NEW MEXICO GAMING CONTROL BOARD

Special Board Meeting

February 14, 2007

MINUTES

The Board of Directors of the New Mexico Gaming Control Board (Board) conducted a one-day Regular Board meeting at Gaming Control Board Headquarters, 4900 Alameda Blvd. NE.  Chairman David Norvell called the meeting to order at approximately 10:17 a.m., on Wednesday, February 14, 2007.  Due notice was published in accordance with the Gaming Control Act and the New Mexico Gaming Control Board Open Meetings Resolution and Chairman David Norvell  declared a quorum.    Present were:  Commissioner Arnold Rael, Commissioner Don Dutton, and Chairman David Norvell.  Commissioner Carolyn Monroe was not present.  General Counsel Frank Baca was also in attendance. 

· Approval of Agenda

Chairman David Norvell presented the agenda for approval and noted that the agenda would be the public discussion of the Bingo & Raffle Policy.    A motion was made to approve the agenda as stated:  A. Rael.  Second: D. Dutton.  Vote: 3-0.   All voted in favor of the motion:  A. Rael, D. Dutton and D. Norvell.

·      Chairman Norvell turned the meeting over to Frank Baca, General Counsel:

Frank Baca:   Asked if all present had a copy of the current policy that had been placed on the front table, because there were a couple of slight changes from the one that had been mailed out giving notice of the meeting. 

· The changes that were made on the policy were:  Page 5 under the Audit Section sub-section A-3:  Sequential numbered.

There has been considerable discussion of sequential numbering, from the licensees in the bingo community and the distributors and in our internal staff meetings about the difficulty that poses.  The reason for that is that it is impractical currently to sequentially number bingo cards. We understand that the manufacturers can in fact do so with a special order which will increase the cost that will be passed on down the line by at least 20%.   We had also been presented with another way to inventory the cards and that is that the bingo paper cards are presented and distributed in packets and most people buy them in 50 or 100 or different quantities and so that might make it easier for you and for the distributors and our staff as well.  As a result of this we’re recommending to the Board that those two words sequential numbered be stricken from the policy.  In the same section the following sentence which states that licensees shall not use a card in any bingo game that is not sequentially numbered.   We suggest that that sentence be struck out. 

· The other change to the policy is on page 6 under the Audit Section sub-section C6.  A log with winning numbers along with a listing of the winning numbers will be kept for 3 years.

We’re convinced by the feedback from the public that it doesn’t make sense to keep this log because there is nothing for Audit to use to audit it against and is not meaningful for purposes of our audit trail or our audit work.  So we are proposing to the Board that that sentence be stricken from the policy.  However, we did add the next sentence which reads as follows:  The licensee shall submit quarterly bingo and raffle supplement form #3 which includes the name and address of each person who has been paid $250.00 or more and the purpose of the expenditure.  This seemed to be a more meaningful record to be kept.  This is a statutory requirement as well.  These are the changes that have been made to the policy as a result of the input we’ve received since the policy has been mailed out.  The policy does include a provision that indicates that if there is some particular provision of the policy that presents a certain hardship that that would be subject to a request for an exception this is in the first part of the letter.  We haven’t quite developed our internal process for that  but we will prepare a form that the bingo licensees could use and they would identify the policy they’re seeking an exception from, identify the entity and contact person and give us a specific reason for the request.  We could then have a committee from audit, enforcement and legal to review it and submit it to the executive director for final approval.

Commissioner Dutton:  That sounds like something that might take time and people asking for a variance would want to hear something quicker, couldn’t you designate someone either in enforcement if it’s an enforcement issue or audit to grant that variance along with the deputy director or executive director to make it an easier process? I think their request needs to be in writing, but there should be a timely conclusion to that result.

Frank Baca:  I think for the initial period of time, I know it helps me to get input from the other division before we give them feedback, as time goes by I think that’s certainly a possibility to implement to get a quick response and turnaround on these like 48 hours or something of that nature.

Chairman David Norvell asks for comments from the public.

John Holler – White Rose Bingo Hall

I don’t know if you guys have ever been to a bingo hall before but there is a lot of paper work involved, it’s virtually impossible to keep up with all the numbers that are involved in what you guys are asking here in C-2 page 6.  It’s impossible for the bingo manger to keep up with this.

Jimmy White:  The way it would be done would be that you would take an inventory of your bingo cards that aren’t used and then the ones that are purchased that would come with the help of the distributor who would tell what cards are sold to you, you would add those two totals and then at the end of the next one you would take an inventory so that way in between we would know how many cards you used.   If you voided any cards you need to keep those.

 John Holler:  At the end of the night you’re not using all the cards that are given to you.  We give the packs to the bingo manger and sometimes those packs are not used, not all of them are used so we use them over again the next time.

Jimmy White:  That’s fine we’re saying at the end of each month, you would know how many cards you have on the 31^st of each month. 

  John Holler:  Inventory meaning the serial numbers?

Jimmy White:  No, just the number of cards.

Corrine Marquez – Duke City Sertoma

You get this pack of cards every night, I don’t know how many come in there about a hundred to a pack, 6 packs to a box, say you go through one and a half boxes but you don’t use the whole pack, how do you balance that, the ones that are left over?

Jimmy White:  You know how many are in a box right?  If you have part of a pack you count those and the others you’ll just have to say that’s what you have left.  We’re saying at the beginning of the month you know how many cards you have you know what your distributor sells you and at the end of the month you take another inventory so the difference is what you sell.

Commissioner Dutton:  I think when you get in it you’re going to find it’s a real simple process.  If you sell 300 cards on a nightly basis, you’ll mark it down, you’re going to do that anyway so that you can count your money, just keep that track running if you do void something have a spreadsheet for sales, voids and balance.  You can start your beginning inventory at 1000 cards is what you purchased for the month of March, you had one game where you sold 300, then your going to have 700 maybe you voided 25 and so you keep a running count that way, that would be to me a real simple process to do and it wouldn’t require a computer or anything else.  Don’t make it tougher than it is.  Keep it simple.  We’re here to assist, if you have a question, call our staff we want you to succeed and at the same time we want to ensure the integrity of the gaming, if you’ll assist us with that we’ll assist you with these rules and policies.

Marcia Vigil:  The purpose for keeping an inventory is a control factor for you to have on hand should you be asked during an inspection.

John Holler:  What about the bingo hard cards, case by case basis what does that mean on page 5 A-1?

Frank Baca:  That is something that we’ve discussed at length at many meetings that we’ve had over the last year and a half and I think it’s the prospective of the staff that is a general rule something that we would feel strongly about because that is the basis for inventory, that’s the basis for regulation, that’s the basis for regulating the industry.  Quite frankly, what I was thinking about personally when I thought there may be some expectation granted on this is we’ve heard from clubs that have maybe ten or twelve people playing bingo where their total gross receipts for the night are $15, $20 they do it not as a business but as a just a fun thing to do for their membership.  So from my personal perspective that’s where I thought there may be some lea way as far was some variance on that.  I don’t know if audit feels any differently than I do about that.

Marcia Vigil:  I think that was one of the primary reasons.  Also, another reason was people who had their own cards who had visual impairment and wanted to use their own card to play bingo, and we said in that case, notify us that we have some patrons who do that because that’s what they’re comfortable using.  That is fine with us.   Just let us know that that’s occurring and we are allowing that and then you would just keep track of the multiple times that that card is going to be used.  Your responsibility is to keep track of the amount of sales that you generate from the use of that card.   That would be an example of a “case-by-case” basis.

Commissioner Rael:  I have a question for Mr. Baca and Ms. Vigil regarding the process when you put your policies together you send them out to the bingo people? The policies, are these sent to them to review before we have meeting like this?  How much input did you have before this meeting about some of the problems that we’re encountering?

Marcia Vigil:  We had several meeting with the public and we’ve also dealt with phone calls.  There are some organizations or operators who have been able to make the changes and there are some that due to certain circumstances within their club, find it a little harder to meet some of them.  So we’re trying to address the specific for some clubs.

Commissioner Rael:  For this one that they were asking on number 2 on page 6 would have been quite easily handled by the staff without even having to come here?

Marcia Vigil:  I agree, the inventory is an issue that has been brought up before because that would have to be regulated by an active agent on premise and right now we have some restrictions about how extensive we can go out there and actually review on premise because from the audit perspective they self report to us. The law requires them to send their documentation in for review but there will be an element in the future of inspection on site to address the regulation aspect of it which may be done by enforcement agents.  That’s what we’re trying to find out if they can have documentation available so that that can be done and that’s kind of touch and go I can’t speak for the enforcement side.

Commissioner Rael:  See like our Commissioner says here it’s very simple, very simply put and that would have saved them a lot of time.

Commissioner Dutton:  Just for some background on this, we’ve been doing this for about 18 months.  We’ve probably had six public hearings.  We’ve done it around the state, we were in Las Cruces a few months in ago, Frank was in Las Vegas, so we’ve reached out to the licensees and we’ve gotten these answers.  Actually that question on the inventory didn’t come about in this particular form but as we said keep it simple.

Frank Baca:  Closer to a dozen meetings. 

Chairman David Norvell:  What is your process going to be on a case by case basis, a phone call in or a form that they have to send in?

Frank Baca:  We anticipate something in writing, we do not have the form in place now but at this point in time a letter, something in writing would satisfy and then we would try to get that turned around pretty quickly.  You’re with White Rose Bingo, on a commercial venture I think it would be ultimately that would have to be made, it’s harder to justify a variance for a commercial venture than it would be a small bingo operation that has just a dozen or twenty showing up once a week because once again from the audit staff what we learned from the very beginning is that’s the only way we have that’s not really intrusive upon your business to just document and make sure that the State is receiving a fair share of revenue because otherwise there is no other way to know how many cards are being sold if you’re just using the hard card.  We just don’t know of any other way to do that.

Chairman Norvell:  Who should they contact?

Frank Baca:  If you want to put it in writing you can send it to Executive Director John Monforte then he could distribute it among whoever needs to be involved in that decision.

Corrine Marquez:  We have a lot of elderly people that like to place hard cards, they find paper distracting, and they’re just used to it.

Commissioner Rael:  Frank could they make an appointment and come over here and talk to you?

Frank Baca:  Absolutely.  We could talk right now after the meeting.

Chairman Norvell:  Mr. Baca and Marcia Vigil one of the Commissioner’s wants to go into closed executive session and discuss this matter with you.

Chairman Norvell entertained a motion to go into executive session for the sole purpose of discussing the bingo policy which is on the agenda.  D. Dutton:  Second:  A. Rael.  Vote:  3-0.  All voted in favor of the motion:  A. Rael, D. Dutton and D. Norvell.

Chairman Norvell entertained a motion to go back into open session.  D. Dutton:  Second:  A. Rael.  Vote:  3-0. All voted in favor of the motion:  A. Rael, D. Dutton and D. Norvell.  Chairman Norvell stated that the only matters discussed in closed executive session were those matters relating to the bingo & raffle policy.

Don Dutton:  Your contact person should be Executive Director, John Monforte.  John might have you go to Marcia or Frank but if you would so we don’t have calls coming in to everybody, if you’ll just direct the calls to John Monforte.

Chairman:  Is there further public statements that want to be made, any discussion you want to have.

Bruce Jorgensen, President of VFNP

I have a question on page 4, #2 regarding callers I have a question why?  They don’t handle money anything they do is in full view of the general public.  They call and monitor and that’s an added expense and a hindrance.  Getting people to do the calling job because they want to do that.

Chairman Norvell:  What’s your concern about it?  That they be of good moral character or have you been convicted of a felony.

Mr. Jorgenson:  No it’s the expense of having to do it.  They don’t have anything to do with the money and everything they do is in full view of the general public.

Chairman Norvell:  I think probably 60-2B-8T probably requires that.

Frank Baca:  It is a statutory requirement, it is an unusual aspect of the law this is not a new act that is the one provision that is specifically required in the Bingo & Raffle Act to have that background check done.

Mr. Jorgenson:  On page 7, the second paragraph before #9, No cash on hand.  Some of the smaller operations have had complaints about that.  They just don’t have the money to be able to have $6,000 setting there on hand to have the different occasion and they have a break in-between occasion on it they count the money verify it and make the forms out and then restart the occasion using the same money I don’t understand why they can’t do that because of the limitation of the funds available.

Marcia Vigil:  There are some requirements in the statute that require that all receipts from games of chance to have to be recorded for that occasion, and in order for you to do that if the clubs are preferring to have two occasions in one evening (which they can) as opposed to having two or three spread out during the week, (because they can have no more than five) they still need to ensure that the receipts at the end of an occasion are accounted for.   Then they can start another occasion. It’s a pretty standard concept.  In order to report your total receipts, you have to account for them.

Mr. Jorgenson:  I understand what you’re saying but they can do that during that break and fill out the receipt and account for that before they start the second session.  They usually take a fifteen minute break.

Marcia Vigil:  If you make a deposit slip, at the end of the evening you could do your paperwork and the next day if you choose to make the deposit, that’s fine as long as those receipts are accounted for.  But if you make that deposit slip, how can you, unless you have an imprest amount that you planned for, how can you take money from the first occasion and start up the second occasion?  The first occasion won’t be truly reflected of the total receipts.

Mr. Jorgenson:  Why are you necessarily going to deposit all the money from the first occasion if you need it for future use before you even have to deposit it?  If you make out the paperwork and your forms and verify the fact that you sold this many card and this amount of money you have in there and this is your documentation from the first occasion that money still belongs to you, you should still be able to use it for the second occasion.

Marcia Vigil:  But the Act indicates there are some primary issues that state 1) there will be no check to cash and 2) all the receipts from all games of chance for every occasion have to be recorded.

Frank Baca:  Isn’t that the key Marcia to reporting and accounting as opposed to the actual deposit of the cash.

Marcia Vigil:  You have to have your start up money and close out at the end of an occasion.  Each occasion should stand alone and each occasion should be funded for its purpose.  If you have two on Monday you should be starting and closing them the same way, and that is why in the Act it states that the Bingo Manager who is responsible for the reporting of this documentation will remain thirty minutes after the end of your game play.  It gives him the time to basically break down and report the receipts for that period.

Don Dutton:  Marcia, usually on the deposit slip there is a space for less cash, couldn’t you simply fill that blank as $500 and put down there next occasion so that you would have complete record.

Marcia Vigil:  That’s fine, that doesn’t violate the requirements of the Act which states that no checks will be made to cash and it still gives them the opportunity to record what they earned and show what they needed.  The reason each occasion has to be recorded is that you are allowed to deduct expenses for each occasion, if you’re not giving us a true accounting of the receipts for your occasion but yet you are taking deductible expenses for that occasion then you’re offsetting, you’re throwing off the total tax due to the State which is a 3% bingo tax required on total receipts for all your games of chance.  We’re trying to get the correct reporting.

Don Dutton:  Does what I suggest cover all of your bases as far as the actual monies collected for that occasion and any expenses that might be deducted and then you have the bottom portion a sub total less cash for next occasion.

Marcia Vigil:  That would be one way and another way would be to have an imprest amount at the beginning.  We get the quarterly report form with the cancelled checks and we have them give us a reporting of what they have for their total net proceeds and I understand that there is a certain amount of money that they want to maintain for lawful purposes but we also included the definition of lawful purpose to be lawful use which is the ongoing expenses for bingo & raffle.

Mr. Jorgenson:  You still haven’t answered his question or my question why can’t you use that to fund that second occasion if you make that entry on your deposit ticket.

Marcia Vigil:  You will put it on the deposit slip, but you are not reporting all the receipts brought in and paying tax on them, right?

Mr. Jorgenson:  Yes you are, all you’re doing is using the cash to fund the second occasion.

Marcia Vigil:  That’s fine if we know that.   That’s not being done now by those people who are using money to fund the second occasion.  They’re just using money from the first occasion to fund the second occasion without documenting it.

Mr. Jorgenson:  Don’t say that you can’t use those funds to support the second occasion make it so you can document it and use it for that second occasion so they don’t have to take money out of the bank.

Commissioner Rael:  Marcia, you’re saying that some only need to borrow money from the first occasion for the second occasion.  About how many are some?  Is there a way for you to develop a form that can be filled correctly so there will be no problems, no mistakes to have this done?

Marcia Vigil:  Yes, we could do that because we would want them to identify to us when they did that.  Yes, we could create a form where they could keep that documented, they send it to us and we tie it into the receipts.  The whole process is self reporting so the more they disclose to us the better.

Don Dutton:  It would be a very simple form, would it not Marcia, because you have total receipts.

Marcia Vigil:  It would be a form that would have to have documentation for every occasion that they had during the quarter, because they report on a quarterly basis.

Don Dutton:  But for their nightly deposit on the deposit slip, put down total receipts and then less cash for the next occasion and that would give you the information that you need for that first occasion and then of course the second occasion.

Marcia Vigil:  Then we would have to require that they send those in as well, because right now we’re receiving bank statements and cancelled checks and now we would need the deposit slips.  It can be done, but with more disclosure.

Chairman Norvell:  Does that work for you, Bruce?

Mr. Jorgenson:  Yes.

Don Dutton:  I really want to get these policies in place, there was a lot of discussion at many of the hearing about the images, front and back of the checks, you’re all resolved that that is the way that it is going to be and that it is not going to impose too great a burden on you?  Does anyone feel that it is going to be too great a burden?  Thank you, very much I appreciate your input.

Commissioner Rael made a motion to approve the policies as presented and amended.  Second:  D. Dutton.  Vote:  3-0.  All voted in favor of the motion:  A. Rael, D. Dutton and D. Norvell.

There being no other business to come before the Board, Chair David Norvell entertained a motion to adjourn. D. Dutton   Second:  A. Rael.  All voted in favor of the motion:  A. Rael, D. Dutton and D. Norvell.

/s/David Norvell, Esq.                                                       Date Approved:  03-20-07

    Chairman