From: Bhleld Law Oloup Fnx: (BOO) 018.2107 To: Attn: John Hay. Esq. Fax: +1 (202) 89%7008 Page 2 of 7 61312013 11S8 

National 1ndialr Gaming Commission 

Settlement Agreement 

1. This settlement agreement (tho Agreement) is altered into by and bclweeu.Ule 

Ponca Tribe of Oklahoma (the Tribe), a WdeFally recognized Indian tribe, and the 

Ch&woman of the National Indian Gaming Commission (the Chairwoman) 

related to the mmana,gement of the 'Tribe's Two Rivers CAsjno by (iay Watldns 

(Watluns) and his'company M, Inc., (02) without an approved management 

contract'in violation ofthe. hdian Gamlng Regulatory Act (IGRA), 25 U.S.C. 

2701 st seq., and National India1 Gaming Commission (NIGC) 1~egdations, 25 

C.F.R. $ 501 et seq. 

Circumstances of Violation 

2. On or about September 1,201 1, theNIGC initiated an investigation into the 

management of the Two Rivers Casino (the Casino), a wholly-owued enterprise 

of the Ponca Tribe of Oklahoma, to determine wheIher lbe facility was being 

managed in absence of a management contract approved by the Chairwoman in 

violation oSIGL4 and NIGC regulations. 

3. A management contract dated July 27,2010, between the Tribe and G2 was 

submitted to the NIGC on Arrgust 4,2010, before fl~e Two Rivers Casino wns 

opened. 

4. On or about October 19,2010, Wa?kins and G2, began managing the Two kvers 

Casino without a management contr,wt approved by the NIGC Chairwoman. On 

the same date, the Tribe and Waflcins entered into a General Manager Agreement. 

5. Watldns was not an employee ofthe Tribe. The General klnnager Agreement 

entered into between the Tribe and Watkins provided that Watldns would receive 

$950.00 per week. However, froom October 2001 to Febnwy 201 1, Wddas did 

not receive any pay checks from the Casino. The General Manager Agreement did 

not bestow any tribal employee benefita on Watldns. The Tribe never provided . 

Watkins with a 1099. 

6. WatItins used his own funds and finds received from a fhkd party to rehbish and 

outfit the casino. Watkins entered inb a construction contract with the Tribe on 

March 1,2010, in which Watkins was to pedorm all work, at his sole cost and 

expense, Watkins stated to he Tribe that the total cost to renovate the Casino was 

approximately $700,000. On October 10,2011, Centurion Games filed a petition 

in the District Court of Tulsa County claiming that a verbal agrtremcnt was in 

effect between WatkinsIG2 and Centurion Games, As part ofthis agreement, 

Centmion Games would loan WatKislG2 $722,970.99 for the rcnovation and 

operation of the Two Rivers Casino. WatkinslGa agreed to pay Centurion Games 
. . . . . . . . . . , , . . , 

From: Bhleld Low Qroup Fax: (800) 610.2107 To: Altn: John Hay. Esq. Pax: +I 1202) 032-7000 Page 3 of 7 GM013 '11:48 

an amount equal to 10% of the monthly gross proceeds generated by Two Rivers 

Casino until paid in full. WatkinsiG2 also agreed to pay Centurion 50% of the 

profits received from his operation of the Casino on a monthly basis as long as he 

managed the Casino. Centurion allcged that WatkinsIG2 only repaid $135,000 of 

the loan and failed to make any profit payments. 

7. On December 31,2010, Watkhs used non-tribal funds to increase t11e vault by 

$48,000. The Casino general ledger notes that on Janumy 2,201 1, the vault was 

increased by G2, stating "raise vault to help with new yea" in the memo line, 

8. On December 17,2010, WaMns issued a cl~eckto G2 mountingto 25% ofthe 

net gaming revenue and distributed 75% ofthe net gaming revenue to the Tribe. 

These distributions were based on the Noveli~ber 2010 profiffloss statement 

reflecting not revenue of $43,029.93 of the Casino. 

9. Payments of$35,000 were made fiwm the Casino operating accaunt to G2 on 

March5,2011,April1,2011,May 1,,2011,June7,2011,andJuly 1,2011. 

Payments 0.€$7,500 were made fmm the Casino opmiiny account to the Tribe on 

February 18,2011, March 16,2011, April 20,2011, and May 18,2011. These 

payments reflect the agreement memorialized in the unapproved management 

agreementthat was submitted to the NIGC. 

i 0. WatMns enttxed into eLeectronio gaming machine agreements and signed all 

agreements. N1 but one of the agreemenu was signed by Watluns as "President". 

11, A Class III Equipment LeaseIPurchase Agreement and Sokware License was 

entered into on October 1 1,2010, between Mega Bingo and thk Ponca Tribe of 

Olclahoma. The document was signed by Gary Watkins, President, on October 8, 

2010. 

12. A Rental or Participation Agreement was entered into on Septevnber 10,2010, 

between BnUy Gaming, Inc dba Bally Technologics and 'ho Rivers Casino. The 

document was signcd by Gary Watkins, President, on September 9,2010. 

13. A Wide Area Network Services Agreement was entered into on September 2, 

2010, betworn Bally Ganiimg, Inc. dba Bally Technologies and the Two Rivers 

Casino. The agreement was signed by Ga~y Watlcins, President, on September 9, 

2010. 

14. AParticipation Agreement was entered into on June 6,2010, between IGT and 

Two Rivers Casino. The agreement was signed by Gary Wrrtlcins, President, on 

June 6,2010. 

15. An Equipment ~ease~gxement was entered into on June 6,2010, between 

Videc, Gamhllg Tecbnologics nnd G2 on behalf of the Ponca Tribe of Oklahoma. 

The agreement was signed by Gary ~aficins, President. 
From: SllleldLaw Group Fax: (800) 619.2107 To: Atln: John Hay, Esq. Fax: +I (202) 852.7058 Payo 4 of 7 6/3/2013 11fl8 

16. A Mutual C~~dentiality xmd Nondisclosure Agreement were made effective on 

Mach 17,2010, between Video Gaming Technologies and Gary Watkins, an 

individual representing the Ponca'rribe of hdians, The ageenisnt was signed by 

Ctary Watlcins, individually, and Ponca Tribe of Indians of Oklahoma's Chairman, 

Doughs R. Rhodd, on March 1,7,20 10. 

17. A Gaming Equipn~eiit Lease Agreement was entered into on September 15,2010, 

between AGS, LIX: and ':ho Rivers Casino. The docummt ww signed by Ctary 

Watldns, President, on September 8,2010. 

18. Watkins hired and supervised employees of the Casino. Ne had authority to hire 

and flre Casitlo employees. 

19. 'The 'l'ribe terminated its relationship with Watlcins on August 31,201 1, and 

withdrew the management contract fromNIOC review. 

20. Consequently, from approximately October 10,2010 though August 31,201.1, 

Watkins and G2 mwngod the Casino witbout a management contract approved by 

the NIGC Chairwomsu in violation of XGIRA, 25 U.S.C. 5 271 1, and NTGC, 

regulations, 25 C.F.R. Part 573. 

21. On Mnrch 26,2012, theNIGC notified ihe Tribe that it was investigating the 

possible management ofthe Casino without an approved management agreement 

and issued a document request. 

22. On April 27,2012, the Tribe complied with the NlGC document request. 

23. On or about November 6,2012, the Tribe and the MGC entered nego!iations over 

a settlement of this violation. 

Recitals 

21. The Chairwoman has authority to levy and collect appropriate civil fines, not to 

exceed $25,000 per violation, against the tFibal operator of an Indian game or a 

management contractor engaged in gaming for any violation of any provision of 

IGIa andNIGC regulations. 25 U.S.C. Q: 2713(&)(1); 25 C.F.R. 4 575.4. "LF 

noncompliance continues for more than one day, the Chairman may treat each 

daily act or omission as a separateviolation." 25 C.F.R. 5 57$.4(a)(2). 

25. The Tribe wishes to enter a settlement agreement with the Chdnvoman to avoid 

the issuance of a notice ofviolation. 

26. The Chairwoman acknowledges that prior to the execution of this Agreement, the 

Tribe took &rmative steps to correct the violation by severing all ties with 

Watkins and G2 and by assuming full, managerial and operational control over the 
. . .. . 

: From: Shlsd Law Group Fax: (800) 618.2107 To: Ath: John Hay. Esq, Fax: +I (202) 692-7066 Page 6 of 7 61312013 11:48 

Two Rivers Casino tIm~gh its Ponca Indian Bconoinic Development AtiIhority 

Board oi'Directars. 

Terms of Settlement Agreement 

27. The Tribe admits the facts set forth in the "Circumstances of Violationn section of 

this agreement; agrees that the NIGC possesses jurisdiction over this matter; and 

agrees to co111p1y with the terms of this apreement. 

28. k~ exchange for the Wms, conditions, and understandings set forth h this 

agreenzent, the Tribe waives its right to any administrative review of this 

settlement (25 C.P.R. $8 584,585), submit iuformnation prior to the issuance of a 

civil fine assessment (25 C.F.R. $575.9, seek the ~eeduction ox waiver of a civil 

fine (25 C.F.R. 8 575.6), and the right to seek judicial review (25 U.S.C. $ 2714). 

29. In exchange for the terms, conditions, and undersimdiis set forthkrcin, the 

Tribe hereby waives the rights specified inpmagraph 28 of this Agreemeut and 

any other right to seek judicial leview or oehawise challenge or conteest the 

Chainvoman's actions under this Agreement, including the right to have the 

Chaiman provide her written analysis of the factors to be considered in 

assessing a civil fine set forth und~r 25 C3.R. 575.4. 

30. The Chahotnan agrees upon execution oi this agreement that the N'IGC shall not 

institute Wer vroceedinm or actions or assess any additional, sanctions against 

the Tribe. tho ~6nca ~ribz ~aminrr Commission o; anv other entitv of the~ribe. 

or any ofhe officers and/or dixectk of such tribal eniities, inchding the 

members of the Business Committee and the members of thb Gaming 

Commission, for any actions arising out of the circlunstmcea of thisagreement 

t in less the Tribe fails to coinply with this Agreement. Ifthe Tribe as any ofthe 

aforementioned parties or individuals fails .to comply with this Agreement, the 

Tribe agrees that it will pay a fme of $75,000, as outlined in Paragraphs 37 and 

38. 

31. 'ke Tribe and/or any tribal entity shall prohibit Watlcins and G2 andlor any other 

entity owned In whole or part or otherwise associated with Watk-ins, including -. any 

enti$ in whioh Watlrins or an entity owned by him is a sharebold& fron~ any 

association of any kind with the Two Rivers Casino, any tribal gaming activity, 

and any tribal gaming facility. 

32. The Tribe and/or any tribal entity shall not employ or retain Wazkias, or any 

entity awned in whoIe or part or otheuwise associated with Watkias, including any 

entity in whioh Waans or an entity owned by him is a shureholder, to operate, 

manage, consdt, or provide any type ofmaterials, machines, or services related 

directly or indirectly to the operation or mat!agcment of any of its gaming 

facilities. 
From: Shlsld Law Oroap Fex: (800) 618.2107 To: Atln: John Hay. Elq. Fax: it 1202) 632-7066 Page 0 sf 7 61312013 11a8 

33. The Tribe and/or any tribal entity shall not permit Watkins, G2, or any entity 

owned in whole or part by or in any way associated with Watkins, including any 

entity in whioh Watlcins or an ehtity owned by bLn is a shareholder, to develop, 

finance, or otherwise have a dimct or indirect financial hitereat in my existing or 

future gaming facility andlor operation or to provide any type of materials, 

maohines, goods or any type of services to the Tribe's existing or future gaming 

facilities or operalions. 

34. The Tribe and/or any tribal entity shall, not entor any lype ~Parrangernent with 

Watkins, G2, or any entity owned in whole or part by Watkhs, any entity in any 

way a3sociated with Watkins, including any entity in which Watlcins or an entity 

owned by him is a shareholder, that provides Watkins or such entities, either 

drectly or indirectly, with a sum of money andlor future sums of money as 

consideration for such entities' past gaming-related sewices to the Tribe or any 

tribal entity andlor as consideration for the prohibition of such gaming-related 

services in the future. 

35. The Tribe, andlor any l~ibal, entity shall not have any type of relationship 

involving Indian gaming with Watkins, G2, any eutity owned in whole or part by 

Watkins, any entity in any way associated with Walkh, andlor my entity in 

which Watkins or an entity owned by him is a shareholder. 

36. The Tribe wiU assist the Cl~airwoman in completing her investigation of 

eircmstames of this violation. Such assistance will include providig sigted 

declarations from tribal officials and employees, including but not limited to 

Chairman Earl "Trey" IIowe 111, and providing witnesses for any administrative 

hearing involving Watldns andlor G2. 

37. The Tribe shall pay a civil fine of seventy-five thousand dollars ($75,000.00). 

However, his he shrill be suspended as long as the Tribe complies with the 

terms of the Agreement. 

38, if the Tribe breaches any of the provisions ofthis Agreement, Tribe agees and 

consents that a civil line of$75,000.00 will become fully due and payable on the 

date of he breach. In such circumstance, thc NIOC shall, issue a written notice 

(also known as a demand letter) to Txibe pursuant to NXGC debt collec;(ion 

regulations, 25 C.F,R. 513. The Tribe agrees that the MGC .andlor U.S. 

Denartment of Treasury may nroceed with debt collection of the $75.000.00 civil . , 

fine (less mounts already ;&) against fie Tribe, and may assess interest, 

penalties and administrative costs from the date of bread of this Settlement 

kgrcement, as provided in 25 C.F.R. 8 513.5. In. suoh circumstance, the Tribe 

waives any rights to an ord hearing under 25 C.F.R. 8 513.6, but the NIGC shall 

provide Tribe with a reasonable opportunity to submit written ma:terid supporting 

a request to reconsider the determination that Tribe is in breach ofthis Agreemeat: 

or to challenge the method by which theNXC+C calculated the debt. 
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39. The Tribe agrees to participate in anNIUC sponsored training conducted in 

Oldahoma within 18 months of the execution ofthis Agreement. Compliance wilh 

this Paragraph can be damonstrated by at least one member of the Ponca Tribal 

Gaming Commission or Business Committee attending any training presented by 

the NIGC. 

40. Tlzis agrement shall not become public unless and until it is accepted and signed 

by -he Chairwoman of the NIUC. However, upon its acceptance by the 

Chitwoman of the NIGC, and her signature, the patties agree thathat this agreement 

will become public. 

Additional Covenants 

41. The parties stipulate that this Agreement shall be deemed a final order ofthe 

.Commission and a final agency action pursuant to 25 C.F.R. 8 580.10. 

42. This Agreement constitutes the entire agreement between the Chairwoman and 

the Tribe and supersedes all prior verbal or written agreements and 

understandings betweeathe parties related to the subjeot mattex l~ereof, No 

warranties, representations, covenants, or agreements shall be binding upon any 

party except as set forth herein. Any modification or waivex of any term of this 

Agreemen4 including the modification or waiver of term, must be in writing and 

signed by the parties. 

43. The Chairnoman and Tribc expressly aged and aclcnowlcdye that time is of the 

essence in the Agreement. The reoitats herein and above shall be binding upon the 

parties, heir agents, heirs, personal representatives, successors, and assigns. 

44. A signature produced by firchile shall be deemed to be an original signature and 

shall be effective and binding for purpose of the Agrem~ent. 

For lhe Pmca Tribe of Oklahoma 

By: 62 & -,&~.r. - Date: 5,'- 

For the National Indian Gaining Commission 

g 5- 0 3-(3 

By: Date: 

Tracie L. Stevens, Chairwoman