UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: March 1, 2004
(Date of earliest event reported) (March 1, 2004)
Multimedia Games, Inc.
(Exact name of registrant as specified in its charter)
001-14551
(Commission File Number)
Texas 74-2611034
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
206 Wild Basin Rd., Bldg. B, Suite 400, 78746
Austin, Texas (Zip Code)
(Address of principal executive offices)
(512) 334-7500
(Registrant's telephone number, including area code)
Item 9. Regulation FD Disclosure
Multimedia Games, Inc. (the "Registrant") has learned that the Supreme Court did
not grant the United States Department of Justice's ("DOJ's") Petitions for
Writs of Certiorari in the United States Supreme Court seeking review of two
U.S. Circuit Court cases that examined whether the Johnson Act prohibits Native
American tribes from offering certain types of electronic gaming devices.
Specifically, the DOJ sought review of: United States of America v. Santee Sioux
Tribe of Nebraska, a federally recognized Indian Tribe, on Petition for a Writ
of Certiorari to the United States Supreme Court from an opinion of the Court of
Appeals for the Eighth Circuit; and, John D. Ashcroft, Attorney General, et al.,
v. Seneca-Cayuga Tribe of Oklahoma, et al. on Petition for a Writ of Certiorari
from an opinion by the United States Court of Appeals for the Tenth Circuit. The
DOJ sought to overturn the two lower court rulings that the use of Class II
technologic aids to the play of electronic pull-tab games is not a violation of
the Johnson Act, and therefore not prohibited for use on tribal lands as Class
II games.
Although the Registrant's machines were not the subject of the lawsuits, the
DOJ's arguments and reasoning appeared to encompass the machines offered by the
Registrant for the Class II market. As a result, on December 2, 2003, the
Registrant filed a Form 8-K indicating that if the U.S. Supreme Court were to
grant certiorari and adopt the arguments advanced by the DOJ, the play of most
of the Registrant's current gaming products without a compact would likely be
prohibited by the Johnson Act, resulting in a significant, material, adverse
impact on the Registrant's business and operating results.
Since the Supreme Court has declined to accept these cases for review, the lower
courts decisions affirming the right of the tribes to offer games such as those
manufactured and sold by the Registrant as legal "electronic aids" to bingo for
the Class II market will continue to stand. The Registrant believes that for the
immediate future significant legal uncertainty has been eliminated concerning
the Registrant's ability to continue to offer Class II games played with the
assistance of technological aids in the Registrant's principal market.
Furthermore, on February 26, 2004, the State of Oklahoma, currently the
Registrant's primary market, passed legislation authorizing the operation of
certain forms of gaming at Oklahoma's racetracks, and additional types of games
at tribal gaming facilities in the state. The Bill now only requires the
Governor's signature. The Registrant believes that for the Tribes that elect to
enter into a compact with the state, the new Oklahoma gaming legislation, if
enacted, will further mitigate risk related to the threat to the Registrant's
tribal customers of prosecution under the Johnson Act for the games operated
pursuant to the compact.
Although the DOJ could bring another action against a tribe based on this legal
premise, such an action would run counter to not only the weight of authority of
five U.S. District Court rulings as affirmed by five U.S. Circuit Court
opinions, but now a rejection of review by the U.S. Supreme Court.
Four U.S. Circuit Courts of Appeal of the United States in five different case
opinions have consistently rejected attempts by the DOJ to have Class II games
that are played using technologic aids declared illegal. Four of those opinions,
from the Ninth, Tenth, and District of Columbia Circuit Courts, have indicated
that the Johnson Act does not apply to technologic aids to the play of Class II
games permitted under the Indian Gaming Regulatory Act ("IGRA"). In another
opinion, the Eighth Circuit Court ruled that the electronic pull-tab game in
question was not a Johnson Act device and was legally used in connection with
Class II gaming on Native American land.
The Tenth Circuit Court, which has twice ruled on the Johnson Act issue, (once
related to an electronic bingo game and once related to an electronic pull-tab
game) stated that, "Absent clear evidence to the contrary, we will not ascribe
to Congress the intent both to carefully craft through IGRA this protection
afforded to users of Class II technologic aids and to simultaneously eviscerate
those protections by exposing users of Class II technologic aids to Johnson Act
liability for the very conduct authorized by IGRA."
Certain Factors
This filing contains forward-looking statements that are made in reliance upon
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These statements are generally accompanied by words such as "will,
"would," "could," "expect," "plan," "hope," and words of a similar nature that
convey future meaning. Future events involve risks and uncertainties that may
cause actual results to differ materially from those we currently anticipate.
Such risks and uncertainties include, but are not limited to: the risk that the
operating results projected in our guidance may be adversely affected by
regulatory developments (such as approval of a compact in Oklahoma enabling our
tribal customers to engage in Class III gaming), increased competitive pressures
from significant entrants into the Class II market, or the failure of one or
more of our projected new revenue sources or significant development
opportunities to generate anticipated revenues; the continuing risk that legal
developments, such as new federal circuit court or U.S. Supreme Court decisions,
could impair or virtually eliminate the ability of our tribal customers to offer
electronic games in the Class II market; the risk of an impaired competitive
position for our games as a result of changes we made in order to obtain a Class
II certification letter from the NIGC; the risk that our new Gen4 system may
encounter technological or other difficulties during its initial deployment;
risks that our development projects with our tribal customers may not lead to
placement of our games with such customers; risks that markets such as
California that we believe represent opportunities for our products may not
emerge as we anticipate; the risk of future regulatory enforcement action
against versions of our games that have not been certified by the NIGC; the
impact of economic conditions on the play of our games in our customers'
facilities, and on our customers' willingness to lease additional games from us;
new risks and challenges we confront as we expand into non-Native-American
gaming activities; risks associated with a high level of customer and geographic
concentration; and the risks that our customers' purchases of our products might
decline in light of these or other developments. Other important risks and
uncertainties that may affect our business are detailed form time to time in the
"Certain Risks" and the "Risk Factors" sections and elsewhere in our filings
with the Securities and Exchange Commission. We undertake no obligation to
update information in this release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MULTIMEDIA GAMES, INC.
Dated: March 1, 2004 By: /s/ Craig S. Nouis
-----------------------------
Craig S. Nouis
Chief Financial Officer and
Principal Accounting Officer