Bingo Advisory Committee Minutes Bingo Advisory Committee Meeting, February 26, 1999, Austin, Texas I. THE BINGO ADVISORY COMMITTEE CHAIR WILL CALL THE MEETING TO ORDER. Meeting was called to order at 10:00 a.m. by William Neinast. Committee members present: Suzanne Taylor, Saleem Tawil, C. H. "Pokey" Matthies, Virginia Brackett, Gene Buchanan, Ronnie Hunter, and Rosemary Garcia. Committee members absent: Jim MacPhearson. II. CONSIDERATION OF AND POSSIBLE ACTION, INCLUDING APPROVAL, OF THE MINUTES OF THE DECEMBER 1, 1998 BINGO ADVISORY COMMITTEE MEETING. Billy Atkins (TLC Director Charitable Bingo Operations) advised that two dates on page three needed to be changed: 1. pre-filing began October 9th should be changed to November 9th 2. filing will continue until March 16th should be changed to March 12th MOTION by C. H. Matthies to approve the minutes with changes, seconded by Ronnie H. VOTE: 7 Approve (Jim MacPhearson not present at this time) 0 Oppose III. REPORT, POSSIBLE DISCUSSION AND/OR ACTION, INCLUDING RECOMMENDATIONS TO THE TEXAS LOTTERY COMMISSION, ON A PROPOSED INSTANT LOTTERY TICKET WITH A BINGO PLAY STYLE. Committee members were given a copy of a memo from Liz Jambor (TLC Marketing Resources Manager) to Billy A. (handout #1) referencing summary findings of bingo instant ticket advertising research. Billy A. outlined the high points of the memo for committee members. The committee was also given a copy of the memo from Toni Smith (TLC Marketing Director) to Billy A. (handout #2). Toni discussed the memo with Committee members and asked for BAC input. 10:12 Jim MacPhearson arrived Committee members expressed concern that the players would not turn the lottery ticket over to see the 800 number for bingo hall locations. Toni S. explained that the instructions would be on the back of the ticket, therefore, players would have to turn the ticket over initially to see how to play. Players calling the 800 number would receive a computer recording requesting the input of the zip code for hall information in that area. This ticket is planned to go on sale in June. Toni S. told BAC members that staff feels that this will be a great way to advertise charitable bingo. PUBLIC COMMENT: Kenneth Griffith (K & B Sales, Inc.) told BAC members that the Gambler Instant Bingo ticket was the number one instant bingo ticket when the TLC took over the management of bingo and the first thing the TLC did was to cut off production of the Gambler because they didn't like the emphasis on gambling. Three weeks later the Lottery came out with a scratch-off poker ticket. Instant bingo then had a great decline as people become familiar with scratch-offs. Kenneth told members that he has now seen a modest increase in the sale of instant bingo tickets, although sales are not back to pre-lottery sales. He feels that the bingo scratch-off will do nothing to show people how to play bingo. The promotion of bingo on billboards, in newspapers, and fliers was good and the implementation of symbols on instant bingo tickets has helped charities increase sales. But, an 800 number on the back of a scratch-off, is not going to help charitable bingo sales. The proposal that charities be allowed to sell scratch-offs in halls would not be beneficial, they can now net up to 35% profit on tabs, they would only net 5% of sales of lottery scratch-offs. Jim M. advised Kenneth Griffith that the Lottery Commission has requested input from the BAC, therefore, the BAC needed to turn this scratch-off into a positive for bingo and asked Kenneth if he had any positive input. PUBLIC COMMENT: Kenneth Griffith agreed that players were not apt to read the back of the scratch-off tickets, that perhaps a tear off coupon could be used. Ken told BAC members that if this ticket could enhance charitable bingo that he would be all for it. But, eventually this bingo lottery scratch-off ticket will be dropped. Ken also suggested that something about charitable bingo needs to appear on the front of the scratch-off ticket. C. H. Matthies felt that any publicity about charitable bingo was better than none. Saleem T. said that since the sale of the bingo scratch-off tickets could be a risk to charitable bingo that perhaps 5% of the revenue netted from sale of the bingo scratch-off ticket should be used by the bingo division to promote bingo throughout the state. Billy A. told BAC members that the reason the Gambler instant bingo ticket was disapproved was because the artwork on the front of the ticket displayed an alcoholic beverage, fire arms, and the name "gambler". It was suggested by the TLC that the name be changed to Beat the Dealer and the alcoholic beverage and firearms be deleted but the suggestion was not taken. MOTION by Saleem T. that support of the bingo scratch-off ticket be considered on the basis that 5% of the revenue goes into a fund for the bingo division to use for the promotion of charitable bingo as long as the ticket is being sold, seconded by Virginia B. VOTE: 8 Approve 0 Oppose MOTION by Jim M. that if the first motion is not allowed a committee be put together to advise the TLC about the design, creation, and promotion of the bingo scratch-off ticket, seconded by Ronnie H. VOTE: 8 Approve 0 Oppose IV. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON LEGISLATION OF THE 76TH LEGISLATURE RELATING TO BINGO, INCLUDING THE PROPOSED RECODIFICATION OF THE BINGO ENABLING ACT. Billy A. reminded committee members that they had requested to be kept current with legislation, two drafts of the proposed recodification of the bingo enabling act had been mailed to the committee. Billy also advised members that the purpose of the BAC is to advise the commission on the interests of bingo. Members cannot represent the BAC in testimony for or against any bill, however, individuals can represent themselves and can say that they serve on the BAC but should also say they are not representing the BAC at this time. Nelda Trevino (Manager Intergovernmental Affairs, TLC) told the BAC that the session began January 12th. Six hundred bills have been filed at this time, only one, SB 575 sponsored by Senator Armbrister, focuses on bingo. The TLC has submitted an Exceptional Item Request for a new computer system which will cost $951,000, plus the addition of two FTE positions. The bingo division is analyzing SB 575 but is not finished at this time. The deadline for filing is March 12th. The bingo division will be monitoring the recodification of the Bingo Enabling Act. V. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON A POSSIBLE RULE RELATING TO THE USE OF GIFT CERTIFICATES. Phil Sanderson (Senior Audit Manager, TLC) briefed BAC members on the draft proposed rule 402.XXX included in the packet of information mailed to committee members concerning the use of gift certificates. Suzanne T. expressed concern that limiting the amount that could be returned to the patron for change could cause a hardship to halls that sell paper and instant bingo in different locations. Billy A. said the staff would inquire of other states which have procedures for gift certificates why they limit the funds which could be returned to the customer. MOTION by Ronnie H. that the BAC recommend to the Lottery Commission that the proposed rule on gift certificates be processed through the rule making procedure with the deletion of sentence 2 under (a) (7) The maximum amount of change to be returned to the bingo patron will not exceed $2.00 or 20% per gift certificate, seconded by C. M. Matthies. VOTE: 8 Approve 0 Oppose VI. REPORT POSSIBLE DISCUSSION AND/OR ACTION, ON PROGRESSIVE GAMES AS PROPOSED PREVIOUSLY BY THE BINGO ADVISORY COMMITTEE. Diane Morris (Assistant General Counsel, TLC) gave BAC members a proposed draft bill (handout #3) concerning progressive games. Diane told the committee that she drafted this bill with the goal of implementing the suggestions made by the BAC at the last BAC meeting. Diane asked if the committee had any additional input of changes to this proposed bill. MOTION by Suzanne T. that on page 2, (f) "in addition" be deleted, seconded by Gene B. VOTE: 8 Approve 0 Oppose C. H. Matthies expressed concerns that the original $750.00 should be included in the $2,500. Suzanne T. was in agreement that this should not cause a hardship, and would still allow the progressive games. Phil Sanderson told the committee that the staff had come to the conclusion that progressive games could be of benefit to the charitable organizations conducting bingo in the state. Billy A. told members that after research by the staff, the greatest drawback could be that instead of charities experiencing consistent attendance, players went to the halls advertising the highest jackpot. The TLC cannot enforce charities not paying the full amount of payouts. MOTION by Saleem T. that the BAC vote to pass the draft bill with the following changes: (1) Section 2 (b) A prize for a progressive bingo game may start at an amount not to exceed $750, which must be included in the $2,500, and may be increased by no more than $500 for each occasion during which the progressive bingo game is played. (2) delete section 2 (f ) "In addition to the actions and remedies available to the commission set forth elsewhere in this Act, failure to keep adequate records may result in the commission imposing penalties, and/or suspending or revoking the licensed authorized organization's ability to conduct progressive bingo games", seconded by Gene B. VOTE: 7 Approve 1 (C. H. Matthies) VII. REPORT, AND POSSIBLE DISCUSSION AND/OR ACTION ON THE CONCEPT OF SATELLITE BINGO GAMES AND/OR THE CONCEPT OF LINKED BINGO GAMES. Saleem T. gave a presentation to BAC members to explain what a service system provider was and what they offered the bingo industry. Saleem told members that he does not support Section 25 (d) for operating a linked bingo game. MOTION by C. H. Matthies that the BAC recommend to the Lottery Commission that the commission oppose any effort to authorize linked or satellite bingo in Texas, seconded by Ronnie H. VOTE: 7 Approve 1 XIII. CONSIDERATION OF AND POSSIBLE ACTION ON FUTURE BINGO ADVISORY COMMITTEE MEETING DATES AND/OR ITEMS TO BE CONSIDERED FOR FUTURE MEETINGS. Committee members discussed future agenda items including authorizing those under 18 to work at bingo halls and legislative items. The next meeting will be planned for some time between March 16th and the next commission meeting. XII. ADJOURNMENT Meeting adjourned at 12:25 p.m. by William N. Minutes as prepared by Suzanne Taylor, BAC Recorder.