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Video Lottery Advisory Council Meeting Minutes July 28, 2015

Members present: Bill Fasy - President - Delaware Park Patti Key – Chief Executive Officer - Harrington Raceway & Casino Vernon Kirk – Director - Delaware State Lottery Tim Shortall – Vice President U.S. Eastern Region – Sales - IGT Ed Sutor – President & CEO - Dover Downs Hotel & Casino Kathy Wayne – General Manager – Scientific Games

Attendees: Matt Bittle – Delaware State News Lloyd Boulter – Scientific Games Peter Bradley – Dover Downs Hotel & Casino Mark Casto – Bally Technologies James Dawson – Delaware Public Media Sal DiMario – Delaware Standardbred Owners Association Bessie Gruwell – Delaware Thoroughbred Horsemen’s Assoc. Steve Keener – Dover Downs Hotel & Casino

Jim Logue – Delaware State Lottery Richard MacDonald – Delaware State Lottery Jon Offredo – News Journal

Opening of the Meeting  Ed Sutor - The minutes of the previous meeting on April 28, 2015 were approved and posted on the State’s website. The date, time and location of today’s meeting was posted on the State’s public meeting section of their website.

Review of Competitive Situation  Ed Sutor - Typically, the agenda for the July VLAC meeting includes review of the items enacted upon from the prior year’s VLAC Report to the State. Since none of the items recommended were passed through legislation by the General Assembly, this will be a very short meeting. - The 2nd quarter of 2015 was the 34th consecutive quarter of year over year decline in slot revenue for the three Delaware casinos combined. While this year’s percentage decrease was not as bad as some prior years (like when Maryland Live first opened), we are expecting a significant negative impact when MGM opens at National Harbor, MD in 2016.

Review of Lottery Initiatives:  Vernon Kirk - Due to recent mergers, a reorganization of the VLAC members is necessary. Robert Neugebauer of IGT is no longer a VLAC member. Mike Nickolich of Bally has been appointed as a member.

1 - iGaming initiatives continue to move along. Mobile gaming is doing well. The NetTeller payment processor went live earlier this month. We are advertising mobile iGaming with banner planes along Rehoboth Beach to capture seasonal business that may not know of the capability. - Some Delaware iGaming players have requested a “Delaware Only” poker option, which the Lottery is considering adding. - The Lottery office wants to be proactive in reviewing regulations of slots and table game operations, in conjunction with Governor Markell’s initiative to streamline the process of working with Delaware government offices. We have received the request to review licensing procedures and requirements. We have forwarded the request to the Division of Gaming Enforcement for review, and will be scheduling a meeting between the Lottery office, DGE, and the tracks to discuss options. - Our three (3) year contract with Double Down is coming to an end. We are expecting a check (which is expected to total less than $50k) from funds owed from our partnership which will be split between the three casinos. We have the option to renew the contract for another year, which we will discuss before making a decision. - We are in the final stages of working with New Jersey Department of Gaming Enforcement to bring WMS games to our iGaming platform. - We are continuing to work with New Jersey to bring them into our multi- state iGaming agreement (currently between Delaware and Nevada).  Jim Logue - We will be releasing a RFP in early August for multi station electronic table games to enable newer vendors to be able to bring their product to Delaware. The contracts we currently have with the two multi station electronic table game vendors, ShuffleMaster and Speilo Alpha Street, expire in October 2015 and December 2015, respectively. Although we have the ability to extend both contracts, we will not be doing so and instead asking those two vendors to bid on the RFP. The RFP is expected to be released around August 7th, and we hope to have the process finalized by mid-late October.

Review of Video Lottery Agents Recent Activities  Bill Fasy – Delaware Park - Business as usual at Delaware Park.

 Patti Key – Harrington Raceway - Harrington is working on regular maintenance projects and reupholstering the casino floor chairs to improve appearance and prolong usage.

 Ed Sutor – Dover Downs - Dover Downs is in the process of reviewing all operations to look for ways to become more efficient and save money. You are probably aware; we recently closed our grave shift table game operation Monday – Thursday. We are now looking at volume in all areas of the property to identify ways to be operationally proficient.

2 Review of Scientific Games Initiatives:  Kathy Wayne - The Scientific Games team is preparing and looking forward to the start of the Sports Betting season. Betting begins August 12th and August 13th on the first pre-season games.

Review of Manufacturers New Products:  Tim Shortall – IGT: The IGT/GTECH integration is complete.  New product to the Delaware market is the S3K cabinet and the game Crystal Dual. We successfully launched Ellen, Gong, Quarter Mania, and are anticipating Jackpot Pirate.  Spin 3D launched in June and we’ve seen a good response so far.

 Mark Casto – Bally: The Bally WMS merging process continues. We are transitioning some WMS premier product to Bally pricing to make it interchangeable in the Delaware market.  WMS themes include Super Jackpot Party, Stepper, and the Life of Luxury / Winning Fortune series.  We are excited to bring the newest Bally product, “Friends” , to Delaware in the fall.

Close of meeting  Ed Sutor - The next VLAC meeting is scheduled for September 22nd, 2015, and will be held in the Chesapeake Room at Dover Downs. - At this meeting we will begin discussing recommendations for the 2015 VLAC Report to the State, due to the Secretary of Finance by November 5th. - We look forward to working with Lottery regulators on licensing, and other, issues. - Having no other business for discussion, the meeting adjourned.