Bingo Advisory Committee Minutes Bingo Advisory Committee Meeting, November 1, 2000, Austin, Texas I. THE BINGO ADVISORY COMMITTEE CHAIR WILL CALL THE MEETING TO ORDER. William Neinast called the meeting to order at 10:00 a.m. Committee members present: William Neinast, Suzanne Taylor, Saleem Tawil, Robert Rinehart, Lexford Speed, Fabian Hoffner, Louie George, David Castillo, and Virginia Brackett. Committee members absent: none. II. CONSIDERATION OF AND POSSIBLE ACTION, INCLUDING APPROVAL, OF THE MINUTES OF THE SEPTEMBER 21, 2000, BINGO ADVISORY COMMITTEE MEETING. The minutes were approved as read. III. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON THE BINGO ADVISORY COMMITTEE CHAIR'S OCTOBER 11, 2000, REPORT TO THE TEXAS LOTTERY COMMISSION. William N. told committee members he gave a report to Commissioners about the items discussed at the last BAC meeting. He also told the committee that he would like the committee to set specific times and dates for BAC meetings to enable more interested individuals to attend. IV. REPORT, POSSIBLE DISCUSSION AND/OR ACTION, INCLUDING RECOMMENDATIONS TO THE TEXAS LOTTERY COMMISSION, ON PROPOSED LEGISLATION RELATING TO BINGO IN CONNECTION WITH THE 77TH LEGISLATURE. Fabian H. reviewed the five proposals included in the legislative subcommittee report given to BAC members. Proposal #1 - The subcommittee recommended that the BAC approve Proposal #1 Expansion of the time and location where Instant Bingo ("pulltabs") can be sold. MOTION by Fabian H. for the BAC to approve proposal #1, seconded by David C. VOTE: 8 Approve 0 Oppose Proposal #2 - The subcommittee recommended that the BAC approve Proposal #2 Repeal of Sec. 2009.409(b): eliminate the 40% limit on electronic card-minding devices. MOTION by Fabian H. for the BAC to approve proposal #2, seconded by Louis G. VOTE: 8 Approve 0 Oppose Proposal #3 - The subcommittee recommended that the BAC approve Proposal #3 Allow for progressive bingo games outside the current prize. MOTION by Fabian H. for the BAC to approve proposal #3, seconded by Robert R. VOTE: 8 Approve 0 Oppose Proposal #4 - The subcommittee recommended that the BAC approve Proposal #4 Allow for summary suspension authority and subpoena power to be vested in the Director. MOTION by Fabian H. for the BAC to approve proposal #4, seconded by David C. Billy Atkins (Director Charitable Bingo Operations Division) told committee members that the bingo division has the authority to request records from license holders at any time. The bingo division would like subpoena power to be able to subpoena records from third parties, such as banks, in a timely manner. Summary suspension authority would speed up the administrative action process by suspending the license immediately and require a hearing to be held within ten days, which would force a resolution. When taxes and prize fees are delinquent to the state the organization can currently continue to operate and can be 10,000 to 50,000 dollars in debt to the state. Saleem T. stated that license holders delinquent to the state should be held accountable, but that outside that realm, the party has rights, and summary suspension could put people out of business. MOTION AMENDED by Fabian H. for the BAC to approve just the subpoena power authority part of proposal #4, seconded by David C. VOTE: 8 Approve 0 Oppose MOTION by Fabian H. for the BAC to approve proposal #4 relating to summary suspension authority, seconded by David C PUBLIC COMMENT: Steve Bresnen representing the Bingo Interest Group told committee members that currently in order to get a summary suspension judgment 1) the agency has the burden of proof to show a judge that the agency will likely prevail at the hearing, 2) the agency must explain to a judge how the violation can cause irreparable harm, and 3) the agency must show that the acts in violation that will be presented at the hearing need to be restrained or they will cause irreparable harm. Steve said that the current staff is doing a good job, but statutes have a tendency to get there and stay there. He told members that manufacturers and distributors are subject to criminal prosecution if they sell anything not approved by the state. Steve said that he strongly opposes the broad granting of summary suspension to this or any other agency; any unbridled government power is to be suspected, summary suspension authority is an extraordinary remedy. Even though the hearing is held within ten days that does not mean a decision will be handed down at the hearing. The judge does not necessarily render their decision the same day as the hearing. Fred Miccio representing the American Legion Department of Texas told committee members that Steve just touched the tip of the iceberg. After being closed for two weeks it could take another month to get customers back to the hall. In a commercial hall, suspending one organization's license would affect the organization sharing the night with the affected organization and would also affect the other organizations playing bingo in the hall. Fred feels that needs to be a hearing before an organization has their license suspended, he is totally against summary suspension authority. Scott Ingerman representing Ingram Hall Corporation and eight charities, told BAC members that Fred is 100% right. Suspending an organization's license will affect the hall's customer base and it could very well take months to get the customers back. An organization that has their license to conduct sessions suspended could also lose their spot at the hall since they cannot conduct bingo sessions while they wait for a hearing and a decision. Scott suggested that a cease and desist order would be a fair compromise and would speed up the process while giving organizations a chance to correct what is wrong. Mike Pitcock (Commander, Security Division) told committee members that he supports Billy A. stance on summary suspension authority. He said it is hard to get compliance from some charities, such as playing outside licensed times. Saleem T. that there needs to be something between the authority the bingo division currently has and summary suspension authority. Billy A. told members that 99.5% or more of the organizations comply with the act, and it is frustrating to those organizations when other groups do not comply. VOTE: 1 Approve (Virginia B) 5 Oppose MOTION by Fabian H. that the Bingo Advisory Committee approve a proposal to allow summary suspension authority be extended to the director in delinquent financial matter only, seconded by Lexford S. VOTE: 8 Approve 0 Oppose Proposal #5 - The subcommittee recommended that the BAC approve Proposal #5 Allow the lottery Commission the authority to charge licensees for the cost of the operator training program and for and for the Lottery Commission to keep the money in its account. MOTION by Fabian H. for the BAC to approve proposal #5, seconded by Lexford S. William N. told BAC members that originally the charities were told they would be required to attend the operator training and that it would be free with no cost to the participants. He feels that that the Texas Lottery Commission should add the training cost as a line item in the budget. Billy A. reminded committee members that the training was not an idea of the Lottery Commission, the idea for the training came from the 1995/96 Interim Committee report. When the legislation for the training was put forward, a fiscal note was put forth, but no money was approved for it. Billy said he has reviewed previous BAC minutes and the agency has said from the beginning that they did not know what the cost would be, but that they would start by offering the training course for free and see what expenses were incurred. The training course is a state mandate. The language in the act would say the cost of the training would be set by rule. All proposed rules first go to the Bingo Advisory Committee for review and comment. After that the proposed rules are presented to the Commissioners with a report of the feelings of the BAC. If the Commissioners agree, the proposed rules would be posted for public comment. After the public comment period, the proposed rule would go back before the Commissioners for approval. The training course is required every two years. VOTE: 0 Approve 2 Oppose (Virginia B & David C) it was brought to the attention of the committee that abstentions are the same as opposition to the motion in which case the vote would be 0 to 8 V. REPORT, POSSIBLE DISCUSSION AND/OR ACTION INCLUDING RECOMMENDATIONS TO THE TEXAS LOTTERY COMMISSION REGARDING AMENDMENTS TO 16 TAC SECTION 4092.567(e), RELATIONS TO THE LOCATION OF BINGO ADVISORY COMMITTEE MEETINGS. William N. told committee members that as a result of public comment at the subcommittee meeting, concerning the location and dates of the Bingo Advisory Committee meetings, he would like to see the dates of the meetings be consistent each quarter and the location of the meetings moved to locations other than Austin except for one meeting each year. MOTION by Louis G. for the Bingo Advisory Committee to recommend to the Texas Lottery Commission that the rules be amended so that the meetings shall be held at places designated by the chairman with one meeting each year held in Austin, seconded by Virginia B. Billy A. told committee members that the amount budgeted for the advisory committee was $4,500 to $5,000 per year, with the cost approximately $900 per meeting. VOTE: 8 Approve 0 Oppose VI. REPORT, POSSIBLE DISCUSSION AND/OR ACTION INCLUDING RECOMENDATIONS TO THE TEXAS LOTTERY COMMISSION, REGARDING METHODS OF INCREASING THE PROFITABILITY OF CHARITABLE BINGO GAME. Saleem T. told committee members that current rules and regulations don't allow those involved with bingo to operate like a business. Generally, charities don't net more than 10% from their bingo operations. Bingo needs the controls removed, locations needs to be able to have more than two sessions per day, and organizations needs to be able to run more than three sessions weekly; then charities could make more money. Saleem would like to see another subcommittee put together to review laws and rules and see how to help charities make more money. William N. said he would like to see the whole committee review this subject at the next meeting. PUBLIC COMMENT: Fred Miccio told committee members that when his hall tried to run a triple session on Friday nights, they were dead on Saturday. There are only so many dollars for gaming available in an area. He feels that long drawn out times will not increase bingo income. He would like to see halls with open times receive a special license to offer company parties in the bingo hall with a fixed charge for each person attending and prizes of $10 to $15. VII. CONSIDERATION OF AND POSSIBLE ACTION, INCLUDING RECOMMENDATION TO THE TEXAS LOTTERY COMMISSION, ON THE VARIATION OF PULL-TAB PLAY STYLES. Suzanne T. told members that she asked for this item to be placed on the agenda to give BAC members a greater knowledge of the variations of pull-tabs play styles. With some changes to the rules, other kinds of tabs could be introduced in the state, which might help increase player interest in pull-tabs. Suzanne requested Ronald Baker and Susan Schultz to attend the meeting to talk about pull-tabs to committee members. PUBLIC COMMENT Ronald Baker, representing Texas Bingo Supply, told members the same pull-tabs are constantly repackaged with different symbols but no longer get players excited and sales are down substantially from previous years. Susan Schultz, from Douglas Press, a paper and tab manufacturer, introduced "sealed" tabs to the committee and showed members how they are used. She told members that this is a new way to play an existing game, and allows for player interaction. Susan also informed the committee that the use of sealed tabs would not require any changes in the act, but would require a definition of sealed cards in the rules. Scott Ingerman told committee members that pull-tabs that give away prizes should not be excluded in the new definition. He felt that criteria should be set and tabs should not have to be individually approved. Texas needs to be more aggressive in our sales. MOTION by Saleem T to amend the pull-tab definition to allow for sealed cards, seconded by Suzanne T. Committee members discussed amending the definition of pub-tabs to make it broad enough to cover this and other variations and additional play styles of pull-tabs. Billy A. told members that some pull-tab games would require a legislative change while others would only require a rule change and advised committee members that it is in the best interest of the committee to examine all types of pull-tabs. Motion not voted on. MOTION by Fabian H. for the committee to approve him to compile a presentation of pull-tab styles and present the findings which will include samples at the next BAC meeting and for Fabian H. and William N. to propose a draft rule change to the Bingo Enabling Act for the committee to vote on, seconded by Louis G. VOTE: 8 Approve 0 Oppose VIII. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON THE CHARITABLE BINGO OPERATIONS DIVISION'S ENFORCEMENT PRACTICES. Billy A. told BAC members that the Commissioners requested this item to be placed on the agenda. Organizations currently have the opportunity to pay back taxes all the way up to the hearing date. There is one organization that has been abusing the process and waiting until right before the hearing and then paying their taxes. Billy gave the following time line, 20 days to respond to billing, 14-17 days to show compliance letter, 10 days to set hearing from legal, 20 days for the hearing to be held. He told members that this gives the organization seventy days to come clean. For those who don't file at all, 10 days to issue non-filer letter, 14 days to send estimated return, then the billing is generated, then a hearing requested, then the hearing must be held. IX. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON THE SECURITY DIVISION'S ACTIVITIES. William N. told the BAC that Mike P. has nothing new on this agenda item since the last meeting. X. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON INTERNET BINGO. Billy A. told the BAC that there is nothing new on this agenda item since the last meeting. XI. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON AN INSTANT LOTTERY GAME WITH A BINGO PLAY STYLE. Billy A. told BAC members that there is no additional information other than that which has been included the notebooks. XII. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON THE BINGO OPERATOR TRAINING PROGRAM. Suzanne T. had asked at the last BAC meeting if one individual had represented more than one organization if it would count for both organizations, since the rule was not in place at the time of the training. Billy A. told members today that individuals who had attended training programs prior to the adoption of rules for more than one organization would be counted for both organizations. It is up to the individual organization to keep up with the training every two years. XIII. CONSIDERATION OF AND POSSIBLE ACTION ON FUTURE BINGO ADVISORY COMMITTEE MEETING DATES AND/OR ITEMS TO BE CONSIDERED FOR FUTURE MEETINGS. The next BAC meeting will be held Wednesday, February 14, 2001. The other quarterly meetings will be held the second Wednesday of May, July, and October. William N. requested the committee member placing the item on the agenda to include a write up in the booklet to give committee members advance notice of each items. He also requested that the individual placing the item on the agenda make a specific motion. Saleem T. will be submitting a number of items for the next agenda. Additional agenda items will be the proposed change to the rules to change and broaden the definition of pull-tabs, the use of debit cards in bingo halls, extending the length of time of bingo occasions, and increasing the number of bingo occasions an organization may sponsor weekly. XIV. ADJOURNMENT Meeting adjourned at 1:00 p.m. by William N. Minutes as prepared by Suzanne Taylor, BAC Recorder. Page 2, middle of the page "MOTION AMENDED by Fabian H. for the BAC to approve just the subpoena power authority part of proposal #4, seconded by David C.