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July 23, 1997


Larry Montgomery
President and COO
Multimedia Games, Inc.
7335 South Lewis, Suite 204
Tulsa, OK 74136

Dear Mr. Montgomery:

This letter is in response to your inquiry as to whether the National Indian
Gaming Commission regards the game "MegaMania," as modified, as a Class II or
Class III game under the Indian Gaming Regulatory Act (IGRA). We have reviewed
the game and conclude that you may play your game, as discussed below, as a
Class II game.

This opinion is based on one site visit where I observed a prototype of the
game, a video tape which you made of that visit and a telefax received today,
which makes a small but important change to the game. It is therefore based
solely on my understanding of the game to be played as described below and will
continue to be subject to our review and further site visits by our field
investigators. If there are any changes made to the game as described or
significant factors not discussed, such changes or differences might materially
alter my opinion.

MegaMania is generally understood to be a game whereby not less than twelve
players, situated in one or more of several Indian bingo halls, each of which
have Electronic Player Stations (EPS), which are electronically interconnected,
may simultaneously play the same game. An EPS unit is vertical standing
structure with a computer, computer monitor and a bill acceptor. The player of
MegaMania must pay the cashier as much as she chooses to have credited to his
or her PIN number. The cashier enters the amount paid by the player into the
computer system and gives the player a receipt with a PIN number to enter into
the EPS. The player then sits in front of the EPS. This is a live game where
balls are drawn for the bingo game with a traditional style bingo blower, keyed
in by an operator and immediately transmitted to the tribal halls.
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The EPS monitor indicates when the bingo game will start, the amount of credit
available and the game pattern to be played, and displays up to four bingo
cards. Before play is started, the player may change cards. To start play, the
player touches each card or touches "select all" to choose all four of the
cards.

The monitor also projects images of three little ball men with numbers on them
which run up into the top right hand corner of the screen and which represent
the three balls drawn. The corresponding numbers are daubed on each card by the
player touching each card or touching the daub all button. Each time three
balls are drawn, a chip up or ante up system for payment is used. In other
words, each time three balls are drawn a certain amount of money is required
from the PIN credit for each card played. If a player fails to daub the card,
the card is automatically deleted and no more money is required to play that
card.

The game includes different traditional patterns and includes interim two,
three, and four corner games played on the way to completion of the patterns.
The amount a player wins on the interim games in dependent upon how many balls
have been drawn. The monitor indicates when the player has won an interim two
corners, three corners or four corners game. The monitor shows how many cards
are in play and previous numbers that have been drawn. In addition, the monitor
will indicate that a bingo has occurred, at what site the bingo has occurred,
the serial number of the winning cards, and the amount won. If the player's
credit runs out while she or he is playing, the player may simply continue play
by placing dollar bills into the bill acceptor. A player cashes out by taking
the original PIN number receipt back to the cashier.

As modified by Multimedia's July 23 telefax to me, the player must touch the
screen, within about 5 seconds, to indicate a bingo to win. If a player fails
to touch the screen the game will continue until there is a winner. In
addition, the four corners games will also continue until there is a winner or
until all players drop all cards.

The game, as described above, is materially different from the game as
previously played. In our letter of March 28, 1997, we indicated that there
were federal concerns that certain elements of the MegaMania game, as then
configured, could be viewed as Class





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III. We requested that Multimedia make specific changes to the game, and submit
the new version of the game, along with appropriate documentation, to the NIGC
for review. We also requested that the company stop play of the MegaMania game
as then configured within 14 days.

In Multimedia's letter of April 1, the new version of MegaMania was submitted.
The new MegaMania game was described as identical to the MegaMania game
reviewed on July 10, 1996, with the exception of the following changes, which
were requested in our letter of March 28:

       1) the numbers or objects drawn for the bingo game are drawn with a
       bingo blower instead of by an electronic number generator or other
       similar device;

       2) an act is required by the card holder, after the balls are drawn, to
       daub the cards, instead of a fully automatic daubing system;

       3) an act is required by the card holder to indicate a bingo to win,
       instead of a fully automatic system; and

       4) the "consolation game" is deleted from the game, and replaced by a
       "four corners" game that requires players to match two, three or four of
       four corners of the bingo card to win. (This letter addition of a four
       corners game was not requested in our March 28 letter.)

We reviewed those changes and the materials submitted and concluded that the
new version of MegaMania described in the letter of April 1, 1997, qualified as
a Class II game. We further entered into a Memorandum of Understanding (MOU)
between Multimedia Games and the NIGC that 1) created a timeframe for
Multimedia Games to implement the changes to the MegaMania game, and 2) stated
that the NIGC would not issue a Notice of Violation, Civil Fine or Temporary
Closure Order during the pendency of the changes to the MegaMania game.

On April 30, 1997, Multimedia wrote a letter to the NIGC indicating one of the
changes agreed to in the MOU would not be profitable and therefore the change
would not be made. As a result of that letter, information received about the
use of a bill-accepter and





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our subsequent understanding that the game was not going to be a live bingo
game, we declared the MOU to be null and void. Multimedia later withdrew its
April 30 letter. A July 23, 1997, letter telefaxed to me further modified the
proposed game.

                                    ANALYSIS

"IGRA established the Commission to regulate Indian gaming, and specifically
authorized the Commission to promulgate regulations and guidelines necessary to
implement the provisions of the Act. See 25 U.S.C. Sections 2704, 2706(b)(10)."
Shakopee Mdewakanton Sioux Community v. Hope, 16 F.3d 261, 263 (8th Cir. 1994).
In April 1992, the Commission issued definition regulations.

Those definition regulations establish:

       Class II gaming means:

              (a) Bingo or lotto (whether or not electronic, computer, or other
       technologic aids are used) when players:

              (1) Play for prizes with cards bearing numbers or other
       designations;

              (2) Cover numbers or designations when object, similarly numbered
       or designated, are drawn or electronically determined, and

              (3) Win the game by being the first person to cover a designated
       pattern on such cards;

              (b) If played in the same location as bingo or lotto, pull-tabs,
       punch boards, tip jars, instant bingo, and other games similar to 
       bingo ....

25 C.F.R. Section 502.3.

       Class III gaming means all forms of gaming that are not class I gaming
       or class II gaming, including but not limited to:

                     * * * *

       (b) Any slot machines as defined in 15 U.S.C. 1171(a)(1) and electronic
       or electromechanical facsimiles of any game of chance ....





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25 C.F.R. Section 502.4.

       Electronic, computer or other technologic aid means a device such as a
       computer, telephone, cable, television, satellite or bingo blower and
       that when used --

              (a) Is not a game of chance but merely assists a player of the
       playing of a game;

              (b) Is readily distinguishable from the playing of a game of
       chance on an electronic or electromechanical facsimile; and

              (c) Is operated according to applicable Federal communications
       law.

25 C.F.R. Section 502.7.

       Electronic or electromechanical facsimile means any gambling device as
       defined in 15 U.S.C. 1171(a)(2) or (3).

25 C.F.R. Section 502.8.

       Games similar to bingo means any game that meets the requirements for
       bingo under Sec. 502.3(a) of this part and that is not a house banking
       game under Sec. 501.11 of this part.

25 C.F.R. Section 502.9.

       The term "gambling device" is defined in the Johnson Act at 15 U.S.C.
Sec. 1171(a) as:

       (1) any so-called "slot machine" or any other machine or mechanical
       device an essential part of which is a drum or reel with insignia
       thereon, and (A) which when operated may deliver, as the result of the
       application of an element of chance, any money or property or (B) by the
       operation of which a person may become entitled to receive, as the
       result of the application of an element of chance, any money or
       property; or

       (2) any other machine or mechanical device (including but not limited
       to, roulette wheels and similar devices) designed and manufactured
       primarily for use in connection





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       with gambling, and (A) which when operated may deliver, as the result of
       the application of chance, any money or property, or (B) by the
       operation of which a person may become entitled to receive, as the
       result of the application of an element of chance, any money or
       property; or

       (3) any subassembly or essential part intended to be used in connection
       with any such machine or mechanical device, but which is not attached to
       any such machine or mechanical device as a constituent part.

GAMES SIMILAR TO BINGO

As discussed in Shakopee Mdewakanton Sioux Community v. Hope, 798 F.Supp. 1399
(D.Minn. 1992), aff'd 16 F.3d 261 (8th Cir. 1994), to be a game similar to
bingo, we must determine whether the statutory elements of bingo are essential
to the game being presented. In this instance, it is clear that the statutory
elements are key to the game.

The game clearly requires the players to use cards bearing numbers and requires
the player to cover the numbers, by daubing the cards, when the three balls are
drawn. Furthermore, the interim and final game of each play require a
predesignated pattern.

It was not clear during my site visit that players would "win the game by being
the first person to cover a designated pattern." 25 C.F.R. Section 502.3. It
appeared that in both the interim and final games that there is a potential for
having no winners for each of the games. Your subsequent July 23 changes,
however, assure that there will be winners for each of the predesignated
patterns.

Finally, a question has been raised about the ante up feature of your game.
While I am cognizant of the similarities between such a feature and slot
machines, this feature is not essential to the MegaMania game nor does it
appear to impact negatively on our analysis of the statutory and regulatory
criteria for "bingo" or a game "similar to bingo." The feature is essentially
similar to the paper card "speed bingo" or "chip up bingo" games played in
halls where the player antes up money for each number called. Therefore, while
not traditional bingo, the ante up aspect does not change the





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game so fundamentally that it prevents me from ultimately determining that this
is a game similar to bingo.

GAMBLING DEVICES UNDER U.S.C. Section 1171

Specifically included within the regulatory definition of Class III is "any
slot machines as defined in 15 U.S.C. 1171(a)(1) and electronic or
electromechanical facsimiles of any game of chance." Facsimiles is defined as
any gambling device under 15 U.S.C. Sections 1171(a)(2) and (3). Therefore, if
the game similar to bingo is using a gambling device, it would be transformed
under NIGC regulations into a Class III game.

We are not prepared, at this time, to decide whether the game uses gambling
devices. Furthermore, we believe that the manufacturer has made every effort to
develop this game with the aid of technology rather than by using gambling
devices. Therefore, we have determined that the tribes may play MegaMania
without risk of an enforcement action by the NIGC.

Please be advised that this legal opinion is advisory in nature only and that
it may be superseded, reversed, revised or reconsidered by a subsequent General
Counsel or Chairman of the Commission. Furthermore, if there are any changes
made to the game as described, such changes might materially alter our
conclusion.

Finally, by issuing this opinion, we do not speak on behalf of the Department
of Justice or the United States Attorneys who share enforcement
responsibilities with the NIGC over gambling devices.

                                      Sincerely,


                                      Penny J. Coleman
                                      Acting General Counsel





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