 you, Mario. 10 And fourth and final on there is the 11 attendance, which -- who was it? Who put that 12 together? Pete did. I'll go over attendance. As we 13 notice -- as you notice from your charts in the back, 14 attendance has been declining. And this is -- we did 15 it from 2000 to 2004. And anyone who is in bingo 16 knows that bingo has bingo highs and bingo lows 17 throughout the year, but if you'll look at the one -- 18 the quarterly attendance from 2000 to 2004, the high 19 starts out in the first quarter in the year 2000, at 20 6.8 million, and declines down in 2004 to 5.6 million, 21 which we once again relate to static bingo games 22 offered, additional gaming competition. A lot of our 23 bingo halls in the -- the borders of the states have 24 to deal with that, Internet gaming, and gaming all 25 over. The lack of interest in bingo in Texas, 0062 1 which -- and then the recommendations for it would be 2 improvement, including progressive bingo, once again, 3 linked bingo, increasing playing times, and adding an 4 appropriation for advertising to the bingo budget, 5 which I think we've kind of gone over a little bit 6 today, having the PS times and things like that. 7 We're trying to get that going. 8 Number five is any other areas 9 requested by the Commission, which at the time when we 10 did this, there were no other areas requested to be 11 looked at. Any questions? 12 CHAIR TAYLOR: Any other comments from 13 the committee? Steve Fenoglio? 14 MR. FENOGLIO: Madam Chair and Members 15 of the Committee, my name is Stephen Fenoglio. One 16 thing -- and I think this is a great report, but we're 17 talking about gross receipts, and we ought to be 18 talking as much or more about net receipts because the 19 gross receipts is kind of a meaningless number. It 20 also in here has -- discusses expenses, but doesn't 21 give the flavor of why expenses are going up. In 22 particular, the event tickets are the reason the 23 revenues are going up, but as y'all all know, your 24 expenses are increasing significantly because of the 25 prize fees, et cetera. And so it's -- it's a good 0063 1 thing that the instant bingo tickets are going up, but 2 you're also -- percentage-wise, your expenses are 3 going up. And if there is going to be any further 4 massaging of that, Madam Chair, I would be happy to 5 work with whomever on that. I don't want you to think 6 that I'm just criticizing for the sake of criticizing, 7 and I'm not. But we ought to be talking as much about 8 net receipts -- more about net receipts, gross less 9 prizes paid. 10 There is another issue that's 11 developing out there -- and I know this isn't probably 12 the correct time to talk about it -- is that there are 13 some perhaps even new -- newer products coming out on 14 pull-tabs. And at the appropriate time, I would like 15 to see about getting that on the agenda. 16 And I'll be happy to answer any 17 questions. Thank you. And good work, Kim. 18 MS. ROGERS: Thank you. 19 CHAIR TAYLOR: To answer the one 20 question about net receipts, what we actually did was 21 Rule 440.567(e) -- and I don't know if it's changed 22 since the time when we originally looked this up -- 23 said that it has specific areas that we have to -- the 24 five specific areas, and net receipts was not one of 25 those five. So that might be something that needs to 0064 1 be added to the rule, because the five areas were the 2 gross receipts, charitable distribution, the -- the 3 five areas. Or maybe other areas requested by the 4 Commission should be net receipts. 5 MR. FENOGLIO: And I -- and I think 6 just because it says those are the areas that you have 7 to report doesn't preclude you from reporting on 8 others as well. But, again, I'm not trying to be 9 critical, but in the legislative process, as some of 10 you know, the only thing the legislator will see is 11 that gross number of 580 million, and yet bingo only 12 gets less than ten percent of that. How can that be. 13 And so we spend literally two-thirds of our time 14 talking about, it's not a number -- the gross number 15 is not a number we can keep. It -- you know, 78 16 percent of it goes right out the door the same day. 17 And they kind of look at you and think, you're -- 18 you're hiding something from us. No, we're not 19 hiding. We're just telling you that's the issue. So 20 we ran into that with the Sunset process, and the 21 staff, to their credit, stepped forward and said, you 22 know, these guys are correct. Thanks. 23 MR. MOORE: Right, Steve. And I think 24 you're correct, and especially with the event tabs. 25 If you think about it, we're retaining 20 -- less than 0065 1 25 percent after the cost of the -- the product and 2 things like that. So I think it's important that we 3 all realize that -- and let everybody else know that 4 that isn't a correct number, in fairness to the 5 charities. 6 MR. FENOGLIO: Okay. Thanks. 7 MR. WHITTINGTON: I wanted to add, too, 8 you are so right, because you're talking about gross. 9 I mean, it sounds like -- and is a lot of money we're 10 talking about. And if -- if we don't have a way to 11 break this down and say, hey, no. 78 percent or 80 12 percent is going out the door -- I mean, everybody 13 looks and says, bingo has gone down. You know, where 14 is the money going? So we're stuck -- it's not like 15 a -- can't move. 16 MR. FENOGLIO: Right. 17 MS. LOPEZ: I think the fault goes 18 back, again, with public awareness. You know, the 19 concept of, you know, seeing the big picture. Of 20 having those big numbers out there, but in reality, 21 those are not the true numbers because of the fact 22 that by the time the, you know, pie is cut into so 23 many pieces, there is only a small portion that 24 actually ends up being divided among all the entities 25 involved. 0066 1 I might mention one other thing that I 2 know that we as charities are going to be facing here 3 in the coming winter months is, utilities are steadily 4 increasing because of what has happened with Hurricane 5 Katrina, Hurricane Rita. We're definitely seeing that 6 increase in our utilities. I mean, and I know that 7 that's another expenditure that we did not foresee 8 happening. And now we're going to be faced with that 9 as well. So that's, I think, a concern on my part as 10 being one of the charity representatives, that, you 11 know, we have to be accountable for paying our bills 12 and yet, you know, our -- our revenues are, you know, 13 not increasing fast enough to be able to maybe 14 sometimes keep up with just the day-to-day operations 15 such as utilities. 16 COMMISSIONER COX: Suzanne, Jim Cox, 17 Texas Lottery Commission. 18 I totally agree with the idea of 19 reporting the net. If -- if the rule says, report the 20 gross, by golly, report the gross. But we've had a 21 number of discussions at the Commission meetings that 22 the number that is really meaningful and the number 23 that can be most closely related to the charitable 24 distributions is, in fact, the net number. And so for 25 all the reasons that everyone has said here, I would 0067 1 like to see it reported along with that. And while I 2 won't attempt to speak for Chairman Clowe, it's been 3 my sense that he agrees that the net is an important 4 number. Thank you. 5 CHAIR TAYLOR: Thank you. 6 MS. ROGERS: Is it at this time that we 7 form another committee, too, since we're coming to a 8 close of this year, to do the 2005 report, or not? 9 CHAIR TAYLOR: Okay. This -- this was 10 actually the 2004 annual report. Previously, the 11 committee -- we hadn't been requested to do anything. 12 I think that if it's the will of the committee, we 13 could add that as a number five. And it wasn't 14 requested, but we could go ahead and do a net and add 15 it to the report. That means that we would probably 16 be coming back to the next committee meeting in -- 17 next year to get the committee to approve this and, I 18 guess, to establish a committee to do the 2005 annual 19 report. So if that's the will of the committee, then 20 Kimberly and I will work on item number five. 21 MS. ROGERS: Very good. 22 CHAIR TAYLOR: We will go ahead and add 23 a net proceeds for item number five and have that at 24 the next meeting. 25 MS. ROGERS: Very good. 0068 1 CHAIR TAYLOR: Yes. Is there any other 2 comment? If anybody wants to help, you know our 3 numbers. 4 MR. MANIO: In -- in reaction to Steve 5 Fenoglio's statement about expenses, and he brought up 6 a very good point about the increased cost in supplies 7 because of presenting more pull-tabs. So what I might 8 suggest is, I can revise the -- the expenses portion 9 to reflect that -- you know, the -- the increasing in 10 cost of supplies. 11 CHAIR TAYLOR: Okay. 12 MR. MANIO: And thank you, Steve, for 13 that comment. 14 CHAIR TAYLOR: Okay. So we will revise 15 it and tweak it a little bit further, and have it at 16 the next meeting. 17 Did we need to take a break? 18 We're going to take a ten-minute break 19 at this time. 20 MR. ATKINS: I'm -- I'm -- I'm sorry. 21 Before we take the ten-minute break, were you going to 22 ask for a committee to work on the 2005? Or did you 23 want to hold that -- 24 CHAIR TAYLOR: At the -- at the next 25 meeting, we'll go ahead and put the committee 0069 1 together. 2 (RECESS.) 3 CHAIR TAYLOR: We'll call the BAC to 4 order. 5 Okay. We're up to item number ten, 6 possible discussion and/or action on the Bingo 7 Operations Manual. Sandy Joseph -- oh, I'm sorry. 8 Phil Sanderson is going to do this. 9 MR. SANDERSON: Thank you, Madam Chair, 10 Members. For the record, I'm Phil Sanderson. I'm 11 Assistant Director of the Charitable Bingo Operations 12 Division. And I had rotator cuff surgery last week, 13 so -- just to let everybody know. It wasn't fighting 14 anybody at a bingo hall or anything. 15 MR. WHITTINGTON: I thought Billy hit 16 you, man. 17 MR. ATKINS: No, we didn't get in a 18 tussle. 19 MR. SANDERSON: In your notebook, you 20 have a -- the -- a final draft copy of the Operations 21 Manual. The committee -- the subcommittee of the BAC 22 and staff that worked on that, I believe, was 23 Mario Manio, Patricia Greenfield, Jody Mahaffey, and 24 Marshall McDade. We have reviewed all the -- we sent 25 it up to legal to review. It's come back. This is 0070 1 what I would like to call the final draft. Hopefully, 2 y'all have had time to look at it and here -- I'm here 3 today just to take any comments that you may have on 4 it. If there are some areas that you want to add to 5 it or make any changes, too, we can discuss that also. 6 And that's all I have for you. 7 MS. LOPEZ: I have to say that this is 8 very user friendly. It's a lot easier for, I think, 9 organizations to go through this manual and read, step 10 by step, what is required, other than going through 11 the rules and the, you know, policies. I think that 12 this is very well done. 13 MR. SANDERSON: Thank you. We're going 14 to try to design it where we can add sections to it. 15 I think one of the things would be, you know, some 16 changes to the unit accounting as we get more into how 17 that's being operated and handled, and any other 18 areas. If, you know, games change, you know, if we 19 get a progressive type game or other, you know, 20 legislative changes allow other types of games, then 21 we can easily update the -- the manual. 22 CHAIR TAYLOR: I have to agree with 23 Rosie. I went through it with the highlighter and 24 didn't highlight a single thing. So I think it's 25 great. 0071 1 MR. SANDERSON: All right. That's all 2 I have. Thank you. 3 CHAIR TAYLOR: Any other comments by 4 the committee? 5 MR. DOUGHERTY: Do you want nitpicky 6 comments? 7 CHAIR TAYLOR: Any comment that you 8 would like to make, we would love to hear. It's only 9 11:47. 10 MR. DOUGHERTY: Well, I do want to 11 preface that as being nitpicky, but -- well, I think 12 the pages ought to be numbered, in addition to the 13 chapter reference, like pages one through whatever. 14 But you do have -- at least you added the chapter 15 page; so that's okay. You don't have standard page 16 numbers. But -- so I can't reference you a page, but 17 on 1-4.2 -- 18 CHAIR TAYLOR: Well, in -- in -- in 19 defense, I think what they're saying is, this way they 20 can continue to add pages to the book as they update 21 things. Without changing everything, they can 22 continue to add to this. 23 MR. DOUGHERTY: Okay. I just have this 24 one little addition under Operator Training Program. 25 CHAIR TAYLOR: What page is that on? 0072 1 MR. DOUGHERTY: Well, it's one -- I 2 think I got it over here. I think it's page eight. 3 Eight. 4 MR. SANDERSON: 1-8? 5 MR. DOUGHERTY: Just page eight. 6 MR. SANDERSON: At the bottom, it'll 7 say 1 -- 1-4.2. 8 MR. DOUGHERTY: Right. Okay. In that 9 third last sentence there, it talks about requiring 10 attendance to a class at least -- it says, at least 11 every 24 hours. I think you ought to say at least 12 once every 24 hours, rather than just -- 13 MR. ATKINS: It actually says, every 24 14 months. 15 MR. DOUGHERTY: I mean months -- excuse 16 me. I meant at least once every 24 months. 17 CHAIR TAYLOR: That's what it says. 18 MR. DOUGHERTY: Mine doesn't. 19 MS. ROGERS: At least -- at least every 20 24 months. 21 MR. DOUGHERTY: At least every 24 22 months. I told you this was -- 23 CHAIR TAYLOR: Once -- okay, once. I 24 get it. Once. 25 MR. DOUGHERTY: For clarity. 0073 1 MR. ATKINS: Okay. 2 MR. DOUGHERTY: Wait a minute. I had 3 one other. Oh, all right. This is on page 13. 4 MR. SANDERSON: What does it say at the 5 bottom? 6 MR. DOUGHERTY: It's under the Audits 7 and Reviews chapter. 8 MR. SANDERSON: There is not a page 9 number on the bottom of the page? 10 CHAIR TAYLOR: 1-8.1. 11 MR. DOUGHERTY: 1-8.1. Okay. All 12 right. Okay. Will you -- I never found anywhere in 13 here a -- a slight definition of what an exit 14 conference is. And I still don't know. So could you 15 at least say a few words as to what an exit conference 16 is. 17 MR. SANDERSON: We can do that. 18 MR. DOUGHERTY: But I still don't know 19 what it is. It just jumps right in there, and it 20 threw me. 21 MR. SANDERSON: The exit conference is 22 where the auditor sits down with the organization and 23 the members of the organization and discusses the 24 results of the audit. 25 MR. DOUGHERTY: So it's an audit term. 0074 1 Huh? 2 MR. SANDERSON: Yes. 3 MR. DOUGHERTY: Okay. Well, I 4 appreciate just a little explanation. And that would 5 be my -- the end of my comment. 6 MR. WHITTINGTON: Phil, could I ask you 7 a question. I mean -- I mean, this has been kind of 8 like a pet peeve of mine for a long time. 9 Registration tags. Is it really beneficial to the 10 staff of -- of a customer calling in from the worker 11 kind of point -- point of view, with a -- with a tag 12 on -- on their shirt or flapping around, or whatever, 13 whichever way they may wear these tags. They wear 14 them a lot, and I really can't tell -- you know, if I 15 don't know the worker, I -- I never could see a name 16 on the -- or the registration number anyway. And a 17 lot of my workers, they forget them. The -- the 18 Lottery Commission came and gave -- threatened to give 19 one of them a ticket next time he came in, but I got 20 it all on the -- on the board in the hall, of all my 21 workers, up where you can see it. If they happen to 22 forget their tag, at least it's on the board. But 23 that don't fly, they said. 24 MR. SANDERSON: No. They have to be 25 wearing their -- they have to be wearing their -- 0075 1 their ID badge. 2 MR. ATKINS: Well, I mean, for 3 clarification purposes, how does this relate to the 4 Operations Manual? 5 MR. WHITTINGTON: Well, I -- I'm 6 just -- I'm just saying -- I'm not relating to that. 7 I'm just -- that's just something I -- that came in my 8 mind as far as registration. I saw this under workers 9 registration -- 10 CHAIR TAYLOR: Is that something you 11 would like to put on the next agenda, then? 12 MR. WHITTINGTON: Yes. Yes. 13 CHAIR TAYLOR: Okay. 14 MR. WHITTINGTON: That's what I was 15 trying to do. Yeah. Under the registration cards. 16 MR. SANDERSON: Well, there is -- there 17 is a chapter on worker registration and identification 18 cards. 19 MR. WHITTINGTON: There is. That's 20 what I was looking at, in the manual. 21 MR. SANDERSON: 2-12. I -- without 22 rereading the whole section, I'll -- I'll go back and 23 look at it and see if there are some things we may be 24 able to add to it to emphasize the wearing of the 25 badge by the individual worker. 0076 1 MR. WHITTINGTON: Okay. Because 2 that -- that happened in -- in the hall. She came in 3 and said, hey, where is your badge, and they had it up 4 on -- you've got to have it visible, except for -- but 5 most people can't see them anyway. They'll be 6 flapping everywhere because they've got them hanging 7 on a little thing -- chain. 8 CHAIR TAYLOR: Well, it -- it does say 9 that. I mean, you do have in there, all workers must 10 wear Commission-issued identification cards while on 11 duty. 12 So what you're talking about is a 13 possible rule change. 14 MR. WHITTINGTON: Yeah, I mean, it says 15 we can put that -- if we can put them in the hall or 16 something, great. If they could just wear a name card 17 to get -- get their name, you know, and we have their 18 registration card in the hall, because they lose them 19 so much. 20 CHAIR TAYLOR: Okay. 21 MR. WHITTINGTON: Get lost so much, or 22 left at home, left in the car, et cetera. It happens 23 all the time. 24 CHAIR TAYLOR: Okay. Any other 25 comments on the Operations Manual? Public comment? 0077 1 We liked it. Thank you. 2 MR. SANDERSON: Thank you. And I would 3 like to thank the work group, too. 4 MR. MANIO: May I make some 5 acknowledgment, Suzanne -- 6 CHAIR TAYLOR: Sure. Go ahead. 7 MR. MANIO: -- of an involvement in 8 this -- well, this document is at -- at least six 9 months in the making. And Phil mentioned the names of 10 the members that are involved in this, but I would 11 like to acknowledge the -- the effort of Jody 12 Mahaffey. She was the real workhorse in this -- in 13 this group. And she did most of the -- the rewriting. 14 The original document, the original -- but the last 15 one, before this, was in -- in the early '90s -- 1991, 16 1992 -- and it was about 95 pages. We are down to 17 about 45 or less. 18 MR. SANDERSON: 44, 45. 19 MR. MANIO: 44, 45 pages. And this is 20 excellent -- you know, easy to read, easy to 21 understand. And I believe this -- this will -- this 22 will be integrated in the operators' training, too, 23 and most of the materials in the operators' training 24 are going to come from the -- from this manual. But, 25 yeah, thanks a lot. Many, many, many thanks to Jody 0078 1 for all of her efforts. 2 CHAIR TAYLOR: Thank you. 3 I have number 11, report on the 4 activities of the Charitable Bingo Operations 5 Division. 6 MR. ATKINS: Madam Chair, Members, 7 there are just a couple of things to my report that I 8 would like to update. On the Bingo Services Center, 9 as of this morning, we had 99 active external users. 10 Generally, the best way that we have found to get 11 people signed up is on a one-on-one basis. When 12 organizations call in, requesting information, the 13 examiners provide it to them, but they also let them 14 know that that's information that's available to them 15 through the Bingo Services Center. And they offer to 16 walk them through the registration process, where they 17 have them on-line. And we continue to receive many, 18 many positive comments on the Bingo Services Center 19 and the information that's available out there to 20 licensees. 21 Also, one other thing I want to touch 22 on is, we did, as a result of Hurricane Rita, send 23 notifications to organizations licensed to conduct 24 bingo in counties that were declared a natural 25 disaster area and informed them of their ability to 0079 1 request an extension on the filing of their quarterly 2 report form. We have had, my understanding, that as 3 of today, nine organizations take advantage of that. 4 So we were happy to be able to reach out to them. 5 Also, our licensing staff has been in contact with 6 those organizations and let them know that if there is 7 any particular assistance that they need, either with 8 temporaries or amendments resulting from 9 Hurricane Rita, that they're available to assist them 10 any way that they can. 11 And that's all I had to offer to update 12 to my report. I would be happy to answer any 13 questions anyone may have. 14 CHAIR TAYLOR: Any questions? Public 15 comment on that particular item? 16 Then we will move on to item number 12, 17 public comment. Any public comment? Hello, Carol. 18 MS. LAUDER: Good morning. 19 CHAIR TAYLOR: Good morning. 20 MS. LAUDER: Yes. For the record, my 21 name is Carol Lauder, and I'm here in the role as a 22 meeting facilitator to provide input to you on the 23 processes that you use in your meetings. And I just 24 have a very quick comment. And I just want to 25 continue to congratulate you and -- and encourage you 0080 1 in the succinct processes that you're using. You're 2 filing your agendas, doing a great job of staying on 3 topic or catching yourselves when you bring in another 4 topic other than the agenda. And I see a lot more 5 discussion among members about topic items than I had 6 seen in the past, which I think really helps you 7 operate as a team and provides more input to the Bingo 8 Division on what you would like to see. 9 And I also want to congratulate Billy 10 and his staff on some terrific things that they have 11 going to support bingo. And I just want to say, job 12 well done. 13 CHAIR TAYLOR: Thank you. Any other 14 public comment? 15 Item number 13, consideration of and 16 possible action on future Bingo Advisory Committee 17 meeting dates and/or items to be considered for future 18 meetings. 19 MR. ATKINS: Madam Chair, one 20 suggestion that we wanted to throw out is the 21 feasibility of setting at least the quarterly meetings 22 for the coming year at this time. You know, there -- 23 there is -- there is nothing under statute or rule 24 that would preclude additional meetings if they were 25 deemed necessary by the Commission, but for planning 0081 1 purposes, the staff at least wanted to suggest that 2 the committee consider possibly setting meeting dates 3 in January, April, July, and October of next year. 4 Not just for the committee, but, you know, we can also 5 publish those on the Web site as the tentative meeting 6 dates to give the public advance notice also. 7 MR. WHITTINGTON: Set the whole year, 8 the annual year for the next year? 9 CHAIR TAYLOR: Mario, you like the 10 idea? You might still be here. You like the idea? 11 Everybody -- okay. Then let's do it. 12 MR. DOUGHERTY: Billy, repeat the 13 months, please. 14 MR. ATKINS: We had identified January, 15 April, July, and October. 16 MS. ROGERS: You know, I would like -- 17 I only add one comment to that. Those are all months 18 that quarterlies are due. Correct? No. Yeah. So we 19 might maybe go a month off? Would that be helpful to 20 anyone? Does it affect anyone else? You follow me? 21 If we did February, May, or is that -- no. 22 MR. DOUGHERTY: What's the purpose? 23 MS. ROGERS: Because all of those 24 months are months that quarterlies are due. April 25 also consists of tax month. So just to give all the 0082 1 work groups, if any -- that affects anyone else. If 2 it doesn't, then no problem. Is that going to affect 3 the staff in any way? 4 MR. ATKINS: I don't -- no, I don't 5 think that would affect the staff at all. No. 6 MS. ROGERS: That's because y'all are 7 awesome. 8 CHAIR TAYLOR: Does everybody agree, 9 then, with offsetting these by one month -- one month 10 behind? Okay. So we're going to meet February, May, 11 August, and November. Thank you. 12 MR. SANDERSON: May I make a comment? 13 CHAIR TAYLOR: Yes. 14 MR. SANDERSON: And that might be a 15 good idea to look at those months for the simple fact 16 that if you have it, say, the -- the second or third 17 week in February, we would be able to give you some 18 preliminary information on the first -- on the 19 quarterly reports that have been filed. 20 CHAIR TAYLOR: Oh, right. Good. Okay. 21 Is the committee plan to keep the meeting dates on 22 Wednesdays? Okay. So we know we're going to meet 23 Wednesdays, and we're going to add very possibly the 24 third Wednesday of the month? 25 MR. ATKINS: The third Wednesday would 0083 1 be February 15th. 2 CHAIR TAYLOR: Third Wednesday of the 3 second month of the quarters. 4 MR. ATKINS: Third -- the third 5 Wednesday of May is the 17th. The third Wednesday of 6 August is the 16th. And the third Wednesday of 7 November is the 15th. 8 CHAIR TAYLOR: And continue at 10:00 9 o'clock in the morning? 10 MR. DOUGHERTY: What was February 11 again? 12 MR. ATKINS: February is Wednesday, 13 February 15th. 14 CHAIR TAYLOR: Okay. So those will be 15 our future meeting dates. If additional meetings are 16 needed, they can be scheduled. 17 Items for future meetings. Badges. 18 The annual report -- 19 MS. ROGERS: '04 update. 20 CHAIR TAYLOR: And that we are going to 21 add a committee for the '05 annual report. 22 MS. ROGERS: And, also, we should have 23 some nominations at that time, hopefully. 24 CHAIR TAYLOR: I also have the VA's -- 25 the 800 number requirements, the gamblers' hotline or 0084 1 problem hotline to discuss. 2 Danny, are you going to have any new 3 and innovative bingo ideas by then? Do you want that 4 on the agenda? Okay. 5 MR. MOORE: Yeah, let's put it on 6 there. 7 CHAIR TAYLOR: Okay. 8 MS. ROGERS: What -- 9 CHAIR TAYLOR: I don't remember what 10 the exact wording of the committee that you're 11 chairman. 12 MR. MOORE: Alternative styles of bingo 13 games. 14 CHAIR TAYLOR: Okay. So we will have 15 that on there. 16 MS. ROGERS: Also the work group, since 17 you're chairing -- 18 MS. LOPEZ: Sure. The bingo caller of 19 the year program, an update on that. 20 CHAIR TAYLOR: And, I believe, the work 21 group with the automated quarterly reports. 22 MR. MOORE: Progressive bingo games. 23 We could probably put that under the other one since 24 it is a style of play. Right? 25 CHAIR TAYLOR: Right. 0085 1 MS. LOPEZ: What about final draft of 2 the PSAs? 3 CHAIR TAYLOR: PSA. 4 MS. LOPEZ: Final draft of the PSA. 5 CHAIR TAYLOR: Anything else at this 6 time? If anybody thinks of anything else they would 7 like to add, you can contact myself or Billy, and we 8 will add that to the agenda. It's going to need to be 9 in by around the end of January, then. Is that 10 correct? 11 MR. ATKINS: Yes. 12 CHAIR TAYLOR: So if you have any ideas 13 by the end of January. 14 Anything else? 15 COMMISSIONER COX: Suzanne? 16 CHAIR TAYLOR: Yes, sir. We would love 17 to hear from you. 18 COMMISSIONER COX: Jim Cox, Texas 19 Lottery Commission. 20 On Monday, the Commission voted to 21 expose a draft of administrative penalties for bingo. 22 There has been quite a bit of work by this committee, 23 I know, on that rule, and there was quite a bit of 24 discussion at the meeting. I think the general 25 discussion was that it's a good idea to know what the 0086 1 penalties for violations are. There were some 2 specific concerns about some of the provisions, 3 however. We extended the period of time -- or made 4 the period of time for -- before the comment is 5 necessary, beyond the 30 days or 20 days, or whatever 6 that's required. So it's -- there is going to be some 7 time for y'all to look at that, and we hope you will 8 look at it and give us any comments or thoughts that 9 you may have, positive or negative, because while we 10 do think this is a good rule, we're not intending in 11 any way for it to be a burden. We want it to be a 12 help, and so we want to make it as good as we can. 13 Secondly, when I walked in and looked 14 around the room and saw what we've got here, I was 15 really pleased to see the -- the mixture that we have 16 here of folks who are experienced on this committee 17 and folks who are bringing new blood and new ideas and 18 new energy to it. And I hope that that's a -- a kind 19 of mixture that we can maintain, keeping some folks 20 that have some tenure and bringing some new folks on 21 right -- you know, on -- to bring the new ideas. So I 22 just wanted to say that as you look at your 23 nominations, try to be sure that you're looking at 24 both of those. Be sure that we've got continuity and 25 institutional knowledge, and be sure that we've got 0087 1 new blood coming in so that we have the -- the new 2 ideas and the new energy. 3 Finally, on behalf of Chairman Clowe, I 4 want -- I just want to thank all of you for the work 5 you do. It's really important to us, and we know you 6 do it at your own expense and on your time, and we 7 really appreciate it. Thank you very much. 8 Are -- are there any things that -- 9 that y'all want to -- want me to address, or do you 10 want me to sit down so you can go to lunch? Okay. I 11 think I hear, sit down and go to lunch. Thank you 12 very much. 13 CHAIR TAYLOR: If there is nothing 14 else, then we'll adjourn the meeting at 12:07. 15 16 17 18 19 20 21 22 23 24 25 0088 1 AMENDMENT SHEET 2 BINGO ADVISORY COMMITTEE MEETING - NOVEMBER 2, 2005 3 4 Page/Line Correction Reason for Correction 5 ______________________________________________________ 6 ______________________________________________________ 7 ______________________________________________________ 8 ______________________________________________________ 9 ______________________________________________________ 10 ______________________________________________________ 11 ______________________________________________________ 12 ______________________________________________________ 13 ______________________________________________________ 14 ______________________________________________________ 15 ______________________________________________________ 16 ______________________________________________________ 17 ______________________________________________________ 18 ______________________________________________________ 19 ______________________________________________________ 20 ______________________________________________________ 21 ______________________________________________________ 22 ______________________________________________________ 23 ______________________________________________________ 24 ______________________________________________________ 25 ______________________________________________________ 0089 1 REPORTER'S CERTIFICATION 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, BRENDA J. WRIGHT, Certified Shorthand 7 Reporter for the State of Texas, do hereby certify 8 that the above-captioned matter came on for hearing 9 before the TEXAS LOTTERY COMMISSION CHARITABLE BINGO 10 DIVISION as hereinafter set out, that I did, in 11 shorthand, report said proceedings, and that the above 12 and foregoing typewritten pages contain a full, true, 13 and correct computer-aided transcription of my 14 shorthand notes taken on said occasion. 15 Witness my hand on this the 8TH day of 16 NOVEMBER, 2005. 17 18 19 BRENDA J. WRIGHT, RPR, 20 Texas CSR No. 1780 Expiration Date: 12-31-06 21 WRIGHT WATSON & ASSOCIATES Firm Registration No. 225 22 Expiration Date: 12-31-07 1801 N. Lamar Boulevard 23 Mezzanine Level Austin, Texas 78701 24 (512) 474-4363 25 JOB NO. 051102BJW