NEW MEXICO GAMING CONTROL BOARD

One-Day Regular Board Meeting

May 20, 2008

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 9:37 a.m., on Tuesday, May 20, 2008. 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, Chairman David Norvell and Commissioner Demesia Padilla. Commissioner James Peterson was not present. Executive Director John Monforte, Deputy Executive Director Greg Saunders and General Counsel Frank Baca were also in attendance.

· Approval of Agenda

Chairman Norvell presented the agenda for approval. Executive Director Monforte noted there were no changes to the agenda. Chairman Norvell entertained a motion to approve the agenda as stated: D. Dutton. Second: D. Padilla. Vote: 4-0. All voted in favor of the motion to approve the agenda as stated: A. Rael, D. Dutton D. Norvell and D. Padilla.

1 Closed Executive Session. Chairman Norvell entertained a motion to go into closed executive session until 1:30 p.m., for the purpose of discussing tribal matters, licensing matters, issuance of finding of suitability on key and affiliated persons, pending administrative and enforcement matters, pending and threatened litigation and limited personnel matters as enumerated in detail on the agenda. (Closed pursuant to section 10-15-1(H), NMSA 1978): D. Padilla. Second: D. Dutton. Vote: 4-0. A roll call vote was taken and all voted to go into closed executive session: A. Rael, D. Dutton D. Norvell and D. Padilla.

2 On Tuesday, May 20, 2008 at approximately 1:37 p.m., a motion was made to go back into open session: D. Dutton. Second: D. Padilla. Vote: 4-0. A roll call vote was taken and all voted in favor of the motion: A. Rael, D. Dutton D. Norvell and D. Padilla. With quorum being present, Chairman Norvell certified the only matters that were discussed in closed executive session were tribal matters, licensing matters, issuance of finding of suitability on key and affiliated persons, pending administrative and enforcement matters, pending and threatened litigation and limited personnel matters as detailed in the agenda.

3 Approval of Minutes.

Minutes of Working Session, March 26, 2008

Minutes of Working Session, April 2, 2008

Minutes of Working Session, April 16, 2008

Minutes of Working Session, April 28, 2008

Minutes of One Day Regular Board Meeting, March 19, 2008

Minutes of One Day Regular Board Meeting, April 15, 2008

Chairman Norvell entertained a motion to approve the Board minutes as stated. D. Dutton. Second: D. Padilla. Vote: 4-0. A roll call vote was taken and all voted to approve the six listed Board minutes as read by Chairman Norvell: A. Rael, D. Dutton D. Norvell and D. Padilla.

4 Board Chairman Announcements.

· Swearing in of New Personnel

· Board Meeting Schedule:

Tuesday, June 17, 2008 – Farmington, NM

Tuesday, July 15, 2008 - Ruidoso, NM

Tuesday, August 19, 2008 – Albuquerque, NM

5 Pending Administrative and Enforcement Actions

· Consideration of approval of Hearing Officer’s Recommendation; Gaming Control Board vs. Casey Lueras; Cause No. 07-023-EA.

Commissioner Padilla moved to approve the recommendation of the hearing officer of suspension of the work permit until such time as Mr. Lueras clears up his child support issues. Second: D. Dutton. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

· Consideration of approval of Hearing Officer’s Recommendation; Gaming Control Board vs. Tammy Myers; Cause No. 07-036-EA.

Commissioner Rael moved to approve the recommendation of the hearing officer of suspension of the work permit until such time as Ms. Myers resolves her child support repayment problems. Second: D. Dutton. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

· Consideration of approval of Settlement Agreement; Gaming Control Board vs. American Legion Post #72; Cause No. 07-031-EA.

Commissioner Dutton moved to approve the settlement agreement between the Gaming Control Board and American Legion Post #72 and dismiss without prejudice the pending litigation in that case. Second: D. Padilla. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

· Consideration of approval of Settlement Agreement; Gaming Control Board vs. Veterans of Foreign Wars #1793; Cause No. 07-037-EA.

Commissioner Dutton moved to approve the settlement agreement between the Gaming Control Board and Veterans of Foreign Wars #1793; and to dismiss without prejudice the pending litigation in that case. Second: A. Rael. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

6 Licensing

Miscellaneous Matters

· Request for Waiver of Finding of Suitability for Institutional Investor; T. Rowe Price.

Commissioner Padilla moved to grant the waiver of finding of suitability for institutional investor, T. Rowe Price. Second: D. Dutton. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

· Request for Waiver of Finding of Suitability for Institutional Investor; Capital Research and Management Company.

Commissioner Padilla moved to grant the waiver of finding of suitability for institutional investor, Capital Research and Management Company. Second: D. Dutton. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

· Request for Variance to deposit discretionary money for each drop into their gaming operating account; American Legion #19 (Conchas, Dam, NM). Commissioner Rael denied the request for variance by American Legion Post #19 in Conchas Dam, NM. The request is in direct conflict with rules and regulations 15.1.10.32 NMAC of the Gaming Control Act. Second: D. Dutton. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

· Request for Variance; Albuquerque Downs.

Commissioner Dutton moved to grant the variance to Albuquerque Downs approving their MIC. Second: A. Rael. There was no discussion from the Board or members of the audience regarding this issue. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

Renewals of Gaming Licenses for 2008

· (2 c) BPO Elks #863: Mr. Emund Horn representing BPO Elks #863 requested to address the Board in closed session. Commissioner Dutton moved to go into closed executive session for the purpose of hearing licensing matters pertaining to BPO Elks #863, Albuquerque, NM. Second: D. Padilla. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

A motion was made to go back into open session: D. Dutton. Second: D. Padilla. Vote: 4-0. A roll call vote was taken and all voted in favor of the motion: A. Rael, D. Dutton D. Norvell. Chairman Norvell certified that the only matter that was discussed in closed session was the pending application for renewal of B.P.O. Elks #863 license. Commissioner Padilla moved that the application of renewal for BPO Elks #863 be tabled. Second: D. Dutton. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

Commissioner Padilla moved to approve the remaining gaming license renewals and read the following into the record:

a. American Legion Post #7 (Carlsbad, NM)

b. B.P.O. Elks #460 (Santa Fe, NM)

c. B.P.O. Elks #863 (Albuquerque, NM) * See motion listed above

d. B.P.O. Elks #865 (Raton, NM)

e. Fraternal Order of Eagles #3245 (Clovis, NM)

f. Fraternal Order of Eagles #4308 (Arrey, NM)

g. Glory, USA (W. Caldwell, NJ)

h. Loyal Order of Moose #2081 (Las Cruces, NM)

i. SunRay Gaming (Farmington, NM)

j. Veterans of Foreign Wars #1793 (Raton, NM)

k. Veterans of Foreign Wars #3280 (Clovis, NM)

Second: D. Dutton. There was no discussion from the Board or members of the audience regarding this matter. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

· Issuance of Findings of Suitability on Key and Affiliated Persons

Commissioner Rael moved to issue findings of suitability for the following key and affiliated persons:

1. New Application

a. Kathleen B. Chavez – Gaming Accountant – American Legion Post #100 (Albuquerque, NM) Recommended with restrictions. That she is not to approve or prepare financial statements as they are prepared by an outside bookkeeper.

b. Marcus M. Stenzer – Chief Financial Officer – Atronic Americas, L.L.C. (Scottsdale, AZ)

c. Kevin C. Whalen – Regional Director, Sales – Bally Gaming (Las Vegas, NV)

d. Dwight Torres – Assistant Gaming Manager – B.P.O. Elks #408 (Las Vegas, NM)

e. Jaymin B. Patel – Chief Executive Officer of GTECH Corporation – Spielo Manufacturing (Moncton, NB, Canada)

f. John Gallegos – Commander – Veterans of Foreign Wars #401 – (Albuquerque, NM)

2. Renewal Key Persons

a. Simon Ashley – Senior Vice President and Chief Financial Officer – Aristocrat Technologies (Las Vegas, NV)

b. Simon C. M. Kelly – Chief Financial Officer and Finance Director – Aristocrat Technologies (Las Vegas, NV)

c. Paul Oneile – Chief Executive Officer and Managing Director – Aristocrat Technologies (Las Vegas, NV)

d. Penelope Morris – Non Executive Director – Aristocrat Technologies (Las Vegas, NV)

e. David J. Simpson – Board Chairman and Non Executive Director – Aristocrat Technologies (Las Vegas, NV)

f. Robert A. Bittman – Executive Vice President, Product Strategy – International Game Technology (Reno, NV)

g. Harold L. Payne – Resident Manager – My Way Holding (Sunland Park, NM)

h. Harold L. Rosbottom – Director and Member – NM Gaming, L.L.C. (Albuquerque, NM)

3. Key Person Update:

a. Kenneth L. Bossingham – Chief Operating Officer/Manager – Atronic Americas, L.L.C. (Scottsdale, AZ)

b. Felix Trujillo – Gaming Accountant – Veterans of Foreign Wars #401 (Albuquerque, NM)

7 Policy & Rulemaking Matters:

· Consideration of approval of Hearing Officer’s Recommendation; 15.1.5 NMAC, 15.1.7 NMAC, 15.1.8 NMAC, 15.1.9 NMAC, 15.1.10 NMAC, 15.1.11 NMAC, 15.1.13 NMAC, 15.1.14 NMAC, 15.1.16 NMAC, 15.1.17 NMAC, 15.1.19 NMAC, 15.1.24 NMAC

Frank Baca, General Counsel: The matter before the Board this afternoon is amendments to the following rules: 15.1.5, 15.1.7, 15.1.8, 15.1.9, 15.1.10, 15.1.11, 15.1.13, 15.1.14, 15.1.16 C, 15.1.17, 15.1.19, 15.1.24. The substances of the changes are all the same. What we had done is there were references to unsuitable methods of operations scattered throughout the rules and it was suggested that they should all be placed in one section which is that entitled unsuitable methods of operation. There was no substantive change, it was moving things around. There was a hearing held on March 31, 2008 in front of Hearing Officer, Henry Alaniz who made recommendations to the Board that you adopt these changes. There was no public attendance, so there was no controversary over these rule changes.

There was no discussion from the Board or members of the audience regarding this matter. Commissioner Padilla moved to approve the rule changes. Second: D. Dutton. Vote: 4-0. All voted in favor of the motion to approve the Hearing Officer’s recommendations: A. Rael, D. Dutton, D. Norvell and D. Padilla.

Consideration of approval of the Bingo Policy:

Frank Baca: Copies of the bingo policy were sent out two weeks ago. We have been working on this policy for quite some time. We had some changes to the last version approved by the Board May 7, 2008 and we sent out a letter to all the various state holders in the Bingo industry and we want to submit this to the Board. We have had various public meetings, we have taken great pains to reach out to the public in regards to Bingo and to get their input. What we have is a policy that shows the changes by words or sentences or paragraphs that have been underlined those are new for the most part and a few places where we had things struck out. Where one section has been moved from one place to another, you will find that in parenthesis at the end of that section and we are here to present this to the Board.

Chairman Norvell: Asked if there was anyone in the audience present to address these bingo changes that were recommended.

Robert Thompson, Gaming Manager, American Legion Post #49: Reference to Page 8 #7: The Bingo operating bank account shall have a month end cut off date. Can we get the bank to give us the end of the month cut off date?

Commissioner Padilla: If you ask for it they’ll do it.

Mr. Thompson: Page 9, the licensee is required to expend all proceeds earned within one calendar year. How is that supposed to work? Is that from January or does that mean that May of year you have to expend that money by May of the next year?

Marcia Vigil, Bingo & Raffle Auditor: Mr. Thompson let me address that. The Bingo and Raffle Act requires that your net proceeds be expended for lawful purposes by the end of the calendar year and it is because the license you’re granted allows you to operate your activities for that period. By the end of that year you spend those monies towards your own purpose before you reapply for your license for the next year. We have not gone into the point in the policy of limiting you, there’s a period of time that you spend this. What we’re doing is when we audit your report, for instance right now the first quarter of this year we‘re reviewing this quarter to notify organizations that they should have done this at the end of last year. Now we’re giving this pretty good time so we can notify you by phone or by letter so that next year you are aware that the law has always required you to expend those proceeds by the end of the calendar year.

Mr. Thompson: The only reason why I’m questioning this is because on the Gaming Control Board has authorized expenditures of all points on gaming accounts, on CD accounts to extend 120 days beyond the end of the year. I was wondering why this is not consistent between the two policies.

Marcia: Because the Bingo and Raffle Act is a separate act from the Gaming Control Act and the rules are allowing a 120 day extension whereas there is nothing to allow us to do that. What we want to do is fulfill the obligations of requiring licensees to follow the requirements of the statute and at the same time we’re doing a draft statute and in the draft we will have more specific information regarding the expenditure of that time line. We may not give 120 days but we will deal with that later.

Mr. Thompson: OK. On page 10 (B)5 - Pull-Tab Operations: All deals shall be reconciled and reported per day and the close out procedure shall be the same as the close out procedures listed under section V(11)(a-g). On some of the pull-tab operations they’re run on machines and those machines basically they’re not tended to on a daily basis. What I’m trying to ask is if that could be set up closer to what currently is allowed with the gaming machines on a drop style basis where the licensee can request a drop schedule from the Board with approval like say every Monday or Friday or once a month or the first day of the month so that you don’t have to do this on a daily basis if they don’t have bingo on a daily basis.

Michelle Garza, Bingo & Raffle Auditor: If you just have pull-tab machines then you can do it weekly if you want to, we’ll try to make it more clear but this particular sentence is for licensee’s that have bingo and pull-tab the same night and they have to reconcile those each evening or in the morning.

Mr. Thompson: That’s where it’s confusing. I’m reading this and it doesn’t make any difference on it, it doesn’t say this is different for the pull-tab machines, it just says that this is what the operators will do.

Michelle: For licensee’s that just have a pull-tab machine operation, we don’t have a restriction or a requirement that you do it daily. We prefer to see it done weekly and the receipts deposited the next business day.

Mr. Thompson: On page 11 on C – When a prize exceeds $100.00 the raffle ticket shall have the following information. Has anybody considered maybe upping that to a more reasonable amount say $500.00? Because basically what I’m looking at right now it sometimes they have raffles and the prizes they give away will total $100.00 and printing these tickets costs about $100.00. I would suggest someone possibly look into raising that amount up to a more reasonable amount considering today’s economy.

Marcia: That’s an issue we can look at, however, we didn’t have anything regarding raffles before and since we’re trying to get some more information to establish more criteria, then we can consider that at a later date but not right now.

Mr. Thompson: It’s just one of those things that if the Board is considering this today that I would like to stress. I don’t have anything to do with this, but I have talked to people that do and basically what we have done, like when we have dinners sponsored by American Legion Post 49, we sometimes have a raffle in conjunction with the dinner.

Marcia: What you’re saying is that it is burdensome for your club to maintain documentation in the amount of $100.00?

Mr. Thompson: The $100.00 seems very restrictive and it also means that basically we can’t do impromptu raffles, we have to have these tickets printed which is an expense in itself well ahead of time. The issue is basically that the amount of $100.00 seems awfully low considering what today’s economy is and what the prizes are we’re looking at.

Frank Baca: Mr. Thompson what is your proposal?

Chairman Norvell: Do you have a $ amount?

Mr. Thompson: To me, I would look at something like $500.00, anything over $500.00 has to have information on the tickets printed and the rest of it set up anything under $500.00 can be set up to do a matching ticket with all the other proceeds covered.

Chairman Norvell: Anything else?

Michelle: Mr. Thompson, are these raffles being reported on your quarterly report or are they just a separate thing with the dinner?

Mr. Thompson: They’re being reported, they are part of our fundraising.

Michelle: Are they reported on our quarterly report form?

Mr. Thompson: I’m not sure. You’re asking me a question that I can’t answer. But it was just the idea that part of the things that I read through this, trying to get a consistency so that if I’m looking at it which I don’t have to look at it because I’m not involved with the bingo, the pull-tab or the raffles at the Post, it’s just that they asked me to bring these points up.

Commissioner Padilla: Michelle, don’t all raffles have to be reported to you?

Michelle: If they have a bingo license and they have it more than four times a year, even it they only have it one time a year and they have a license, it’s supposed to be reported, so I’ll look into that.

Johnny Washington: American Legion Post #117. On page 7 A/B and C I want it to be an increase. Right now everything has gone up, utilities and expenses are jumping up to the sky, gas and stuff that $100 in rent and janitor those three things I think there should be a way to increase that as you know the utilities, lights, water, everything is just its no telling how high it’s going to go.

Marcia: Mr. Washington you’re writing the check out of your bingo operating bank account to pay for your utilities, your rent, your janitorial for the total amount correct?

Mr. Washington: Yea. Right now we’re fixing to move into our new building but we were renting from VFW Post 3015 and their bill, it was a five way split and in the winter time the bill went from with the gas, lights and water and everything went from $800 to $1,600 so that made us go over what we’re allowed to pay for the utilities. We weren’t paying rent then we decided since the stuff was getting so high they split it up in five ways we all had bingo at the same time so at the winter time those bills jumped to 700/800 a month but we’re going to be moving in the next couple of weeks.

Marcia: You’re still able to write a check to pay for your utilities?

Mr. Washington: We write the check when we get the full total bill, its split five ways to the Post VFW 3015 for utilities.

Marcia: The only thing the cap is doing is giving you an amount you’re using in calculating the bingo tax that you owe. For the amount that’s there, which is the amount that everybody has been using all along which is the amount that was granted under regulation and licensing. The difference that you’re talking about is a few dollars less the bingo tax that you would be paying because you are still authorized to write a check in full for any cost you incur in the operation of bingo and raffle for the account. Increasing these amounts here would give you very little dollar amount benefit and the benefit would be less tax that you would be paying. We, in the future plan to look at these expenses but we have some other statutory information that we have to address before we go into this. I know that the costs have gone up but these are pretty nominal and I’m not sure that you understand that you’re still able to pay for your costs or the expenses that you’re incurring out of the account at 100%.

Mr. Washington: I thought we’re allowed so much.

Marcia: You’re allowed a limited amount just in calculating the 3% bingo tax.

Mr. Washington: On page 8, the inventory. We have a very small post with volunteers, we’re lucky if we get one to come one week, the next week you might not see him, especially in the summertime, people go on vacation. Should you have a sheet or something you send us that we can use?

Marcia: We can send you a sheet that we think might help you, we choose not to impose those kind of activities on the club it’s a very similar process what you have and what you start with and at the end of the month what you have left should be your bingo, pull-tab inventory that you have on hand.

Mr. Washington: But what I’m saying you put your number down to start then you go through your selling effect then you might in the middle there might be a skip in-between those a lot of times there is a loss in the nine pack. We sell a nine pack for $5.00 first half following the second half and due to the series of numbers it don’t come out, some of them do some of them don’t. I don’t know if it’s in the shipment at the factory?

Marcia: Is that an issue with the distributor about the inventory that you’re receiving?

Mr. Washington: We get all the stuff from the Southwest Bingo, it’s all packaged and sealed up. We can’t tell whether it’s bad or not bad until we start getting into it and selling it.

Marcia: When it does happen, you would apply the same principal for inventory you would by documenting the serial number and the amount in the packet received from your distributor and any discrepancies you would note that in that packet there was a discrepancy at that time. The issue is not for you to account for each card individually, the issue is for you to keep an accounting of the inventory you have on hand so that any point in time you’re accountable and you need to keep it very simple but if you need a form, then we can forward you a sample.

Mr. Washington: I’d like to see a form then I can make up a form myself and send it back to you. My last thing is front and back of the checks, lot of banks charge you. We write them a check whatever the jackpot is an they cash it, the only thing on the back of the check is the person that cashed it. This don’t make sense to me. The bank won’t cash the check unless it has two signatures but once that check leaves our hand and whoever cash it, there’s only one signature on the back. Is there a certain reason for that? Cause there’s nothing on the back of it.

Commissioner Dutton: That’s the information we need. We want to know who cashed the check, it’s that simple.

Michelle: Especially, if it’s for charity, it’s just a fraud deterrent. I’ve talked to a lot of the banks in Clovis and most of them aren’t charging any fees for check images so if you can give me your bank name?

Mr. Washington: I got lucky because we’ve been going to the same bank for 42 years. I know the bookkeeper, we pay no fees.

Arthur Holguin, NM Sheriff’s & Police Association: I just have a couple of questions on page 7, item F. There are some things I want to get cleared up that I didn’t quite understand from your answer. Are you looking at changing these caps to make them a little more reasonable based on the economics of today vs. the economics of twenty some odd years when these were put into place?

Marcia: At this time, we’re using the same amount. We have the option of looking at that and reviewing that to determine if we’re keeping the expenses and the amounts, however our choices are changed we’ve given staff a draft statute and within that there is going to be some changes to that where we will change allowable expenses, until then, we’re looking at the caps.

Mr. Holguin: By not having to address the allowable expenses meaning that the caps are going to go away and we won’t be paying taxes, we won’t be paying the initial tax above these or you just want to delete this language?

Marcia: The idea is right now we are looking at language which might allow us to look at bingo tax, gross vs. the net.

Michelle: We decided to leave the caps as they are because the bingo tax is only 3% as opposed to gross receipts tax which is 6.875%.

Marcia: Until we get that information, if we pursue looking at an avenue of trying to go for gross vs. the net, that will eliminate expense caps altogether. So when we find out that that is not an option, we’ll go back and revisit these.

Mr. Holguin: Payroll taxes are not addressed in these caps and then security expenses and it’s clearly spelled out here, they are not to be calculated as a bonafide expense for purposes of calculating the bingo tax, why is that?

Marcia: Payroll tax was never an itemized expense. There is nothing in the rules that allows us to do that.

Frank Baca: I have a letter that was sent to us. I’d like to read it just for the record. Dated May 19, 2008, signed by Defina Trujillo, Gaming Manager at St. Vincent de Paul Catholic Church and her comment in regards to section 5 #11, she states: “I would like to offer my opinion of the above subject I strongly disagree with the proposed operating procedures. Our operation is very small, we have two occasions, one day a week. As we operate now we are finished by 9:00 pm by closing out each session it would keep us there until 10:00 pm. Weekly deposits average $500.00 sometimes more but no where ever near $10,000.00”.

Marcia: We’ve allowed them, what we want is the money kept separate at each occasion because the money needs to be accounted for each occasion as long as the accounting is kept separate, they can choose to finalize it the next day or when they get a chance and make a deposit once a week. The issue is the accounting of the money for each occasion reporting and keeping it separate is the issue.

Michelle: And keeping the money secure too.

Frank Baca: You are correct it is in the policy under 11D, so we can just write to her that that issue has been addressed.

Commissioner Dutton: moved to approve the policy and rulemaking that had just gone over. Second: D. Padilla.

Frank Baca: As a point of clarification there were two issues that I thought there may be some thought to change in regards to the policy that was under Page 11, the $100 amount for the raffle.

Chairman Norvell: I didn’t know that Marcia and Michelle had any serious objections to increasing that number.

Marcia: I think we settled on the $100 amount because we had no amount previously. The issue is keeping documentation for activity that’s being conducted on hand should there be an issue. I suggested the $100 amount. The other one that was discussed was section 5B pull tab operations and I think Michelle indicated that we don’t want to require a daily close out of pull-tab machines.

Chairman Norvell: What is your suggested language change?

Michelle: Use two separate sentences. I will give to Kelly.

Frank Baca: Would it be weekly that you would want it to be closed out on the dispensing machines?

Michelle: I think it should be weekly and at the end of the month.

Commissioner Dutton: I would move to adopt the bingo policy as presented increasing the amount from $100 to $250.00 and clarifying the language with regard to pull-tabs to specify the pull-tab machine. Second: D. Padilla. There was no further discussion on this matter. Vote: 4-0. A. Rael, D. Dutton D. Norvell and D. Padilla.

7 Presentation of the FY-2007 Audit of NM Gaming Control Board by Meyners + Company, LLC.

Janet Pacheco Morton – Engagement Manager on the Audit of the Gaming Control Board as of June 30, 2007.

Copies of presentation have been handed out to Board members. What I’d like to over today is the opinion on the audit report of the required communications that we have to report to you as the Board and any findings. We performed the financial audit of the Gaming Board as of June 30, 2007 and we have given the Board an unqualified opinion which means that it is the best opinion that you could receive or obtain from a financial statement audit. That is very good. We also considered the internal control structure of the Board and found two control deficiencies related to reconciliation of compensated absences with the newly implemented share system and also to the prior year audited year balances and we considered that to be a deficiency. Another deficiency is with regards to the general ledger reconciliations as it relates to accounts payable and reversions to the State General Fund and the reasons that these were deficiencies is because we had some associated audit adjustments to these accounts that could potentially become material in the future. Our responsibility as auditors under government auditing standards is that we perform the audit to obtain reasonable assurance that the Board’s financial statements are materially stated and we have done that through our audit procedures. There were no new policies or changes to existing policies for the Board this year and no new significant accounting estimates. The only estimate that the Board has at this point an time is the lives of capital assets on the books. As far as the audit adjustments are concerned, there were seven. There were two reclassification adjustments which had no affect on the bottom line or your fund balance net assets so to speak, there were three audit adjustment regarding reversions to the State General Fund. One was to reverse prior year reversion liability the other was to post the current year reversion liability and an additional entry to increase the reversion liability after we reviewed the liability that the Board provided to us. There were two accounts payable accounts that were adjusted tied to the subsidiary ledgers of the Board. The reconciliations between the subsidiary ledgers and the share systems there was no link between the two so there were adjustments related to that. Now as far as the number of adjustments, this is a fairly small amount of adjustments for a governmental agency for this size so I would say it’s a fair presentation that on the audit.

Commissioner Padilla: Are any of these material changes?

Ms. Morton: The net affect was immaterial, yes. If we move on to required communications these are the communications that we as auditors have to communicate to the Board. There were no disagreements with management, we had no consultation with other independent auditors, we did not have any issues discussed prior to retention and we had no difficulties that we encountered during our performance of the audit. There is one additional finding that didn’t rise to the level of a significant deficiency and that was the Board vacancy. There was a Board vacancy as of the prior year and as of June 30, 2007 it had not been filled. Per New Mexico statutes that vacancy has to be filled within 30 days so that was listed as another finding. That is our presentation today, does anyone have any questions?

Commissioner Dutton: Ms. Morton I don’t have any questions with regard to the presentation, but in the future let’s leave off any religious symbols from the paperwork that we get. We have a lot of diversity within our agency and leaving the symbols off would make me feel much more comfortable.

Ms. Morton: Absolutely Sir, and just to clarify that’s a plus symbol, an addition symbol. But, you’re right it does have the appearance to be construed as something else.

There was no further discussion. Commissioner Padilla moved to accept the 2007 audit presentation for the State of New Mexico Gaming Control Board. Second: D. Dutton. Vote: 4-0. A. Rael, D. Dutton D. Norvell and D. Padilla.

8 Public Comments. There were no public comments.

9 Adjournment. There being no other business to come before the Board, Chairman David Norvell entertained a motion to adjourn. D. Dutton. Second: D. Padilla. Vote: 4-0. All voted in favor of the motion: A. Rael, D. Dutton, D. Norvell and D. Padilla.

/s/David Norvell, Esq. Date Approved: 07-15-08

Chairman