Bingo Advisory Committee Minutes Bingo Advisory Committee Meeting, September 21, 2000, Austin, Texas I. THE BINGO ADVISORY COMMITTEE CHAIR WILL CALL THE MEETING TO ORDER. William Neinast called the meeting to order at 10:02 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 JUNE 13, 2000, BINGO ADVISORY COMMITTEE MEETING. MOTION by Fabian H to approve as read, seconded by Virginia B. VOTE: 8 Approve 0 Oppose III. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON THE BINGO ADVISORY COMMITTEE CHAIR’S JULY 18, 2000, REPORT TO THE TEXAS LOTTERY COMMISSION RELATING TO PERSONS UNDER 18 YEARS OF AGE WORKING IN A BINGO HALL. William N. reported to the committee that the proposal for workers under the age of 18 years in bingo halls was met with a negative reaction from the Commissioners. He told committee members he felt this is a dead issue at this time but suggested that anyone feeling strongly about this request should approach their local legislative representatives if they want to try to further this proposal. IV. ORIENTATION, POSSIBLE DISCUSSION AND/OR ACTION ON, INCLUDING BUT NOT LIMITED TO: ORGANIZATION OF THE BINGO ADVISORY COMMITTEE; CHARITABLE BINGO OPERATIONS DIVISION’S OPERATION; AND, STATE TRAVEL REQUIREMENTS RELATING TO AN ADVISORY BOARD. William N. reviewed the duties and responsibilities of the Bingo Advisory Committee with committee members. He explained the procedure for adding items to the agenda and requested that a narrative discussion for the notebook be submitted with the agenda item. He also requested that the member requesting the agenda item say how long the discussion of the item should last and represent the topic at the meeting and end the discussion with a motion. He also advised committee members that any time five or more members meet a quorum would be reached and the meeting would be subject to the Open Meetings Act. Arlette Taylor (Travel Coordinator) gave each committee member a handout with the travel requirements for member’s review. Billy Atkins (Director, Charitable Bingo Operations Division) gave committee members an overview of the charitable bingo operations and reviewed the information supplied to committee members in their booklet. V. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON THE SECURITY DIVISION’S ACTIVITIES. Mike Pitcock (Director, Security Division) gave committee members an overview of the security division. He told members that the security division enforces the Bingo Enabling Act and the Texas Lottery Commission rules and regulations. Region offices are located in Odessa, El Paso, Dallas, Houston, San Antonio, and Austin. Mike reviewed the statistics provided to committee members in their booklet. VI. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON STATISTICS RELATING TO CHARITABLE BINGO FOR THE 2nd QUARTER OF YEAR 2000. Phil S. reviewed the information supplied in committee member’s booklets. He told BAC member that gross bingo receipts from the 2nd quarter 2000 were down approximately 4 ¼% from the 2nd quarter 1999 and approximately 5% from the first quarter of 2000. VII. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON INTERNET BINGO. Billy A. gave new committee members an explanation of the information contained the booklet provided to them. Saleem T. told members that AOL has blocked offshore gambling, and other ISP’s could also do this. He also told members that Nevada has blocked internet gambling and has prohibited ISP’s from bringing internet gambling into the state and that Texas needs to move in that direction and be proactive, not reactionary. VIII. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON AN INSTANT LOTTERY GAME WITH A BINGO PLAY STYLE. Billy A. gave BAC members an overview and history on the bingo scratch off lottery ticket and the locator service. He also reviewed the report that had been provided in the member’s booklets including the information that as of 8/00 19,658 calls had been received averaging 25 to 50 calls daily. IX. REPORT, POSSIBLE DISCUSSION AND/OR ACTION ON THE BINGO OPERATOR TRAINING PROGRAM. Roy Gabrillo (Senior Audit Manager, Charitable Bingo Operations Division) reviewed the information contained the booklets provided to BAC members. He told members there have been twenty-five training sessions as of this time; nine sessions have been after hours in the evenings and on Saturdays. The evening sessions were held on two nights, participants had to attend both nights to receive their certificate of completion. Information about the training sessions, including directions to the locations, is provided on the bingo web site. Roy also told committee members that the operator training rule has been adopted and the rules are now in place and any changes in the laws or administrative rules will be incorporated in the training program. Suzanne T. asked 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. responded that he would like to talk to legal and revisit this issue at a later time. X. 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. William N. introduced committee members to Nelda Trevino (Director of Governmental Affairs). Fabian H. provided committee members a booklet concerned with the decline in instant bingo sales entitled "A Proposal to benefit Texas Charities". Fabian told BAC members that the annual NAFTM (National Association of Fundraising Ticket Manufacturers) report has just been finished. It shows that the gross receipts for bingo tickets have continued to fall in Texas. Receipts in 1995 were 139 million compared to 96 million in 1999. PUBLIC COMMENT: Mary Maguson, general council for NAFTM, advised BAC members that thirty-six states allow instant bingo and twenty-six allow charitable gaming. Seven states allow instant bingo to be sold on a wide basis including at bingo games, not for profit clubs, taverns, convenience stores, and restaurants. States which permit sales of tabs in taverns or clubs have a much higher per capita sales than states that limit the sale of tabs to bingo games with Minnesota at a $297 per capita spend compared to Texas as a $5 per capita spend. Fred Miccio, with the American Legion, told the committee that the sell of instant bingo during non-bingo hours at the American Legion would be a great help. MOTION by Fabian H that the Bingo Advisory Committee appoint a sub-committee to review the bingo act and rules and develop specific proposals to eliminate certain restrictions on the sale of instant bingo tickets, moreover, be it resolved that these recommendations be forwarded for approval directly to the Lottery commission, seconded by David C. William N. requested that the motion be amended so that any recommendations of the sub-committee go back to the entire committee to be voted on. MOTION AMENDED to read, Bingo Advisory Committee shall appoint a sub-committee to review the bingo act and rules and develop specific proposals to eliminate certain restrictions on the sale of instant bingo tickets, moreover, be it resolved that these recommendations be made to the Bingo Advisory Committee and if necessary for the Bingo Advisory Committee to have an additional meeting prior to the legislative session, seconded by David C. VOTE: 8 Approve 0 Oppose Saleem T. requested that the sub-committee look into what is required to move in a direction to protect lottery and bingo within the state. William N. responded that this item would be included in the sub-committee meeting. Saleem told members that he would like to see the previous motion include the proposal to look into controlling Internet bingo in Texas. He requested that the sub-committee look into ways to help charities increase bingo proceeds and protect the bingo industry in Texas. Fabian H. responded that he does not want to broaden the work the committee will be doing too much because of time constraints. Billy A. told the committee that the staff will put forward several legislative proposals requests which he has separated into four broad categories including 1) Clean up provisions - administrative, 2) Clean up provisions - operational, 3) New provisions - operational, and 4) New provisions - administrative. Other legislative proposals, which the staff is aware of, have been listed under other items. 1. Clean up provisions - administrative would include: 1. Eliminating 2001.002 "Definitions" Subsection (11) "Fraternal organization" (B) "National Historical Districts" since this license type has not been used to date. 2. Repealing 2001.305 "Notice to Local Authorities" which requires applicants and license holders to send copies of the bingo application and bingo license to local law enforcement authorities. 3. Repealing 2001.154 "Ineligible Persons" Subsections (6), (7), (8), and (9) dealing with who may hold a commercial lessor license. These Subsections were found to be unconstitutional by a court of law in 1997. 4. Repealing 2001.106 "Form and Contents of License" Subsection (4) purpose to which net proceeds of bingo are to be devoted; and (5) statement of whether a prize is to be offered and the amount of any authorized prize. These two Subsections create additional paperwork because of the requirement that they be printed on the license. 5. Amending 2001.551 (b) relating to exempt games, which would address restrictions to allow games for family purposes, not for generating revenue for charitable purposes. 6. Amending 2001.414 "Bingo Records" (b) by deleting the words "cash register" from the following "an organization conducting bingo must record on a cash register all transactions for which it received bingo gross receipts in conformance …" 7. Clarification of term occasion in the Bingo Enabling Act. 2. Clean-up provisions - internal operations would include: 1. Repealing the requirement of a prize fee on prizes under $5.00. The staff is currently looking into this to see what effect it would have. 2. 2001.458 "Items of Expense" Subsection (a) items of expense, Subsection (8) adding operators to those who can be paid for service. 3. Repealing 2001.409 "Card-minding Devices" Subsection (b) "Not more than 40 percent of the individuals attending a bingo occasion, based on the average of two previously submitted quarterly reports, may use electronic or mechanical card-minding devices". This rule is very hard to enforce and new licensees do not have two previous quarterly reports to use to establish allowable usage. 4. Ease the restriction under Section 2001.161 "Licensed Authorized Organization As Commercial Lessor" that require charitable organizations to hold a bingo license to lease to other non-profit organizations. PUBLIC COMMENT: Roger Franke, representing Arrow International, expressed concern that repealing 2001.409 (b), which would remove the 40% maximum usage rule for electronics, would change the major beneficiary from the charities to the distributors renting the card-minders. Billy A. responded that this is not the end of the process; this item can be further discussed during the sub-committee meeting on legislative proposals. PUBLIC COMMENT: Fred Miccio, representing the American Legion, told committee members that he originally thought that card-minders would be great, but they are currently the greatest expense to the hall. Saleem T. told members this would be opening up Texas to 100% terminal bingo play. MOTION by Fabian H. that all the clean-up administrative items and all the clean-up internal operations, except 2001.409 (b), move directly on to the Texas Lottery Commission to propose legislation to the Legislature seconded by Lexford S. VOTE: 8 Approve 0 Oppose 12:50 Virginia B. leaves 3. New provisions - operational will include three items: 1. Pull tab issue 2. Authorizing progressive games, which the agency is in favor of and; 3. Granting the agency summary suspension authority and subpoena power. PUBLIC COMMENT: Chuck Bertani, former BAC member and sub-chairman of the Charitable Bingo Association, told the BAC that bingo operations at the TLC were going great and bingo training is going well. He cautioned the committee that because this was a redistricting legislation this session, we need total support for any proposal since it was going to be very difficult to get anything through the legislature. He also told committee members that he would support summary suspension authority if it were used correctly because he felt that the TLC must be given the tools needed to operate, but cautioned the committee that Billy A. and Phil Sanderson may not always be at the TLC and summary suspension could be used in a different manner than was intended. Chuck requested the BAC 1) to recommend the elimination of sales tax on bingo items 2) to recommend for those under 18 to work at bingo halls to add youth and vitality to the halls, 3) to recommend the removal of the 40% rule for electronics, and 4) not to recommend progressive bingo. Chuck felt that any hall using 100% electronics would be out of business, and that by allowing progressive bingo, players will follow the big games from hall to hall. Chuck said he would not object to a bill providing for progressive games for a limited time and then see how it goes. MOTION by Fabian H. that all the items under new provisions – operational to the sub-committee for further discussion and consideration, seconded by Louis G. VOTE: 7 Approve 0 Oppose 4. New provisions - administrative will allow the division to charge attendees to attend the training program. The cost has been over $30,000.00 for the first round of training, which is around $25 to $35 per attendee. MOTION by William N. that this item goes to the sub-committee for further discussion and consideration, seconded by Saleem T. VOTE: 7 Approve 0 Oppose Other – items include: 1. Exemption of bingo products from sales tax 2. Satellite bingo 3. Proposal to allow up to 30 amusement devices to be allowed in bingo halls 4. The creation of a separate security division from the Texas Lottery Commission which would concentrate only on bingo PUBLIC COMMENT: Chuck Bertani informed BAC members that the Texas Charitable Bingo Association is proposing a separate security division under the Bingo Director’s command. He also told the committee that the Amusement Machine Operators of Texas are proposing the 30 devices in a hall, which he feels will not pass. Chuck said he strongly support the previous items suggested by Billy A. but is opposed to satellite and linked bingo. William N. responded that he has had a very prompt response when referring complaints to the TLC. Nelda Trevino told committee members that time is of essence, after the sub-committee makes it’s recommendations to the full committee, the recommendations of the BAC need to go to the commissioners. The staff will start drafting bills after the commissioners have made their recommendations. The sooner the staff can get started the better; the last date to file bills will be March 12th. She recommended we stay away from that date. Billy A. told committee members that due to time constraints the BAC can meet just to review the sub-committee recommendations. Saleem T. told members he would like to see operators given more time to operate bingo games. It was agreed that the sub-committee to review legislative issues would be comprised of Saleem T., Fabian H., Bill N., Suzanne Taylor, Louis G., and David C. Fabian H. will act as the chair. This meeting will need to be posted because a quorum will be present. It was agreed that the sub-committee would go over all proposals, including debit cards. 11. 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 to consider proposals for legislative changes; all other agenda items will be postponed for future meeting. XIV. ADJOURNMENT Meeting adjourned at 1:30 p.m. by William N. Minutes as prepared by Suzanne Taylor, BAC Recorder.