MGAM News!
TULSA, Okla.--(BUSINESS WIRE)--June 11, 1997--Multimedia Games, Inc.
(Nasdaq:MGAM) (MGAM) announced today that it has completed the development and
preliminary field testing of modifications to the MegaMania electronically-aided bingo game as
recommended by the U.S. Department of Justice.
The NIGC reviewed and inspected the modified system on June 9, 1997. MGAM believes that
after analysis of the changes, the NIGC will agree that all modifications have been designed to
meet the requests made of MGAM, and that the MegaMania game and the electronic player
stations upon which MegaMania is played comply with the requirements of the Indian Gaming
Regulatory Act (IGRA) and the Regulations of the NIGC.
Although MGAM is confident it has met both the requirements of the law and the requests of the
regulatory agencies, it is possible that the NIGC analysis will require a judicial review. MGAM's
management fully expects that such a judicial review should be favorable to the company.
Gordon T. Graves, chairman and chief executive officer of MGAM, said, "Most of the changes
have already been implemented in the field. Incorporation of the remaining changes, which were
reviewed in a beta-test environment yesterday, will begin in about one week and should be
completed before July 15."
MegaMania is an interactive multimedia bingo game which utilizes the latest technology to give
players a new level of entertainment. MegaMania is delivered to bingo players electronically
through fast action color video presentations augmented by sound and featuring state-of-the-art
graphics and animation. The game provides a high level of prize award reinforcement and requires
interactive touch-feel player participation. Revenue from MegaMania has grown to more than
$1.8 million per month in less than one year. The new version involves: (a) changing the prize
structure of the game, (b) increasing the level of interactivity involved, and (c) revising the method
of random number selection.
Gordon Graves also stated, "The NIGC wrote us a letter in July of 1996 telling us MegaMania
was a bingo game as defined by Congress in the Indian Gaming Regulatory Act. The DOJ
disagreed and in February 1997 suggested certain changes be made to make it more apparent
that MegaMania was a bingo game. On April 8, 1997, we entered into a Memorandum of
Understanding (MOU) with the NIGC to make these changes and the NIGC agreed that if we
did so, they would continue to rule that MegaMania was a bingo game. We do not agree that the
changes are necessary to meet the legal requirements of bingo. We are not in any way attempting
to negotiate, set policy, or establish precedence on this important issue. Our regulator asked us to
make the changes and we have complied. The changes we have made to our new version of
MegaMania are those we agreed to in our April 8 MOU with the NIGC and its subsequent letter
of approval dated April 9, 1997. On May 12, 1997, the Acting Chair of the NIGC, Ms. Ada
Deer, told us in a news letter that the NIGC would not be bound by the MOU by declaring it null
and void'. We believe this was because the NIGC thought we had made changes to MegaMania
other than those set forth in the MOU. This is not the case and we are confident that the NIGC
on-site inspection showed that the changes we have made are the same as we had previously
agreed."
Graves went on to add, "This is an important juncture in our company's history. In our May 15,
1997 public filing with the SEC (Form 10-QSB), we explained in great detail the status of our
situation with the NIGC and the DOJ.
"We trust that our long-time friends and customers, the sovereign Indian nations, will continue to
show patience as we work through these issues. There has been a lot of rumor, innuendo and
half-truths spread about our company, particularly from competitors and would be competitors,
but we are confident that our customers can see through all of that. We continue to be profitable
and are pleased with our progress in expanding into the lottery industry, TV game business, and
charity bingo business. Our future looks bright to me. Perhaps we could have moved a little faster
in capturing market share with this product if we had not been so insistent that the NIGC review
our products and activity almost every step of the way, but, at the end of this, we want to have an
exciting game for our customers to play with the certainty that all concerns of the NIGC and the
DOJ are behind us. I believe our slower, more conservative approach will prove to be
successful."
Multimedia Games, Inc. through its wholly owned subsidiary MegaBingo(R), Inc., has exclusive
contracts with over 50 Indian nations to provide linked games that are integrated among multiple
halls. Multimedia Games, Inc. is the nation's leading provider of linked, high-stakes bingo games,
electronic based interactive bingo games, and associated data processing services and products
to the Indian gaming industry.
CONTACT: Multimedia Games, Inc., Tulsa
Gordon Graves, 918/494-0576 or 800/726-2464
REPEATS: New York 212-752-9600 or 800-221-2462; Boston 617-236-4266 or
800-225-2030; SF 415-986-4422 or 800-227-0845; LA 310-820-9473
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