MISSISSIPPI GAMING COMMISSION MONTHLY MEETING JULY 29, 1992 BE IT REMEMBERED that the Mississippi Gaming Commission met at 10:00 a.m., Wednesday, July 29, 1992, in the Appropriations Committee Room on the second floor of the Mississippi State Capitol Building, Jackson, Mississippi. In attendance were: Ed Buelow, Jr., Chairman and Commissioner of MSTC, Presiding Harvey Johnson, Jr., Associate Commissioner, MSTC William W. Tann, Associate Commissioner, MSTC Bruce Nourse, Deputy Executive Director, MS Gaming Commission M. Gene Hill, Chief, Investigations, MS Gaming Commission Patsy Knowles, Investigator, MS Gaming Commission Ronald Statham, Investigator, MS Gaming Commission Jean Watkins, Investigator, MS Gaming Commission Allen Godfrey, Tax Auditor, Miscellaneous Tax Division, MSTC Bobby Long, Legal Division, MSTC Judy Stein, Legal Division, MSTC Wilson Carroll, Attorney General's Office, Jackson, MS Sam Begley, Maxey, Pigott, Wann & Begley Michael Collins, City of Biloxi F. J. Cuquet, Tunica Casino Ed Ellers, President Casino Ed Ernst, Riverboat Corporation of MS/Isle of Capri Casino Chris Gibase, MS. Riverboat Amusement, Ltd./Biloxi Belle Bernard Goldstein, Riverboat Corp. of MS/Isle of Capri Casino Lee Gore, Gulf Coast Research Lab, Biloxi Pete Halat, City of Biloxi Tim Hinkley, General Manager, Isle of Capri Casino Bart Jacka, Bally Gaming, Inc. Kay Johnson, Clerk, City of Bay St. Louis Cliff Kirkland, City of Biloxi Scott Leavenway, Mardi Gras Casino Corp., RCM, Jackson, MS Charles Liberis, MS Gaming Corporation Carol Mabry, Families for Quality Life Alan Maiss, President, Bally Manufacturing Corporation Buddy Medlin, Medlin & Associates Neil Miller, MS Riverboat Amusement Corp./Biloxi Belle Casino Dan M. McDaniel, Southern Elegance Cruise Line Michael McDermott, City of Biloxi Alan Moore, Bally Gaming, Inc. David Nichols, City of Biloxi Michael Olivier, Harrison County Development Commission Donald Rafferty, Attorney, Bay St. Louis Keith Rogers, Families for Quality Life Tommy Shepherd, Watkins, Ludlam & Stennis Bill Smith, Bally Gaming, Inc. Alan Solomon, Riverboat Corp. of MS, Inc./Isle of Capri Casino Matthew B. Walker, Tunica Casino Jim Warren, MS Riverboat Amusement, Ltd./Biloxi Belle Casino Charles Wilbanks, President Casino Bob Wood, Tunica Casino Commissioner Buelow called the meeting to order at 10:05 a.m. and Mr. Nourse asked that item III. A. - Recommendation for Final Approval to Commence Gaming Operations: Riverboat Corporation of Mississippi, Inc. [RCM], d/b/a Isle of Capri, Biloxi, MS, be moved to the first item of business for this meeting. Condition "E" of the licensing for this entity states that licensee must submit a letter to the Commission from the Institute of Higher Learning [IHL] which approves the site of the licensee. Mr. Nourse turned the floor over to Scott Leavenway, counsel for RCM, who in turn introduced

Pete Halat, representing the City of Biloxi [Biloxi]. Mr. Halat informed the Commission that Biloxi has a contract with the Department of Housing and Urban Development [HUD] which requires Biloxi to meet certain national objectives. In order to receive HUD money, one caveat of the HUD contract demands the incorporation of all leases with the IHL. RCM has an exclusive lease on the Point Cadet site for the establishment of a gaming operation, and since IHL has raised concerns about the possibility of additional gaming operations at the Point Cadet site, RCM and Biloxi are willing to enter into a contract with IHL stating no additional developments of gaming operations will be put into that area. As of today, Biloxi has not met any of the aforementioned HUD national objectives, but feels that with the integration of the Isle of Capri Casino it will be able to meet them. Mr. Halat distributed a letter from Sandra Freeman, writing on behalf of the Jackson, MS, HUD Office, received by Biloxi in response to Biloxi's inquiry as to what the impact, if any, would be on Biloxi's contract with HUD in the event of a rescission of leases. Mr. Halat read a sentence from Ms. Freeman's letter that he had previously highlighted for the Commission: "If leases are terminated without provisions for addressing this national policy objective, all CDBG funds expended at Point Cadet would be unallowable costs". Mr. Halat then told the Commission that these "unallowable costs", approximately 4.1 million dollars, would have to be repaid by Biloxi to HUD, and that all monies Biloxi receives from RCM will be reprogrammed back to HUD. Mr. Halat concluded his presentation by stating that all but this one condition of IHL has been met, but all parties involved are striving to work out the problem. Lee Gore, representing IHL, stated that the primary interest of IHL's Board of Trustees is to recover property at Point Cadet to prevent further development of gaming establishments on the property owned by IHL and leased to Biloxi and the Point Cadet Development Corporation. Upon further questioning by Mr. Nourse, Mr. Gore stated that although he is not authorized to speak for the IHL Board of Trustees, if a condition guaranteeing that there would be no expansion of the casino operations south of Highway 90 and east of the southern extension of the IHL property was placed on the license, this condition would prevent development, which is one of IHL's objections. Further discussion ensued, and Commissioners Tann and Johnson both stated that the original condition for RCM's licensure dealt with property infringement only; not the issue regarding leases. Mr. Gore stated that it was his understanding that two issues, the property line dispute and the school issue, were involved. Following further discussion, Commissioner Buelow turned the floor over to Mr. Nourse for a recommendation. Mr. Nourse recommended approval of the request by RCM to amend condition "E" placed on its license by eliminating the requirement of the receipt of a nonobjection letter from IHL if RCM provides the Commission with sufficient matter demonstrating that it has not and is not infringing on IHL's property. Mr. Nourse continued by stating that he believes the infringement matter has been discussed and he does not believe that it is an issue at this point. He concluded this recommendation by requesting that an additional condition be placed upon this recommendation, stating that if approval is given to RCM to commence gaming operations the Commission will attach a condition to that approval that reads RCM will not extend its casino to the Point Cadet area south of Highway 90 and east of the southern extension of the common property line between the Gulf Coast Research Laboratory and the Isle of Capri. Commissioner Tann motioned to accept this recommendation and Commissioner Johnson seconded the motion. The motion passed with Commissioner Buelow abstaining. Mr. Nourse, stating that the next item was the application for approval to commence gaming operations, turned the floor over to Scott Leavenway, who in turn introduced Tim Hinkley, General Manager of the Isle of Capri Casino. Mr. Hinkley distributed photographs of the present site to the Commissioners and gave a short presentation. Work permits are being approved and temporary work permits are being issued until a full investigation can occur. All but one agency approval has been received, but the US Coast Guard, the one outstanding approval, has inspected the vessel and has given verbal approval which will be followed shortly by written approval. Mr. Nourse recommended final approval to commence gaming for Riverboat Corporation of Mississippi, Inc. at the Isle of Capri Casino, with the following conditions:

1) licensee will not extend its casino in the Point Cadet area south of Highway 90 and east of the southern extension of the common property line between the Gulf Coast Research Laboratory and the Isle of Capri Casino, to include through a sublease; and

2) 2) licensee will not commence gaming operations until the licensee has certified to the Executive Director that all required permits have been received, and approval is granted by the Executive Director. The recommendation of the Executive Director to grant final approval to RCM to commence gaming operations at the Isle of Capri Casino passed 2-0, with Commissioner Buelow abstaining from voting.

For the next item on the agenda, Bally Manufacturing Licensure and Suitability, Alan Moore, representing Bally Gaming, Inc. introduced Alan Maiss, President of Bally Gaming, Bart Jacka, Director of Corporate Compliance, and Bill Smith, Manager of Product Compliance. The representatives gave a presentation to and answered questions from the Commissioners, then the floor was returned to Mr. Nourse for his recommendation. Mr. Nourse recommended approval of the application for a Manufacturer and Distributor License filed by Bally Gaming, Inc. and that Alan Maiss be found suitable to be associated with the licensee as its President. He also recommended that the following conditions be placed on the issuance of, the license: the licensee will continue to comply with the laws of Mississippi and particularly the MS Gaming Control Act; the licensee will continue to comply with all the policies, rules and regulations adopted by the MS Gaming Commission; and the finding of suitability of Mr. Maiss is conditioned on approval by the Executive Director after reviewing the results of an FBI fingerprint check which has not been received by the Gaming Commission as of today. He concluded by recommending approval of the application for registration of the following publicly traded companies: Bally Manufacturing Corporation and Bally Gaming International, Inc. Mr. Nourse stated that the above mentioned conditions are the standard conditions placed upon all manufacturers and distributors. Commissioner Johnson moved to accept the recommendation of the Executive Director and Commissioner Tann seconded the motion. The recommendation passed unanimously. The next item of the agenda was the finding of suitability for Tim Hinkley as general manager and casino manager of the Isle of Capri Casino. All other officers, directors and shareholders were previously approved at the initial licensing stage for RCM. Mr. Nourse recommended that Tim Hinkley be found suitable to be associated with the license issued to RCM as the General Manager and Casino Manager of the Isle of Capri Casino with the condition that the Executive Director give final approval once the FBI fingerprint check is received and reviewed. Commissioners Tann and Johnson moved and seconded to accept this recommendation, and the recommendation to find Tim Hinkley suitable as General Manager and Casino Manager of the Isle of Capri Casino with the one stated condition was passed unanimously. Ed Ellers distributed photographs of the President Riverboat Casino and gave a short presentation on the current status of this casino. The soft opening, scheduled for August 13 and 14, will be limited to invited guests, limited hours and restricted play, and the casino will shut down to test all systems before opening to the public on August 15. Mr. Ellers stated that there is currently nothing pending or scheduled before a Court regarding litigation and/or arbitration which would prevent the opening on August 15. Four approval letters/permits are outstanding: the Coast Guard, which is inspecting the vessel today; the U.S. Army Corps of Engineers, which has inspected and has stated that the permit will be issued on August 4; the city of Biloxi permits and approvals--all appropriate documentation has been filed to obtain permits for WF-1 zoning ordinance, the architectural landscape committee has unanimously approved the site, and the Biloxi City Council has verbally approved the casino and a formal written approval is forthcoming. The final approval needed is from the Gaming Commission. Mr. Nourse recommended approval of the President Riverboat Casino Mississippi, Inc. application for final approval to commence gaming operations with the following condition: the licensee, will not commence gaming operations until the licensee has certified to the Executive Director that all required permits have been received and approval is granted by the Executive Director. Commissioners Tann and Johnson moved and seconded to accept the recommendation of the Executive Director for final approval to commence gaming operations for the President Riverboat Casino Mississippi, Inc. and it passed unanimously. Jim Warren distributed photographs of the Biloxi Belle Casino to the Commissioners and introduced Neil Miller and Chris Gibase. The soft opening date is scheduled for August 25, and ABC approval is all this entity is lacking. Mr. Nourse recommended approval of the Mississippi Riverboat Amusement, Ltd., d/b/a the Biloxi Belle, application for final approval to commence gaming operations with the following condition: the licensee will not commence gaming operations until the licensee has certified to the Executive Director that all required permits have been received and approval is given by the Executive

Director. Commissioners Tann and Johnson moved and seconded to accept the recommendation of the Executive Director for final approval to commence aming operations for Mississippi Riverboat Amusement, Ltd., d/b/a the Biloxi Belle, and it passed unanimously. For the next item on the agenda, status report of Gaming Licensee (IV.), Sam Begley informed the Commission that the proposed opening date for Lady Luck Mississippi, Inc. in March of 1993. Construction on the boat is proceeding and construction on the parking facility will begin shortly. A work permit from the U.S. Army Corps of Engineers and approval from the local government zoning board have been secured. Although no formal agreement has been reached, Andy Thompkins is in negotiations with Jackpot Enterprises regarding a joint venture. Scott Leavenway, representing Mardi Gras Casino Corporation, d/b/a Casino Magic in Bay St. Louis, informed the Commission that the opening date for the approximately 43,000 square foot casino is scheduled for September, 1992. The barge is onsite and construction is ongoing. The dealer school, located in Bay St. Louis, has been open for approximately a month. Agency checks have been sent out and a few have been received. Additional lands around the facility have been obtained and future plans include an 18-hole golf course and a hotel. Bob Wood, representing Tunica Casino, distributed photographs to the Commissioners which showed the present site and ongoing site construction. The construction of the vessel is ongoing and nearing completion in Mobile, Alabama, and is scheduled to leave Mobile around the 12th of August and arrive in Tunica 10 to 14 days later. The dealer school, located in Tunica, is free of charge, accepts job applications and is currently interviewing potential employees. Work permits will begin being submitted within a week to 10 days. The opening date is scheduled for September 15, 1992, and it is hoped that Tunica Casino will be on the August agenda for final approval. The County Board of Supervisors has requested assistance from Mississippi Development and Economic and Community Development for construction of an access road. Construction of this project should begin Spring 1993 and be completed by late Summer. Commissioner Johnson repeated the condition on the license that stated an estimated cost and sources of funds for this project are required to be submitted to the Commission for its review. Mr. Nourse said that he would closely monitor this situation. The Commission returned to agenda item I. and the minutes of the June 22, 1992 Special Meeting, the June 24, 1992 Regular Meeting, the July 2, 1992 Special Meeting, and, although not on the agenda, the July 24, 1992 Executive Session were all approved as written. For agenda item V.A., Update, Legal Matters, Wilson Carroll informed the Commission that Terrell Ladner filed a lawsuit involving the denial of the preliminary site approval and the Pratt entity has filed a lawsuit against the Gaming Commission specifically seeking reversal of the decision to grant the license to the President Casino at the Broadwater Beach Hotel. Mr. Carroll anticipates his having a draft of Bingo Regulations for the Commissioner's review prior to the regular August Gaming Commission meeting so that they may be adopted at the regular August meeting. Upon questioning by Sam Begley, Commissioner Buelow stated that once a draft of Bingo Regulations is prepared it can be released to all interested parties prior to the August meeting. Mr. Carroll began agenda item V.B., Bingo Division Update, by stating that the bingo application packet includes separate applications for manufacturers, distributors, operators, commercial lessors and charitable organizations. Commission action is required to adopt a fee structure in association with these applications. Following an extensive discussion, Mr. Nourse made the following recommendations:

1) the Commission find that an imminent peril to public safety and welfare exists due to the fact that this agency is required by law to issue bingo licenses, but cannot assure that these applications will be handled in a manner which will protect the public interest and welfare without immediate adoption of a fee structure;

2) 2) the Commission immediately adopt the following fee structure as a rule of the Commission: Charitable Organization License $50.00 due at time of application; Manufacturers License-$2,500.00 due at time of application; Distributor's License-$2,500.00 due at time of application; Operator's License-$2,500.00 due at time of application, plus a) $50.00 per month per video Bingo and video pull tab machine due by 15th of succeeding month in which machine was used, and b) 5% of net proceeds on manual pull tabs due by 15th of succeeding month in which proceeds were earned; and Commercial Lessor's License-$2,500.00 due at time of application,

which will be credited to subsequent fees due, and 10% of annual gross revenue derived from the lease, which will be due by 15th of succeeding month in which lease payments were received. [SEE EXHIBIT "A"] All fees must be paid at time of application by

certified check made payable to the Gaming Commission, which will forward all payments to the Miscellaneous Division of the Tax Commission; and

3) at the next regular meeting of the Gaming Commission this same fee structure will be adopted by the Commission as an ordinary rule along with the remainder of the bingo regulations thus allowing a thirty day comment period for interested parties to submit responses. Commissioners Johnson and Tann moved and seconded to accept these recommendations of the Executive Director, and this motion passed unanimously. A temporary bingo license will be issued as each application is received, and the Bingo Division has 60 days from the receipt of an application to render a decision on that temporary license, to deny or approve a one-year license to that applicant. The Miscellaneous Division of the Tax Commission will issue/sell the 25 cents per head tickets that the law identifies, and it will be the duty of bingo enforcement personnel to ensure that all patrons are sold these tickets in order to participate in the games. For agenda Item V.C., Update on Work Permits, Mr. Nourse stated that all felons are precluded from being issued work permits in gaming operations. Misdemeanor gaming violators will be looked at on a case by case basis. A temporary work permit will be issued, but by law a regular work permit must be issued within 90 days of application. Bobby Long informed the Commission that he saw no problem with the release which the IRS wishes to attach to all work permit applications in order to monitor an individual's tax compliance. It was decided that the release may be attached to the work permit application and failure to sign this release would be a disqualifier for a work permit. A short discussion ensued regarding item V.D., Chips and Tokens, but no action was taken on this item. Mr. Nourse had earlier distributed tokens and chips that had been previously approved for the Biloxi operations. After an extensive discussion on agenda item VI., Removal of Disability of Minority, it was decided that Wilson Carroll would draft a letter to send to judges in counties where boats are and will be which would request that the removal of disability of minority not include casinos. There being no further business, the meeting was adjourned at 1:40 p.m. The next regular meeting is scheduled for August 26, 1992, at 10:00 a.m.

ACTING GAMING SECRETARY

MISSISSIPPI GAMING COMMISSION BINGO LICENSE_ APPLICATION FEES All funds must be paid by certified check and are non refundable. Charitable Organization Due at time of

License Fee $ 50 application.

Manufacturer's Due at time of

License Fee $ 2,500 application.

Distributor's Due at time of

License Fee $ 2,500 application.

Operator's Due at time of

License Fee $ 2,500 application.

$ 50 per month, Due by 15th of per video Bingo succeeding month and video pull in which machine tab machine. was used.

5% of net Due by 15th of proceeds on succeeding month manual pull in which proceeds

tabs. were earned.

Commercial Lessor's Due at time of

License Fee $ 2,500 application, will be credited to subsequent fees due.

10% of annual Due by 15th of gross revenues succeeding month derived from in which lease the lease. payments were received. EXHIBIT "A" PARTIAL TRANSCRIPT: JULY 29, 1992 - REGULAR MEETING Commissioner Buelow called the meeting to order at 10:05 a.m., and Mr. Nourse _requested that item III. A. be the first thing discussed for today's meeting. Mr. Nourse reminded the Commission that condition "E" of licensure for RCM was to produce a letter from IHL stating that it approves the site of RCM. Mr. Nourse turned the floor over to Scott Leavenway, who in turn introduced Pete Halat, representing Biloxi, MS... HALAT: We have a contract with the Department of Housing and Urban Development (HUD) which requires Biloxi to meet certain national objectives to justify the money that was put into that project. At this particular time we have not met those national objectives. But HUD has been working very closely and cooperatively with the City of Biloxi to assist us in meeting those objectives. We feel with the integration of the Isle of Capri Casino we will finally be able to meet these objectives. One of the conditions that was raised by IHL was the possibility of additional gaming operations at the Point Cadet site. RCM has an

exclusive lease on those premises for the establishment of a gaming operation. We have talked with IHL. RCM and the City of Biloxi are willing to enter into a contract with IHL to say no additional developments of gaming operations will be put in that area. That should allay any concern that they have about that land area. When we prevailed upon the HUD to allow us to use that money we were given certain caveats and conditions that we had to meet. One of the conditions which I spoke of earlier was the national objective. In order to receive that money from HUD we entered into a contract with them that we would put this plan into effect. It's an overall plan. It covers the entire site. It doesn't just cover the 10 acres the City of Biloxi owns. It incorporates all the leases with the IHL. We received a letter from Sandra Freeman, the manager of Jackson, MS after we requested that she tell us what impact, if any, rescission of leases would have on our contract with her. She provided us a letter {Halat distributes handout}--read the highlighted part. "If the leases are terminated without provision for addressing this national policy objective, all CDBG funds expended at Point Cadet would be unallowable costs." Unallowable costs would have to be repaid by the City of Biloxi to HUD to the tune of approximately 4.1 million dollars. There are ways to accomplish what our negotiations focused on the past couple of weeks. The opening of the Isle of Capri Casino must not be delayed. We have met all but this one condition. We will work it out. BUELOW: When was this license issued? NOURSE: May 27th. BUELOW: Why have we waited? HALAT: Lack of communication between IHL, Biloxi, RCM. We felt they knew about the caveat. BUELOW: Anything else? LEE GORE: IHL Board of Trustees primary interest is to recover property at Point Cadet to prevent further development of gaming establishments on the property owned by IHL leased to Point Cadet Development Corporation/City of Biloxi. We have heard Mr. Halat's proposal to you which is substantially the same as we discussed yesterday and I am authorized to say that we are looking forward to taking that before the Board. BUELOW: Does this letter say you are withdrawing your objection to the granting of the lease? GORE: No sir. I am not authorized to withdraw the objection. BUELOW: We do not have a letter as required by the license? GORE: No sir, you do not. NOURSE: Would IHL be satisfied if a condition was placed to the license which would guarantee that there would not be expansion of the casino operations south of Highway 90 and east of the southern extension of the IHL property? GORE: I am not authorized to speak on behalf of the Board to that question, but I think if you examine our objection you will see that that would prevent development, which is one of our objections. BUELOW: Has the City of Biloxi paid up its lease? They were in arrears. GORE: They delivered their check of $95,000 about 4 o'clock yesterday afternoon. Which brings the payment up to date as of now. Due in January, did not become delinquent until March 31st. BUELOW: Is that the first time they've been delinquent on their lease agreement? GORE: No it is not.

TANN: I was the one that made the motion that we receive this. My understanding was that our expectations of that letter, or our concerns were addressing whether or not, as the lease spelled out in his letter, the property line; it looked like an overlap on parking in the property line situation and the determination of a school on that site. And I think those concerns have been addressed to my satisfaction. H.JOHNSON: I have a question for Mr. Gore. Following up on what Commissioner Tann said, was it your understanding that the context of our request for a letter was around the infringement issue, property infringement issue, not the issue regarding leases? GORE: Are you talking about the parking lot? H.JOHNSON: Right. GORE: That parking lot was shown on a freehand plat. If you will recall that was all the information we had at that time, until either right before that meeting started on May 27th or right after it began, that, their plat showed their parking lot is not where that original plat showed it. H.JOHNSON: As a result of reviewing that, and your raising that concern at the meeting in May, we asked that this letter be obtained indicating that IHL didn't have any problems and after being assured by the operator, the applicant, there was no infringement. GORE: My understanding was that was one issue, but also it would be a problem with the operation of the school. And there was some debate back and forth as to what there was, or wasn't, school, and as your regulations say. My understanding was that you wanted a letter addressing two issues, a no objection letter, which would be based on the parking lot issue. The other is the issue of the school itself which does have approximately 15,000 students annually, school age students coming through that property. IHL's concern is since the property is used as a laboratory and a teaching facility for school age children, they are inside the building and outside the building, on the grounds, and they are occasionally there overnight. Our concern is the increased traffic in that area. And we could not issue a letter resolving that because of the problem that we now found out--the City of Biloxi has no H.JOHNSON: It's just my recollection that the parking issue was the only thing; property infringement was the only thing that was hanging and the school issue was dispensed with at that meeting. HALAT: Two payments have been late. However there only have been two. The first one, dedicated to the payment on a piece of property that the City of Biloxi purchased; swapped out with IHL. First payment came due back in 1990. S.LEAVENWAY: No longer just a property line dispute. We recently learned this is not only an infringement issue but also on encroachment rights. We offered an agreement that we would not expand southernmost ... in a July 28th letter. We feel like the additional condition has been met. BUELOW: When did you enter an agreement between Biloxi/ RCM an exclusive right to that area? EDERNST: Prior to licensure. BUELOW: Approval on May 27th was it part of the lease agreement? EDERNST: We did not want the City to lease S.LEAVENWAY: Read that condition. It makes it sound like we want to expand. We're willing to give up that HALAT: Lease agreement. Was an agreement with another entity--exclusivity.

NOURSE: Addressing whether or not that condition has been met. On approval of license, no. BUELOW: Any other comments? R.ROGERS: Would it be possible for RCM to sublease this property? HALAT: The term of the lease agreement can not be S.LEAVENWAY: We don't intend to sublease. BUELOW: Any conditions on granting an opening? You're satisfied that lessee has met the requirements? TANN: Yes. H.JOHNSON: Yes. BUELOW: Of today I am concerned with what happens to that property. I'm not prepared to grant you a license until we have a formal agreement with the University. I'm not satisfied, exclusive rights to property. NOURSE: We can place a condition on the license to prevent RCM from expanding operations into the property. S.LEAVENAAY: This Commission has the authority to approve or disapprove any other applicant. NOURSE: To include a condition that this extension would not be allowed. S.LEAVENWAY: All licensee's licenses have the condition that it is only good for two years. BUELOW: All the stipulations on May 27th that have not been met yet H.JOHNSON: Don't condition renewal on IHL and RCM on working out problems. Our intent was to ensure everyone is satisfied on the parking property issue. The other issue I was not aware of. It was not my understanding that these other issues were part of the package. Let's go forward. It is important IHL and Biloxi work out their problems. Let's don't hold the opening up. BUELOW: I have no intention of approving any licenses that do not meet the full specifications of what we intended them to do. I'm satisfied that we waited until the last minute to try to approve this thing instead of trying to work it out months ago, as it should have been, as a condition of this lease, thinking that we can get down here and pressure us, and I'm, that's just not going to happen anymore. H.JOHNSON: I don't think that was a condition. We didn't see it as a condition at that time. I agree with you. I have a concern about withdrawing a condition. And I don't think we ought to go around withdrawing conditions and all that. I think we're going to have to be very careful as a Commission as to how we state our conditions and make sure everybody understands the particulars of those conditions. I don't think that was the case here. Now I'm afraid the condition was so broad, that everybody could interpret it the way they wanted to. And we're going to have to be more careful as to how we set forth conditions. I think the intent was not to be all encompassing. EDERNST: Our intent was not to go to the last minutes and hang you up. We first, we only learned of the expanded request on Friday from Bruce. Our understanding was the same as the two Commissioners who were sitting there. That issue was the property line dispute that we had a survey, that we delivered on that day and essentially, mistakenly relying on the assumption that that was the only issue we had, at the point, we presented a copy of the survey to Mr. Gore, and he said we'll get back to you. And subsequently with the survey was certified. This was not something, where we went ahead with the idea

that USM would resolve at the end. And quite frankly we were not sure why we weren't hearing back about the property line issue. We resolved the condition that was placed on the license to our understanding. We learned of additional concerns that they had on Friday. The first communication we had from IHL was the letter you received yesterday, that issue from IHL. We thought the issue had been resolved, and we could not force IHL, or any other party, to give me something that I can't control. We've done everything that we could. BUELOW: We may owe you an apology. We knew about these conditions weeks ago. We were of the understanding that the City of Biloxi and USM were in discussions at that time. HALAT: We first heard about the additional conditions on June 6th. That conversation followed with a letter of June 12th. On June 16th I met with Mr. Gore and Dr. Lucas. EDERNST: The 5-point letter really didn't deal with the issue. The 5-point letter said I want these 5 things. And that issue wasn't raised. Their concern is they are being surrounded. We would have clearly told them that day that our purpose was only to not allow another casino. NOURSE: I recommend approval of the request by RCM to amend condition E placed on its license by eliminating the requirement of the receipt of a nonobjection letter from IHL, if RCM provides the Commission with sufficient matter demonstrating that RCM has not and is not infringing on IHL's property. I believe the infringement matter has been discussed. I do not believe that that is an issue at this point. I will make that recommendation with the additional condition to satisfy the Commission--if approval is given for them to commence gaming operations we will attach a condition to that approval that reads RCM will not extend its casino to the Point Cadet area south of Highway 90 and east of the southern extension of the common property line between the Gulf Coast Research Laboratory and the Isle of Capri. Now before the Commission votes on this Mr. Lee Gore has requested that he make a statement. GORE: No statement. TANN: I'll make the motion that we grant the opening as requested by the Executive Director. NOURSE: We are addressing that condition. The next recommendation will be the opening. TANN: That we are satisfied that we have been given evidence that they have done everything that they need to do to satisfy that condition. BUELOW: All in favor say Aye. Oppose, no. It passes. Next. NOURSE: Next would be the application of RCM for final approval to commence gaming operations in Biloxi. BUELOW: Wait a minute. You skipped over that second condition. NOURSE: That will be a condition on this approval. This approval coming up, you have another vote, and that condition will be placed on this. So before you give them the right to open, to commence gaming operations, that condition will be placed ,on it, that they will not expand into that IHL property. Or that will be a condition on this last approval. BUELOW: What prevents someone else from expanding into that area? NOURSE: The Commission. BUELOW: I mean other than the Commission. If someone else were to come in and make an application and the Commission were to grant it, they could get it. NOURSE: If they have a lease with the City, certainly.

S.LEAVENWAY: We have the exclusive right to do that. BUELOW: You're saying Riverboat has the exclusive rights to go in there and they have a document with the City. I want to see it. TANN: You might want to add to that any sublease agreement. That would preclude anyone else. H.JOHNSON: What about the regulatory issue? NOURSE: We have now the application for approval to commence gaming operations. What I've done is ask them to bring some photos of the property so you can get a current picture of what it looks like. We'll also address the agency permits and licenses that they are in the process of getting. SCOTT LEAVENWAY INTRODUCED TIM HINKLEY, GENERAL MANAGER Hinkley distributed photographs of the site as it was as of Monday afternoon. HINKLEY: Our parking construction is being finished. We will have approximately a 300 car parking lot on the south side of the highway and another approximately 150 car spots on the north side of the highway. We finished all of our concreting yesterday. The landscaping is currently going on. When I left yesterday afternoon a great majority of the sod was already put down. The landscaping company was bringing in all the shrubbery and plants. We're planting trees on Thursday. This site has been irrigated so we'll be able to take good care of that property. We're going to be going right along on the east side of the building. On one of the photos where it shows a tract of land there, we'll be landscaping and we'll be putting a canopy down for the patrons as they go to enter our pavilion. The mooring itself is just about done. We started putting our piles down on Monday. Those should be completed and completely in place today, and then we'll put the boats adjacent to the Boarding Pavilion. The boats will be docked. I really think if you take a look at these (you'll see) they're going at flight speed. We've had over 100 workers everyday onsite finishing this project up. And I would almost guess by tomorrow evening we'll be totally ready to go for Saturday. The next portion that we included in these booklets is where we stand with work permits. We have starting Saturday on our payroll, a total of 620 employees. The work permits that have been submitted, and this is as of yesterday afternoon, are 380, and those are work permits for those who have to be permitted. I had an outstanding balance of 45, and I know that we were taking a number up to Jackson yesterday afternoon, so we should be up to 100% by the end of the day. BUELOW: Where do you stand on having them approved? NOURSE: We're in the process of approving those right now and getting temporaries printed up to supply them by Thursday evening so that they would be in a position to open on Saturday. We'll be issuing temporary work permits initially so that we can conduct the investigations that may be a little more detailed than what we're doing initially. We'll discuss that at the work permit section of your agenda. HINKLEY: The last portion of this booklet is the outstanding agency approvals. We have attached all of these approvals from the various agencies with a heading that shows all of the different departments that have been checked off. The only department that we have not received a national letter of approval from is the US Coast Guard. We have received verbal approval yesterday that they are writing a letter. They were on the vessel today. Just going through our safety training with our staff, going through the drills. And the minute that's done they will be faxing the letter up to the Commission. So I think that we have supplied everything that we have been asked to submit. NOURSE: That's the only thing outstanding at this point. HINKLEY: That's right. BUELOW: Is there any reason why the letters from the Tax Commission aren't signed? NOURSE: I'm not sure. I'll follow up on it.

{Conversation regarding unsigned letters} H.JOHNSON: Did you see that the pilings are being installed now? HINKLEY: They are being put into place now. When I left there yesterday, there were four piles that we were finishing up with that were on the barge. We had one in, we were finishing the second one on the port side of the barge, and two on the starboard side today, and once they were finished we will bring the boats into place. BUELOW: Anything else? Questions? H.JOHNSON: Is someone going to be down, those things that are outstanding, like the conditions by the MS Department of Wildlife, Fisheries and Parks, deal with the placement of pilings and sidewalks and cluster piles and all that? NOURSE: Yes, I will recommend a condition that they still have to get all these approvals, but I will recommend that they certify to the Executive Director that they have met all conditions and then the Executive Director will give them final approval. H.JOHNSON: I guess what I'm saying is this letter from wildlife, Fisheries & Parks says that it's okay if you do these things. NOURSE: Well again, a condition I would make on my recommendation would be that they certify to me that they have everything. And once they have done that I will give them a final approval to open their doors to the public. And this may be an hour before they want to open. And I will make myself available to them this week, and, to give them the other approval as they need on the surveillance system, and be there for the opening to make sure they have all of these required permits before they open their doors to the public. That will be a condition on this approval. That's my recommendation. BUELOW: Okay. State your recommendation Mr. Nourse. NOURSE: I recommend approval of Riverboat Corporation of Mississippi's application for final approval to commence gaming operations with the following conditions: as previously stated that RCM will not extend its casino to the Point Cadet area south of Highway 90 and east of the southern extension of the common property line between the Gulf Coast Research Laboratory and RCM. To include, through a sublease. Also, I recommend that the licensee will not commence gaming operations until the licensee has certified to the Executive Director that all required permits have been received and approval is granted by the Executive Director. Which would satisfy your concern, Commissioner. They certify, to me, and once they can certify to me I would give them the final approval, without having to come back before the Commission again. H.JOHNSON: That's fine but we need to be careful that they understand, and you understand, that these letters, some of these letters, simply list out further conditions that must be met. For instance, on Internal Control, some of our people have some concerns about having certain things in place before you begin operating, so we need to not just take the letter on its face, but make sure that if there are any conditions within the letter that they also are met, and that's what you'll be certifying. NOURSE: The burden is on them to certify that to me. BUELOW: Well, hopefully in the future it will be all done by the time we get to this point, so we don't have to go back again. NOURSE: Mr. Chairman, realistically though, I think that we will also have on the agenda Biloxi Belle which is not to open until August 25th, with many of these things, these permits will not be able to be received until a very short period before opening. So, for them to have all these approvals a month ahead of time, as in this situation, could be very difficult, and that's why we still want to have the control of

making sure they have all these permits, and that would be the condition that I just addressed: that they certify to me, and then I give them a final approval. BUELOW: Well, you can solve that another way. You just don't meet until you've got all the approval, and then you meet and okay, it's up to you. All right, do you all want to make a motion to accept that? H.JOHNSON: So moved. TANN: Second. BUELOW: It has been moved to accept the motion of the Executive Director, all those in favor say aye. H.JOHNSON: Aye. TANN: Aye. BUELOW: Oppose? No. I would like to be recorded in the minutes as not voting on this application and on the recommendation concerning the letter from IHL. Next? NOURSE: Any questions? BUELOW: The next item is Bally Manufacturing Licensure and Suitability. {Agenda Item II}. ALAN MOORE: My name is Alan Moore, I'm here representing Bally Gaming, Inc. which has before the Commission an application for a license to manufacture and distribute. There are three corporate representatives of Bally Gaming we us today. Alan Maiss, Bart Jacka, and Bill Smith. They have prepared remarks, and since they have prepared remarks, if they will speak loudly and turn the microphone up and speak there, do they.need to come up here? ALAN MAISS: Good morning. Mr. Chairman, members of the Commission, ladies and gentlemen. I'm Alan Maiss, President of Bally Gaming, and I have with me today, two members of our management team. Mr. Bart. Jacka, who is Director of Corporate Compliance, and Mr. Bill Smith, who is Manager of Product Compliance. Bally has been a well known world leader, an innovator of coin operated machines business for decades. August 19, 1991 saw the emergence of a consolidated operation responsible for gaming machine manufacturing and distribution, world wide, under a new holding company, Bally Gaming International, Inc. which we refer to as BGII. Bally Gaming, the applicant today, is a subsidiary of BGII. That means our sister company, Bally Wolf, the German Wall Machine operating company. As part of its continuing ongoing restructuring plan, Bally Mfg. Corporation completed an initial offering of common stock to the public of BGII in November of 1991. Whereby, 3,450,000 shares of the 10,450,000 shares then outstanding, were sold. In addition, just recently on July 16th, Bally Mfg. Corp. completed an additional second public offering of 4,547,600 shares of the common stock of the company which it held. Bally Mfg. Corp. now holds approximately 22% of the outstanding stock of BGII. Bally Gaming distributes its gaming devices literally all over the world. Europe, South Pacific, the Far East, the Middle East, South America, Central America, the Caribbean, Africa, the Coastal Islands, and in Canada. The role in legalized gaming including Indian Gaming, in the United States, in recent years and in fact the past few months, has witnessed Bally's sales expansion beyond Nevada and New Jersey. South Dakota, Colorado, Louisiana, Iowa, Minnesota, Wisconsin, Maryland, South Carolina, West Virginia, Illinois, Arizona and Oregon are states currently involved, or about to become involved, with legal gaming machine operations. Bally Gaming and/or its predecessor have been continually licensed in Nevada and New Jersey for over a decade with no problems. More recently licensing has taken place in states just mentioned when required. To ensure proper conduct on our part, in both our external and internal distance relationships, a compliance officer, Bart Jacka, previously introduced here, monitors our activities on a full time basis. A Compliance Committee, as mandated by both Nevada and New Jersey, provides additional security for management in its overall operation. We have applied for a distributor and manufacturer license for both gaming devices and our data systems here. Our system division provides software packages which on-line monitor the operation of our devices, both for the performance and security standpoint. The data produced is helpful to you and local governments for tax purposes. Should

you have any specific technical questions, I also have with me today our product compliance manager, Mr. Bill Smith, also previously introduced to 'you, and hopefully he and I can respond to your questions. Let me assure you Bally has both the technical competence and the overall ability as well as the desire to respond appropriately to the state of Mississippi in this new area of development. It is an industry with which we are very familiar. We stand ready to assist the Commission and its staff to accomplish both our objectives. You will find that we are outstanding corporate citizens. I would like to take this opportunity to thank Bruce Nourse, Gene Hill, Patsy Knowles for their professional processing of this application. If you have any questions whatsoever we will by happy to respond. NOURSE: Bill, could you explain to the Commission some of the safeguards built into the slot machines and the SDS system, relative to accounting and security of these machines. BILL SMITH: Bally equipment is currently produced with the state of the art technology as to our, this technology has been approved in every legal gaming jurisdiction throughout the world. We use the latest in microprocessing technology to ensure that the integrity of the device is present for both player and for the State of Mississippi. All of our random number generators have been thoroughly tested to ensure the integrity of the device to the customers. We can get a full accounting within the device as far as point in/point out, jackpots, security wide monitoring of all floor winnings, any inappropriate offense that might occur within the device. If our devices are in fact a two way data collecting data system, be it ours or somebody else's', then online monitoring any accounting data flow, and of course any security breaches or events or.... these know when the doors open or if any other occurrence has taken place. BUELOW: Have you ever been denied a license any place you have applied? ALAN MAISS: No sir. I would also like to add in reference to the SDS system, we have 9 of the 12 casinos in Atlantic City online wired to the SDS system. As we speak there are in excess of 22,000 machines online between Nevada and Atlantic City as well as a couple of situations outside of the county. BUELOW: Are there any other questions? H.JOHNSON: Can you explain the theoretical hold, the percentage, at 85%, what does that mean? ALAN MAISS: In essence what that means is if all of the possible events, jackpots, awards, every single possibility were to occur one time, we're talking now most easily about a wheel spinning, a wheel spinning slot machine, every combination occurred one time that was capable of occurring, the game would have a percentage of whole win for the house, and a percentage of payback for the playing customer. That in essence is the theoretical percentage of the game. If every possible combination happened one time, we call that, we refer to that cycle of a particular game, and it's different for each and every game as designed in terms of the nature of the game, features of the game as presented to the public. These are all worked out mathematically in advance and set out on paper, the theoretical percentage of the machine. H.JOHNSON: And so the number, the end value, varies from game to game, is that what you are saying? A.MAISS: As designed by the game. Designed in the game I should say. In essence gaming devices are approved by various jurisdictions, regulatory agencies, and must be played and must function randomly..... Again, the theoretical percentage is the percentage that if every possible combination as designed into a particular game will occur one time then it is the theoretical whole. Now as we all know, because of randomness, a player could have jackpots occur very aggressively at points of time, not so aggressively at other points of time. The machine goes through one entire cycle with every possible combination that could occur. NOURSE: I recommend approval of the application for a manufacturing and distributing license filed by Bally Gaming, Inc. and I recommend that Alan Maiss be found suitable to be associated with the licensee as its president. I also recommend the following conditions be placed on the issuance of the license: the licensee will continue to comply with the laws of Mississippi and particularly the MS Gaming Control Act; the licensee will continue to comply with all the policies, rules and regulations adopted by the MS Gaming

Commission; and the finding of suitability of Mr. Maiss is conditioned on approval by the Executive Director after reviewing the results of an FBI fingerprint check; additionally, I recommend approval of the application for registration of the following publicly traded companies: Bally Manufacturing Corporation, Bally Gaming International, Inc. The condition on Mr. Maiss, we have not received the FBI check back so we have put this as a condition. BUELOW: You've heard the recommendation. Any comments, questions? MAISS: Conditions? B.NOURSE: These are the standard conditions on all manufacturers and distributors. H.JOHNSON: So moved. TANK: Seconded. BUELOW: All in favor to approve the recommendation of Mr. Nourse, say aye. Aye. TANN: Aye. JOHNSON: Aye. BUELOW: Oppose, no. The ayes have it. Next you want to go to Mr. Hinkley? NOURSE: Mr. Hinkley's application is for a finding of suitability as general manager and casino manager of Isle of Capri. The Commission's policy is to not allow anyone to open to the public unless they have all of their officers, directors, shareholders and key employees, including the GM position and Casino Manager position licensed by the Commission. The Isle of Capri is basically going back complying with the Commission and getting these positions approved. If you have any questions for Mr. Hinkley he's present. BUELOW: Have all the other officers of this corporation been approved? We approved them at the licensee stage? NOURSE: We approved officers, directors and shareholders at the licensing. They had not designated a casino manager or a general manager at that time. They have since done so and we have investigated him. He is applying as both casino manager and general manager. They have also made application of another individual who will become casino manager upon approval by the Commission. At this point though, Mr. Hinkley will be licensed, or a recommendation for licensure, on GM and Casino Manager. BUELOW: Do you have a recommendation? NOURSE: Yes, I do. I recommend to the Commission that Tim Hinkley be found suitable to be associated with the license issued to Riverboat Corporation of Mississippi, as the general manager and casino manager of the Isle of Capri Casino; I also recommend the following conditions be placed on the finding of suitability: that the finding of suitability is conditioned on approval by the Executive Director of the individual after reviewing the results of an FBI Fingerprint check. Again, we haven't gotten that back. TANN: I so move that we accept the recommendation. BUELOW: It's been so moved that the recommendation be accepted. Is there any objection? Hearing none, then it is so approved. Next is President Riverboat Casino Mississippi Inc., President Casino. NOURSE: This is for the final approval to commence gaming operations at the Broadwater Beach Marina.

BUELOW: Do you have a presentation you want to make first? ED ELLERS: We have a very, short presentation which involves some pictures. NOURSE: I've requested that all these applicants for final approval bring photos, the most recent photos they have of the operation. ELLERS: We only had time to make one set. Essentially, pictures of the vessel, the inside of the vessel where the gaming equipment is being installed, the site, and some of our people hiring people, going through the hiring process. We're well underway now. See, the vessel is right now at the port of Gulfport, it's been there since July the 9th, work has been progressing. There are pictures in there of the surveillance system, the kitchen and restaurant facilities. Only the table games have arrived and are set into place. The slots are arriving today, will be arriving today, tomorrow and Friday, and will be installed over the next week. Probably within the next week. The slots stands are in, it's just the machines themselves that are arriving now. We've hired approximately 300 employees, 350 employees as of today. We have outstanding job offers to another approximately 200. And we'll go up to a full complement of around 700 by August 13th, our soft opening date. By soft opening we mean that we will be only open for a limited number of hours, 12 noon to 12 midnight, we'll shut down, test our systems for two days to make sure that we're ready to handle 24-hour gaming. We don't want to go full time live for the first two days, because we want to make sure our systems work. We will make sure that everything is set before we allow gaming. We'll also limit the number of people the first two days to probably 4 to 500 per session. We don't want to, want a shake down for our people. That's our intention right now. The site is under construction, our paving contractor is out there with the parking lot, there are pictures as you can see of that work going on. Work with the moorings has also been going on for several weeks. We do not anticipate any stumbling block at this point unless of course it rains for the next ten days. Other than that we will be ready. We've made a lot of progress and a lot of effort was put out. We feel like we're in good shape. As far as the regulatory approval letter, we have provided Mr. Nourse with an update as of last Friday. I believe yesterday Mr. Wilbanks also consulted with the Commission office. We have received many approvals. The major three, actually four. One inspecting the vessel today, ones that are outstanding are is the Coast Guard, which is going through their nautical trials today. Jim Lowsklowski from the Mobile office said today that by next week those certifications ought to be finished. The U.S. Army Corps of Engineers permit, which is necessary to finish the pilings, is at its comments period, and by August 4th Jim Wynn, from the Army Corps of Engineers, has expressed to us as of 4:30 yesterday that the permit will be issued on the 4th of August. Just so I'm clear about this, we can proceed with what we're doing now with a nationwide permit. We do not need any special permit from the Corps to do the work that's occurring right now. When that work reaches a certain point then you cannot proceed under the nationwide permit. You must get a specific permit for the site. That's the permit we're talking about. 15 days from, in July, we filed with the Corps and it sat at the Corps on a desk. It took three weeks for the Corps to assign a number to it. The Corps recognizes that they did not act as promptly as they should, they have therefore said to us that as soon as the common period is over they are not going to delay one minute. They recognize that there was a lag time in there. Our third permit that is necessary is from the City of Biloxi. We have filed with the City of Biloxi the applications necessary to seek a WF-1, a zoning ordinance, we have filed with the City the appropriate documentation to obtain those permits. We have appeared before the architectural landscape committee the 22nd of June and received their approval by unanimous vote. We also appeared before the City Council on Monday and received, not their vote formally because they can't vote until their waiting period is up, but they've certainly given us every indication of doing it. Cliff Kirkland is here from the City of Biloxi, any questions you might have, he is the City Administrator. BUELOW: My sheet says that you await City Council action the week of July 13th. Is that wrong? NOURSE: There was a little delay in this. But they have received that approval.

ELLERS: Those are three of the major ones. The only major thing that we have that I am aware of is by Friday this week papers signed by Del??? for the Tax Commission, {Miscellaneous Division}. Other than that, I believe we have all of the necessary approvals or declarations of jurisdiction, whatever the appropriate language is. Of course, Mr. Nourse and his staff have to approve our surveillance and approve all the various things that they have to approve. BUELOW: And when is your anticipated opening? ELLERS: Soft opening on the 13th of August. That will be this restricted situation for the 13th and 14th. Invited guests, restricted play, test the systems, open to the public on the 15th. In terms of the opening for your purposes it will be the 13th. This is a brand new vessel that left the shipyard in June, completed in June. Absolutely brand new. It has never been used for any other purpose, any other place. Absolutely gorgeous vessel. Will make a wonderful casino. H.JOHNSON: Is it handicapped friendly? ELLERS: Oh absolutely. There are ramps to walk on. Even our old President in Iowa that was built in 1924 is handicapped accessible. Complies with the ADA, we have elevator service and ramps going up and down. Sections of the tables have been cut out so wheelchairs can be fit underneath. NOURSE: I have a question which is an obvious question. You have a condition on the license, the licensee will continue to provide the Commission all litigation and/or arbitration documentation 'as it is filed by or against the licensee. What could happen, I guess this is a legal question, between now and 13th with that litigation that could prevent you from opening? ELLERS: Being a lawyer but not practicing law, anything could happen. We don't see anything as likely to happen. There's nothing pending, there's no hearing pending, there's nothing before any Court, that would have the effect of preventing the opening. Nothing pending or scheduled before Court to prevent the opening on the 13th. BUELOW: Anything else? Recommendation? NOURSE: I recommend approval of the President Riverboat Casino Mississippi, Inc. application for final approval to commence gaming operations with the following condition: licensee will not commence gaming operations until the licensee has certified to the Executive Director that all required permits have been received and approval is granted by the Executive Director. H.JOHNSON: That's fine. As long as the permits mean approval of the agency. NOURSE: I fashioned that to address your concerns that before they open their doors on the 12th they've got to have it all, they have to certify it to me and then I have to give them the final approval. H.JOHNSON: Approval of all agencies, all permits in hand. NOURSE: Yes. The burden is on them to do that. All we're doing is monitoring them at this point. BUELOW: Seems like to me what we're doing here is we're adding another approval again, when they've already had three. What we need to do is get all this in hand before we call a special meeting. As opposed to making another approval. NOURSE: Well, I fashioned that condition to alleviate the Commission from having to call a special session. BUELOW: Okay. You move? TANN: I do.

H.JOHNSON: I second. BUELOW: Tann moves to accept the recommendation of the Executive Director. Further discussion? Comments? If not all those in favor vote aye. Aye. TANN/JOHNSON: Aye. BUELOW: Hearing none, it's approved. ELLERS: Thank you very much. You're all invited. TAPE IS BLANK. MS. RIVERBOAT AMUSEMENT-BILOXI BELLE. SECRETARY'S NOTES REFLECT PHOTOGRAPHS DISTRIBUTED BY JIM WARREN TO COMMISSIONERS. INTRODUCTION OF NEIL MILLER AND CHRIS GIBASE. ABC APPROVAL IS ONLY APPROVAL LACKING. SOFT OPENING DATE SET FOR AUGUST 25TH. OBTAINED ABS APPROVAL IN LIEU OF COAST GUARD APPROVAL. JIM WARREN: There are two freestanding structures. BUELOW: You've got your approval from the Coast Guard, the Corps of Engineers and all that? WARREN: The Coast Guard has issued the permits that are necessary for us to do the work ... It is my understanding that the Coast Guard will show up and look at the moorings. Sign off on that. Of course that won't happen until the vessel.... BUELOW: Comments? Anybody else? Recommendation? NOURSE: I recommend approval of Mississippi Riverboat Amusement, Limited application for final approval to commence gaming operations with the following condition: licensee will not commence gaming operations until the licensee has certified to the Executive Director that all required permits have been received and approval is given by the Executive Director. H.JOHNSON: I move. TANN: Seconded. BUELOW: Motion has been made to accept the recommendation of the Director. Is there any objection? Hearing none it is approved. I guess next we want to do the Gaming Licensee Status Reports, or is there something else you want to do before that? Let's go into that. Lady Luck, Mississippi. SAN BEGLEY: We have gotten the work permit from the Army Corps of Engineers. We are proceeding with construction of the boat. We plan to commence construction on our parking facility in the next week ... We have also secured approvals from the local government zoning board for our project. Historic Preservation. H.JOHNSON: Do you have a proposed date? S.BEGLEY: We have stated to the public that we will open up in March, but possibly that could be earlier. The March date will coincide NOURSE: Sam, could you address something else? I spoke with Andy about this yesterday concerning his agreement to enter into an agreement with Jackpot Enterprises, which is public information. What is that?

S.BEGLEY: I'm not aware of a formal agreement having been reached, but Andy Tompkins, who is one of the owners of Lady Luck has been in negotiations with Jackpot, which is a Nevada corporation. Primarily it is involved in route sales. They service slot machines in Nevada. Jackpot has been looking at... joint venture with ... we have talked with some land owners. BUELOW: Mardi Gras Casino Corporation? S.LEAVENWAY: I represent Mardi Gras Casino, doing business as Casino Magic in Bay St. Louis. We started construction on July 4th with a 24-hour a day, 7 day week construction schedule. We've obtained a construction company to develop it. They are doing all of our site improvements. This is a land based facility. Also building our casino facility onto the barge. All those construction projects are going on. The barge is onsite, all the steel structure is up. We expect to have a 43,000 square foot casino. All surveys on the site have been completed. Our dealer school has been open for approximately a month now. We're in a third shift in that school. We run approximately 8 students per shift. So, we're up to approximately 240 students then. The school is located in Bay St. Louis. We rented office space. The carpet which we bought from US Axminster in Greenville is due in August. Our agency letters are in process. We can't receive some of them until they come out and do an inspection. We currently have about 50 employees. We have obtained additional lands around our facility. We plan to build in future phases an 18-hole golf course. We do currently have plans to build a hotel. Plans are being drawn up for 1,500 1-person rooms hotel. That's what we've got. I'd like to emphasize that we've worked real hard to use Mississippi vendors. Have obtained great advertising. The general manager says we'll open September 1. Realistically it will probably be the middle of September. H.JOHNSON: I do have one question. Have you started on your agency check? LEAVENWAY: 1st of June. And we've received several. Do you get the weekly report that we send up here? We send one NOURSE: No, that's just me. LEAVENWAY: It has a list of those we have received already on it. It's about a 15 page document. TUNICA CASINO: NOURSE: Originally their application was to dig a hole and put the boat in. They made a determination that it would not be feasible at this time, so the Commission approved them to go to the Mississippi River on a temporary basis while they were digging that hole. What they have determined now is that they can now go into that hole and they do not need to go onto the bank of the Mississippi. So what they have done, the Commission has approved both the Mississippi River Bank position and the hole. What we're doing now is really accelerating the process to where they will now go into the canal that they are building. I asked them to come forward and present that to the Commission. BOB WOOD: {Distributes pictures to the Commissioners} My name is Bob Wood with the Tunica Casino partnership. We don't have overnight processing in Tunica, Mississippi like some of the other people do, so the best I could do here is bring you some Polaroids that I took yesterday. Basically showing the site and the construction that is going forth right now. You'll see in that there is a giant backhoe and it is digging a very, very large, we like to call it a slip rather than a hole, but anyway, it is going in. The dirt from the slip, that has been dug out of the slip, is going into the parking area to raise the parking area. Above the flood level. Construction is going fine. If you have any questions after you review this, our architect from the onshore facility is here. He's got all the plans, everything you may want to see. That construction is going along well. They are on schedule as far as the site construction is concerned. The construction of the vessel itself is still ongoing in Mobile, Alabama. They are putting the finishing touches on right now. It is my understanding that they are finishing up the painting and getting ready to put in the carpet. The vessel is scheduled to leave Mobile, Alabama sometime around the 12th of August, and we're expecting it will be 10 to 14 days before it arrives in Tunica, Mississippi. The slip will be ready to accept the vessel when the vessel gets there. It will be put into the slip. We're estimating that it will

probably take us a couple more weeks after that for us to get all of the equipment on the vessel and have all of our employees ready. We are estimating the 15th of September for an opening date. As far as the operations are concerned we are accepting applications, we are starting to interview people for jobs. We will be submitting our first group of applications for the work permits probably within the next week to ten days. Our dealer school is progressing. The first ones to enter the school are finishing up now, our 12-week course. We have started three or four other schools during that period of time. There are approximately 250 people training potential dealers in our dealer school. Everything else is going well. Our equipment is ordered, some of it is starting to come in already. We're pretty much ready to go. We are planning to be on the agenda for final approval next month. NOURSE: I contacted Paul Battle, the president of the Board of Supervisors in Tunica, concerning the road, to see what the status of that was. He says that the prep on the road is in progress as far as getting clear titles, etc. He assured me that they absolutely will build a road. They have applied for a grant to help build it. They will not start construction until they get the grant aid money. The cost will be about 1.2 million. They expect to start around Spring and complete in late Summer. H.JOHNSON: I think we asked for a financial plan for this road, and indicate the licensee in this plan. Have we received that yet? NOURSE: Do you know what the bond issue status is? BOB WOOD: That was a condition you put on the license. Basically the status is that the first approval that needs to be made is this grant, the 750,000 dollar HUD grant that the county has applied for. That is in final stages right now. The county has committed to fund the project through a bond issue. They cannot actually vote on that bond issue until they know the amount that it is going to be, and they won't know the amount that it is going to be until they find out the status of the funding of the grant. As of yesterday I was informed by the people at HUD that they are in the final stages. I think they needed to talk to your office about something on the financial statements. I'll get hold of them and make sure. But they are in the process. I can read a letter here that came to Mr. ...... this morning, last night. This is from the Delta Council. Basically giving status report. It says this is in response to your request on the status of road construction to an economic development site on the Mississippi River. Presently the County Board of Supervisors have requested assistance from Mississippi Development of Economic and Community Development for the abovementioned project. On July 28, 1992, a commitment letter for full funding of said proposed project i.e. road construction at an economic development site planned on Mississippi River, is pending and we expect a commitment letter coming forward very shortly. So we are in the final stages of that, the funding of that grant. The county can look forward to that. Commitments have been made. It's just a matter of going through the formalities. H.JOHNSON: What I envisioned in terms of this particular condition was an estimate of how much this particular project would cost and the sources of funds. The applicant represented to us that he would in fact guarantee those bonds if there were some problems. That's as I understand it what we need to see-=some written documentation as to what the cost is going to be and the sources of funds and the level of participation in that whole scheme by the applicant. NOURSE: We'll follow up on that. What they're doing, I think they're trying to determine that there's an x-amount of bond that needs to be issued--1.2 million--but if the grant is given, that's going to pay for 750,000, then it will go out for subscription, and whatever balance is left after you have the grant and subscription then Tunica Casino will pick up the balance. We'll certainly monitor that. H.JOHNSON: You mentioned your dealer school and the applicants. Where is the dealer school located? BOB WOOD: It's located in Tunica. We've got an office in Tunica and in back of the office we have the school. Our dealer's training center. It's not a school because we do not charge for it. It is a free school open to anyone who wants to come. We have not rejected anybody who has come forward. We are also accepting applications there from anyone who has applied to go to school, and we will let them go to school. And at some point in time, which will be within the next week or so, we will start actually go

through the formality of filling out the employment application. And then we will start processing them through the H.JOHNSON: Do you have any. idea of how many Tunica residents you have in that 250 number? BOB WOOD: No, I don't. I would say Tunica itself, right in the families of Tunica, there are probably maybe 50 or 60. The outlying areas, Senatobia, Clarksdale, Robinsonville, Walls, Southaven, I would say probably about 70% of the people who are in the school are from that surrounding area. Within the county or just outside the county. We have some from Arkansas, we have some from Memphis. The majority are from this area. H.JOHNSON: On this slip. This is the same area. I went on the site area up there. This is the same area where, that you originally planned. This is not a new. BOB WOOD: No. The original plan was at Mhoon Landing, to dig the slip, that you saw right there, bring the boat into the slip. H.JOHNSON: There's already a bayou or something running in there. BOB WOOD: There is. The slip is actually going right next to that. We're not utilizing that one that is there. The slip will be going in next to that. And that was always intended to be our permanent facility. We had decided that at one point in time we would go into a temporary facility on the river but the partners decided it would be an economic detriment, and to spend a lot more money now and go ahead and build the permanent facility there. BUELOW: We better be thinking about what condition we're going to put on the end of the canal. BOB WOOD: Good point. You've got to remember that every foot it goes further and further in it costs an awful lot of money, so BUELOW: Thank you. All right, do we have anything else you got people waiting for? where we? NOURSE: No. BUELOW: The rest of it is our stuff. Let's go to the top and start from there. The minutes of the June 22, 1992 Special Meeting, June 24, 1992 Regular Meeting, July 2, 1992 Special Meeting, and, although not on the agenda, the July 24, 1992 Executive Session, were approved as written. This was listed as Agenda Item No. I. BUELOW: The next item we come up to is "Update-Legal Matters". Bruce Nourse distributed tokens and chips that have been approved for the Biloxi operation. W.CARROLL: We are involved in 2 lawsuits. One by Mr. Ladner involving denial of the preliminary site approval, and the second is a suit that has been filed against the Gaming Commission specifically seeking reversal of the decision to grant that license to the President Casino at the Broadwater Beach Hotel. There have been no expedited hearings set for either of those. The Ladner suit is set for hearing on September 28th, I believe, and the first hearing on the Pratt litigation will take place probably first of the So, neither of those were expedited. Also, pursuant to conversation with the Chairman, I'm working on a consolidated one we have on bingo regulations and gaming school regulations. I'm working with Bobby Long of the Tax Commission. We will have Bingo Regulations in front of the Gaming Commission for adoption at the regular August meeting of the Gaming Commission so that they will be effective in time for the new rule, October 1st.

H.JOHNSON: Will we have them before the meeting itself? A couple weeks maybe? W.CARROLL: Oh yes. Probably by the second week in August. I've been in contact with my counterparts in Washington, Ohio, Florida, and Louisiana. Washington is known to have the best framework going in terms of both regulations and statutes. NOURSE: And I've been in contact with Nebraska, Minnesota, and NAGRA--the National Association of Gaming Regulators-and they have submitted directives to us. W.CARROLL: They will not be nearly as complicated or burdensome as these gaming regulations. We do have a couple of memos that I've prepared that we will discuss at the appropriate time. SAM BEGLEY: Mr. Chairman, may I address the Commission? I would be interested in knowing what opportunities the public will have to comment on those regulations other than ...I think we may have some perspective on that. W.CARROLL: Mr. Chairman, under the administrative procedures act if they are adopted in August they will not be effective for 30 days, the ......period in which the general public will have an opportunity to review the regulations. In the past we have tried to work closely with all the legal counsel and all the representatives of the casino industry, in advance, to go ahead and open up the process of getting comments and feedback. BUELOW: At what period, when do you think you'll have a draft regulation ready? W.CARROLL: I'm intending'to have a draft of regulations to you by August 15th. Approximately 2 weeks before the next meeting. BUELOW: I think the best thing, unless the Commissioners have an objection, as far as I'm concerned, once we get a draft prepared, it can be released to those interested parties for comment prior to our meeting, and if you will let it be known to the Commission who is interested in having them we will make, some arrangements for notifying you when we have a draft completed for you to have. NOURSE: Mr. Chairman, I've had a number of requests in that regard and I've encouraged all these people to give us input. These are alot of the manufacturers and distributors, people who are literate in Bingo and I have asked them to send me a notification that you would like these regulations as soon as we have the draft so we can get them out and get some comments back from them. BUELOW: Well I don't think there is any problem with you giving anything on the front side. You want to give to the staff, as far as input is concerned, and then they can go from there. But, from my standpoint I'd rather have all this stuff we can get up front so we don't have any problems outside. We'll try to get as much input we can from everybody. We may not agree with you but we don't have any problem listening to what you say. H.JOHNSON: A special meeting? BUELOW: We may do that. We may have some sort of a special meeting where we'll get together to hash it out. SAM BEGLEY: I guess that would be fine. We have an informal group of Gaming Attorneys.... NOURSE: We'll just go right into the Bingo Division Update. What Wilson has done is created these bingo applications.... Informal discussion about cancelling chips and tokens that had previously been distributed. NOURSE:

W.CARROLL: The application packet has been divided, includes applications for manufacturers licenses, distributors licenses, operators licenses, commercial lessor licenses, and charity licenses. Under the Charitable Bingo Law, each of those different functions are separated and the Law actually prohibits cross over in most cases. In other words a charity cannot be manufacturer or distributor or commercial lessor. Commercial lessor cannot have contractual arrangements with a distributor. There are all kinds of barriers, walls built in, so it's necessary to have a separate license for each of those entities or components of the bingo system. These are basically the same applications which are used in Louisiana. Louisiana has a very similar arrangement. We've taken their forms and modified them slightly to reflect some of the idiosyncrasies of Mississippi law. It is my understanding that they are being processed at this point, so they will be a clean copy when they are.... and these are not, I will point out, it does not require agency action. It's not a regulation, simply a form that reflects current law and I think they're being presented to you for information purposes. Now, I have also provided to you, you should have that, an overview of the charitable bingo law. At Bruce's request I went through the law and in about 6 or 7 pages summarized what the law requires under the charitable bingo law. And the one item that does require Commission action is the adoption of a fee structure in association with these applications. The charitable bingo law does specify that a $50 license application fee is to be charged for the charitable organization application. But then, the other license applications, manufacturers and distributors, commercial lessors and operators, the fees are not set and the Legislature expects this Commission to set those fees. So it is something that needs to be done. At Bruce's request I contacted the State of Louisiana to find out what kind of fee structure they have, and I have given Bruce a memo covering that. Basically they charge $2,500 for each application. For a manufacturer, for a distributor, and for operator. Also the operators, the people who put the machines, the video bingo machines into the, in Louisiana they call them electronic bingo distributors, and that's a more honest representation of what they are. In Louisiana they charge a $2,500 license fee plus $50 per machine per month. And in Louisiana they have approximately 600 machines licensed, so that brings in a total of 130,000 dollars per month to the gaming control commission on the video bingo machines. And then finally commercial lessors the charitable bingo law directs that the license fee that is set has to be based on a percentage of annual gross revenues generated by commercial lessors. So you can't just set up a flat fee, you have to come up with some percentage. Of annual gross revenues. I have not been able to locate another state that does it quite like that. I've talked to four other states and they don't do it quite that way. And that's, I have, just for your edification, have been shopping around trying to find out what these people charge. A commercial lessor normally charges ... in the range of between $500 and $700 per session. In rent. Now, the charitable bingo law limits the number to 8, the number of sessions, which may be conducted in any bingo hall. So, by extrapolation you can assume that they will be making somewhere in the range of $37 to $40 thousand dollars per week on these charitable bingo halls this is the commercial lessor. NOURSE: $4,000. Not $40,000. W.CARROLL: This is per week. Oh, yes, $4,000. I'm sorry. It is $4,000. So, you might take that into consideration when you think about what percentage fee to charge. Now, in making that determination, I was not able to get any information about fixed costs, variable costs, and so forth. People operating those types of businesses. So, I'm sure that the commercial lessors or their representatives are going to want to come and present to you evidence of exactly what part of those gross revenues are going to have to be taken up in overheads and expenses. Basically at this point I would suggest that you're just going to have to pick a number out of the air. And then let them come back during the 30-day comment period and convince you it needs to be a lower figure. NOURSE: So what we have to do, August 1st the Commission is supposed to have applications available. Everyone who has called me I have asked them to send me a name and an address. Once we get the applications in place, we have created a list. By doing that also through the Secretary of State where charitable organizations have to file, through the miscellaneous tax division where they also have to register, and then we also sent a letter to every sheriff in the state and asked them to give us addresses of every charitable bingo operator. Through that, people will start applying to us. We'll start sending them out to whoever we need to notify. I have thought about also putting a notice in all the papers in the state, a legal notice notifying anyone who has a charitable bingo operation that they have to apply for a license through the Mississippi Gaming Commission. That way, we will have covered

everything that we can possibly cover as far as getting the word out that you need to apply and sending applications to those people who do apply. What the Commission has in front of it now, these people are going to request an application and we're going to send it to them. When they return it to us, what fee are they going to have to pay along with that application? That is a fee that will be set by the Commission, and before they start filing anything with us we need to have that fee structure set up and in place. BUELOW: You want that now? NOURSE: August 1st we're supposed to start issuing these by law. That's why we have the application ready now. And yes, it's kind of tight but we're trying to meet the deadlines of the law and one of those is to have applications available by August 1st. Which would include the fee schedule. W.CARROLL: And a legal matter. It might be adopted as an emergency rule. In order for it to be effective I'll submit it to Bruce with proposed language to consider. In order to adopt an emergency rule under the administrative procedures act it is necessary for you to find that there is a peril to the public welfare and safety. And explain {tape #3, side one, begins here} interest in public welfare in these bingo operations without a fee. BUELOW: Might be pretty important to our health also. We don't have them ready. All right, well let's go over this suggestion as to what the fees are again. TANN: We can charge $50, by law we can charge $50 to the charitable organization. NOURSE: There are a number of organizations here. One of them is the charitable organization itself, and that's $50 by law. Then you have a manufacturer, a distributor, an operator and a commercial lessor. So you really have five distinct entities here that you can charge one of them by law $50 the other four have to be determined by the Commission. H.JOHNSON: The operator is the charitable, not necessarily W.CARROLL: The operator is better understood, that's a euphemism for electronic video, bingo distributor. H.JOHNSON: Well, here's a distributor's license. W.CARROLL: They are recognized as different components. The distributors distribute paper. There are, for example, electronic number generators that are used. There are other bingo supplies that are used in the traditional game of bingo that don't include sheets. BUELOW: These are the guys that go put these machines in all these places and all they do is H.JOHNSON: So who is the commercial lessor? BUELOW: A commercial lessor is the person that rents the property. W.CARROLL: A commercial lessor would be an individual who sets up an operation for charity. In other words a commercial lessor would contract with manufacturers, they cannot contract with distributors under the law, but they will go and line up a building premises, and then they'll go find charities to use the premises. And charities will pay the commercial lessor a set rate. That has to be determined by this Commission. This Commission has the responsibility of the rental that's charged to the charities by the commercial lessor. But the commercial lessor makes it easy for the charities to get involved in bingo by having the whole operation set up. H.JOHNSON: That's the commercial lessor's responsibility. The operator supplies the electronic equipment, the basics. And the distributor is for other supplies, basically.

W.CARROLL: Yes. BUELOW: How are you going to determine what the 20% of the gross is? They have to pay these fees on the front end, right? W.CARROLL: That's a good question. It's something that the Commission will have to determine. I couldn't find any other state that does it this way. BUELOW: Wait a minute. Do what? W.CARROLL: That charge an application fee to commercial lessors based on percentage of gross revenues. They normally don't charge anything or they charge a flat fee. But the Legislation specifies that the fee to commercial lessors will be based on percentage. BUELOW: Well then I guess we better do us a regulation that says we'll do us an approximate fee to begin with, which would have to be adjusted at the end of the year, according to whatever the gross receipts were. Could we do that? TANN: It seems to me an operator from a, a commercial lessor, is saying I'll run your operation for you. No? W.CARROLL: Another line is drawn there. A commercial lessor is prohibited from having any role in the conduct of the bingo games. All he can do is act as a lessor who puts the machines in place, the tables in place, the chairs and then turns the key over to the charity and says come on in. The law prohibits the commercial lessor from having any role in the actual conduct of the game. The concern is the commercial lessor would have his hand in the till, and will be taking out some of the profits that would be generated in the game, so the statute keeps them out altogether. Now the commercial lessor has contracts with manufacturers and with operators, but they are prohibited from contracting with distributors. Again, I think the concern which led to that was the perception that the commercial lessors would have arrangements, for example, here's the commercial lessor and perhaps his sister would be in the distributing business and he would require the charities to buy the supplies that were being sold by his distributor. There are all kinds of scenarios like that that have arisen in other states that led to the particular structure that was adopted here. TANK: Louisiana charges, what are Louisiana's rates, $2,500? W.CARROLL: Yes. TANN: And what do they charge for a commercial lessor's license? What is their fee? W.CARROLL: $200. That's just a flat fee. TANN: I just have a concern, I mean, I don't know, I have a concern looking at levying a 20% on annual gross revenue on anything. BUELOW: But he says the law requires it. W.CARROLL: No sir. Some percentage. TANN: In other words, I don't know how much money has come in, but that's my next, question, could we say, just thinking out loud here, could we say that commercial lessors license will be 10% of gross revenues with a minimum of $2,500 a year? In other words, you pay us $2,500 up front annually, but we're going to assess you at 10% or 20% of your gross. See where I'm going with that? Get the money up front, number one, and number two, maybe at a lesser percentage. You don't think we can have a minimum rate? In other words, franchise tax is based on x per thousand, but yet you have a minimum of 250, you have a minimum of $25 charge.

BUELOW: Let's hear from our collector back here. What's the best way to collect this stuff so we're not beating our brains out? ALLAN GODFREY: Tape does not pick up answer. TANN: You're not going to collect this stuff until, I would think, thinking out loud, it would be due 10 weeks after the fiscal year, just like the taxes are due. I think it would based on the fiscal year, wouldn't it? I mean, couldn't we collect it monthly like we do sales tax? W.CARROLL: The comparable situation involves, in Louisiana, per machine, per month tax, on video machines. Actually it's an annual fee but they do collect it monthly. BUELOW: Well we've got to collect it monthly because we've got to get some revenue to be able to pay these folks we're having to hire to regulate it. We can't wait a year. W.CARROLL: It would be possible to require that we pay $2,500 at the beginning of the year, and then credit it against the revenues generated. At the conclusion of the year, if that $2,500 exceeds the percentage rate that you impose then it will be refunded to them at the end of the year. NOURSE: I think the law addresses, as long as the basis is the gross revenue, that's the bottom line. If you ask for some of that up front ........ it's conceivable. BUELOW: We can collect it on`. a monthly basis just as a percentage of gross revenue. That shouldn't be a problem. W.CARROLL: They're going to have revenue generated, from what I understand, the first month. I mean, November 1st you'll have October's revenues. Or you'll have reports available on that. BUELOW: We just obviously will be short one month this year. But I don't know much about collection, that's the reason I'm asking you. From an administrative standpoint how much more difficult is it to collect it on a monthly basis as opposed to a quarterly basis? GODFREY: I would think monthly would be easier. NOURSE: Especially given the fact that they are filing monthly reports. We'll be able to track what their revenue should be at that point. BUELOW: Let's do it at 10% of the revenue, monthly. TANN: Having it due on the nth day following the month's end? W.CARROLL: The reporting requirements that informs, the law being established by the Commission in order to be able to be part of the regulation. BUELOW: Have it due on the 15th of the month following the preceeding month? W.CARROLL: Louisiana gaming people have developed a disc, software, that they provide all of the bingo operators, they plug that into the computers and at the end of the month, 15th or before, they bring a copy of that disc in, gaming commission plugs it into the computer and it's automatically downloaded so that they have instantly computerized information at their fingertips. BUELOW: I have a little problem following Louisiana. Gives me no sense of security. Have you talked to South Carolina at all? W.CARROLL: No sir.

BUELOW: We might ought. I just came back from a meeting in which South Carolina's commissioner said that they are having a nightmare with bingo. South Carolina is in the process of outlawing _it. Putting it out of business, they've had so much trouble with it. H.JOHNSON: Oklahoma is another state to contact. BUELOW: He suggested that we contact his state to get some information from them, because some of the folks there are running off or going to these other states. W.CARROLL: Ohio said the same thing. BUELOW: If we find out some of these pitfalls on the front end it might help us not have a lot of headaches later on. NOURSE: Some of the time frames that we're dealing with here is, August 1, if the Commission approves this, and again it doesn't take Commission action, we'll start sending these out to people who have requested it. Also we're going to need a fee structure in place. As they come back in we've had a lot of people concerned about having closed bingo parlors. Your direction, what we'll be doing is issuing temporary licenses. It could be just an informal letter that you have a temporary license to operate. The law says that we have 60 days. That temporary license is only good for 60 days so we're going to have to make some type of decision during that period. The problem that we are having at this point is getting the bingo division staffed to conduct investigations to make some type of good judgment on these licenses. We'll move on that the best we can but that's the problem we're having now. In that regard we're in the process of interviewing for the division director's position. Once they are filled then they will be bringing in investigators first, that's the first problem we will address, and then enforcement people. That 60 day window really puts a crimp in our ability to conduct thorough investigations. Because we will have hundreds of applications. What I have asked the sheriffs to do and other interested parties to identify who the problem bingo halls are so we can focus on the problems, right off the bat, rather than going ..... I mean the sheriffs are identifying to us the problem bingo parlors. That way we can arrange...... We're trying to get to the meat of the problems as quickly as possible. There is a risk of issuing licenses based on the inability of this Commission to do our investigation within 60 days of issuing licenses to people that may be revoked when we do get a chance to get up and get our investigation ready. So no bingo parlors will be closing, we will issue temporary work permits within 60 days later issue permanent, except for the ones that we know had a chance to investigate and deny them for licensure. H.JOHNSON: So all you have to do August 1 is submit an application and you get an automatic 60 day temporary license? Is that what you're saying? NOURSE: No. They will make application to us and we have 60 days from the time that we issue the license to them. So, once it's processed and it goes out, we have 60 days, the clock is ticking on us, 60 days to issue them, to render a decision on that temporary license, to deny or approve a one year license. H.JOHNSON: So August 1, someone gets in an application we have 60 days to process an application, a temporary license will be issued at that point, after the processing of the license? NOURSE: The first thing that goes out of my office is the temporary license good for 60 days. H.JOHNSON: That's what. I thought. So then all you have to do is submit an application and you get a 60 day license. NOURSE: And a check. And that's what we're trying to determine. TANN: A check for $2,500 or $50 or whatever. BUELOW: As soon as we've got their money and their application we're going to be set up to issue them a license?

NOURSE: We're trying to get set up as quickly as possible to do that. The first two people I hire as the division director and secretary to handle it and get these things out. Processed. BUELOW: We'll be set up. If we need some help from the Tax Commission we'll be set up to get instant turnaround on these applications. Since we're not going to be doing anything other than getting, the money, getting the applications and giving them a license. NOURSE: My feeling is that the license will be in the form of a form letter and we'll just type in a name and an address of the responsible party and issue it to them. It will be no problem. A temporary license that will be good for 60 days. The problem is what happens on the 60th day? BUELOW: You'll require a certified check otherwise you'll have to wait for your money. NOURSE: How much is the certified check going to be for? TANN: H.JOHNSON: All speaking at once. Cannot decipher. W.CARROLL: NOURSE: Let's talk manufacturers application received and they give a check for $2,500. Distributor's applications we receive have a check attached for $2,500. The operator's license, based on Louisiana, I have to agree with this, they are charging $2,000 plus $50 per machine per month. So we are able at that point, which we are not able on the gaming side, to go out and assess a fee based on the number of machines that they have in operation. These will be video bingo machines and video pull tabs. This will be the only way we can assess a fee on a video bingo machine. Whereas on the pull tab machine, now we may want to exempt them from the $50 per month because we have a provision to charge 5% of the gross proceeds.... H.JOHNSON: What are pull tabs? W.CARROLL: They are, at McDonald's where you break open the prize and you win something, here you break open sealed tickets and there are instant winners, instant gratification is the term they use. And you pay a dollar, get a ticket, break it open and it tells you what you win. H.JOHNSON: This is bingo? W.CARROLL: It's found in the bingo charitable law, yes it is. NOURSE: This is something different from bingo. Pull tab is separate from it, but it's defined as H.JOHNSON: But it's allowed within the bingo operation? W.CARROLL: Yes sir. An electronic representation of that game is also. NOURSE: So there are two electronic devices that will be coming into this state. Number one is a bingo device, the law does not allow us to assess any fee against the revenue or per machine, but we can do it through this structure, to go assess a $50 charge on that. Video pull tab machine, the law does allow us a 5% of the gross proceeds, so as far as the operators are concerned, we could charge them $2,000 plus $50 per machine, and if the Commission would like, you would go $50 per machine on the bingo machine, that would give us a fee on them, and then just let the law dictate the 5% of the pull tab machine. That way H.JOHNSON: But we would still need to put it in the fee structure.

NOURSE: Yeah, but you would say $50 per video bingo machine, or you could go $50 per machine on each one, and then you're assessing basically two against the video pull tab machines at $50 and the 5%. BUELOW: I don't think we want to do that. That would hit them twice. Do you? H.JOHNSON: No. I mean NOURSE: I have to agree. This way your assessment fee against everything that they have, $50 per video bingo machine, and then levy the fee of 5% on gross annual revenue on the video pull tab machines. But the $50 fee would just be on the video bingo. H.JOHNSON: The 5% would be monthly also? W.CARROLL: The law, statute states that the Commission has the authority to levy up to 5% of gross revenues on pull tabs. And we take that to mean video pull tabs as well. And it doesn't say how to collect it. Monthly report or otherwise. BUELOW: We're collecting'the other on a monthly basis. We might as well be consistent. NOURSE: And you would like to leave it at 5% That is in your discretion. W.CARROLL: That's the maximum. BUELOW/TANN/JOHNSON: Yeah. BUELOW: I guess we can always go down. I don't think anyone will be mad about that. NOURSE: So on the operator's license then, it would be a $2,000 application fee. BUELOW: You've got $2,500 written down here. NOURSE: No, on the operator's license. BUELOW: This has $2,500. NOURSE: I'm looking at a different one. So, on the operators it would be $2,500 plus $50 per month per video bingo machine. TANN: We've got two memorandums here. NOURSE: Yeah, we're talking about the July 29th where they are all $2,500. I was reading off the wrong sheet. H.JOHNSON: And 5% of gross. NOURSE: That takes care of the $50 per month per video bingo machine, and then it stands at 5% on the gross of pull tabs, whether they're pull tabs, manual or video. H.JOHNSON: Are we then, collecting the percentage or the per machine amount on a monthly basis and a $2,500 up front charge? NOURSE: I think that would be up to the Commission. On the gaming side, certainly we don't have that ability to do that, get it right up front. So they go out, before the end of the month, count the machines and that's what they assess the fee on.

W.CARROLL: Bear in mind that in theory, there are none of these machines out there right now. They're not legal until October the 1st, so we won't be able to immediately collect. H.JOHNSON: So before we can only collect the set amount, so that would be, what, submitting an application. NOURSE: So it leaves the pull tabs at 5% and then the commercial lessor at 10%. BUELOW: The more I think about this commercial lessor, we're making everybody put up an upfront for their license, other than them. They will not have an upfront amount. What would be wrong with making them do a $2,500 upfront, for which will be used as a credit against your monthly fee, until you have used up your amount? Then we're consistent on all licenses except for charity. NOURSE: That complies with the law and that final analysis is based on 10% of the annual gross revenue is what the $2,500 that is paid up front is a credit against it. Now on the machines, the $50 per month, do you want that upfront as well? BUELOW: I don't think so. NOURSE: You want that due on the 15th of the following month? BUELOW: Because they are already paying $2,500 for the license upfront. And then the rest of it, the machine by month. You said they wouldn't have any on the front end anyway. NOURSE: No, the temporary licenses will be issued. Will go to manufacturers, distributors, operators, commercial lessor, everywhere. In order to keep this thing moving. BUELOW: I think initially we need to put them on certified check otherwise you're going to be chasing your tails with bad checks. It will be another thing you're going to have to deal with if you don't take care of it on the front end. NOURSE: We'll have to work something out with the Tax Commission on the collection of the fees, and I think that we have determined that since they have the mechanism set up to sell these 25 cents per head tickets, that they were going ahead and sell those out of the tax commission offices? BUELOW: Whatever. That's why I wanted him in here for, to tell us what's the best way to collect it. NOURSE: We don't have the capability in our office to. BUELOW: My understanding was that they were going to do it. How they are going to do it, I don't know. Have you talked about that? ALLAN GODFREY: {cannot hear answer} BUELOW: Well you better start doing that. It's almost August 1st. I thought I told everybody I wanted to get this going. I thought that's what the Thursday meeting was for. NOURSE: Now my understanding, no that wasn't discussed in there, on this, the Tax Commission would be doing a number of things. It would be selling the 25 cents per head tickets that the law identifies. Now what that means is that everybody, if a charitable organization wants to have a bingo game, and they are going to have 100 people, they have to come to the Tax Commission and buy 100 25 cents tickets. And as they walk in the door they have to have one of these tickets. What our enforcement personnel will be doing when they go in there, they are going to sit down, somebody sitting there playing, the enforcement personnel are going to make sure that number one if they're playing bingo they have to have a ticket. If there is 100 people in the hall they have to have $25 worth of tickets bought from the Tax Commission. That's in the law. So the Tax Commission will be selling those, and our enforcement agents will be

monitoring to make sure everyone has those tickets. Also the Tax Commission, we will be processing application fees similar to what we do in the gaming. And also the 5% of gross gaming revenue, the Tax Commission will have to be monitoring that and collecting that as well. BUELOW: Have we decided how we're going to do all that? NOURSE: And I think the mechanism is set up because it's very similar to what we're doing on gaming. We're investigating people and monitoring enforcement. The whole audit function on the gaming side is under the Tax Commission. The mechanism is there for that. I think the mechanism should be expanded to include the bingo part. BUELOW: My understanding 'is we're going to sell something like we do with a tobacco tax. Some type of sticker that they're going to get. Now when you do that you'll be able to tell when your sticker is good for. Otherwise they've got a sticker they can use every game they go to. If you don't have different colors or different dates, you can't audit it if you don't have it that way. Do it by numbers or something like that. But, and you also have to arrange it, so the guy goes in, he doesn't have to buy the exact number every time. He can buy 5,000 stickers if he wants to and then use them up as he goes along. NOURSE: I think on a practical manner, yes, if they were all numbered, so for this session you have issued numbers 100 to 200 in this hall, and my enforcement agent goes out there it better be one of those between 100 and 200 in that hall. Instead of going and having print dates, etc. When they bought it, a record will be made, saying that they are going to have a bingo operation on this date and they have been issued these numbered tickets. That will be made available to our enforcement agent, they go out there and that's what they are looking for. This date, these numbers have to be used. If not, then they are using a ticket from another session that shouldn't be used and they are out of compliance. BUELOW: All of those things have got to be worked out. Very, very soon. NOURSE: Yes. And the regulations. But first things first, and that's the applications and the fee structure. That's what we're addressing 'today. Next meeting we'll have the regulations. BUELOW: What are we doing back there? We just .... you better get hold of that woman and tell her we need to get going. I thought I'd already made that clear. NOURSE: I've been advised we need to read something into the record to make this official. First, I recommend that the Commission find that an imminent peril to public safety and welfare exists due to the fact that this agency is required by law to issue bingo licenses, but cannot assure that these applications will be handled in a manner which will protect the public interest and welfare without immediate adoption of a fee structure. This finding should be reflected in the minutes. Second, I recommend that the Commission immediately adopt the following fee structure as a rule of the Commission: Charitable Organization License $50.00; Manufacturer's License $2,500.00; Distributor's License $2,500.00; Operator's License $2,500.00 plus $50.00 per month per video bingo machine and 5% of gross gaming revenues of pull tabs or video pull tabs; Commercial Lessor License is 10% of annual gross revenues derived from the lease and payable monthly. H.JOHNSON: And $2,500.00 credit payable at the time of application. NOURSE: Exactly. And $2,500.00 upfront to act as a credit against the 10% on annual gross. BUELOW: And then you've got the part that you need to put in about the fact that it will need to be paid by the 15th of the month preceding receipts. However you want to word that. And to be paid by certified check. NOURSE: Certified check and pay to the State Tax Commission, Miscellaneous Tax Division. BUELOW: You also need to say that these other licenses, the fee should accompany the application.

NOURSE: Okay, so for the record, these are application fees that should be paid at the time application is made. They will be paid by certified check to the Gaming Commission and forwarded to the Miscellaneous Division of the Tax Commission. The monthly charges will be paid by the 15th of the following month of which they occurred. And collection of all fees will be done by the Miscellaneous Division of the State Tax Commission. BUELOW: So that means the Miscellaneous Division of the Tax Commission is also going to get your applications and so forth back. NOURSE: Yes. What we're doing now, they send the application, they're filing it with us, with a check, and we send it over to them. BUELOW: You're getting the check and then you're sending it over. NOURSE: Yes. BUELOW: But you're going to get all the fees coming into you and you're going to have to handle it. NOURSE: It's the same way we're doing on the gaming side. All these fees come to us and then we turn them over. H.JOHNSON: Are these fees annual fees? We're calling them application fees, but are they annual fees? NOURSE: They are application fees and licenses are issued for one year. BUELOW: What about renewal fees? Are renewal fees the same? W.CARROLL: In Louisiana they have a lower, don't have a lower renewal fee because they only have $200, I honestly don't know whether they raise up.... Let me say this as well. Since this is an emergency rule, it's going to have to be reintroduced next month for the regular agenda process. We could have the renewal fees in that rule. BUELOW: I think there would be some reason to say that we could reduce the renewal fee since the investigation part of it should have been completed. NOURSE: There will be an ongoing investigation based on whether the operations are in good standing with us or not. BUELOW: All right, we'll do that. NOURSE: The problem is I think we have a continued funding mechanism for the Commission. We're doing this, certainly it's going to fund us up to $500,000 next year if you decrease this, that funding mechanism will also be decreased. H.JOHNSON: Maybe we're just talking about terminology. We ought to call it a license fee and it's due at the time of application and annually thereafter. NOURSE: Well on the gaming side, let's compare, we have an application fee and a license fee. So what we're addressing here is the application fee. H.JOHNSON: Well, I'm just suggesting that there is not an application fee, that with the application you have to put up a license fee, $2,500. NOURSE: So they are prepaying a license fee. And if we deny them a license then we refund their money. H.JOHNSON: What does that do to the investigation?

BUELOW: Less expensive. TANN: Can we do that though? Take their $2,500 and investigate them and then say, no, we don't approve you, here's your $500 back. BUELOW: No, I think we'd better have an application fee. H.JOHNSON: Yeah. BUELOW: And a license fee. I think your application fee can act as your license fee the first year, and then after that you'll have a, because I sure don't care about hitting them twice. If you're going to do that then we need to lower the application fee and put in an additional license fee. NOURSE: I think that the problem could probably be addressed by if we had the $2,500 license application fee then we could do our investigation, issue the license and then have a diminished amount for a renewal on a yearly basis. Which we could address in the regulations. BUELOW: All right. Let's go with that. Let's leave it as an application. You want to read the third thing first? NOURSE: Third, I will recommend that at the next regular scheduled meeting of the Commission that this same fee structure be adopted by the Commission as an ordinary rule along with the remainder of the bingo regulations this will allow a thirty day comment period for interested parties to submit responses. H.JOHNSON: Are we putting regularly scheduled in there to mean the administrative procedures act requirement? W.CARROLL: Yes, it's supposed to go on the agenda. We couldn't adopt it as an ordinary rule today since it wasn't on the agenda. H.JOHNSON: No, I mean it seems to me that, well, I think this has as much potential to occupy our time as anything that this Gaming Commission does. And I'm just a little concerned that we're going to stick it into an hours time slot, an hour and a half ...... So we could, conceivably, have a special meeting just to deal with bingo. BUELOW: I think we're probably going to have a lot of special meetings ........... What have we got next? NOURSE: So the 5% on the pull tabs is a net not gross. W.CARROLL: Which fees shall be limited to the amounts necessary to administer..... BUELOW: We're going to have to do something to clean up our administrative act right here. NOURSE: I will supply the secretary with what we are discussing here. To show accurate discussions. TANN: If the pull tabs are 5% of net we might want to leave them at $50 like all the others. BUELOW/JOHNSON: But the law says 5%. TANN: I thought it said we may. W.CARROLL: The Commission has the authority to assess and collect fees not to exceed 5% of net proceeds of pull tabs. BUELOW: Just because we have the authority doesn't mean we have to do it. So we could do $50 as long as it didn't exceed...

W.CARROLL: As long as it's a license fee. NOURSE: So you could have a license fee of $50 per machine per month as well as the 5% of net proceeds. W.CARROLL: You don't have to go with 5% for the sake of simplicity, or $50 per machine, and that way.... a fairly complicated question about when a machine is bingo and when it is video pull tab. Because a lot of times, I'm told that pull tab has three representations. They'll stack three pull tabs together and all of a sudden it looks like a tic-tac-toe board ...... there's a tremendous and boring distinction here, so $50 per machine would make it a lot easier. NOURSE: Which would support the argument yes, because we don't have to go in and debate this. You just count the machines and $50 per machine. BUELOW: I just didn't know how a pull tab works. NOURSE: Just a different program. Telling the machine it's either a bingo machine or it's a pull tab. It's a very fine definition, one or the other. This way, we could go in and count the machines, it's $50 per machine, and then also you have 5% of the net, all those that are being defined as a pull tab machine, as well as the regular manual pull tabs. But there is a distinction here. On a pull tab you can have a video machine. What we're saying is it is a $50 assessment. You can also have manual pull tabs which are as we said similar to what you have at McDonalds, so would you want 5% of those, because these are being sold separately from W.CARROLL: None of this is necessary for the purpose of the license application fees. We'll address those regulations TANN: I was going to say, his motion that, I think we need to go ahead and approve, we can, these fees and whatever, are subject to our review by next month. BUELOW: Can we outlaw the manual pull tabs? NOURSE: I bet you can. H.JOHNSON: You put money in there to get NOURSE: No, it's very similar to a lottery ticket, when you go to buy a lottery ticket, a pull tab is the same thing. H.JOHNSON: So there is a cashier that you can go to? NOURSE: You pay a dollar she can hand you a pull tab. You want to assess 5% of those that are sold that are manual and then you've got $50 per machine on the other side. More discussion is held regarding pull tabs, but is unintelligible on tape. This discussion was mainly an explanation of exactly what a pull tab is. BUELOW: Well, what do you need? NOURSE: That's it. H.JOHNSON: Is there any way of limiting the number of machines per operating hall? W.CARROLL: The statute does not speak of that. But you have general authority to pass rules and regulations.

BUELOW: I know that Louisiana is limited, well they've limited all their video, poker machines except at truck stops where I think they are unlimited. But that's video poker. W.CARROLL: Just as a matter of procedure the Commission does need to move and to adopt the recommendation. BUELOW: I'll handle that when we're finished with all this discussion. I didn't know whether we were finished or not. But we do need to establish regulations concerning the number of machines that could be on. We could do that? W.CARROLL: You could. BUELOW: Any further discussion? Are there any objections to the rules, if not, hearing no objection, they're approved. W.CARROLL: There's one other point that I would point out to you that you may consider since they are having a lot of discussions about the standards that would apply in the work permit, I've given each of you a memorandum discussing the standards that would be applied by the Gaming Commission assessing the applications for permits and licenses. And there it specifically states that quote if anyone is convicted of certain related offenses as established by the Commission within the last five years, then they are to be denied a permit. In other words, you, gentlemen, have the discretion to define what types of offenses you think should preclude the issuance of a license. I wanted to point that out to you so you could give some consideration to that. Under the current arrangement a felon is not prohibited from being permitted a license. Anyone convicted of a gambling related offense, which would be a felony..... BUELOW: Is a bingo offense considered a gambling related offense? W.CARROLL: I would think so, but that's questionable. You are also directed to not issue licenses to professional gamblers. I have no idea how you're going to identify a professional gambler ... You may want to give some thought to the types of offenses that you would like to preclude in issuing the license. That will be presented to you 15th. NOURSE: I think what I would recommend, very similar to what we're doing with the work permits on the gaming side, is when we issue this temporary license to conduct bingo, that we attach a memo, similar to what we are on the work permits, stating that we are in the process of developing regulations that could have a direct and negative impact on that license, so that they are aware that we are in the process of doing this, identifying certain disqualifiers temporary license that regulations are being developed. BUELOW: Work permits. H.JOHNSON: Before you leave the bingo division, these applications will be cleaned up? There are some questions on here and I assume that we will look at this again. I don't know if it's appropriate to....... there are some things in here I disagree, Wilson, there are some questions asked that could lead to other impressions by the applicant. There's a question on the number of parking spaces that you have. Is that going to be considered in terms of issuing the license? In Louisiana there's a Louisiana Gaming Ordinance under Parish Gaming Ordinance that they have to enforce. Which it means, .I guess, that there is some regulation of the operation at the local level. And I assume that we don't have the same. What I'm saying is that our applications need to reflect our environment and if there are any questions in here that would lead the applicant to believe that we have jurisdiction that we don't have, then they need to be taken out. W.CARROLL: You are absolutely correct. That sort of question, we'll get something printed.

H.JOHNSON: Maybe we ought to call it temporary so we can come back and maybe revisit this thing and not be satisfied that this is the same application that we'll be issuing in October. That's sort of a rush job in August. NOURSE: So we want to call this a temporary application? H.JOHNSON: I don't know whether it's appropriate or not, but I would feel comfortable saying that we're going to go back and revisit this application and make sure it's something that we can use in terms of our law, rather than Louisiana. W.CARROLL: Again, there are many more similarities than there are differences. Most of the questions asked do relate to specific prerequisites that are included in the Mississippi statute to the extent that the questions suggested that the local clubs have some regulatory authority, and you're exactly right...... BUELOW: But these things go out August 1st. October. H.JOHNSON: What I'm saying, we're going to do these August 1st, but in my estimation, they could probably be better designed if we went back and did them, looked at them again, past August 1st, and I'm just suggesting W.CARROLL: You have the authority at any time, in any form. BUELOW: For one thing at the top you've got blocks for manufacturer, electronic and distributor, but you don't have one just the other types of applications. NOURSE/W.CARROLL/????: All speaking at once. Secretary cannot decipher. BUELOW: All right. Work permits. NOURSE: Just a minute Commissioner. So, on August 1st we can start sending these out and then we will fine tune these over a period of time? H.JOHNSON: Yeah. BUELOW: We're going to have to do something, even if it's wrong here. We're going to make some mistakes, but we've got to go. Too many speaking at once. H.JOHNSON: Just make sure we strike out Louisiana and insert Mississippi. NOURSE: All that is being typeset right now. On the work permits, first off, I'll take responsibility for this, but we had discussions about issuing work permits to felons, and it was brought to my attention that the Gaming Control Act identifies that the Executive Director shall refuse to issue a work permit if the applicant has committed, attempted or conspired to, commit a crime which is a felony in this state, or offense in any other state or jurisdiction which would be a felony if committed in this state. So felons are precluded from being issued work permits in gaming operations. In our discussion we talked about misdemeanor gaming violators, and we will continue to look at them on a case by case basis but felonies are precluded by law. What I have done, I have put together, as we have discussed, when we issue the temporary work permits we are going to attach a memo to them and I would recommend that we do that on temporary bingo licenses, which would identify that we're in the process of writing the regulations. It could have a direct impact on the status of that work permit or license. This is what we have submitted. Bobby, can I get you to talk about the IRS? The IRS has asked us to attach to this, to all the work permits, a release which we have sent to Bobby, you want to talk about this?

BOBBY LONG: What it is........ there's no problem with the release. They also want .... '..... exchange may involve... Chairman has to sign in answer to your questions there is no problem with the release. NOURSE: For my understanding, we attach a release to this and work permittee signs that release, what happens? what exactly does this give the IRS the ability to do that they didn't have before? BOBBY LONG: Gives them the ability to furnish that information to the establishment and to the Gaming Commission. NOURSE: That's information on that permittee to Isle of Capri and to.... if they do not sign it, would that be a disqualifier for a work permit? BOBBY LONG: Well, I think if the purpose of the release is to ensure that they are complying with federal and state laws ....... I think under the provision of the gaming ..... they have to........ you can for other reasonable cause deny them a work permit ......... if you construe that to be the other reasonable cause........ NOURSE: My question to the Commission is that if they do not want to sign this, would your direction to us be that that would be a disqualifier of that work permit? BUELOW: If you are asking me, yes. I don't know about the others. They have to pay their taxes. TANN: Well if we're in the unique position of being a tax commission as well as a gaming commission, is it within our bounds to ask for tax information on an employee, not on a, now I can see on a manufacturer and developer, etc., operator, on an employee one of these people, as a gaming commission, do we have that right to ask for that? I don't BOBBY LONG: I think we have the right to put any type of restrictions on that person. Mississippi ..... and a part of that would ensure that it complies with the tax laws. I don't see any, to me..... you don't have to have a release for us..... they're the ones who are sending us this release, the IRS........ H.JOHNSON: How do they get into this discussion? BOBBY LONG: They do this in other states and it is my understanding, this is a standard agreement and release, this is the same thing that is being done in other states. NOURSE: They approached us on this. They came to us and said listen, we understand you're doing this, could we have access to your process by allowing them to sign this release to give them. BUELOW: My understanding was that they wanted this more of a standpoint of getting the operations, more than the individuals, but I don't. NOURSE: No, we've been meeting with them regularly, and they're interested in the individuals themselves. They feel that the operations are covered. They want to take a look at the individuals, both through the work permits and also, and I'll be discussing this with you later, we met with them this past week, they would like to place IRS agents in our office as financial investigators to give them, and they do the same thing in Illinois, when you go into the Illinois Gaming Control Board you have gaming control agents and IRS agents in there working together. They are going to propose that to us as well. They're going through the process of getting their approvals in there and request that in writing of the Commission, but that was my question, are you interested in the operations or the individuals themselves, and they are interested in the individuals through the work permits and then through the finding of suitability process. So that's coming down, but right now, they want to be a part of our work permit process to go in and tap into each one of these, on the individuals.

BUELOW: Does anyone have an objection to that? H.JOHNSON: Tap on the individual. NOURSE: Well they want to have, they want each individual to sign this release so that we can get this information and they have the ability then and go out and do their investigation, see whether or not they have complied with the tax requirement to file a tax return. This is all for a tax compliance. Their focus is to monitor tax compliance, and they need this release signed in order for them to do that. H.JOHNSON: And if they file an appropriate, would they also audit, for auditing purposes, would they look at our returns, the liability of the person they have for Mississippi taxes at the same time they are looking at NOURSE: No I think their primary interest, they're looking at BUELOW: We're looking for everybody that doesn't pay their taxes. Anybody that doesn't want to sign NOURSE: Well that's my point. I guess two questions H.JOHNSON: I agree with that. But if we're going to work with them, then I would like for them, but if we're doing individual taxes then there's no work for BUELOW: This matter came up in a sharing of information in a meeting that we had with the IRS. They wanted to know if we would share that and they would share with us. They are sharing with us also. BOBBY LONG: This agreement is just ........ the IRS gives us alot of information. If they for example audited one of the proprietors, they would furnish that information to us. Still the other ........... broad scope of information. NOURSE: So number one, I'm hearing the Commission say that yes, we do want that release attached to this memo, and number two, that it is a requirement that they sign it. Or it is a disqualifier if they do not sign that IRS release, and I'll go ahead and include that in the memo. The tax form must be signed as a prerequisite of the issuance of this work permit. BUELOW: That's correct. Anything else on chips and tokens? Moving on to Removal of Disability of Minority. NOURSE: Before we leave the work permits, we have been also in law, as it stated on the memo, as there is a 60 day limit on the bingo, there is a 90 day limit on the work permits. Again, so when we issue a temporary work permit the clock is ticking on us to issue the regular permit within 90 days. BUELOW: Is there a fee on the work permit? NOURSE: $35.00. And the problem is, as we had originally discussed, not issuing the regular permit until we got the FBI check back. We may not have that back within 90 days. H.JOHNSON: Conditional? TANN: Well no anybody that's got a license if an investigator comes up to with something subsequent to their they can lose their license. That's not going to stop the process if they don't have that document in hand. NOURSE: If we issue the regular permit and the next day we get a bad FBI check we can go out and.... Talking amongst themselves about work permits. Buelow moving ahead to removal of disability. NOURSE: We have already had a request on this, to issue a work permit to someone, what was the specifics?

W.CARROLL: A young woman who was about 20 years old and had obtained from the Jackson County, or Harrison County Chancery Court, an Order removing the disability of minority which specified that for all purposes that individual was to be treated as if she were 21. The Gaming Control Act specifies that no one shall be employed in the casino if they are under 21 years of age. And the general language of the order, which seems to supersede the control of the language of the statute, when a judge says you'll disregard the fact that she's 20, that's pretty clear. And I was asked for a legal impression on that. I gave it. I thought they were held to issue a license to that individual. Reviewing the general authority to issue work permits, subpart IV says that an application may be granted or denied for any cause deemed reasonable by the Commission. So in other words, you may not be limited in basing a denial to the one section that says you shall issue a work permit to someone who is 21. If the Commission were uncomfortable allowing anyone under age 21 in a casino, if they have an order removing disability, it is conceivable that you could simply use that, with the general provision, saying that you could not for any reason be plausible. I think we're going to end up in court, if you do that, but it's, we discussed this with the Chairman last week, he expressed a real concern with the fact that we're going to have people 17 18 years old working in a casino. The other proposal was that we simply, or the Commission has a resolution of some sort, to be forwarded to all the Chancellors down on the Coast, letting them know about this particular situation. I think the perception was that alot of these Chancellors don't have any idea that they're enabling these people to work in a casino. When the issue a general order removing disability. And they somehow make it, put it...... All talking at once. NOURSE: They don't realize that when they issue this they are allowing a 17 year old to work in a casino. The problem is that they could. BUELOW: What Wilson is saying is that all the judges on the Coast are so stupid that they don't know that when they do this that they are giving permission to work on gambling. And in bars. Do we need to approve this one right here? Or is that something you do? NOURSE: I think what we are looking at here if the Commission does not want this to happen they do need to make a statement on the record that anyone coming forth with this, I don't know if legally you can even do it. We will not accept. You have to be 21, per your birth certificate, to work at one of these casinos, to be issued a work permit. BUELOW: I don't want to do that. NOURSE: What you're doing is allowing this to stand. That we allow someone to come in with this removal of disability, you will have 17 and 18 year old dealers in Mississippi. Now do you want that? BUELOW: I don't think that's going to happen. H.JOHNSON: I don't think that. TANN: I take exception. I think that this is going to happen, and I think, we've watched this, but I don't think that we're to say that the judge can't say the minority can't be removed from, capable of doing what they think they're capable of doing at 19 years old, H.JOHNSON/BUELOW/TANN: all speaking at once. DON RAFFERTY: I just want to make an observation. Most of the time what we present to Chancellors, they never see the individual, the lawyer just goes in and presents the documentation for signing. I also want mention that there have been an increasing number, in my practice, in the last few weeks. Most of them want to be bartenders and waitresses. The problem ........ alot of people down there are taking the position ......... good job. NOURSE: Could we compel them to go back and..

RAFFERTY: They do it for bars right now, and I've seen a couple of waitresses ...... chancellor, and they say I work in a bar and I understand ...... casino, so maybe it would be a good idea to address the chancellor down there. NOURSE: On the request for the removal of disability that they fill out, does it identify what they want to do? RAFFERTY: Just petition in Chancery Court. BUDDY MEDLIN: This past session the restaurant association pushed to pass and legalize 18 to 21 that work in restaurants and allowing them to serve alcoholic beverages. But it barred them from being a bartender. But it is specific, that they are trying to pass this act, for 17 to 21, in particular take it from the table to the garbage but could not take it to the table. Unless they have a legal disability. W.CARROLL: It's a good analogy prior to this time. If you have a general removal of this disability of minority, you good serve as a waitress, and I think it's exactly the same. BUELOW: To me we're getting into a discussion here that we really don't have anything to say about. I mean to me the law says we can't have anyone in the gambling casino that is under 21 years of age. So that bars us right there. To issue a work permit to anyone under 21. You can't have a work permit, you can't be in a casino if you're under 21 years of age. Right? You can go in the casino as long as you're not gambling. NOURSE: You can walk through the casino to get to a restaurant. BUELOW: We've wasted all afternoon here for nothing. The law says you can't do anything unless you're 21 or older. The only way you're going to do this is if you get an order from a judge. If you get an order from a judge you're going to have to do it anyway; and there's nothing we can do about it. Is it? So lets go to the next item. If they get a judge that says this 17 year old can work in there, I don't know of anything that I can do to stop that. Now I think that's stupid. But I don't have a problem with an 18 year old, that' s married, and got a kid, and trying to get work. Maybe we could, do you have to have a high school diploma to get one? You don't have to have anything to get a work permit. I don't know what we can do about it. So let's go to additional applications. NOURSE: Don Laughlin's Gulfside Casino located at Mississippi State Port in Gulfport has filed an application. For your information this is the individual that is seriously negotiating to bring the Queen Mary from Long Beach California to Gulfport. I spoke with them and this is a serious offer. Casino One Corporation located at 215 Beach Boulevard, a gaming operation, that's in Biloxi. Front beach. That's on Beach Boulevard. More talk about Queen Mary. GENEHILL: Investigative status. 2 investigators on Grand Casinos, for 8 individuals ..... about halfway through investigation .... plan to be on October agenda. Jack Pratt/Palace Station/Broadwater Beach Operation/total of about 10 people located in Dallas and Las Vegas area... investigator has completed about half of the investigation on the Pratts.... hope to have it on September agenda. The last one is Carl Adkins, who is the Casino Manager for Mardi Gras, this is about halfway completed and should be on the September agenda. BUELOW: Public comments? SCOTT LEAVENWAY: You're all welcome to attend the grand opening of the Isle of Capri, 9 a.m.

BUELOW: Wilson, do you think, that if we were to agree to send a letter to the Chancellors in those areas that have boats, that we would like them not to approve anybody under the age of 18, that we could agree on that? That that would do any good? TANN: Or, could we just ask them if they would specify that W.CARROLL: In the future, could you in your removal of disability not to include casinos. BUELOW: I don't have any problem with them issuing it to them if they are 18 or above. Now if they're under 18, I do have a problem with that. RAFFERTY: Knowing our judges down there, if ya'l1 sent that a letter, telling them what your concerns are, as diligent and conscientious as they are, I'm sure they will follow your request. BUELOW: Well I'm not sure we all three agree on what we want to send. I don't know. H.JOHNSON: I agree with that. TANN: I would agree with whatever you say. W.CARROLL: I'll draft a letter for all signatures. MEETING ADJOURNED AT 1:40 P.M.