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Multimedia Disagrees with NIGC Ruling

AUSTIN, Texas -- (PRESS RELEASE) -- Multimedia Games, Inc. (NASDAQ: MGAM) today reported that the acting General Counsel of the National Indian Gaming Commission (NIGC) has issued a letter to Multimedia Games and one of its Native American tribal customers opining that their development agreement regarding the WinStar Casino in Thackerville, Oklahoma constitutes a "management contract."

Clifton Lind, President and Chief Executive Officer of Multimedia Games, stated: "We were surprised by the letter and differ with the opinions expressed therein. The development agreement was furnished to the NIGC in June 2003 prior to the WinStar Casino's opening in July 2003. Prior to receiving the letter, neither Multimedia Games nor the tribe was ever contacted by the acting General Counsel to indicate that she was reviewing the agreements for this purpose or consulted in this matter."

The agreement provides that Multimedia Games would fund the construction and development of an expanded Class II gaming facility for the tribe in return for committed floor space for MGAM games for a specified term. The agreement was drafted and reviewed by legal counsel who specialize in Native American gaming regulation.

The authority of the NIGC to review and approve gaming related contracts is limited to management contract and related collateral agreements. According to the acting General Counsel, the performance of any planning, organizing, directing, coordinating or controlling with respect to any part of a gaming operation constitutes management for purposes of determining whether an agreement for any of these activities is a management contract.

Mr. Lind continued: "We respectfully disagree with the acting General Counsel's recent interpretation that the development agreement and collateral agreements constitute a management contract. We invest significant resources to ensure that our activities are compliant with applicable laws and regulations. We believe that the acting General Counsel's view of management is broader than was intended and that counsel's interpretation in this case was based in part on collateral agreements not in effect, without the benefit of discussions with MGAM or tribal representatives."

Mr. Lind concluded by saying, "We have requested a meeting with NIGC representatives to discuss and hopefully resolve these matters. As we have done in the past, we intend to support our tribal customer and work closely with our customer and the NIGC to clear up these uncertainties."

Under the Indian Gaming Regulatory Act (IGRA), a management contract is an agreement with a tribe that provides for the third-party management of all or part of a gaming operation. NIGC approval of management contracts is required by IGRA. The acting General Counsel has requested that Multimedia Games and the tribe submit within twenty (20) days the development agreement and any related agreements for approval by the NIGC Chairman.

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