0001 1 TRANSCRIPT OF PROCEEDINGS 2 BEFORE THE 3 BINGO ADVISORY COMMITTEE 4 (TEXAS LOTTERY COMMISSION) 5 AUSTIN, TEXAS 6 7 QUARTERLY MEETING OF THE § BINGO ADVISORY COMMITTEE § 8 WEDNESDAY, NOVEMBER 5, 2008 § 9 10 COMMITTEE MEETING 11 WEDNESDAY, NOVEMBER 5, 2008 12 13 BE IT REMEMBERED THAT on 14 Wednesday, the 5th day of November 2008, the Bingo 15 Advisory Committee meeting was held from 10:00 a.m. to 16 p.m., at the Offices of the Texas Lottery 17 Commission, 611 East 6th Street, Austin, Texas 78701, 18 before CHAIR SUZANNE TAYLOR. The following 19 proceedings were reported via machine shorthand by 20 Aloma J. Kennedy, a Certified Shorthand Reporter of 21 the State of Texas, and the following proceedings were 22 had: 23 24 25 0002 1 APPEARANCES 2 BINGO ADVISORY COMMITTEE: 3 Ms. Suzanne Taylor, Chair Ms. Kimberly Rogers 4 Ms. Pat Gifford Mr. Earl Silver 5 Mr. Thomas "Tom" Weekley Mr. Larry Whittington 6 Mr. Knowles Cornwell Mr. Francis M. Ciancarelli 7 8 CHARITABLE BINGO OPERATIONS DIVISION DIRECTOR: Mr. Phil Sanderson 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 TABLE OF CONTENTS 2 PAGE NO. 3 AGENDA ITEM NO. 1 - Meeting Called to Order... 5 4 AGENDA ITEM NO. 2 - Consideration of and possible discussion and/or action on the 5 minutes of the August 6, 2008 Bingo Advisory Committee meeting.................... 5 6 AGENDA ITEM NO. 3 - Recognition of new Bingo 7 Advisory Committee members and outgoing Bingo Advisory Committee members.................... 6 8 AGENDA ITEM NO. 4 - Report, possible 9 discussion and/or action on the appointment of presiding officers............. 7 10 AGENDA ITEM NO. 5 - Report, possible 11 discussion and/or action on ethics, administrative procedure, and open 12 government laws pertaining to the Bingo Advisory Committee...................... 8 13 AGENDA ITEM NO. 6 - Report, possible 14 discussion and/or action on the 80th and 81st Legislature.......................... 11 15 AGENDA ITEM NO. 7 - Report, possible 16 discussion and/or action on the membership of the following workgroups: 17 Market Conduct, Licensing Group #1, Licensing Group #2, Books and Records 18 Requirements.................................. 17 19 AGENDA ITEM NO. 8 - Report and possible discussion and/or action on the Market 20 Conduct workgroup............................. 21 21 AGENDA ITEM NO. 9 - Report and possible discussion and/or action on Draft 16 TAC 22 §402.412 Signature Requirements............... 40 23 AGENDA ITEM NO. 10 - Report and possible discussion and/or action on Draft 16 TAC 24 §402.402 revised Worker Registry.............. 43 25 0004 1 TABLE OF CONTENTS 2 PAGE NO. 3 AGENDA ITEM NO. 11 - Report and possible discussion and/or action on Draft 16 TAC 4 §402.409 relating to Abandonment/Lease Term.......................................... 75 5 AGENDA ITEM NO. 12 - Report and possible 6 discussion and/or action on Draft 16 TAC §402.424 relating to Amendment by Fax or 7 Phone......................................... 77 8 AGENDA ITEM NO. 13 - Report and possible discussion on the activities of the 9 Charitable Bingo Operations Division.......... 80 10 AGENDA ITEM NO. 14 - Public comment........... 83 11 AGENDA ITEM NO. 15 - Consideration of and possible action on future Bingo Advisory 12 Committee meeting dates and/or items to be considered for future meetings................ 104 13 AGENDA ITEM NO. 16 - Adjournment.............. 108 14 REPORTER'S CERTIFICATE....................... 109 15 16 17 18 19 20 21 22 23 24 25 0005 1 P R O C E E D I N G S 2 WEDNESDAY, NOVEMBER 5, 2008 3 (10:00 a.m.) 4 AGENDA ITEM NO. 1 5 MS. TAYLOR: Okay. It is 10 o'clock. 6 We do have a quorum, so the meeting is now called to 7 order. 8 AGENDA ITEM NO. 2 9 MS. TAYLOR: Item No. 2, consideration 10 of and possible discussion and/or action on the 11 minutes of the August 6, 2008, Bingo Advisory 12 Committee meeting. 13 The report that I made to the 14 Commissioners is contained in your notebook. The 15 actual minutes were posted on-line. 16 Do I hear a motion to approve the 17 minutes as posted? 18 MR. CORNWELL: I move that we approve 19 the minutes as posted. 20 MS. TAYLOR: Second? 21 MR. SILVER: Second. 22 MS. ROGERS: Second. 23 MS. TAYLOR: Got to be faster. 24 Okay. It's been moved and seconded. 25 All in favor? 0006 1 FROM THE COMMITTEE: Aye. 2 MS. TAYLOR: Opposed? 3 Unanimously passes. 4 AGENDA ITEM NO. 3 5 MS. TAYLOR: Item No. 3, recognition of 6 new Bingo Advisory Committee members and outgoing 7 Bingo Advisory Committee members. 8 And at this meeting right now, we are 9 still waiting for Markey Weaver and Larry Whittington. 10 We would like to recognize our new 11 member -- I'm not going to attempt to say his last 12 name -- Francis from Mission. Would you like to 13 introduce yourself and tell us a wee bit about your 14 bingo. 15 MR. CIANCARELLI: Yes. My name is 16 Francis Ciancarelli. I live in Mission, Texas, on the 17 border, about two and a half miles from the wall. I 18 moved here about two years ago. I have lived in Texas 19 prior to that, first starting in 1966 and leaving and 20 moving back to New Jersey in 1985. I'm married, have 21 four children and two grandsons. 22 MR. CORNWELL: Francis, who is your 23 charity? What's your charity? 24 MR. CIANCARELLI: I'm with the Mission 25 Rotary Club, and we play in the Americana Hall in 0007 1 McAllen. 2 MS. TAYLOR: Thank you. Welcome. It's 3 great to have you here. 4 The next item that we're going to be 5 talking about is Rosie Lopez, who is no longer with 6 us. We've got her name plaque. And if everybody 7 would like to sign a little something on the back, I 8 suppose that Phil is going to make sure that this ends 9 up where it needs to be. 10 I would like to take this opportunity 11 to say how much I appreciated having Rosie on the 12 committee, how much we all appreciated Rosie. She was 13 an awesome committee member, a hard worker, a 14 go-getter, and she will be tremendously missed. 15 I would like to also welcome Larry 16 Whittington to the meeting at this time. Welcome, 17 Larry. 18 AGENDA ITEM NO. 4 19 MS. TAYLOR: Item No. 4, report, 20 possible discussion and/or action on the appointment 21 of presiding officers. 22 Mr. Sanderson. 23 MR. SANDERSON: Each year the Bingo 24 Advisory Committee must elect a presiding officer. 25 And then once that officer is selected, then they will 0008 1 appoint the individual who will preside at the 2 meetings in their absence. So I will open it up for 3 nominations for the presiding officer. 4 MR. CORNWELL: Madam Chairman, I would 5 like to nominate Suzanne Taylor for chair of the Bingo 6 Advisory Committee. 7 MS. ROGERS: I second that nomination. 8 MR. SANDERSON: Are there any other 9 nominations? 10 Hearing no other nominations, is there 11 a vote? All in favor? 12 FROM THE COMMITTEE: Aye. 13 MR. SANDERSON: Anybody opposed? 14 Congratulations, Suzanne. You're chair 15 for another year. 16 MS. TAYLOR: Thank you so much. At 17 this time I would like to go ahead and appoint Kim to 18 serve in my absence, unless there is any objection or 19 somebody else would like to do it. 20 Thank you. 21 AGENDA ITEM NO. 5 22 MS. TAYLOR: Then moving right on. 23 Item No. 5, report, possible discussion and/or action 24 on ethics, administrative procedures, and open 25 government laws pertaining to the Bingo Advisory 0009 1 Committee. 2 MR. SANDERSON: Members, as new 3 individuals join the committee and also as a refresher 4 for those members currently on the committee, I've 5 asked Ms. Sandy Joseph, our attorney, to come up and 6 give a brief discussion and outline of the Open 7 Meetings Act as it relates to the Bingo Advisory 8 Committee. 9 Ms. Joseph. 10 MS. JOSEPH: Thank you, Phil. 11 For the record, my name is Sandra 12 Joseph. I'm Special Counsel in the Legal Division of 13 the Lottery Commission. And I did just want to say a 14 few brief items about the Open Meetings Act. 15 Y'all are subject -- the Bingo Advisory 16 Committee is subject to the Open Meetings Act, not by 17 statute but, rather, by rule. The Commission has 18 adopted a rule about the Bingo Advisory Committee. 19 That's Rule 102, Bingo Administrative Rule 402.102, 20 and that rule provides that this committee will be 21 subject to the Open Meetings Act. That means that 22 notice must be posted of your meetings and the agenda 23 must be included in that notice. 24 We publish notice of the agenda seven 25 days -- at least seven days before the meeting. 0010 1 That's in order to give the public a fair opportunity 2 to ascertain if there is anything they might be 3 interested in and attending. That is on the Secretary 4 of State website and on the Lottery Commission website 5 for people to view. 6 Once that agenda is published, your 7 meetings are somewhat bound by the items. You have to 8 stick to the items on the agenda, with the exception 9 perhaps of public comments, where you may receive 10 information but not act on it. If you're going to act 11 on something, then you need to have a specific item 12 posted for that. That's just a very general 13 description of the Open Meetings Act. If you have any 14 questions about that, you know, you can feel free to 15 talk to Suzanne or Phil or myself. 16 Included in your notebooks also is a 17 handbook of guidelines that was provided to the 18 Commissioners, and this is available to state officers 19 and public employees. This does not pertain to you 20 directly, but we thought it would be helpful to you to 21 see the kind of guidelines that the agency operates 22 under insofar as ethics is concerned. And if you ever 23 have any questions about something, whether something 24 is appropriate for you or not, I would be happy to 25 consult with you on that. 0011 1 Are there any questions at this time? 2 All right. If not, just feel free to 3 contact me if something does come up. Thank you. 4 MS. TAYLOR: Thank you. 5 Is there any discussion by the members 6 on this item? Any public comment? 7 If not, we'll go on to the next item. 8 AGENDA ITEM NO. 6 9 MS. TAYLOR: Item No. 6, report, 10 possible discussion and/or action on the 80th and 81st 11 Legislature. 12 MS. TREVINO: Good morning, Madam Chair 13 and members. For the record, I'm Nelda Trevino, the 14 Director of Governmental Affairs. 15 The last legislative report provided to 16 the advisory committee was at your May meeting. It 17 was reported then that the House Licensing and 18 Administrative Procedures Committee would be meeting 19 to consider its interim charge related to bingo and 20 the Bingo Enabling Act. 21 Included in your meeting packet is copy 22 of the May 15, 2008, hearing agenda. You will note 23 there are several members of the industry who provided 24 testimony. Phil Sanderson was also in attendance and 25 served as a resource to the committee. 0012 1 Also included in your meeting packet is 2 a copy of a letter to Chairman Keno Flores dated 3 October 7, 2008. This letter is in response to a 4 request the agency received to provide the committee 5 recommendations for statutory changes that would help 6 or assist the agency run better. Several items in the 7 letter relate to bingo. 8 Additionally, as stated in this letter, 9 Phil has been a participant in a legislative workgroup 10 comprised of Chairman Flores' staff and industry 11 representatives, to identify statutory changes needed 12 in the Bingo Enabling Act. The primary focus of this 13 workgroup was a review of House Bill 1156 from the 14 last session. As many of you are aware, this 15 legislation did not pass and included provisions to 16 streamline the licensing process and also included 17 some general provisions related to the regulation of 18 bingo. 19 Furthermore, the agency has provided 20 responsive information to the committee's request as 21 it relates to funding needs to adequately enforce the 22 Bingo Enabling Act. The House Licensing Committee 23 will likely meet later this month to consider and 24 adopt its recommendations for the 81st Legislature. 25 It is our understanding items noted in the October 7th 0013 1 letter, along with items addressed during the 2 workgroup discussions, may be considered by the 3 committee at their hearing. 4 Lastly, included in your meeting packet 5 for this agenda item is a listing of legislative dates 6 of interest. And you will note that prefiling for the 7 legislation for the 81st Legislature begins next 8 Monday, on November the 10th, and the Legislature will 9 convene its regular session on January 13, 2009. 10 This concludes my report, and I'll be 11 glad to try to answer any questions that you might 12 have. 13 MS. TAYLOR: Any questions for Nelda? 14 MR. CORNWELL: Madam Chair, can I ask 15 Nelda some questions? 16 MS. TAYLOR: Definitely. 17 MR. CORNWELL: On No. 9, review current 18 authorized penalty -- in your letter, I mean, 19 Mr. Sadberry -- does everybody know that Mr. Sadberry 20 passed away last week? Sorry to hear that. Great 21 guy. 22 But in Mr. Sadberry's letter, Item No. 23 9, the charge there is, "Review current authorized 24 penalty amounts in the Bingo Enabling Act for 25 assessing penalties on different categories of 0014 1 licenses." Can you expand upon that? 2 MS. TREVINO: Yes. And I want to ask 3 Phil to assist me with this. And, Knowles, this has 4 been an item that really has come up from discussions 5 by the Commissioners at their Commission meetings when 6 orders on administrative actions are taking place. 7 And so, Phil, if you would -- 8 MR. SANDERSON: Pick it up from there? 9 MS. TREVINO: -- pick it up from there, 10 yes. 11 MR. SANDERSON: The Commissioners felt 12 like that there should be a review of how much 13 penalties are assessed or what the maximum penalty 14 amount assessed could be for the various types of 15 licensees as it relates to the conductors, the 16 lessors, manufacturers, distributors and so forth, and 17 so we are conducting research in other states to 18 determine if there is a fluctuating fee, based on 19 whether or not the organization is a for-profit or 20 non-profit entity. 21 MR. CORNWELL: And what research have 22 you found so far? Didn't -- our little matrix even 23 seems a little bit high from the way -- 24 MR. SANDERSON: The maximum penalty for 25 a non-profit is a little bit higher here than it is in 0015 1 other jurisdictions, and the penalty for the 2 for-profit entities is probably a little bit lower. 3 MR. CORNWELL: Okay. Nelda, what is 4 the Commission's thinking about Charge No. 10? What's 5 the desire in No. 10, "Strengthen and assign central 6 enforcement responsibility against illegal gambling 7 devices"? 8 MS. TREVINO: Knowles, I think that 9 just goes with some of the discussion that the 10 Commissioners again have had. This was something, 11 again, that was included in the letter, based on some 12 discussions at Commission meetings, but I think the 13 ongoing concern of illegal competition that might be 14 existing in the state. And these are not charges; 15 these are recommendations that the agency has 16 provided. 17 And so, again, I think the way it's 18 written, strengthen and assign central enforcement 19 responsibilities. You know, right now each individual 20 county is responsible for enforcing those provision of 21 the Penal Code, and so I think that's part of the 22 thinking behind the Commissioners. 23 MR. CORNWELL: They desire to 24 centralize that enforcement. Is that what the charge 25 is, assign -- 0016 1 MS. TREVINO: Again, it's not a charge. 2 It's a recommendation -- 3 MR. CORNWELL: A recommendation. I'm 4 sorry. 5 MS. TREVINO: -- for the committee to 6 consider of including that maybe in their 7 recommendations that they provide to the next 8 Legislature. 9 MR. CORNWELL: And have they discussed 10 the lottery should be that central authority? Is that 11 what their discussion is? 12 MS. TREVINO: No, no, not at all. No, 13 I don't believe, Phil -- and correct me if I'm 14 wrong -- but I think in the discussions that the 15 Commissioner have had, no, there has not been any 16 indication that it should be this agency, no. 17 MR. CORNWELL: Is there any other 18 agency or any other item that you can think of, Nelda, 19 that the state has jurisdiction on a centralized 20 basis, that you can think of? On any illegal activity 21 that's taking place, is there anyplace else in the 22 state that a state agency is charged with the sole 23 enforcement of those illegal activities? Do you know? 24 MS. TREVINO: You know, I'm probably 25 not the best person to ask that question to. 0017 1 MR. CORNWELL: Nelda, thank you. 2 MS. TREVINO: You're more than welcome. 3 Any other questions? 4 Madam Chair, any questions? 5 MS. TAYLOR: No questions. Thank you. 6 MS. TREVINO: Okay. Thank you. 7 MS. TAYLOR: We have several witness 8 affirmation forms that have asked to speak on all of 9 the items on the agenda. Does anybody that gave us 10 one of these forms want to speak on this? 11 Any other public comment? 12 Committee, any comment? 13 Okay. 14 AGENDA ITEM NO. 7 15 MS. TAYLOR: Item No. 7, report, 16 possible discussion and/or action on the membership of 17 the following workgroups: Market Conduct, Licensing 18 Group No. 1, Licensing Group No. 2, Books and Records 19 Requirements Group. 20 We have these BAC workgroups that we 21 have put together previously. Some of the members -- 22 and as you can see, Rosie is on several of these. So 23 I guess at this time, if we would like to change the 24 composition of the workgroups, this is where we would 25 do it. 0018 1 Okay. Market Conduct. Markey is 2 chair. She is not here right now. 3 Earl, you're content to continue 4 serving on this workgroup? 5 MR. SILVER: Yes. With Markey not 6 being here, we did collect some data, though, in 7 preparation for our first meeting. Data has been 8 collected on market conduct reports for other 9 industries as well as a hard copy of the Sherman 10 Antitrust Act. We also went ahead and did some 11 definitions of a fair market value. 12 MS. TAYLOR: Okay. Market conduct will 13 be the next item on our agendas. So if you can wait 14 and give us all that information under the next item, 15 that would work great. 16 MR. SILVER: Weren't we on that item? 17 MS. TAYLOR: No. We're on the 18 composition of the workgroups. 19 MR. SILVER: Okay. 20 MS. TAYLOR: But hold the thought. 21 MR. CORNWELL: You're on next. 22 MS. TAYLOR: Okay. So we have Earl, 23 who is happy to stay on that group. 24 And Tom, you wanted to stay on that 25 group? 0019 1 MR. WEEKLEY: That would be fine. 2 MS. TAYLOR: Okay. Great! 3 As public members, we had Kris Keller 4 and Steve Bresnen. 5 Kris, any other changes that we want on 6 this workgroup? 7 Hang on just a second. We're on the 8 Market Conduct workgroup. Markey is actually the 9 chair of this workgroup, and she has been given the 10 authority to add or delete members, as she needs to, 11 of this workgroup, to keep it a functioning workgroup, 12 to make sure it doesn't get too big or too small. 13 So unless anybody that's here right now 14 would like to opt out of being on the group work, 15 we'll leave the composition the same as it is at this 16 time and continue to allow Markey to have the 17 authority to make this workgroup -- 18 FROM THE COMMITTEE: Changed. 19 MS. TAYLOR: Right. We've taken Rosie 20 off, so we're going to allow Markey to continue with 21 this workgroup. If you would like to serve on it, if 22 you can contact Markey and she will take care of the 23 workgroup then. 24 On the second workgroup, we have the 25 Licensing Group, with Earl Silver as chair. Markey 0020 1 Weaver is also on this work group. 2 Earl, same authority. Whatever you 3 want to do, add or subtract, is great. Public members 4 on that workgroup were Stephen Fenoglio, Steve Bresnen 5 and Richard Bunkley. 6 Anybody here wanting to opt out of that 7 workgroup? 8 MR. SANDERSON: And Pat Gifford is on 9 that workgroup also. 10 MS. TAYLOR: Okay. Sorry, Pat. You 11 are on that workgroup, too. Your have a lone name on 12 the bottom of that first page that I neglected to see. 13 Okay. Then, once again, the same 14 thing. If you want to be or off that group, go ahead 15 and talk to the chair, which is going to be Earl 16 Silver. 17 The licensing Workgroup No. 2, Knowles 18 is on there as chair, Larry Whittington. Rosie is no 19 longer on there. So, Knowles, if you would like to 20 add another member. If somebody from the BAC would 21 like to be on that workgroup, get in touch with 22 Knowles. Otherwise, Knowles, we will expect that 23 you're going to take care of that opening on the 24 workgroup. The public member on that was Stephen 25 Fenoglio. 0021 1 Books and Records, we had Markey Weaver 2 as chair, Kimberly Rogers and Earl Silver, with public 3 member, Steve Bresnen. 4 So anybody wanting to be on a 5 workgroup, contact the chair of each workgroup. 6 Did you have something more to say 7 about the workgroup, Earl? 8 MR. SILVER: No, ma'am. 9 MS. TAYLOR: Okay. Any other comment 10 about the workgroups from BAC members? 11 Public comment? Did you have any 12 public comment? Anybody with public comment? 13 Okay. 14 AGENDA ITEM NO. 8 15 MS. TAYLOR: Then let's move on to Item 16 No. 8, report and possible discussion and/or action on 17 the workgroup - Market Conduct. 18 19 MS. ROGERS: Earl. 20 MR. SILVER: I'm with you now. 21 Well, on Market Conduct -- Markey is 22 not here -- but, like I said earlier, we did collect 23 some data, some market conduct reports from other 24 industries, through the insurance industry -- you 25 know, that's different -- as well as the Sherman 0022 1 Antitrust Act as well as identifying -- defining 2 several key terms that we want to try to use, is "fair 3 market value," "price fixing," "collusion," 4 "monopoly," "free trade", "free market system," 5 "capitalism," as well as "competition." 6 We've also gathered prices of paper 7 products and computers around the state, not what 8 people are specifically paying, just general averages. 9 And that would not be including discounts that people 10 would get also. So we're just trying to see if we can 11 find something that's a trend that could develop 12 there, before our first meeting, which Markey will 13 call soon. 14 MS. TAYLOR: Any other questions for 15 Earl? 16 MR. CORNWELL: Earl, why don't you 17 expand on what you see that purpose of defining the 18 market conduct and what you're attempting to do and 19 refresh everybody's memory -- I mean for the new 20 folks. 21 MR. SILVER: The workgroup came about 22 because of an issue with the hall about computer 23 pricing, whether it was fair for them to do specific 24 things with their computer pricing. And the workgroup 25 formed basically to try to see if it was fair for them 0023 1 to do something like that, but then it was expanded 2 upon to see -- I assume to get into the fair market 3 system as well as it's going to expand into capitalism 4 and competition -- 5 MR. CORNWELL: Sure. 6 MR. SILVER: -- no matter what, having 7 to do with market conduct. I haven't really gone into 8 the insurance industry on their market conduct 9 reports, because it's pretty detailed and there is a 10 learning curve there with some of their terminology. 11 But I assume that the Market Conduct 12 group would also fall into the Sherman Antitrust Act 13 as well as like different definitions of what I said 14 earlier, to make sure that competition is good and 15 competition is going to be viable in the bingo 16 community. 17 I want to make sure I said that right. 18 MS. TAYLOR: Okay. Any other questions 19 for Earl? 20 Any public comment? 21 MR. PRUITT: I kind of do -- 22 MS. TAYLOR: Please. 23 MR. PRUITT: -- since I wasn't aware of 24 what was going on. J.D. Pruitt. 25 MS. TAYLOR: If you could come up to 0024 1 the mike, please. 2 MR. PRUITT: Is where we're getting on 3 this, that the Commission is going to set something on 4 pricing standards? 5 MS. TAYLOR: I don't believe -- 6 previously I know that there was a clause -- and I 7 don't know if it's still there or not -- that the 8 Commission had the authority to set pricing. It used 9 to be by county or area. 10 I don't know. Is that still in? 11 MR. SANDERSON: The statute does 12 provide for the Commission to, by rule, set I believe 13 pricing and/or a price schedule; however, the 14 Commission has chosen not to take that action at past 15 meetings when this came up for discussion. 16 I believe this committee was formed at 17 the request of a member of the industry to conduct an 18 analysis of market, you know, conduct and do research. 19 And this is strictly a BAC workgroup at their request 20 and not at the Commission's. 21 MR. PRUITT: Yes. But I'm interested 22 in the final result, not what brought it on. I mean, 23 parts of this state sell a fully-loaded card-minding 24 device for $25. 25 MR. SANDERSON: Well, it's my 0025 1 understanding that the committee has not even had an 2 initial meeting yet, so there's not a result at this 3 point in time. 4 MR. PRUITT: Well, but that's what I'm 5 saying. I think you're getting somewhere you don't 6 need to be. I get $170 or $180 for an electronic. 7 That's the standard in my area. In larger cities, 8 they're dumping them out there with 66 card faces on 9 them for 25 bucks. It's my market area, and I'm not 10 sure I need somebody else telling me how to run my 11 market area. 12 MS. TAYLOR: Mr. Pruitt, I believe that 13 it wasn't that we were talking about so much setting 14 the standard price at this point. It was I think more 15 or less trying to see if there was unfair competitive 16 practices out in the market; and, if so, what they 17 were. The committee hasn't gone anywhere near to 18 talking about setting minimum prices. It was more or 19 less to see what was going on in the marketplace. 20 MR. PRUITT: But if you're not headed 21 that way, there is no reason to even be there. 22 MS. TAYLOR: Any other public comment? 23 MR. KELLER: I guess so. I don't know 24 if this -- my name is Kris Keller. I don't know if 25 this is the right time for me to be up here or not. I 0026 1 had tried to get something started a long time ago 2 about the Commission not setting a price but setting a 3 minimum price that you could sell an electronic for. 4 And if you could get more than that minimum price, 5 that's great. 6 If we could get $25 a session, we would 7 be doing triple backflips down there in San Antonio, 8 because you know what they're going for? $5.00 a 9 session, fully loaded. And the next one you buy is 10 for a penny after that. So is this the time for me to 11 be up here to talk about setting a minimum price for 12 an electronic, please? 13 MS. TAYLOR: Well, we are talking about 14 market conduct, so I think it is appropriate. 15 MR. KELLER: Is there anyone in the 16 state or in this room that would have a problem with 17 the Commission setting a minimum price of $10.00 a 18 session for an electronic? Speak now. 19 Anybody have a problem with setting a 20 minimum price of $10.00? If you can get more, I'm all 21 for it. 22 Kim, do you have a problem with that? 23 MS. ROGERS: Not at all. If everyone 24 did it at the same, then your customers would -- it 25 would be fair across the board. 0027 1 MR. KELLER: I mean, I don't know what 2 you're getting for your electronics. I get $11 for 3 mine. 4 MS. ROGERS: More than a penny. I 5 think they're $12, and $15 on the weekend. 6 MR. KELLER: So we're probably the two 7 highest in the city. 8 MS. ROGERS: And I would follow Kris, 9 if we could get $25 -- backflips. 10 MR. KELLER: So that's what I want to 11 put out on the table. A $10.00 minimum price; once 12 again, not a fixed price of what you can sell it for 13 but a minimum price of what you can sell it for. 14 So -- 15 MS. TAYLOR: What do you sell your 16 paper for, Kris? 17 MR. KELLER: $3.00 a session at one 18 hall for 18 cards, that has the electronics. And 19 there again, I think we -- I don't know if we're the 20 highest or not. I think some of the other halls are 21 at $2.00, but it's just a pretty ridiculous price. 22 And I'm still doing good. My hall does fairly well, 23 but we have a good reputation and a pretty loyal 24 following. 25 But I can promise you that there will 0028 1 be no legitimate new bingo games that open in 2 San Antonio and compete with a $5.00 price. You may 3 have a hall that comes in that does not do everything 4 aboveboard and compete, but you won't get a small hall 5 coming in there, because the halls that are doing this 6 for $5.00, they might have 852 computers, so that's a 7 pretty big chunk of computers to have in your 8 inventory. 9 Anyways, once again, if there is 10 anybody in the room that says $10.00 is too high to 11 sell your thing for, or that minimum price, I don't 12 want to leave till somebody says that they'll do this. 13 MS. ROGERS: Is this something, Phil, 14 that could actually be done? 15 MR. SANDERSON: I would have to, you 16 know, do some research as far as what the actual 17 statute allows us to set in a rule and work with our 18 attorney. 19 But I believe, Mr. Keller, you're a 20 member of this workgroup that is performing this 21 analysis and research. And I think the purpose of the 22 workgroup was to come up with research and some sort 23 of a recommendation possibly to the BAC for some 24 movement forward. 25 MR. KELLER: I am on that workgroup and 0029 1 I am available for that workgroup. We haven't met 2 yet. So do we go another nine months before we bring 3 it up again or can we meet tomorrow or what? This is 4 kind of ridiculous for this to drag on this long 5 really. 6 MS. TAYLOR: Earl, you're a member of 7 that workgroup. Have y'all set any meeting or do you 8 have any projection in mind of when you are going to 9 meet? 10 MR. SILVER: No, ma'am. Markey would 11 just need to call a meeting with some type of phone 12 conference or whatever, but we have the data ready for 13 our first meeting. 14 MS. TAYLOR: So if -- can we do a 15 three-way call talking about it, Mr. Keller? 16 Earl, can you get on a three-way call 17 with Markey or can you call Markey and see about 18 getting this meeting set, move it forward? 19 MR. SILVER: Yes, ma'am. 20 MS. TAYLOR: Mr. Keller, if Markey 21 doesn't -- they don't get the meeting moved forward, 22 please give me a call and let me know and I'll see if 23 I can intervene and get the process started. 24 MR. KELLER: Forward by when? What's 25 the date here we're looking at? 0030 1 MS. TAYLOR: Well, wait until Monday, 2 because -- 3 MR. KELLER: Monday? 4 MS. TAYLOR: Yes. Give me until 5 Monday. 6 MR. KELLER: That's fair. I can do 7 that. 8 MR. WHITTINGTON: Suzanne, I want to 9 ask him a question. 10 What's your attendance size per night, 11 on average? 12 MR. KELLER: Well, this is at the 13 daytime location. And last quarter we averaged 180 14 people a session. This quarter it's going to be 15 lower. 16 MR. WHITTINGTON: I play like that. If 17 I set some prices like that in my hall -- I have 18 500 -- and that would never happen, because we 19 couldn't make it. I mean, one of my halls gets 60 20 people, and we pay out $5,000 a day and we make it, 21 because we have $35.00 computer prices on ours. I 22 wouldn't go no lower than $25 -- ever. 23 MR. KELLER: So if somebody opened up 24 next door and was doing $5.00 computers, you would 25 probably be screaming bloody murder? 0031 1 MR. WHITTINGTON: I would. I would be 2 screaming bloody murder, but they couldn't make it -- 3 MR. KELLER: Yes. 4 MR. WHITTINGTON: -- no way, not in 5 Dallas doing it. 6 MS. ROGERS: Kris, I don't know if it's 7 even possible, and I can't even begin to think of how 8 you would start, but maybe to assist something that 9 you or someone that you have could help out on the 10 workgroup that could gather some information like: 11 Who would this affect, in essence, on San Antonio, 12 $10.00 for a computer per session? 13 Well, there's maybe a couple of halls 14 that charge that much. See what I'm saying? In 15 Dallas, no one charges less than $10.00. You follow 16 what I'm saying? Maybe do some of that kind of 17 research to bring forth to tell us, "Well, it would 18 affect three-quarters of the state, not" -- I mean, I 19 don't know if that would help or not. 20 MR. KELLER: Well, I can't see how it 21 would negatively affect anyone. 22 MS. ROGERS: I agree with you. It 23 gives them more insight -- I'm talking about the 24 lottery. 25 MR. WHITTINGTON: Well, see, the 0032 1 problem that you're running into, your computer is far 2 more less than your paper, so that's going to affect 3 your paper prices, too, as well, by them buying this 4 computer, because it's more cost in the computer, for 5 $10.00 that you going to get on any computer -- on 6 paper face. That's just the way it is. 7 So your business of negative marketing 8 strategies has gone on, and y'all don't really 9 understand it, because computers has taken over the 10 paper part. But the paper -- if somebody were to look 11 in and say, "Wait a minute. Why am I going to buy a 12 nine or an eighteen when I can buy a computer for 10 13 bucks? Why am I going to pay nine and five bucks for 14 the paper?" So that's what y'all got going on. And 15 it's really going to get the bingo halls in big 16 trouble down there eventually, once this is get caught 17 up. I promise you that's what's going to happen. 18 MR. KELLER: I agree with you. I have 19 been saying it: "Please, somebody, listen to me. 20 It's going to get us in big trouble." 21 MR. CORNWELL: Kris, aren't you really 22 talking about predatory pricing? You're not engaging 23 in the predatory pricing. Is that really what your 24 concern is? Is it a manipulation, purposeful 25 manipulation of pricing down there to cause predatory 0033 1 pricing? Is that really what the group is meeting 2 about, and predatory practices, like the second 3 computer for a penny or -- 4 MR. KELLER: I'm not sure what 5 predatory pricing is here. 6 MR. CORNWELL: Well, I'm not either. 7 MR. WEEKLEY: It's to drive out other 8 halls. 9 MS. TAYLOR: I think the committee 10 needs to meet. We know that you need to meet. But I 11 do agree that there's got to be some research done. 12 It's not going to do any good to go into a room and 13 sit and talk if you don't have some numbers that 14 you're going in there with. So I do think that you 15 need to -- I know that Earl says they've been doing 16 some research on it, and I don't know what numbers 17 that you've come up with. 18 MR. SILVER: I haven't come up with any 19 numbers, because I haven't made it that far. First of 20 all, you've got to realize what you're dealing with. 21 You could be opening up a Pandora's box, almost doing 22 a market conduct report, and especially the 23 conversations we've been having. 24 Setting minimum prices in my opinion is 25 the same as setting prices. And you could be coming 0034 1 into a whole other issue that can go beyond the state 2 level. So we just have to be very careful in what we 3 do and make sure that the terminology is right in our 4 meetings and any report we give. 5 MR. KELLER: Well, once again, I'm not 6 in favor of a set price, just a minimum price. 7 MS. TAYLOR: Outside of San Antonio, 8 how many halls have a pricing of less than $10.00 on 9 computers? 10 MR. KELLER: I have no idea. 11 MS. TAYLOR: That's something that the 12 group needs to know before you meet, which is going to 13 take somebody sitting down on a telephone or calling 14 up. Who would know the answer to this question is 15 going to be the distributors. 16 MR. KELLER: Yes, them and -- 17 MR. CORNWELL: It would give you a 18 pretty good answer, you know, as to maintenance down 19 in the same place, San Antonio. 20 MS. TAYLOR: Those distributors know. 21 They're renting those electronics and they know what 22 that pricing is. Their service people are the ones 23 that set it up for us. 24 MR. KELLER: Now, if the Lottery has 25 the authority to do it by county, can you do that, 0035 1 Phil, or would it have to be a statewide deal? 2 MR. SANDERSON: I'll read you what the 3 statute says in Section 2001.056. Paragraph (c) says, 4 "The commission may set the price or adopt a schedule 5 of prices for the sale or provision of bingo cards by 6 a licensed authorized organization." 7 Paragraph (d), "A licensed authorized 8 organization may not sell or provide a . . . card at a 9 price other than a price authorized by the commission 10 or schedule adopted by the commission." 11 And Paragraph (e) says, "The commission 12 by rule may require a licensed authorized organization 13 to notify the commission of the price for bingo cards 14 the organization will use for one or more reporting 15 periods." 16 MS. TAYLOR: So does the schedule of 17 prices mean that they can do that by county? What 18 exactly does a schedule of prices mean? 19 MR. KELLER: Well, then, you might be 20 able to do it by county. If you can do it -- 21 MR. SANDERSON: I'll have to defer to 22 legal counsel as far as -- 23 MR. KELLER: Okay. And if you can do 24 it, then I'll just speak for Bexar County. And I hope 25 your counties don't get in the shape we're in, 0036 1 wherever you're at. 2 MS. ROGERS: Well, I would just like to 3 voice that I would have one problem with it if they 4 did -- and I think this is what I'm gathering -- if 5 you set a minimum price on a county -- let's just use 6 Bexar County -- and I open a hall right on the 7 outskirts of that county line and I do my computers 8 for $2.00, well, I've just defeated the whole purpose. 9 You follow what I'm saying? My personal opinion is, 10 if it's going to be done, it's going to be done 11 statewide, because then it's fair for everybody. 12 MR. SILVER: Yes, because if it's done 13 just by county, look what the smoking ban has done. 14 MS. ROGERS: Look at Dallas. 15 MR. WHITTINGTON: Yes; yes. 16 MS. ROGERS: Dallas is very split, 17 aren't you? You have county, county -- y'all are 18 all -- 19 MR. WHITTINGTON: Yes. 20 MS. ROGERS: So is Houston -- no, y'all 21 are all Harris County. But Bexar County, we're pretty 22 fortunate. It surrounds all of our commercial halls 23 and a lot of our bingo halls. There's very few that 24 are on the outskirts. But if you did it by county, my 25 personal opinion is, that would not work. 0037 1 MS. TAYLOR: This is something that 2 needs to be discussed -- 3 MS. ROGERS: Right. 4 MS. TAYLOR: -- in the workgroup. But 5 before you meet as a workgroup, you need to have the 6 information and you need -- I mean, truly, those are 7 the fastest people. If I was going to get these 8 numbers, I would go to the distributors and ask them 9 what kind of pricing schedules their halls are using 10 and how much the computers are renting for. They 11 know. 12 So that's just my advice. I think you 13 need to have numbers before you go to the meeting or 14 else you're going to sit down and talk in a room for 15 three hours and you're not going to be able to 16 accomplish anything. The goal is to come out of there 17 with a recommendation to the BAC, bring if back here 18 to a meeting and tell the rest of the committee what 19 your found during your research and what your 20 recommendation is that we should make to the 21 Commission. 22 MR. KELLER: That's fair with me. 23 MS. TAYLOR: Call me Monday. If Markey 24 hasn't given you a call, call me Monday and I'll be 25 glad to get on that with you. 0038 1 MR. KELLER: Okey-doke. 2 MS. ROGERS: But first be in charge and 3 get those numbers. Danny is there; Knowles is there. 4 They will help you. 5 MR. KELLER: Okay. 6 MS. ROGERS: They will. 7 MR. WHITTINGTON: And I really don't 8 think the distributors would know the prices, what the 9 halls charge. 10 MS. TAYLOR: Excuse me, Larry, but who 11 goes to the hall and sets up the computers? 12 MR. WHITTINGTON: They have a certain 13 price they pay the distributors. 14 MS. TAYLOR: They also set it all up 15 for us. They know exactly what we're charging in 16 those halls. 17 MR. WHITTINGTON: Yes. 18 MR. CORNWELL: We can talk in 19 generalities. 20 MS. TAYLOR: Yes. 21 MR. WHITTINGTON: Right. 22 MR. CORNWELL: We don't have those 23 records but we know pretty much where we are. But I 24 would also like to make one other additional comment 25 for the workgroup's benefit and for anybody else's. 0039 1 There's only 60 counties in the State of Texas that 2 fall out of what they call the SMSAs, the Statistical 3 Metropolitan Standards Area, whatever it is -- I don't 4 know what it is -- but only 60 counties. They're very 5 rural counties, primarily out in West Texas. So 6 instead of using a county, you could use these 7 metropolitan areas and have a standard that would fix 8 your problem, Kim, and fix Dallas' problem and 9 Houston's problem. 10 MS. ROGERS: Okay. 11 MR. KELLER: That's a good idea. 12 MS. TAYLOR: Okay. 13 MR. CORNWELL: I just thought I would 14 add that little bit of "know nothing." 15 MS. TAYLOR: So this is workgroup 16 discussion, and we're going to get the workgroup 17 meeting going. Okay? I look forward to the next 18 meeting, because I'm sure the workgroup is going to 19 come back to the BAC with recommendations. 20 Thank you. Kris. 21 MR. KELLER: Okay. Thank you. 22 MS. TAYLOR: Any other public 23 discussion on this topic? 24 Any other committee discussion? 25 Good. Let's go on. 0040 1 AGENDA ITEM NO. 9 2 MS. TAYLOR: Item No. 9, report and 3 possible discussion and/or action on draft 16 TAC Rule 4 402.412, signature requirements. 5 Mr. Sanderson. 6 MR. SANDERSON: This agenda item and 7 the other three are rules from the licensing section 8 that have been developed. I believe all four of these 9 have gone through the workgroups. And the first one 10 is signature requirements, and it outlines whose 11 signature can appear on applications and how many 12 signatures and whether or not we can accept 13 photocopies or PFD. 14 And I'll let Bruce Miner, the Taxpayer 15 Services Manager, come up and elaborate. 16 MR. MINER: Bruce Miner, Taxpayer 17 Services Manager. 18 Basically what Phil has mentioned on 19 the signature requirements, just a little history. 20 The two signatures is to benefit the industry. That 21 way one person can't shanghai the organization and 22 make unilateral decisions. 23 Internal Audit indicated that we didn't 24 have anything in place that allowed that, so this is 25 our effort to provide something that would meet our 0041 1 needs, meet your needs. And it will be open for 2 review and discussion in the near future. 3 Any questions on that? 4 MS. TAYLOR: I do. I think further on 5 in the book, it talks about faxing and using our PIN 6 numbers. So we would still be able to fax these 7 signatures as long as it had been signed and we have 8 the original in our possession, still the Lottery will 9 accept a fax? 10 MR. MINER: Right. Yes. 11 MS. TAYLOR: Okay. 12 MR. MINER: Yes, sir. 13 MS. TAYLOR: Yes, sir. 14 MR. CIANCARELLI: On the electronic 15 .pdf files, Mr. Miner, has any thought been given to 16 the digital signatures? I understand you're talking 17 about two signatures required, but one person could 18 actually authorize that and lock that document? 19 MR. MINER: As in with e-mail, sending 20 it, and just because it came from an e-mail address? 21 MR. CIANCARELLI: No. As an 22 attachment. The .pdf would have a digital signature 23 lock on it. 24 MR. MINER: That's above my level as 25 far as technical skills. I mean, those are things 0042 1 that we could work towards once -- 2 MR. CIANCARELLI: Okay. And the reason 3 I ask that question is, I've sent a couple of 4 documents to the Commission and Charitable Bingo with 5 that. I don't know if Mr. Sanderson has picked that 6 up, or somebody, but usually to the other people, but 7 that is something that's available. 8 MR. MINER: Okay. 9 MR. CIANCARELLI: Thank you. 10 MS. TAYLOR: Any other questions for 11 Bruce? 12 Thanks, Bruce. 13 MR. MINER: Is that all of these, all 8 14 through 11? Thank you very much. 15 MR. SANDERSON: Madam chair, our 16 intention is to take these four rules to the 17 Commission at their next meeting in December. 18 MS. TAYLOR: Was Bruce going to be 19 talking about the next several rules? 20 MR. SANDERSON: He is. 21 MS. TAYLOR: Then you might as well 22 come and just stand up there. 23 Any other discussion by the committee? 24 Public comment? 25 0043 1 AGENDA ITEM NO. 10 2 MS. TAYLOR: Item No. 10, report and 3 possible discussion and/or action on draft 16 TAC, 4 Rule 402.402, revised Worker Registry. 5 MR. MINER: We're amending this rule to 6 capture some additional information, references to 7 "primary operator." We just generalized "operator." 8 We wanted to capture definitions for a clearly defined 9 "bookkeeper," "completed application," added an 10 additional position of Bingo Chairperson, so we've 11 captured that in this rule, and just an effort to 12 clarify what already is currently in practice. 13 MS. TAYLOR: The biggest change -- are 14 you finished? 15 MR. MINER: I'm finished, yes. 16 MS. TAYLOR: Okay. I didn't want to 17 interrupt you. 18 The biggest thing I saw that I don't 19 recall seeing before is that your bingo bookkeeper, 20 the person who prepares and maintains any records is 21 now a -- must be on the list of registered bingo 22 workers. And, of course, the Bingo Chairperson -- 23 which I know is a new thing -- was it October 1st 24 everybody had to name a bingo Chairman? 25 MR. SANDERSON: Yes. 0044 1 MS. TAYLOR: I think I was faxing 2 everything back around then, that they must be on the 3 registry. 4 I do have a question about that. I was 5 just trying to think of how to frame that to you. The 6 bookkeeper and the bingo chairperson, the chairperson 7 already has to be a member of the board of directors 8 of the organization that they're going to be the bingo 9 chairperson, which means their name has already been 10 turned in, because if they had a record, they wouldn't 11 be allowed to stay on the board. Is that correct? 12 When we submit the name of our officers and directors, 13 they're all run through the DPS. Is that correct? 14 MR. MINER: We do verify that. But you 15 would be surprised how many people added the 16 chairperson that was not an officer or director of an 17 organization -- or tried to. 18 MS. TAYLOR: Okay. So you would have 19 told them, "No. If that person is an officer or 20 director, they can't be your chairperson." So my 21 question being, the answer to that is, I do not 22 understand why they would need to be on the Registry 23 of Bingo Workers if they've already been approved 24 through DPS as a member of the organization. Why 25 would they need to be on the registry in addition? 0045 1 MR. MINER: The officers are not 2 submitted -- they're not on the registry. What we're 3 saying is add an operator -- I'm sorry -- the bingo 4 chairperson on the worker registry. But it's to put 5 it out on the list for general use throughout the 6 state. But, yes, you're correct, they've done a 7 background check on the officers but they are not on 8 the registry. 9 MS. TAYLOR: That's my question. Why 10 would they need to be on the registry if they've had a 11 background check and they don't work the bingo 12 occasion? 13 MR. MINER: That's something we can 14 capture. You know, it's just that that was our frame 15 of reference at the time we were writing this. 16 MR. SANDERSON: We can take another 17 look at it. 18 MR. MINER: Sure. 19 MR. WHITTINGTON: And, Bruce, why was 20 No. 11, 12 scratched out, 13, on the operator? 21 MR. SANDERSON: What page are you on, 22 Larry? 23 MR. WHITTINGTON: I'm on Page 1 where 24 it says cashiers, managers, operators means an active 25 bona fide member. And then 11, 12 and 13 are 0046 1 scratched out and ". . . designated by an authorized 2 organization as an 'alternate operator,'" why is that 3 scratched out? 4 MR. SANDERSON: Well, with the addition 5 of the bingo chairperson, that's going to be our 6 primary contact person, so they've replaced the term 7 "primary operator" and now it's just "operator." And 8 so that comes as both primary -- what used to be a 9 primary operator and an alternate operator. So 10 "operator" is just one term now. 11 MR. WHITTINGTON: Okay. 12 MS. TAYLOR: So there is no primary 13 operator anymore, then? 14 MR. SANDERSON: That is correct. 15 MS. TAYLOR: That means every operator 16 has the same responsibility? 17 MR. SANDERSON: Yes. 18 MS. TAYLOR: The bingo chairperson has 19 more or less taken the place of the primary 20 operators -- 21 MR. SANDERSON: To a certain extent. 22 They don't have to be at the bingo occasion. 23 MS. TAYLOR: Right. 24 MR. SANDERSON: But they are the 25 primary contact and the individual that is responsible 0047 1 for overseeing the activities. 2 MS. TAYLOR: Okay. 3 MR. WHITTINGTON: Thank you. 4 MR. MINER: It's evolving, though. I 5 mean, the primary operator is on the form and things 6 we're in the process of trying to change. 7 MR. WHITTINGTON: Okay. You answered 8 my question. They don't have to be there. Other 9 operators can -- okay. That's what I needed to know 10 big time. 11 MS. TAYLOR: Any other discussion? 12 MR. SILVER: I have a question on Page 13 3. What was added, like 13 through 20, it's a 14 question -- I don't know if I'm reading it right. But 15 is this for if the registry worker has expired or for 16 new people trying to get on the registry that, "A 17 licensed authorized organization may only pay a worker 18 that is registered at the time of service for serving 19 in a position that requires the person to be listed on 20 the registry," is that for expired people who are 21 trying to get back on or new applications? 22 MR. MINER: Well, to answer your 23 question, it applies to both. If they're not on the 24 registry, they're not authorized expense but in this 25 verbiage here that focuses on don't let your registry 0048 1 expire, renew timely; otherwise, it won't be an 2 authorized expense. 3 MR. SILVER: I understood that and 4 that's good, because you want to make sure people 5 update the registry. My only concern is with the 6 charities hiring somebody and then training somebody, 7 because on the beginning, on Page 2, Line 15, "The 8 registrant will be added to the registry as soon as 9 possible. . ." I mean, that's just kind of vague in 10 itself and it just kind of leaves it up to the 11 charity, that -- I meant to call our hall manager to 12 find out how things were going on getting people's 13 cards, and it seems to be going good, in a timely 14 manner. But I was just concerned that if there was 15 delay -- I just hear stories that it's taking two, 16 three weeks to get somebody's card back -- not 17 recently. 18 MR. MINER: Right. 19 MR. SILVER: But that was just my 20 concern, is that you can't pay somebody even if 21 they're training or starting a new job there. 22 MR. MINER: We filled the position for 23 data entry that will allow us to more timely respond. 24 So we can -- you fax it in. We enter it. It clears 25 DPS the next day and we print it. So it should be in 0049 1 the mail in two or three days. 2 MR. SILVER: That was just my only 3 concern from the stories. 4 MR. MINER: Okay. 5 MR. SILVER: Any I didn't make the call 6 this morning to find out, but that's just what I had 7 on there. Thank you. 8 MR. MINER: Okay. 9 MR. SANDERSON: Also, Earl, the statute 10 does not allow for an individual to work until they 11 have gone through the background, so there's not 12 really any training period authorized for an 13 individual. 14 MR. SILVER: Okay. 15 MR. MINER: And just expand on that: 16 We tried to give us that flexibility by rule four 17 years ago, and we were told we didn't have statutory 18 authority. So we couldn't put them in a training 19 status to allow them on work. Now that it's 20 automated, I think we'll just try to respond more 21 quickly. 22 MR. SILVER: Yes. Our hall manager did 23 make comments that things -- I always ask her, "Well, 24 how" -- we have turnover right now for some reason, 25 and I was just asking her about the new people. And 0050 1 she says, "Things are going fine" -- 2 MR. MINER: Good. 3 MR. SILVER: -- "and everybody is 4 getting their cards. 5 MR. MINER: And if it's not going fine, 6 let me know. 7 MR. SILVER: That was just my only 8 concern, that it's in here in a rule -- 9 MR. MINER: Okay. 10 MR. SILVER: -- and that if something 11 happened, it reverts back to the second page, "The 12 registrant will be added to the registry as soon as 13 possible," that just seems vague to me. But I 14 understand. 15 MR. MINER: Yes. 16 MR. WHITTINGTON: Could I ask a 17 question? I have been wanting to ask this question a 18 long time, Phil. I oversee a bunch of charities, 19 about 20 or 25. And the charities that come to me, 20 since they are getting a lot of their funding from 21 bingo, which is part of their operation basically, to 22 make them run, operate every day. They are 23 developing, through a lawyer everything, a bingo 24 division section in their charities and listing all my 25 workers as part of their charities, because we are the 0051 1 one that fundings -- they're funding from bingo for 2 the organization. Okay? And I was asked a question, 3 I don't know if they can do that. I think they can, 4 because that makes all my workers a member of their 5 organization under the Bingo Division part, and that's 6 what they're doing and that's what they're trying to 7 do. along with the rest of their members. 8 MS. TAYLOR: A bingo committee? 9 MR. WHITTINGTON: Under their 10 charitable organization, yes, and their meetings and 11 everything when one of us have to be there and go back 12 and report to all the workers exactly what went on in 13 the meeting. Okay? And that makes all my workers 14 part of -- they're listed under the Bingo Division 15 part of the committee, whatever, and they're doing 16 that and they say that way they know they're covered. 17 All our workers know what's going on with them. One 18 can report back everything at their meetings and what 19 they talk about, and all of them were abreast with 20 what's happened with that charity. 21 On a month basis every month, one will 22 report back to all the workers and say: This is what 23 went on in the meeting. Since we help with the 24 charity to raise funds, this is what they are doing. 25 So all my workers are abreast of what all my charities 0052 1 are about, exactly what happened on a month-to-month 2 basis with them when it comes to bingo and us helping 3 them out. And now they are all classified as a member 4 up under that charity, because we are part of it. 5 MR. MINER: Okay. Was there a 6 question? What's your question? Yes. Okay. 7 MR. WHITTINGTON: That's the question: 8 Is that okay? I don't know if that was okay for them 9 to say that and do that. 10 MR. MINER: I don't think we regulate 11 how they conduct their business. But, you know, 12 however they're organized by bylaws or charter and 13 stuff, if it's only veterans that served in foreign 14 wars, then maybe you can't have the worker -- 15 MR. WHITTINGTON: No, we don't have 16 that. 17 MR. MINER: Okay. 18 MR. WHITTINGTON: What I'm saying, 19 basically just cut and dry, short-cut it, they are 20 making us almost a bona fide member of their 21 organization by doing that. That's basically what I'm 22 saying. 23 MR. MINER: Okay. 24 MR. WHITTINGTON: And I don't know if 25 that was okay. I thought it was. I mean, that was 0053 1 pretty cool. 2 MR. CORNWELL: Can I ask what -- you're 3 still compensating these workers. Right? 4 MR. WHITTINGTON: Yes, yes, yes. They 5 are professional workers here. 6 MR. CORNWELL: I had to ask that. 7 MR. WHITTINGTON: Okay. But now they 8 are actually a part of that organization all the way, 9 instead of just knowing they're working for that 10 organization, with one operator standing there every 11 day. Understand what I'm saying? 12 MR. MINER: Yes. I think it would be 13 good to have their buy-ins so they're looks out after 14 the interest of those charities. 15 MR. WHITTINGTON: Yes, yes, so they're 16 making them a bona fide member of their organization, 17 because they're listed as one of the bingo workers up 18 under that division part on that charity. 19 MR. MINER: Okay. It's however they 20 organize -- 21 MR. WHITTINGTON: Okay. That's all I 22 wanted to know. 23 MS. TAYLOR: Any other comments from 24 the committee or questions for Bruce? 25 Well, thank you, Bruce. Appreciate it. 0054 1 Do you have anything else to tell us? 2 MR. MINER: Not about that one. I have 3 more rules. 4 MS. TAYLOR: Okay. I'm going to do 5 public comment next to see if anybody has public 6 comment, and then we'll see you again. 7 MR. BUNKLEY: Hello. My name is 8 Richard Bunkley. I work for Littlefield Corporation. 9 Many of you may know that Littlefield Corporation is a 10 publicly traded company. We own 40 bingo halls in 11 Texas, Alabama, South Carolina and now Florida. 12 I've got a specific and a general 13 concern with this rule. My specific concern is 14 identical to yours, Madam Chair, Lines 10 through 14 15 that seem to imply a bookkeeper must be a natural 16 person as opposed to an accounting firm. I really 17 don't see what greater good is served by requiring 18 that bookkeeper to be on the registry of approved 19 workers. They're not conducting bingo. So that's my 20 specific concern. 21 And in general, I'm not sure what 22 greater good is served by this and all the other 23 numerous rules that are being proposed over the last 24 several weeks. I mean, we're asking these volunteers 25 to read hundreds and hundreds of pages of new rules 0055 1 that are now even longer than the Bingo Enabling Act 2 itself. Each rule on its own makes sense, seems 3 reasonable. But when examined together, there are a 4 mountain of paperwork to overcome. It's just kind of 5 a death of 1,000 cuts for these charities. 6 So that's my comment. Thank you guys 7 very much. 8 MS. TAYLOR: Thanks, Richard. Just so 9 that you know, I can tell you that the members of the 10 BAC have all professed the same awareness of the 11 numbers of pages of rules that we have to read and 12 understand and especially show to a new organization 13 trying to get into the bingo game. 14 Any other public comment? 15 David Heinlein and then Bill. Let me 16 give David and then we'll get you, Mr. Pruitt. 17 MR. HEINLEIN: David Heinlein, for the 18 record, representing charities. 19 You submitted a comment -- I think I 20 heard you a while ago say that all of these rules that 21 are being presented today have already been run 22 through a committee. Is that right? 23 MS. TAYLOR: No. 24 MR. HEINLEIN: No? Okay. I did 25 misunderstand you, you know, because this is the first 0056 1 that I've seen of these particular rules, and this 2 particular one has certainly some problems. Richard 3 has just identified one of them that I am also 4 concerned about. And perhaps a definition of 5 "bookkeeper" would have to be looked at, because what 6 is the bookkeeper? 7 I'm a designated agent for many trusts 8 units. And, as such, I have been background-checked, 9 authorized representative for many charities. Why 10 would I need to be on the Registry of Bingo Workers? 11 I don't work in a bingo hall. I very seldom go to the 12 bingo hall. I get e-mailed and faxed all of the 13 records that I prepare the quarterly reports from, and 14 other reports. 15 So perhaps the term "bookkeeper" needs 16 to be defined, because at each of the bingo halls, 17 there is someone that we may call a bookkeeper who is 18 filling out a daily cash report and keeping inventory 19 records at the hall, and we call them a bookkeeper. 20 And maybe since they are involved perhaps -- maybe 21 not -- but perhaps in the activity of the bingo 22 itself, they would need to be on the Registry of Bingo 23 Workers. But myself and any of the people in my 24 staff, I see no reason why we would be on the Registry 25 of Bingo Workers. 0057 1 MS. TAYLOR: Do you maintain any record 2 used to substantiate the contents of the quarterly 3 report? 4 MR. HEINLEIN: Excuse me? 5 MS. TAYLOR: Do you maintain a record? 6 MR. HEINLEIN: Oh, absolutely. 7 MS. TAYLOR: So you're here. 8 MR. HEINLEIN: That's why I'm saying, 9 thought, I believe it is an incorrect -- 10 MS. TAYLOR: Right. I agree. 11 MR. HEINLEIN: I think we need to 12 redefine this thing. I don't believe the intent is to 13 have all of my staff and myself on a Registry of Bingo 14 Workers. Most of my staff have never even been to a 15 bingo hall, so there is no reason for them to be on 16 the Registry of Bingo Workers, though myself and one 17 of my staff members, who is a supervisor over all of 18 them, is on the authorized representatives. 19 And so being there, you've had your 20 background checked, so you are good to go. You've got 21 all the background -- everything that would be done to 22 list you on the Registry of Bingo Workers has already 23 been done on anyone that's an authorized 24 representative or a designated agent. 25 So we've already passed that. This 0058 1 would be an additional time to have to do that, plus 2 one more thing to keep up with that we've got to be 3 sure we're on it every three years. Currently I go to 4 operator training every two years, and I would have to 5 insert every third year. Then I would have to re-up 6 on my Registry of Bingo Workers. I just don't think 7 that's necessary. It needs to be re-examined. 8 MS. ROGERS: I have a question, Phil, 9 that this kind of makes me think of. If a charity 10 wants to have all of their quarterly reports done by a 11 CPA firm -- okay? 12 MR. SANDERSON: Yes. 13 MS. ROGERS: -- does that mean that CPA 14 firm has to go through this? What if the charity 15 doesn't keep their own books? What if they do? I 16 mean, they have that option. I don't know of anyone 17 who does, but . . . 18 MR. SANDERSON: Well, the first 19 sentence in the definition may need some 20 clarification. The second sentence would capture what 21 your question pertains to. 22 MS. ROGERS: Yes, right, because what 23 if they do the quarterly reports for them? 24 MR. HEINLEIN: Would that qualify as a 25 tax preparer? 0059 1 MR. SANDERSON: That's why I said the 2 first sentence -- 3 MS. ROGERS: Right. 4 MR. SANDERSON: -- may need some 5 clarification. 6 MS. ROGERS: Okay. 7 MR. HEINLEIN: Would this tax preparer 8 be the quarterly report, because you are preparing a 9 report to pay a tax, a winner's fee. I mean, we also 10 do other tax work, too -- 11 MR. SANDERSON: Mr. Heinlein, are you 12 on the worker registry already? 13 MR. HEINLEIN: No, sir. 14 MR. SANDERSON: You're not? 15 MR. HEINLEIN: No, sir. 16 MR. SANDERSON: Okay. You're a 17 designated agent? 18 MR. HEINLEIN: Yes, sir. 19 MR. SANDERSON: Okay. 20 MR. HEINLEIN: And an authorized 21 representatives in some cases. 22 MR. SANDERSON: Well, the authorized 23 representatives do not have background checks 24 conducted. 25 MR. HEINLEIN: I thought we did. I 0060 1 thought I remembered filling that out on the Schedule 2 E. 3 MR. SANDERSON: You fill out a form but 4 it doesn't have a background. 5 MR. HEINLEIN: Oh! Well, the Schedule 6 E has all that information to do the background check, 7 yes. 8 MR. SANDERSON: Well, it could, but we 9 don't perform background checks. I don't know what 10 the information on Schedule E assists in capturing. 11 MR. HEINLEIN: It's got your driver's 12 license number and it's got your social security 13 number, which I don't like putting on all of these 14 forms that are floating around. You know, I'll send 15 that out to a charity and have them sign it for me, 16 but I don't put my social security number on it. I 17 get it back in my office, then I put my social 18 security number on it and faxed it to you. 19 MS. ROGERS: But you bring up a good 20 point. So now Phil can go back and look at that, 21 because there's -- 22 MR. HEINLEIN: Yes. See, I thought the 23 Schedule E -- 24 MS. ROGERS: -- of a charity -- 25 MR. HEINLEIN: -- did cause a 0061 1 background check. 2 MS. ROGERS: But there may be a charity 3 out there that just wants to have all their records 4 kept by a CPA. 5 MR. HEINLEIN: Yes. 6 MR. ROGAS: And I can't see any 7 business CPA going, "Okay. Well, I'll" -- 8 MR. HEINLEIN: We're in the same boat. 9 We're a firm. You know, we have an accounting firm 10 and we have employees. And I am at the top because 11 I'm younger, so I'm listed as a designated agent in 12 these units. But I did think that we did the 13 background check on the Schedule E. I guess I was 14 wrong on that. 15 MR. WHITTINGTON: So you're basically 16 saying the bookkeeping, as far as you think, the 17 definition of "bookkeeping" is basically the cashier? 18 MR. HEINLEIN: Yes. A bookkeeper could 19 be, at the bingo hall, called a -- I mean he -- they 20 may also be a cashier, but maybe one of their duties 21 is to be the bookkeeper, to fill out the daily cash 22 report, keep the inventory -- 23 MR. WHITTINGTON: That's my cashier. 24 MR. HEINLEIN: -- and file all of the 25 paid bill files and the office type work that you 0062 1 would call someone a bookkeeper. If it were defined 2 like that, then I think this could apply to bookkeeper 3 and you would have them on the Registry of Bingo 4 Workers. 5 But someone that's off-site doing the 6 preparation of taxes, quarterly reports, keeping the 7 records of the sales journals, et cetera. You know, 8 there are lots of different reports and lots of 9 records. And maintaining those records for four 10 years, that doesn't seem appropriate that they would 11 be listed on the Registry of Bingo Workers. 12 MR. CORNWELL: Mr. Heinlein, before you 13 came up and made your public comments, do you feel 14 like in your position there is statutory authority to 15 make you get a Registry of Bingo Workers - of bingo? 16 MR. HEINLEIN: No, no. 17 MR. CORNWELL: Okay. Can, Phil, you 18 and Bruce go through that for us, statutory authority 19 for putting a bookkeeper in the rule? 20 MR. SANDERSON: I'll call on Bruce. 21 MS. TAYLOR: Now, on your way up here, 22 Bruce, my question is, since this is going to be going 23 to the Commission, is there something that can be done 24 with this particular -- I mean, there's a little small 25 part in here we're having a problem with. Will that 0063 1 be before or after it goes to the Commission for -- 2 MR. MINER: We'll consider it. 3 Excuse me. Bruce Miner. 4 We'll consider it both times, because 5 it goes before the Commission and then the public 6 comment, so we'll respond to those public comments. 7 So those items that still aren't satisfactory, you can 8 have a chance it address them then. 9 But to answer David's question, the 10 only persons that can assist in conducting -- and 11 there is a list under 2001.411, and it includes a 12 bookkeeper, so the bookkeepers are allowed to be 13 involved in bingo. And how we tied it, because we 14 have had situations where a bookkeeper caused the 15 charities to go out of business because they didn't 16 pay us, they didn't pay the IRS. 17 So under 2001.313, it talks about 18 converting -- let's see how it starts: The Commission 19 may refuse to add a person or remove a person if, 20 after notice and a hearing, the person is determined 21 to have converted funds that are in, or should have 22 been in, the bingo account. 23 Well, if we don't have the bookkeeper 24 addressed in here, then we have no authority against 25 that individual for converting those funds, which 0064 1 happens seldom, but it has happened, so that's kind of 2 some of the background. So whether it's flawed or 3 not. And Schedule E, we take the information just to 4 get it on the system, but we don't run background 5 checks. 6 MS. ROGERS: So you're saying that if 7 someone misdirects or misuses bingo funds, the Lottery 8 has no way of reprimanding them unless they're on the 9 registry workgroup list, whatever? 10 MR. MINER: Yes. If you don't tell us, 11 I mean, it becomes your problem, a civil matter, 12 because we have no authority over them if they're not 13 identified as being part of bingo anywhere. And that 14 was our effort to capture a bookkeeper -- on the 15 registry. 16 MR. WHITTINGTON: Well, that is making 17 more sense now, because I would love for y'all to 18 handle it. Well, my bookkeeper is -- you know, I got 19 a bookkeeper, I got a CPA, we got everything. So my 20 bookkeeper is part of bingo. 21 MR. HEINLEIN: I mean, I agree with 22 Bruce's concern, because I think where you're in a 23 position of handling a lot of money, something could 24 happen to have it misappropriated, you certainly need 25 some legal remedies available to you. In our 0065 1 situation, we don't actually handle any money. The 2 money is deposited by someone from the bingo hall. I 3 don't sign any checks. I'm not on the signature card 4 for any of the bank accounts, but I do write a lot of 5 checks -- a lot of checks. 6 And I do that in a way, too, to protect 7 the charities by not having any pre-printed checks. 8 The computer prints them so that I don't have to worry 9 about stored checks with names on them being stolen. 10 The only way a check can be printed, it has to be 11 computer-generated with bar codes on it that can be 12 read. 13 So we are concerned about any funds 14 being missing. That's a very big item that we look 15 very carefully at on everything that we do. But I do 16 believe that that needs some authority to -- and, 17 Phil, it seems like an appropriate change would be to 18 be sure that you do a background check on an 19 authorized representative or you classify this for 20 that purpose, but not register them on a bingo worker 21 list because they're not a bingo worker. 22 MS. ROGERS: Well -- 23 MR. HEINLEIN: And here is what it says 24 on the registry in 2001.313, Registry of Approved 25 Bingo Workers: A person who is not listed on the 0066 1 registry established by this section may not act as an 2 operator, manager, cashier, usher, caller or 3 salesperson, clearly indicating those that are 4 involved in the conduct of bingo are those people that 5 are to be listed on the Registry of Bingo Workers. 6 That makes sense. 7 Whereas, a CPA firm or an accounting 8 firm outside the bingo operation is not involved in 9 the conduct of bingo but they certainly should have 10 some sort of credibility establishment. And I sure 11 would not be opposed to there being a background 12 check. And, in fact, I thought I already had been 13 checked numerous times, but I guess I'm not. So I 14 think you might want to add language to be able to do 15 that -- I agree with that -- because I don't mind 16 being background-checked. 17 MR. WHITTINGTON: David, do any of 18 these charities send you money when you make it? 19 MR. HEINLEIN: Excuse me? 20 MR. WHITTINGTON: Are you in control of 21 their money? 22 MR. HEINLEIN: I'm not in control of 23 their money. 24 MR. WHITTINGTON: Okay. So you just 25 basically do paperwork. Right? 0067 1 MS. ROGERS: And that's exactly what I 2 was going to say, Phil -- 3 MR. HEINLEIN: They tell me what bills 4 to -- 5 MS. ROGERS: -- maybe that first line 6 needs to say something to the effect of if they're 7 just preparing forms, then they don't have to be. But 8 if they're dealing with any type of signed checks, 9 anything with a bingo -- 10 MR. HEINLEIN: Yes, if you're signing 11 checks -- 12 MS. ROGERS: -- financial, money, then 13 they have to be listed. 14 MR. HEINLEIN: Define that first as to 15 whether or not they have actual -- all of the money. 16 MR. SANDERSON: Can I ask that y'all 17 not talk over each other. The court reporter is 18 having a very difficult time carrying on three 19 conversations. 20 MR. HEINLEIN: Sorry. The manager or 21 someone authorized -- in some cases is the bingo 22 chairperson -- requests a check -- in writing. I tell 23 my staff, you know, "Unless they" -- I've got one guy 24 that will come over and just tell them to cut a check. 25 And I say, "Don't let him do that. You make him sign 0068 1 what he is requesting a check for and that he's 2 authorized you to cut that check." So they have to do 3 that. 4 So we don't write a check unless 5 someone has authorized us to cut the check. Then 6 another person either comes to my office and signs 7 that check or I send it to the bingo hall, which it 8 may be in another town, and that bingo chairperson is 9 usually the one -- or maybe two of them. Some of them 10 require two signatures -- and they will meet at the 11 bingo hall and sign those checks. 12 So they are looking to be sure I didn't 13 make a mistake on the check. They ask me to send a 14 check for $100 and I wrote it out for $1,000, and 15 that's a clerical mistake. But they have the 16 responsibility then to look at that check and be sure 17 that I made it out for what they requested it for. 18 MS. TAYLOR: Because -- 19 MR. HEINLEIN: That's a double check. 20 You know, you've got checks and balances; you must 21 have that. 22 MS. TAYLOR: And you have a firm that 23 takes good care for the checks and balances, and I 24 understand that not every organization in this state 25 has you doing their books. 0069 1 MR. HEINLEIN: Right. 2 MS. TAYLOR: And I understand, you 3 know, once Bruce has talked about this, the reason 4 that they're trying to do it, to have these people 5 captured. I just think this is the wrong place to 6 capture these people. 7 MR. HEINLEIN: And I certainly agree 8 that it needs to be captured, because that is an 9 important function. And there might need to be the 10 rules set such that how that's done. Like I'm telling 11 you, there needs to be some safeguards on that money. 12 I don't have any way of getting the 13 money to the bank. But once the money is in the bank, 14 then we need to be careful how it goes out of the 15 bank, and we need some checks and balances in that 16 area. And we do that, but we're not told that we have 17 to do that. So maybe you got to tell them that you 18 have to do that. I think that's a separate section. 19 That's a different, maybe a separate rule by itself. 20 MR. WHITTINGTON: Well, I'm going to 21 put all of y'all on alert about checks. Some kind of 22 way, I don't know who have gotten ahold of a couple of 23 our bingo accounting checks to bingo halls, Jupiter as 24 well as a couple more halls we got, somebody has 25 been -- we had to close two accounts, because we have 0070 1 been hit for like $80,000 on chasing debits on these 2 accounts. And these people get the checks, looks just 3 like our check, copy of a signature and everything. I 4 don't know where they got them from, but they have 5 gotten these checks and we have to close these 6 accounts. And we have gotten our money back. But in 7 the meanwhile, they're still hitting these old 8 accounts over and over. 9 MS. TAYLOR: Well, if anybody has 10 VersaCheck, you can make up any check you want. I 11 mean, there's check-making software out there. I use 12 it. You know, any check you see, you can make any 13 check you want to as long as you have a check to look 14 at. 15 MR. WHITTINGTON: I'm talking about, 16 Suzanne, they getting in accounts, and debits is being 17 taken out of the bank. We didn't catch it, and they 18 got away with about $3,000 first. Okay? This has 19 happened. So I'm just really telling the people be 20 aware. We need to -- 21 MR. HEINLEIN: Well, that's right. I'm 22 very careful about there not being printed checks that 23 could be stolen. 24 MS. TAYLOR: Do you hand out paychecks? 25 MR. HEINLEIN: We have a -- our CPA 0071 1 wants us to change to QuickBooks and we're not able to 2 do it, because with QuickBooks, you've got to have 3 pre-printed checks. And our accounting package allows 4 us -- I could have 100, 200 bank accounts, different 5 banks, and I can just pre-print one check after 6 another, and I don't have to take the paper of the 7 machine. It's still the same paper, but it's printing 8 a different check to a different bank, and so I have 9 to stay with that kind of an accounting package. 10 MS. TAYLOR: Okay. Thank you very 11 much, Mr. Heinlein. 12 And we do have some more. J.D. Pruitt, 13 would you like to speak? 14 MR. PRUITT: Y'all keep getting off in 15 other places that brings up other problems. 16 On this registered bingo worker thing, 17 whenever I have somebody come in and fill out an 18 application, I have them fill that request, and it's 19 faxed in, whether I'm even remotely interested in 20 hiring them, which is creating a lot of extra work for 21 you, because I'm not going to go through, you know, 22 all my screening process of drug tests, backgrounds, 23 credit checks, until I know they can work, and I'm 24 sure other people do that. 25 You probably have hundreds of people in 0072 1 that bingo worker database that will never be in a 2 bingo hall -- just for your information. But that's 3 the first thing I do as part of my application 4 package, and I immediately fax it, tell them, "When 5 you get your cards, come back and talk to me." 6 Phil -- I'm going to direct this at 7 you -- I get the idea with all these rules that we're 8 getting, is you're trying to put the organizations 9 back or more involved in their bingo, rather than 10 commercial operators and what have you. Is this where 11 you're headed? 12 MR. SANDERSON: I don't know if I would 13 say that with these rules, we're trying to get the 14 organization more involved, because statutorily that's 15 the organization that we license and they should be 16 involved. The rules that we're developing are, one, a 17 result of two audits that we've had from Internal 18 Audit that have made recommendations that we provide 19 the industry with information so that they can know 20 what the expectations are. 21 And some of the rules that are out 22 there are process rules that indicate how an 23 organization will file an amendment to their license 24 and more or less instructions. We could put them out 25 as guidelines. But I think with rules, it's a little 0073 1 bit better, because it does offer up the opportunity 2 for public comment and the industry to -- just as 3 today with this worker registry, we'll offer a comment 4 on potential things that we did not see in developing 5 some of the rules. 6 MR. PRUITT: When I think where we've 7 got to here -- and, of course, I've been in bingo -- 8 well, I have been in bingo a little longer than you 9 have. I was around back at the Comptroller's Office. 10 But we have got this industry with regulations, rules 11 and everything to the point that a layperson cannot 12 stay up with it, just like the IRS. 13 I put all my stuff in a shoe box and 14 take it to a tax professional. He does my stuff, says 15 "Sign this. Give me a check," and that's where we're 16 at in the bingo industry. An organization which is 17 usually made up of volunteers does not have anybody 18 with the capability of staying on top of this stuff. 19 They have to go to a bingo 20 professional, somebody that lives this stuff. And, I 21 mean, I know where you're at; I understand it. But 22 y'all created this. You're the ones that has put this 23 in the hands of the commercial operators or, quote, 24 bingo professionals. I don't consider myself a 25 commercial operator. 0074 1 But I don't know that we got a way back 2 out of it. It's kind of like the bingo computer 3 pricing. Those people, through competition, created 4 that problem themselves. They can't get theirself 5 back out of it because if they all sat down and, 6 "Pricing is price fixing," so now they want you to get 7 them out of their problem. And, you know, I'm 8 sympathetic to them. I understand. I have been 9 shaking my head for years, says, "How do they stay in 10 business?" 11 Another thing that we've gotten into 12 here, you're doing away with the primary bingo 13 operator. You're going to a bingo chairperson who has 14 to be a member of the board of directors, in most 15 cases a voluntary organization. That person may be on 16 that board for two years. You have lost continuity. 17 Your primary operators are usually one 18 person in that organization that has taken on bingo 19 and has done it quite often for a number of years. 20 Now you're making a person responsible that really 21 doesn't know that much about it. They're the person 22 that has to answer. So you've lost part of your 23 continuity in the organization by making it somebody 24 on the board of directors that is the person who is 25 involved. 0075 1 Was there anything else I wanted to 2 fuss about? 3 MR. SANDERSON: I don't know how any of 4 those comments had to do with the worker registry 5 rule, but I appreciate the comments. 6 MR. PRUITT: Well, it does in that 7 worker registry -- I mean, it's a part of that, and 8 then a part of the other discussion we got into here 9 loops back to that. What I'm saying is, we're getting 10 so many rules that it's almost impossible for a 11 layperson to operate bingo in compliance. 12 MS. TAYLOR: Thank you, Mr. Pruitt. 13 We also have a witness affirmation form 14 from Bill Pruitt -- Pewitt. 15 FROM THE AUDIENCE: He left. 16 MS. TAYLOR: No? He left. Okay. 17 Any other public comment? 18 AGENDA ITEM NO. 11 19 MS. TAYLOR: Okay. Let's go on with 20 Item No. 11, report and possible discussion and/or 21 action on draft 16 TAC, Rule 402.409, abandonment 22 and/or lease term. 23 MR. MINER: This rule is to clarify the 24 process to act on 2001.108. It doesn't happen very 25 often. So when somebody wants to do an amendment 0076 1 related to a lease termination or abandonment, we have 2 to explain it, we have to tell them how to do it. So 3 all we're doing is providing the information in a 4 short rule here to facilitate that. And this 5 addresses requirements in the Bingo Enabling Act. 6 Are there any questions related to this 7 rule? Comments? 8 MR. SILVER: On the second page, No. 5, 9 I don't understand the sentence, "license of the 10 organization and has abandoned the premise without 11 removing its license." I may not be thinking right. 12 MR. MINER: Additional, going up -- 13 let's see. We're asking that the application include 14 this list of documentation and where it's saying 15 provide the license -- 16 MR. SILVER: The original license or a 17 copy of the license or -- 18 MR. MINER: Normally whatever is on the 19 wall. 20 MR. SILVER: Okay, because -- there 21 have been instances where two charities haven't gotten 22 along and letters have been exchanged about, "Okay. 23 You can play this time." And then one decides not to 24 play and then a lease was terminated and the license 25 was supposed to be surrendered. I'm just wondering 0077 1 why does the license, the physical license, need to be 2 in hand? 3 MR. MINER: We license a charity at a 4 time, a place. If there's already a license out there 5 for that charity, time and place, we are just 6 requesting, if it's available, if it's still on the 7 wall, that when they walk out or when you kicked them 8 out, they hadn't provided it, we just ask them to send 9 it back to us. So if it's available. 10 MR. SILVER: If it's available? 11 MR. MINER: Yes. 12 MR. SILVER: Okay. 13 MS. TAYLOR: Any other questions for 14 Bruce? 15 Any public comment on this item? 16 We'll move on. 17 AGENDA ITEM NO. 12 18 MS. TAYLOR: Item No. 12, report and 19 possible discussion and/or action on draft 16 TAC, 20 Rule 402.424, amendment by fax or phone. 21 MR. MINER: This rule, amendment of a 22 license by telephone or fax, lays out a few 23 definitions and a simplified process. All we're 24 trying to do is, we have a licensing rule, 400, that 25 captured everything, and we wanted to simplify the 0078 1 process by making a small bite-sized item. So if 2 you're looking for something, you can look at the 3 title and see what you're going to try to address. So 4 that was our effort here and it's the current 5 practice. It's just put on paper. 6 Any questions? 7 MS. TAYLOR: No questions? 8 Any public comment? 9 No public comment. Thanks, Bruce. 10 MR. MINER: I'll be available. 11 MR. CORNWELL: Madam Chair, are you 12 going to call for any actions on these rules by the 13 BAC? 14 MS. TAYLOR: Well, I guess we could. 15 MR. CORNWELL: I mean, that's your 16 call. 17 MS. TAYLOR: Okay. Is it the pleasure 18 of the committee to comment to the Commission on any 19 recommendations for any of these rules? 20 We'll start back with Rule No. 9. Any 21 action on signature requirement? 22 Rule 10, anything on the worker 23 registry? 24 The public comment, the comments that 25 the committee made will be in my report to the 0079 1 Commission, so they will hear these items there 2 without us actually making a recommendation. But if 3 you propose to make recommendations, we can do that at 4 this time. 5 MR. CORNWELL: I would like to put 6 forth the BAC not agree or recommend with 402, the 7 bingo registry worker, as written. I don't think it's 8 right to have the bookkeeper as defined in there to be 9 part of that registry. I understand the Commission's 10 problems with these bookkeepers misapplying funds, but 11 I think this is not really getting at the heart of 12 what we need to get. I think it needs to be 13 rewritten. 14 MS. ROGERS: I agree with Knowles it 15 needs to be rewritten somehow to the effect if this 16 person has to do with cash, they are on the worker 17 registry form; if they're not -- if they're just doing 18 the forms, it's not required. 19 MS. TAYLOR: Okay. So, Knowles, just 20 so that I know, is your motion -- 21 MR. CORNWELL: My motion. 22 MS. TAYLOR: -- that we not recommend 23 the rule as written concerning the bookkeeper 24 appearing on the registry? 25 MR. CORNWELL: That's correct. 0080 1 MS. TAYLOR: And, Kim, is my 2 understanding you seconded this motion? 3 MS. ROGERS: Yes. 4 MS. TAYLOR: Any other discussion on 5 the motion? 6 All in favor? 7 I'm sorry. I didn't hear. All in 8 favor? 9 FROM THE COMMITTEE: Aye. 10 MS. TAYLOR: Any opposed? 11 Okay. That unanimously passes. 12 Chairman Cox, we would like to 13 recognize you at this time. Thank you so much for 14 taking the time to come to our meeting. 15 CHAIRMAN COX: Forgive me for being a 16 little late. 17 MS. TAYLOR: We love seeing you here. 18 CHAIRMAN COX: Thank you. 19 MS. TAYLOR: Any recommendation to go 20 on any of these other rules? 21 No? Just Rule 10. Okay. Then we go 22 on. 23 AGENDA ITEM NO. 13 24 MS. TAYLOR: Item No. 13, report and 25 possible discussion on the activities of the 0081 1 Charitable Bingo Operations Division. 2 MR. SANDERSON: Members, in your 3 notebook is a report from the activities of the Bingo 4 Operations Division. Quarterly reports for the third 5 quarter were due last Monday a week ago. And I 6 believe we have just recently had them all data- 7 entered, so we'll start looking at the statistics and 8 the trend of sales for that quarter. 9 Also the on-line operator training 10 program that was introduced June 25th continues to be 11 a great success. We have now had over 100 individuals 12 take the class and pass the test. We've also 13 implemented an on-line pre-licensing interview for 14 those organizations that are requesting an original 15 license. And anybody that may be interested in bingo 16 can look at that pre-licensing interview. And it 17 encompasses the requirements for completing the 18 application and some of the rules and regulations. 19 Also in accordance with the Compact 20 with Texas, we conduct a survey for customer service. 21 We choose to do that twice a year, in June and 22 December. We have had a survey sent out in June of 23 2008, and the results are that the customer service 24 from the Bingo Division is excellent or good from 25 97.7 percent of the respondents. 0082 1 And that concludes my report. 2 MS. TAYLOR: Any questions for Phil? 3 I have one question on this. I notice 4 that down in the bottom of the report, it mentions 5 that the -- it's somewhere in there -- oh, the 6 automated phone service -- the "Respondents find it 7 frustrating due to wait times for automated messages." 8 And I know this is something that we've 9 talked about before when we call up. And I noticed 10 that there was being more money asked for, for the 11 Legislature. Is that going to change this? 12 MR. SANDERSON: In the LAR? 13 MS. TAYLOR: Yes. Thank you. Is that 14 going to charge this automated phone system and make 15 it easier to get on to Bingo without going through the 16 Lottery? 17 MR. SANDERSON: First off, we have so 18 many requests that when you dial in to the 1-800 19 number, the first option you have is to press 1 for 20 Bingo or 2 for Lottery, and then it will go from there 21 into Bingo. Or if you choose Lottery, then it will go 22 in. I don't know where we are in the process of that 23 request, but that has been submitted, and that's as a 24 result of this survey. 25 As far as the LAR and the funding 0083 1 requested for a telephone, I can't answer the 2 specifics of that, only what I've heard during the 3 meetings, and it's an upgrade to the system for 4 software purposes. 5 MS. TAYLOR: Okay. Well, that would be 6 really awesome to be able to just choose Bingo right 7 off the bat, especially since we're calling 8 1-800-BINGO-77. 9 Okay. Any other questions for Phil? 10 Any public comment? Any questions for 11 Phil? 12 AGENDA ITEM NO. 14 13 MS. TAYLOR: Then we are down to Item 14 No. 14, public comment. 15 Public comment? 16 We have -- I'm not even going to 17 attempt your last name. Emile is here, and he would 18 like to have public comment. 19 And do remember, committee members, 20 that this is public comment only. 21 MR. BOURGOYNE: Madam Chairman -- 22 MS. TAYLOR: Thank you. 23 MR. BOURGOYNE: -- and members of the 24 Bingo Advisory Committee, I appreciate the opportunity 25 to be here. Knowles asked me to come here, as a 0084 1 courtesy, to show you our new vending machine that we 2 plan on submitting to the Texas Lottery Commission for 3 approval. 4 MR. SANDERSON: Emile, would you please 5 state your name and affiliation. 6 MR. BOURGOYNE: Sorry. My name is 7 Emile Bourgoyne. I'm with International Gamco. We're 8 a licensed play for pull-tab manufacturer in Texas. 9 While he's setting it up, I'll give you 10 a little brief rundown about it. We have about 30 of 11 these devices out right now with the Idaho lottery, 12 another 50 out in the UK and about 30 out in Indiana 13 in their new Type 2 tavern market pull-tabs, and 14 they're doing fairly well. 15 It's a new type of vending machine. 16 It's got four columns. Each column holds about 800 17 tickets. Events -- pull-tab tickets the same way 18 other vending machines do. When you shut the door, 19 the difference stops right there. 20 We replaced the Plexiglas screen that 21 you used to see the columns with, with a touch screen 22 monitor. We download the ticket graphics so that the 23 ticket is displayed on that touch screen, and the 24 touch screen acts as the vending buttons for each 25 particular column. 0085 1 And what's unique about this is, it 2 gives us the opportunity to only download Texas legal 3 pull-tab graphics into the machine so that you can't 4 play non-approved games in this vending machine. 5 That's one of the advantages of it. 6 Besides that, it has all the auditing 7 bells and whistles you can possibly imagine. To load 8 the graphics in the front -- the graphics just simply 9 show the ticket front. They don't do anything else, 10 doesn't shown any winners, doesn't determine a winner. 11 It just is a graphic picture of the ticket front. 12 Well, once you load that form number 13 in, the machine automatically knows whether it's a 14 dollar ticket, a 50 cent or a quarter ticket, and it 15 vends that column appropriately. It also knows the 16 beginning ticket count of that deal, by that form 17 number, so it starts your recordkeeping right there. 18 You don't have to plug it how many tickets are in a 19 deal. It knows that Form No. XYZ has 396 tickets in 20 it. 21 And the way you load and unload these 22 graphics, you go to our website and you'll put in your 23 PIN number code, and you download it to the computer 24 and you print on a USB key that comes with the 25 machine. And the beauty of that key is, when you want 0086 1 to put new games that we make to get the graphics in 2 the machine, you simply download it from the website, 3 plug it in the machine and hit the "Upgrade" button 4 and the new graphics are loaded in there available to 5 choose that as a column. 6 Now -- I hope I'm not talking too 7 fast -- once that key is plugged in, it automatically 8 downloads the accounting information to that USB 9 drive, which you can take back and plug it into your 10 computer and open up an Excel spreadsheet, and all the 11 accounting data for each of the four deals that's in 12 play is right there in front of you. 13 So we've tried to think of as much as 14 we could to minimize recordkeeping or help with the 15 recordkeeping situation with this. But it is the 16 first of its kind as a vending machine. So as a 17 courtesy, before we submit it, we wanted to show you. 18 I will tell you that we've gone through 19 the rules, and it is our opinion that it meets 20 existing vending machine rules for the State of Texas. 21 Mr. Sanderson, it is our intention to leave it with 22 you here and to submit it after this, rather than haul 23 it back and whatever that process is. 24 And I will be happy to show you as soon 25 as we get it set up. We didn't have time before. 0087 1 MR. CORNWELL: Emile, can I ask a 2 question? 3 MR. BOURGOYNE: Yes. Sure. 4 MR. CORNWELL: Is this -- 5 MS. TAYLOR: No. This is public 6 comment, so you -- 7 MR. CORNWELL: I'm not deliberating. 8 I'm going to ask him a question about the 9 capabilities. Can I ask him that? 10 MR. SANDERSON: Ms. Joseph? 11 MS. JOSEPH: Yes. Yes, that would be 12 appropriate. 13 MR. CORNWELL: Does it have the 14 capability to power up and power down at certain 15 times, like during a charity's licensed period time? 16 MR. BOURGOYNE: Sure, sure. 17 MR. CORNWELL: It can do that? 18 MR. BOURGOYNE: It can do that's. 19 MR. CORNWELL: And you will lock-code 20 that where that is done automatically? 21 MR. BOURGOYNE: That's not in the 22 existing code. I'm not a programmer, but I know 23 programming capabilities, and that's certainly 24 possible. 25 MR. WHITTINGTON: Well, we've got about 0088 1 two hours of bingo. Do you think we could be able to 2 set it up in two hours? 3 MS. TAYLOR: Okay. Then let's go ahead 4 and take -- and this is written in stone here, unless 5 it takes him longer -- a 10-minute break. Put your 6 quarter in your machine -- 7 MR. CORNWELL: Yeah. There you go. 8 MS. TAYLOR: -- and we'll be back here 9 in 10 minutes. 10 (Recess: 11:36 a.m. to 11:47 a.m.) 11 MS. TAYLOR: Okay. Our 10-minute break 12 is up, if we could reconvene, please. 13 Are you ready? 14 MR. BOURGOYNE: Yes, ma'am. We took a 15 few shortcuts. We took the stackers off, and that's 16 what it would hold, 800 tickets. Just so we can show 17 you, there's four dispensers. It's a regular pull-tab 18 dispensing device. 19 THE REPORTER: I'm sorry. You'll have 20 to speak up. 21 MR. BOURGOYNE: Yes, ma'am. I'm sorry. 22 And again, we just display the front of 23 the ticket on each column. And when we loaded that 24 form number in, it moved it (inaudible) with a dollar 25 ticket, it moved it -- this one with a 50-cent ticket, 0089 1 and it shows the different payouts on it. And to 2 vend, it will actually vend out all four columns at 3 the same time, and you could vend one, five, $10 or 4 vend all your bid on one column if you want. 5 To get into the audit screen -- I'll 6 get this figured out in a minute -- you plug that USB 7 key in and your audit screen automatically comes on. 8 It shows you your four games that are up here, the 9 beginning ticket count, the remaining ticket count. 10 And then it keeps (inaudible) this for how many were 11 played and how many tickets were vended out of each 12 column. 13 You can log in by your PIN code (cough) 14 this USB key and upgrade the graphics. There's even 15 some what we call fuel gauges per column, to show how 16 many tickets are remaining in the column that you can 17 set. 18 One of the other things it allows you 19 to do is, there is an area on the screen for scrolling 20 messages. If you wanted to advertise a particular 21 charity, what the funds are going for, must be 18 or 22 21 to play, you can program all those messages in. It 23 can take up to 154 different messages that you could 24 program in. 25 And last but not least, when the 0090 1 machine has no credits on it and it's sitting idle, it 2 just doesn't sit up again the wall. Every 20 seconds 3 it goes into an attract screen, and that attract 4 screen can be whatever you want. It can advertise 5 your charity. If you've got a fund-raiser coming up, 6 it can advertise that. We can advertise the games 7 that are available in the machine. That's all 8 controllable by the signage. 9 If I had downloaded new graphics for a 10 new game that just come out and I stuck my USB card in 11 and logged in, I would simply hit the "Upgrade" button 12 and I would hit "Yes" and it would upgrade the new 13 graphics in there, making those tickets available for 14 play. 15 And again, one of the advantages is, we 16 have the capability of only allowing Texas 17 distributors to download graphics to Texas-approved 18 games, keeping out unapproved games from our vending 19 machine. 20 And that's really it. The rest of it 21 is mostly accounting and auditing features, but that's 22 really the basis of it. The difference is, it's a 23 touch screen that players see versus a Plexiglas 24 window with columns in it. It's more of a modern 25 vending machine. 0091 1 There is your scrolling messages. The 2 question mark takes you to the help screen, tells you 3 how to play it, could even have the games flare at 4 that point if you wanted. 5 Any other questions? 6 MR. WHITTINGTON: We can't ask no 7 questions. Right? I mean, we're looking at a new 8 device; we should be able to ask about it. 9 MR. SANDERSON: You can ask a question, 10 yes. 11 MS. JOSEPH: You can ask questions; you 12 cannot have a discussion. 13 MR. CORNWELL: You can't deliberate. 14 MR. WHITTINGTON: Okay. How long -- do 15 this have to fall in the bingo allotted hours for it 16 to be played in the bingo hall? In other words, I 17 don't want to play this alone -- 18 MS. TAYLOR: All you have allotted is 19 four hours. 20 MR. WHITTINGTON: -- with me working, 21 my workers. I would like for it to be set by itself 22 and make its own money without dealing with my 23 workers. You understand what I'm saying, because that 24 would create more profit for the charities if my 25 workers are not working at the time I'm using this. 0092 1 MR. SANDERSON: It can only be -- it's 2 conducting bingo, and it can only be done during the 3 licensed time. 4 MR. WHITTINGTON: Right. Okay. Well, 5 that's -- okay. 6 MR. SILVER: For the accounting screen, 7 can you hook a printer up to that and print the 8 accounting information? 9 MR. BOURGOYNE: As soon as you plug 10 this key in, that accounting information is downloaded 11 here. You can take this to your computer and plug it 12 into your Excel spreadsheet. 13 I don't know where that question came 14 from. 15 (Laughter) 16 I'm sorry. 17 The information -- as soon as I plug it 18 in, it downloads the accounting information onto the 19 jump drive. 20 MR. SILVER: Would a network be easier 21 to use than a USB port? 22 MR. BOURGOYNE: We can plug it into a 23 network, but now you're talking -- it's already 24 network-capable. But long-term, what we would like to 25 be is like the new jukeboxes, where you don't have any 0093 1 CDs contained in the jukebox. It's hooked up to an 2 Internet. 3 MR. SILVER: It's all hard drive. 4 MR. BOURGOYNE: And you go to that 5 jukebox and you download the album you want to play or 6 the CD you want to play, and it comes off the 7 Internet. Well, those graphics could be the same way, 8 they could come off the Internet. 9 But we have to be very careful. 10 Regulators are very sensitive about graphics and what 11 they do. And we made sure that these only show the 12 face of the tickets, they don't spin or do anything 13 like that. It's not showing any winners. It's just 14 vending pull-tabs. It's just a modern way to vend 15 pull-tabs. It's more attractive to the players, we 16 think, rather than a box sitting on a corner not doing 17 anything. 18 Again, I don't know what attract 19 screens we have in here, but I'll try to run out 20 (vending machine noise) credits. And now that no 21 credit is on it, in 20 seconds it should go into one 22 of those attract screens that I talked about. 23 MR. CORNWELL: Emile, do you have any 24 sense -- I know it's early on -- do you have any 25 sense, are you going into these things with these 0094 1 other markets where they've had existing sales? 2 MR. BOURGOYNE: Yes. Like I said, 3 we've been in the Idaho lottery market now for some 60 4 days. We've got -- on a whole, they're averaging at 5 least 1,000 tickets a month. We've not sites, though, 6 that were averaging nine or 10,000 tickets a year 7 through their site. They're doing that in four or 8 five months through one of these, so we have seen 9 significant increases. 10 MR. CORNWELL: So twice to three times 11 when they normally sold? 12 MR. BOURGOYNE: Yes, compared to their 13 older vending machines that they had. 14 (Music playing from vending machine) 15 MR. BOURGOYNE: It makes you look, 16 doesn't it? 17 MR. WHITTINGTON: It makes you dance, 18 man. 19 MR. BOURGOYNE: You can stop it this 20 time. 21 MR. CORNWELL: Emile, could you explain 22 to folks here at the Bingo Advisory Committee how that 23 ticket is made for other lotteries? We use a scratch- 24 off here in the State of Texas, but other states use 25 break-opens. Correct? 0095 1 MR. BOURGOYNE: There's at least five 2 or seven state lotteries that use pull-tab tickets on 3 the supplement instant game to their scratch-off 4 lottery tickets -- 5 MR. CORNWELL: Right. 6 MR. BOURGOYNE: -- and they're 7 contracted out. We have a contract for I think five 8 of those seven states. But they use actual pull-tab 9 tickets as a supplement to their instant scratch-off 10 games, and they sell them in retail outlets, airports, 11 bars, wherever. 12 MR. CORNWELL: Chairman Cox, that's not 13 an idea, sir. 14 MR. WHITTINGTON: Well, that would be a 15 great idea. As long as the charities can get it, they 16 can put them in the spots. It can be a supplement to 17 the charities. 18 MS. TAYLOR: How do you charge the 19 charities? 20 MR. BOURGOYNE: I'm sorry? 21 MS. TAYLOR: How do you charge the 22 charities? 23 MR. BOURGOYNE: We don't charge the 24 charities a penny; we charge the distributors. 25 MR. WHITTINGTON: How do you charge the 0096 1 charities? 2 (Laughter) 3 (Simultaneous discussions) 4 MR. CORNWELL: Where is this made? 5 MR. BOURGOYNE: Good question. This 6 thing is assembled just outside of Fort Worth, just 7 outside of Fort Worth. 8 MR. WHITTINGTON: That's close for me. 9 MR. BOURGOYNE: And it runs -- the full 10 unit runs around -- between 36 and $3,800 per unit, 11 depending on volume that a distributor purchases. 12 It's very comparable to what the existing vending 13 machines go for. 14 MR. WHITTINGTON: So I need to ask a 15 distributor: Would a distributor be buying these for 16 the charities, Knowles? I mean, that would be great, 17 I think. 18 MR. CORNWELL: I'm not allowed to 19 discuss pricing -- 20 MR. WHITTINGTON: Okay; okay. 21 MR. CORNWELL: -- on unapproved 22 product, Larry, so -- 23 (Laughter) 24 MR. SANDERSON: Emile, do you know how 25 many locations in Texas currently use vending type 0097 1 machines for pull-tabs? 2 MR. BOURGOYNE: No, sir, I do not; I do 3 not. 4 MR. CORNWELL: About 20? 5 MR. BOURGOYNE: I didn't think it was a 6 lot. That's why we haven't pursued this market as our 7 first choice. 8 MR. SANDERSON: I wasn't aware of but 9 just a few; you know, a handful. 10 MR. WHITTINGTON: Just a few. That's 11 all there is. 12 MR. BOURGOYNE: I said I didn't think 13 it was many. That's why we are just now coming here. 14 MR. WHITTINGTON: That would solve a 15 big problem, three hours of my time. I don't 16 (inaudible) nothing. We can't sell nothing in three 17 hours. 18 MR. CIANCARELLI: Madam Chair, I have a 19 question. 20 Is the display information in both 21 English and Spanish? 22 MR. BOURGOYNE: Not under this existing 23 program, but it's certainly capable. All we need is a 24 translation so we can do that. 25 MR. WHITTINGTON: Cool! 0098 1 MR. BOURGOYNE: Again, the graphic 2 monitor is PC-controlled, so we can pretty much do 3 anything we need to do. 4 MR. CORNWELL: Francis, it's script, so 5 it would be real easy to change it to Spanish. 6 MS. ROGERS: How long does it usually 7 take right now to get something approved -- roughly? 8 MR. SANDERSON: Roughly about 45 days, 9 but I don't think it will take that long for this. 10 MR. BOURGOYNE: Excuse me. Do you see 11 any problems with your rules that I'm not aware of? 12 MR. SANDERSON: On the surface I can 13 say probably not, but I have not had a chance to look 14 at the whole product yet. 15 MR. WHITTINGTON: Look inside, go 16 through all the wires and everything. 17 MR. BOURGOYNE: Think about that, being 18 able to only download approved Texas games. That's a 19 definite advantage. 20 MS. ROGERS: Emile, if it is approved, 21 let's just say in a couple of months, are y'all 22 prepared and ready? Do you have these machines in 23 stock? 24 MR. BOURGOYNE: Yes. The assembly 25 plant in Fort Worth is dying to get busy. 0099 1 MS. ROGERS: Gotcha! 2 MR. WHITTINGTON: I just have so much 3 idle time, about two and a half hours a day when no 4 one is there during the playing time. And putting 5 something like that in there would really increase a 6 lot, because people -- that would make them come a lot 7 earlier for everything. 8 MR. BOURGOYNE: These little fuel 9 gauges we talked about, once you have the columns set 10 to the level, you can set them to the level 11 (inaudible) to the columns. 12 MR. WHITTINGTON: I like it. You have 13 to buy it. 14 Phil, could you make some kind of rule 15 where the charities wouldn't have to purchase this, 16 they can be bought through the distributor? I mean, 17 can you do that, some kind of rule, Phil -- please? 18 MR. SANDERSON: Y'all keep saying we 19 have too many rules and now you're asking for another 20 rule. 21 (Laughter) 22 MR. WHITTINGTON: Well, that rule would 23 be okay. We never had a positive rule, money-wise, to 24 come back. We always have a negative rule that go 25 out, as far as money. 0100 1 MR. SANDERSON: The statute does allow 2 for lease, so you can -- 3 MR. WHITTINGTON: Could you set a 4 minimum price for a lease, like a dollar a month, 5 something like that? 6 MS. TAYLOR: Emile, thank you so much 7 for taking the time to show this to us -- 8 MR. BOURGOYNE: Thank you. 9 MS. TAYLOR: -- before you give it to 10 the staff at the Lottery Commission to approve. 11 MR. BOURGOYNE: Thanks for allowing me; 12 thanks for allowing me to come. 13 MR. WHITTINGTON: That's great; that's 14 great. 15 MR. CORNWELL: Thanks, Emile. 16 MR. WHITTINGTON: That was great. 17 MS. TAYLOR: Any other public comment? 18 Commissioner, would you like to make 19 public comment? 20 CHAIRMAN COX: Thank y'all for your 21 service. We really appreciate it. 22 A couple of announcements that you may 23 already be familiar with. Last week Anthony Sadberry, 24 the Executive Director of the Texas Lottery, passed 25 away. A number of us went to his service in Caldwell 0101 1 on Saturday, and it was a beautiful service, a lot of 2 people there. Anthony had a lot of friends and was a 3 highly respected man. 4 When we had our meeting last Wednesday, 5 which was the day after Anthony passed away, we had a 6 beautiful comment from the Governor. And on behalf of 7 the Commission, Commissioner Schenck spoke and I 8 spoke, and we talked about how dedicated Anthony was 9 to his work and how brave he was. 10 You know, he had pancreatic cancer, and 11 that's just the worst there is. And he learned of it 12 last December, I guess. And he was still coming to 13 work, didn't take a vacation this year. He was still 14 coming to work two weeks before he died and coming in 15 at 7:30 and staying until 6:30. I've never seen a man 16 fight so hard. And we said, "Anthony, why don't you 17 take some time off, take some vacation." And he said, 18 "This is the best place for me. This gives me a 19 reason to be here." And so a real tribute to Anthony 20 that he served so well when he was so sick. 21 Secondly, we have a new Commissioner. 22 Our third seat is full again. Mary Ann Williamson is 23 from Weatherford, Texas. She's a CPA. She operates a 24 natural gas company up there. She is the widow of 25 Rick Williamson, who was the Chairman of TxDOT. 0102 1 And I think she's going to be 2 excellent. She came down on Tuesday before the 3 meeting, had her orientation -- or had her briefing on 4 the meeting. And Thursday she was here for her 5 orientation, and she is anxious to attend one of your 6 meetings. So I wouldn't be surprised if she's at your 7 next meeting. 8 I'm sorry that I missed. I told 9 Suzanne that I have been trying since May to get my 10 roof replaced -- we had a big hailstorm down here -- 11 and the roofing crew showed up unannounced this 12 morning to do the punch list and I didn't want to turn 13 them away, so I'm late. 14 If there are any questions that y'all 15 had on what happened earlier in the meeting that you 16 want to throw at me, I'll be happy to do what I can 17 with them. 18 MS. TAYLOR: Commissioner, when is your 19 next meeting planned? 20 CHAIRMAN COX: Our next meeting will be 21 on the 12th of December. It's different. We're not 22 going to meet in November, so we're having our meeting 23 early in December. And we're going to try having our 24 meetings typically on the third Friday, to accommodate 25 Commissioner Schenck's schedule. But this is on a 0103 1 second Friday, December being an unusual month. 2 Our Internal Audit group just completed 3 an audit of a portion of Phil's operation. And if it 4 isn't now, it will soon be on the -- is it already on 5 the website? 6 MR. SANDERSON: Yes, sir, it is. I 7 looked this morning. 8 CHAIRMAN COX: So if y'all want to take 9 a look at what they found there. There will also be a 10 presentation of that report at our December meeting, 11 in the event that you want to hear what Catherine and 12 Phil have to say on that. 13 My understanding, Phil, was that you 14 totally concurred in the recommendations and that 15 implementation has begun? 16 MR. SANDERSON: That is correct, yes, 17 sir. 18 CHAIRMAN COX: Good. 19 Suzanne, do y'all have anything for me? 20 MS. TAYLOR: I don't have anything. Do 21 any of the other members have anything? 22 Once again, I can't begin to tell you 23 how much we appreciate that you take the time and 24 effort to come to our meetings. 25 CHAIRMAN COX: Well, again, I apologize 0104 1 for being late. It was very important to me. And I 2 will try to be more prompt. I think that the others 3 had been more prompt than I have. And thank y'all 4 again for your service. We really appreciate what 5 y'all do for the State of Texas and for Charitable 6 Bingo. 7 MS. TAYLOR: Thank you, Commissioner. 8 MR. SANDERSON: Thank you. 9 AGENDA ITEM NO. 15 10 MS. TAYLOR: We are now on Item No. 15, 11 consideration of and possible action on future Bingo 12 Advisory Committee meeting dates and/or items to be 13 considered for future meetings. 14 Of course, the first item that we need 15 to make sure we have on this agenda is the report from 16 our -- 17 MR. SILVER: Market Conduct. 18 MS. TAYLOR: -- Market Conduct 19 Committee. 20 One other thing that I would like to 21 put on there for our discussion is the new opinion 22 that Phil Sanderson e-mailed us -- and I also saw it 23 on the bingo website -- about when an authorized 24 bingo's licensed time actually begins, for you that 25 didn't see it, because now they're saying the licensed 0105 1 time begins at the point when you begin selling paper 2 or electronic for either session and that they can 3 overlap; whereas, before I think we've always had the 4 understanding that as long as you didn't begin playing 5 any bingo games or sell your pull-tabs, that you could 6 sell paper or electronics for future use and not be in 7 your licensed time. So I would like to see that on 8 there so we can have a discussion on that. 9 Are there any other items besides our 10 normal items that any committee members would like to 11 see on there? 12 MR. CORNWELL: New products, Madam 13 Chair; New Products and New Methods Committee. 14 MS. TAYLOR: And would the new products 15 also include where we are on the new pull-tab machine, 16 because -- 17 MR. CORNWELL: Well, sure. 18 MS. TAYLOR: -- that would be three 19 months from now? Would that be appropriate to talk 20 about the new pull-tab machine at that point? 21 MR. SANDERSON: I believe so, yes. 22 MS. TAYLOR: Okay. 23 MR. SANDERSON: The other part of this 24 item number talks about future meeting dates. 25 Normally in the past, y'all have set the following 0106 1 calendar year's meeting dates at this meeting. Y'all 2 have consistently met on the first Wednesday of 3 February, May, August and November. So I don't know 4 if you want to deviate from that or continue with 5 that. 6 MS. TAYLOR: Or do we want to go 7 back -- we actually used to meet the second Wednesday 8 of the second month of the quarter, but then the 9 Commission started meeting on that Wednesday, so we 10 switched ours to the first Wednesday. 11 So what would the committee like to do? 12 MR. WEEKLEY: And make it February, the 13 first Wednesday in February? 14 MR. SANDERSON: The first Wednesday in 15 February -- 16 MS. TAYLOR: That is the first? 17 MR. SANDERSON: -- is February the 4th. 18 MR. CORNWELL: Yes. First Wednesday in 19 the second month of every quarter. 20 MS. TAYLOR: Okay. Then we'll 21 tentatively schedule the meeting for those days. And 22 I know Phil has a calendar here so he can just whip it 23 out and tell us exactly what they are. 24 MR. SANDERSON: February 4th will be 25 the next meeting date. And we'll need -- if you have 0107 1 any additional items that you would like to have on 2 the agenda, we'll need those by January the 23rd so 3 that we can post the following Tuesday, on the 27th. 4 We'll also need any items for the notebook that you 5 would like to distribute to the members, by Friday, 6 January the 23rd also. 7 MS. TAYLOR: Okay. So, committee 8 members, remember we need to have that in the 9 notebook, if you're going to be giving us any 10 information. 11 Thanks, Earl, so much for your service. 12 You're really awesome. 13 Anything else on this agenda item? 14 And, Larry, you're great, too. 15 MR. WHITTINGTON: Thanks, members. 16 (Inaudible) point out Earl. 17 MS. TAYLOR: Well, because Earl is 18 going to be providing us so much information for this 19 next notebook, I thought I should especially thank 20 him. 21 MR. CORNWELL: You should. 22 MS. TAYLOR: But if you were going to 23 be participating and help him provide that 24 information, Larry, I will be glad to especially thank 25 you, too. 0108 1 MR. WHITTINGTON: Way to go, Earl. 2 MS. TAYLOR: Okay. Thank you, Earl, 3 once again. 4 Once again, on behalf of whole 5 committee, in case Rosie reads the minutes, I want to 6 say thank you for her service. If you haven't signed 7 her plaque, please don't forget to do so. She will be 8 greatly missed. 9 And we are very glad to welcome you to 10 the Committee. 11 MR. CIANCARELLI: Thank you. 12 AGENDA ITEM NO. 16 13 MS. TAYLOR: If nothing else, this 14 meeting is adjourned. And it's approximately 12:10. 15 MS. ROGERS: Thank you. 16 (Meeting adjourned: 12:10 p.m.) 17 18 19 20 21 22 23 24 25 0109 1 C E R T I F I C A T E 2 STATE OF TEXAS ) 3 COUNTY OF TRAVIS ) 4 I, Aloma J. Kennedy, a Certified 5 Shorthand Reporter in and for the State of Texas, do 6 hereby certify that the above-mentioned matter 7 occurred as hereinbefore set out. 8 I FURTHER CERTIFY THAT the proceedings 9 of such were reported by me or under my supervision, 10 later reduced to typewritten form under my supervision 11 and control and that the foregoing pages are a full, 12 true and correct transcription of the original notes. 13 IN WITNESS WHEREOF, I have hereunto set 14 my hand and seal this 14th day of November 2008. 15 16 17 ________________________________ 18 Aloma J. Kennedy Certified Shorthand Reporter 19 CSR No. 494 - Expires 12/31/08 20 Firm Certification No. 276 Kennedy Reporting Service, Inc. 21 Cambridge Tower 1801 Lavaca Street, Suite 115 22 Austin, Texas 78701 512.474.2233 23 24 25