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Multimedia Games, National Indian Gaming Commission Resolve Lawsuit13 March 2003AUSTIN, Texas--(Press Release)-- Multimedia Games Inc. (Nasdaq:MGAM) announced today that it has reached a settlement with the National Indian Gaming Commission ("NIGC") resolving its lawsuit and related appeal concerning Multimedia's MegaNanza family of games, and establishes a fast-track, 60-day timetable for NIGC review of Multimedia's MegaNanza replacement game, Reel Time Bingo(tm). The U.S. Department of Justice has approved the settlement agreement. Pursuant to the terms of the settlement agreement, Multimedia recently submitted Reel Time Bingo to the NIGC for expedited review and classification of the game and its equipment. Multimedia is seeking a Class II classification for Reel Time Bingo. The agreement stipulates that in the 30 days following Multimedia's submission of Reel Time Bingo, Multimedia and the NIGC will engage "...in informal discussions designed to clarify the workings of the game and identify issues that may preclude classification of the game as Class II. These discussions will be made in an open and candid atmosphere designed to identify characteristics of the game that could result in a Class III classification." While the outcome of the NIGC review cannot be predicted, Multimedia believes that this submission and review process, combined with the anticipated dialogue with the NIGC, creates an opportunity for the Company to address and satisfy NIGC concerns, if any arise, about Reel Time Bingo as a Class II game. Clifton E. Lind, Multimedia Games president and chief executive officer, commented, "This settlement emphasizes a preference for open communication over litigation between Multimedia Games, the NIGC and representatives of the U.S. Department of Justice. We are very pleased that all parties took an open, collaborative approach during the discussions leading up to this agreement. "In concert with tribal regulators, Multimedia Games is committed to working closely with the NIGC on all regulatory matters, as we firmly believe it is in the best interests of our tribal customers, our Company and our shareholders. "We view this as an important agreement for Multimedia Games, as it establishes a very reasonable timetable for the review of and game classification notice for our Reel Time Bingo game. We are hopeful that the combination of this settlement, our discussions with the NIGC and the expedited timetable will position us to address any NIGC issues related to Reel Time Bingo in a timely manner, and help to secure a Class II classification for the game." As part of the settlement agreement, Multimedia Games will withdraw its appeal in the Tenth Circuit Court of Appeals in Denver regarding its standing as a vendor to challenge an opinion by the Deputy General Counsel of the NIGC. In addition, the agreement states that "...the office of the General Counsel of the NIGC shall issue an explanation to tribes that operate gaming facilities explaining some of the characteristics that make bingo-type games with pre-drawn balls Class III gaming." This explanation will be given simultaneously with the issuance of the advisory opinion on the game classification of Reel Time Bingo. When the classification issue first arose in April 2002, revenue associated with MegaNanza game placements accounted for the vast majority of Multimedia's revenue. Since that time, Reel Time Bingo has been increasingly deployed at Native American gaming facilities as a replacement for the MegaNanza gaming engine, and has been well received by Multimedia's tribal customers and their players who previously played MegaNanza. Reel Time Bingo continues to be popular with players and has quickly become a successful revenue generator for Multimedia's tribal partners. Subject to regulatory and tribal approval, Multimedia expects to convert substantially all of the remaining MegaNanza player stations to Reel Time Bingo in the first half of calendar 2003. While Multimedia and many of its tribal partners have always contended and continue to believe that MegaNanza is a Class II game, the settlement agreement does not address the issue of game classification. In order to allow ample opportunity for a seamless transition from MegaNanza to Reel Time Bingo for tribal customers that have not already done so, the agreement allows for a period of 45 days after the advisory opinion is issued for MGAM to convert all remaining halls to an alternate gaming engine. Multimedia Games Inc. is the leading supplier of interactive electronic games and player stations to the rapidly growing Native American gaming market. The Company's games are delivered through a telecommunications network that links its player stations with one another both within and among gaming facilities. Multimedia Games designs and develops networks, software and content that provide its customers with comprehensive gaming systems. The Company's development and marketing efforts focus on Class II gaming systems and Class III video lottery systems for use by Native American tribes throughout the United States. |