Multimedia Games, Inc.

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International Guild of Hospitality & Restaurant Managers

Multimedia Games, Inc. (NasdaqNM:MGAM)

206 Wild Basin Road
Building B, Fourth Floor
Austin, TX 78746

Phone: (512) 334-7500
Email: acegraves@multimediagames.com
Employees (last reported count): 279

Multimedia Games, Inc., incorporated on August 30, 1991, is a supplier to the Native American gaming market of both interactive electronic games and the electronic player stations (EPS) on which the Company's games are played. The Company delivers Class II games to its customers through a telecommunications network, Betnet, which links EPS located both within and among Class II gaming facilities, enabling players to compete against one another in the same game to win pooled prizes. Multimedia Games designs and develops software, content, networks and systems that provide its customers with comprehensive gaming systems. The Company has focused its development and marketing efforts on Class II gaming systems and Class III video lottery systems for use by Native American tribes throughout the United States. As of September 30, 2002, the Company had 2,139 linked Class III video lottery terminals installed, an increase of 42% from 1,506 installed Class II video lottery terminals as of September 30, 2001. Its Class III video lottery terminals are located in 12 gaming facilities in the state of Washington.

Class II Games and Systems

The Company provides the Class II Native American gaming market with linked, interactive electronic games and related online systems and player stations. These games, systems and EPS include flexible gaming platforms that enable Multimedia Games to operate and regularly launch new game engines; flexible game engines that enable the Company to display the same underlying bingo game in a variety of ways; high-speed, interactive Class II bingo games designed and developed by Multimedia Games that are intended to provide its end users with an entertaining gaming experience; EPS that are linked via Betnet, thereby enabling the Company to rapidly communicate its games to end users, broaden end user participation in the same game throughout the country and monitor the performance of its network in real time, and information services that allow its customers to monitor their gaming activities and to improve service to its end users.

Multimedia Games' offering of high-speed, interactive Class II bingo games consists of its Legacy platform of games, which includes MegaMania, Flash 21 Bingo, Big Cash Bingo and People's Choice, and the Company's New Generation platform of games, which is comprised of MegaNanza, Reel Time Bingo and their related family of games. Multimedia Games offers MegaBingo as part of its Class II product offering, although its contribution to revenues has significantly decreased as customers have migrated to the high-speed, interactive market, which produces significantly greater revenue per square foot of gaming hall floor space than MegaBingo and other forms of paper bingo.

Class III Games and Systems

The Company sells or leases linked Class III video lottery systems to Native American customers in the state of Washington and receives back-office fees based on a share of the hold per day generated by the player stations. Class III video lottery gaming in the state of Washington is allowed pursuant to a compact between the state and certain Native American tribes in that state. The compacts contain the specifications for permissible video lottery systems including only those video lottery terminals within the same gaming facility may be linked with one another and the system must be cashless.

Multimedia Games' Class III systems in the state of Washington are comprised of all the software and hardware necessary for operation and are designed to be readily adaptable to the video lottery requirements of jurisdictions outside that state. The Company's hardware includes multiple servers that generate sets of electronic lottery tickets and distribute them on demand to end users sitting at terminals networked throughout a casino. As with its Class II gaming systems, Multimedia Games' Class III back-office system allows it to maintain details of ticket manufacture, distribution and sales, end user information and the ability to monitor game system operation and generate system reports.

New York Video Lottery Project

In May 2002, the New York Lottery notified the Company that it had been selected as the winning vendor to provide the central operating system for its video lottery system. On December 17, 2002, Multimedia Games executed a definitive agreement to provide the central system, which agreement remains subject to various levels of approval by New York State officials before it becomes effective.

The Company competes with Miami Business Development Authority.

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