10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission File Number 001-32622

GLOBAL CASH ACCESS HOLDINGS, INC.

(Exact name of Registrant as specified in our charter)

Delaware	20-0723270
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

3525 East Post Road, Suite 120, Las Vegas, Nevada 89120
(Address of principal executive offices including Zip code)

(800) 833-7110
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Common Stock, $0.001 par value per share Name of Each Exchange on Which Registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES þ NO o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES o NO þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer” and “accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer þ Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ

As of June 30, 2006, the aggregate market value of the registrant’s common stock held by non-affiliates was approximately $671.3 million.

There were 82,968,078 shares of the registrant’s common stock issued and outstanding as of the close of business on March 15, 2007.

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DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for its 2007 Annual Meeting of Stockholders to be held on May 4, 2007 are incorporated by reference into this Annual Report on Form 10-K in response to Part III, Items 10, 11, 12, 13, and 14. Except as expressly incorporated by reference, the registrant’s Proxy Statement shall not be deemed to be a part of this Annual Report on Form 10-K.

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GLOBAL CASH ACCESS HOLDINGS, INC.

ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2006

TABLE OF CONTENTS

			Page
Part I
	Item 1:	Business		6
	Item 1A:	Risk Factors		18
	Item 1B:	Unresolved Staff Comments		39
	Item 2:	Properties		39
	Item 3:	Legal Proceedings		39
	Item 4:	Submission of Matters to a Vote of Security Holders		39
Part II
	Item 5:	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		39
	Item 6:	Selected Financial Data		41
	Item 7:	Management’s Discussion and Analysis of Financial Condition and Results of Operations		42
	Item 7A:	Quantitative and Qualitative Disclosures About Market Risk		56
	Item 8:	Financial Statements and Supplementary Data		57
	Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		100
	Item 9A:	Controls and Procedures		100
	Item 9B:	Other Information		105
Part III
	Item 10:	Directors, Executive Officers and Corporate Governance		105
	Item 11:	Executive Compensation		105
	Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		105
	Item 13:	Certain Relationships and Related Transactions, and Director Independence		106
	Item 14:	Principal Accountant Fees and Services		106
Part IV
	Item 15:	Exhibits and Financial Statement Schedules		106
Signatures				110
Exhibit 10.36
Exhibit 12.1
Exhibit 21.1
Exhibit 23.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

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PART I

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities and Exchange Act of 1934 (the “Exchange Act”). All statements in this Annual Report on Form 10-K other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any statements of the plans and objectives for future operations and any statement of assumptions underlying any of the foregoing. Statements that include the use of terminology such as “anticipate,” “contemplate,” “may,” “intend,” “will,” “expect,” “believe,” “plan,” “estimate,” “seek,” “will continue to be,” “potential,” or “continue,” or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions are forward-looking statements.

Forward-looking statements include, but are not limited to, statements regarding the following matters: in Item 1, (1) the declining usage of checks relative to other forms of payment; (2) our efforts to obtain card association acceptance of biometric facial recognition as an approved transaction completion protocol to enable the completion of credit card cash advance and POS debit card transactions at our ACMs without the assistance of a cashier and the potential of our ACM’s to reduce transaction times, to improve the customer experience or to reduce a gaming establishment’s cashier labor costs; (3) our belief that gaming establishments find our patron marketing services helpful as they try to attract new patrons and to retain existing patrons; (4) our continuing to build existing patron profiles and add new patron profiles to our patron transaction database as the applicable transaction volume increases; (5) the trend towards cashless gaming, our efforts to obtain approval for TODD and EDITH from the appropriate authorities and our plan to submit EDITH for approval in other gaming jurisdictions in the future; (6) our belief that the ability to introduce and respond to technological innovation in the gaming industry will be an increasingly important qualification for the future success of any provider of cash access services; (7) our belief that almost all gaming establishments outsource their cash access service to third-party providers; (8) our continuing to implement policies and procedures as well as adapt our business practices in our to comply with the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act of 2003, similar state credit reporting laws and regulations, the Gramm-Leach-Bliley Act and similar state privacy laws and regulations; (9) our engagement in efforts to collect on our QuikCredit Service, dishonored checks purchased by Central Credit pursuant to our check warranty services, returns from customer payments on their account with the Arriva Card, and chargebacks on our cash advance products; (10) our expectation to become subject to additional gaming regulations and other laws in the jurisdictions into which we expand our operations; in Item 3, (11) our belief that resolution of legal disputes and proceedings arising from the ordinary course of general business activities will not have a material adverse effect on our consolidated financial position, results of operations or cash flows; in Item 5, (12) our intention to retain all our earnings to finance the growth and development of our business and our anticipation that we will not pay any dividends on our common stock in the foreseeable future; (13) our belief that the Peer Group Index of companies operates in a similar manner to our operations for the fifteen months since our initial public offering of common shares; in Item 7, (14) our recognition and enjoyment of deferred tax assets and liabilities from the expected tax consequences of differences between the book basis and tax basis of our assets and liabilities in connection with our conversion to a taxable entity and the pro forma expected effect of such asset; (15) our expectation that the increase in the average amount disbursed per cash advance transaction is a trend that will continue; (16) our expectation that the increase in the number of transactions completed at our ATMs and the increase in the average surcharge assessed to patrons is a trend that will continue; (17) our expectation that commissions will increase as a percentage of revenue as new contracts are signed or existing contracts are renewed; (18) our expectation that commissions and interchange will continue to increase, and that in 2007 cost of revenues (exclusive of depreciation and amortization) will increase at a rate faster than revenues; (19) our expectation that operating expenses will increase in 2007 at a rate of growth lower than the rate of growth in cost of revenues (exclusive of depreciation and amortization); (20) our expectation that, assuming a constant level of LIBOR, interest income (expense), net will decline in 2007 as a result of lower anticipated levels of outstanding indebtedness; (21) our anticipated effective tax rate for 2007 and our belief that pretax income in 2007 will be higher than it was in 2006; (22) our expectation that IFT will record a loss in 2007; (23) our estimates about future operating results of our reporting units to determine their estimated fair value for the annual evaluation of goodwill and other non-amortizing intangible assets; (24) our belief that it is more likely than not that we will be able to utilize our deferred tax assets; (25) our estimated effective tax rate of 38%, resulting in tax payments being approximately $17.4 million less than the provision for income taxes shown on the income statement for financial accounting purposes, and our expectation that this will result in an aggregate of $214.4 million in cash savings over the remaining 13 year life of the deferred tax asset related to our conversion to a corporation; (26) our belief that borrowings available under our senior secured credit facilities together with our anticipated operating cash flows will be adequate to meet our anticipated future requirements for working capital, capital expenditures and scheduled interest payments on our debt through the next 12 months and the foreseeable future; (27) our belief that replacement costs of equipment, furniture and leasehold improvements will not materially affect our

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operations; (28) our expectation to continue to pay interest based on LIBOR of various maturities; (29) our expected amortization of the acquisition cost of the “3-in-1 rollover” patent over its remaining legal life of 13 years; (30) our intent to reinvest the earnings of our foreign subsidiaries into such subsidiaries; (31) our use of significant estimates in preparing the consolidated financial statements including the estimated useful lives for depreciable and amortizable assets, estimated cash flows in assessing the recoverability of long-lived assets, and estimated liabilities for warranty expense, chargebacks, litigation, claims and assessments; (32) our use of estimates in determining the fair value of options granted, including expected option lives and employee option exercise behavior, expected volatility and expected dividend yield and our expectation that the cost of unrecognized compensation expense with respect to stock options will be recognized on a straight-line basis over a weighted average period of 2.15 years; (33) our expectation regarding the vesting of restricted shares and that the cost of unrecognized compensation expense with respect to the restricted stock will be recognized on a straight-line basis over a weighted average period of 3.1 years; (34) our expectation to defend the Canadian GST rebate claim through the assessment process, the appeals process and then through court, if necessary; (35) our expectation that all issues raised by card associations will be resolved in the normal course of business and that related changes to transaction processing, if any, will not result in a material adverse impact to our financial results; (36) our expected future use of net operating losses and foreign tax credits to offset future taxable income; (37) our intention to remediate the material weaknesses in our internal control over financial reporting and our ability to obtain an unqualified opinion regarding our internal control over financial reporting in the future, including (a) our plan to increase the number of people working in our information systems department, our intention to fill open positions and create and fill new positions in the accounts payables and financial accounting departments, and our belief that filling such existing and new positions will assist us in remediating the internal control weakness that results from inadequate accounting and financing staffing, (b) our belief that the use of specific procedures and checklists for our financial close process will allow us to more efficiently and predictably manage our financial close process and to make financial information related to accounting periods available to management on a more timely basis, (c) our expectation that the integration of the tax area more closely into our planning activities will allow us to know the tax impact of certain anticipated activities or events on a more timely basis, and (d) our plan to redesign the system of controls governing our commission calculations systems; and (38) our intention to promptly disclose to the public, to the extent required by law, any amendments to, or waivers from, any provision of the Code of Conduct by posting the relevant material on our website in accordance with the SEC rules.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or assumed in such forward-looking statements, including, without limitation, (1) changing consumer preferences with respect to the choice of payment methods and the possibility that consumers find the usage of checks increasingly desirable in the future; (2) card association resistance to accepting new technologies, the failure of biometric facial recognition to accurately identify patrons, patron unfamiliarity with ACMs or patron preferences to complete transactions in person at a cashier; (3) gaming establishments finding our patron marketing services as unnecessary, costly or less desirable than alternative methods of attracting new patrons and retaining valued patrons; (4) changes to applicable privacy laws and regulations or patron opt-out elections that preclude the collection of data that is necessary to build patron profiles and add new patron profiles; (5) regulatory or social responsibility resistance to cashless gaming or unduly burdensome obstacles to obtaining regulatory approval for our EDITH or TODD products; (6) competitive pressures such as pricing, availability or breadth of offerings causing technological innovation to become a decreasingly important qualification for the future success of any provider of cash access services; (7) gaming establishments replacing their outsourced cash access services with in-house cash access services to generate additional revenue, exert greater control over their operations or increase their autonomy; (8) our establishment of policies, procedures and business practices that fully comply with the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act of 2003, similar state credit reporting laws and regulations, the Gramm-Leach-Bliley Act and similar state privacy laws and regulations, or our discontinuation of product or service offerings that require compliance with these laws and regulations; (9) our potential outsourcing of all collection efforts or our decision not to pursue collection efforts in any particular instance for business development, cost containment or other reasons; (10) our inability to expand our operations into jurisdictions in which we do not currently operate for competitive, regulatory or operational limitations; (11) uncertainties associated with and our limited ability to control the litigation process; (12) an unanticipated accumulation of cash or stockholder pressure to declare or pay cash dividends; (13) differences between our operations and the operations of Peer Group Index companies resulting from differences in company size, products and services offered and markets served; (14) unanticipated changes to applicable tax rates or laws or changes in our tax position, including changes in the amortization of our tax asset as a result of an audit or otherwise; (15) a change in patron behavior that results in smaller but more frequent cash advance transactions; (16) an increase in the availability and usage of competitive ATMs nearby gaming establishments that displaces use of our ATMs; (17) our ability to offer gaming establishments other incentives to enter into new contracts or renew existing contracts without increasing commission rates; (18) our inability to control interchange rates and our ability to offer gaming establishments incentives other than increased commission rates; (19) unanticipated cost savings or larger than anticipated revenue increases due to market expansion, competitive success or otherwise; (20) our inability to control LIBOR, our failure to repay existing indebtedness or unanticipated incurrence of additional

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indebtedness; (21) changes to tax laws or changes in our tax position, unanticipated increases in operating expenses as a result of litigation, changes in labor rates or otherwise or a decline in revenue due to competitive forces, in each case resulting in lower than expected pretax income in 2007; (22) an unanticipated realization of revenue by IFT as a result of product introduction into the market, recoveries in litigation to enforce intellectual property rights, or otherwise; (23) the inherent uncertainties in estimating the future operating results of our reporting units as a result of competition, regulatory restrictions, changing gaming establishment patron preferences and behavior or otherwise; (24) changes to tax laws or changes in our tax position, as a result of an audit or otherwise, including changes in the amortization of our tax asset as a result of an audit or otherwise; (25) changes to tax laws or changes in our tax position, as a result of an audit or otherwise, including changes in the amortization of our tax asset as a result of an audit or otherwise; (26) unanticipated needs for working capital and capital expenditures, our failure to satisfy conditions precedent to our ability to borrower under our senior secured credit facilities or an unanticipated reduction in cash flow from operations as a result of competitive pressures or otherwise; (27) the unanticipated loss of or damage to our equipment or the need to replace our equipment as a result of unanticipated obsolescence, regulatory changes or otherwise; (28) fluctuation in interest rates generally and LIBOR specifically; (29) unanticipated invalidation of or obsolescence of the “3-in-1 rollover” patent or our potential disposition of the patent prior to the expiration of its legal life; (30) our need to repatriate the cash earnings of our foreign subsidiaries to satisfy capital requirements of our operations in the United States; (31) the unanticipated obsolescence of certain assets due to technological innovation or otherwise and the inherent uncertainties in estimating cash flows and liabilities from future operations; (32) our inability to predict employee turnover, control employee option exercise behavior, and predict stock price volatility, or the unanticipated payment of dividends; (33) our inability to predict employee turnover that affects the vesting of restricted stock; (34) the possibility that we abandon our pursuit of the GST rebate claim due to doubts as to the likelihood of success or to avoid costs; (35) our inability to predict changes in card association regulations and the possibility that unanticipated changes materially impair our operations; (36) changes to tax laws or changes in our tax position or our failure to generate income against which net operating losses or foreign tax credits can be applied; (37) our failure to remediate the material weaknesses in our internal control over financial reporting due to (a) our failure to recruit and retain qualified personnel in our accounts payable and financial accounting departments, (b) the failure of our personnel to follow the procedures and checklists for our financial close process or flaws in such procedures and checklists that cause financial information not to be made available to management on a more timely basis, (c) our inability to integrate our tax area more closely into our planning activities and our limited ability to analyze the tax impact of certain activities on a more timely basis notwithstanding such integration, or (d) limitations in our information systems or our failure to follow controls governing our commission calculation systems; and (38) a change in our disclosure policy relating to amendments to or waivers of our Code of Conduct to utilize an alternative method of disclosure that is permitted under applicable law.

Additional factors that could cause actual results to differ materially are included under the heading “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. All forward-looking statements and risk factors included in this document are made as of the date hereof, based on information available to us as of the date hereof, and we assume no obligation to update any forward-looking statement or risk factor. You should consult the risk factors listed from time to time in our Reports on Form 10-Q.

ITEM 1. BUSINESS

Global Cash Access Holdings, Inc. (“the Company” or “Holdings”) is a holding company, the principal asset of which is the capital stock of Global Cash Access, Inc. (“GCA”). Global Cash Access, Inc. directly or indirectly owns all of the assets and either all or a majority of the equity interests of the subsidiaries which operate our business. These subsidiaries include Central Credit, LLC (“Central” or “Central Credit”), CashCall Systems Inc. (“CashCall”), Global Cash Access (BVI) Inc. (“BVI”), Arriva Card, Inc. (“Arriva”), Global Cash Access Switzerland A.G. (“GCA Switzerland”), Innovative Funds Transfer, LLC (“IFT”) (formerly known as QuikPlay, LLC), Global Cash Access (HK) Ltd. (“GCA HK”) and GCA (Macau), S.A. (“GCA Macau”). IFT is a joint venture that is 60% owned by GCA and 40% owned by International Game Technology (“IGT”). Unless otherwise indicated, the terms “we,” “us,” “our,” “our company” and “our business” refer to Global Cash Access Holdings, Inc. together with its consolidated subsidiaries.

Overview

We are a provider of cash access products and related services to the gaming industry in the United States and several international markets. Our products and services provide gaming establishment patrons access to cash through a variety of methods, including Automated Teller Machine (“ATM”) cash withdrawals, credit card cash advances, point-of-sale (“POS”) debit card transactions, check verification and warranty services and money transfers. In addition, we also provide products and services that improve credit decision-making, automate cashier operations and enhance patron marketing activities for gaming establishments. Commencing in the third quarter of 2006, we began offering the Arriva Card, a private-label revolving credit card aimed at consumers who perform cash advance transactions in gaming establishments.

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We provide cash access products and related services at approximately 1,092 gaming establishments worldwide. In general, our contracts with gaming establishments are exclusive and range in duration from three to five years.

In 2006, we processed over 84.7 million transactions which resulted in approximately $19.3 billion in cash being disbursed to gaming patrons. For the year ended December 31, 2006, we generated revenues and operating income of $548.1 million and $85.2 million, respectively.

We began our operations in July 1998 as a joint venture limited liability company among M&C International, entities affiliated with Bank of America, N.A. (“Bank of America”) and First Data Corporation (“First Data”). In September 2000, Bank of America sold its entire ownership interest in us to M&C International and First Data. In March 2004, all of our outstanding ownership interests were contributed to a holding company and all of First Data’s ownership interest in us was redeemed. Simultaneously, Bank of America reacquired an ownership interest in us (the “Recapitalization”). In May 2004, M&C International sold a portion of its ownership interest to a number of private equity investors, including entities affiliated with Summit Partners, and we converted from a limited liability company to a corporation (the “Private Equity Restructuring”). In September 2005, we completed an initial public offering of our common stock.

Our principal executive offices are located at 3525 East Post Road, Suite 120, Las Vegas, Nevada 89120. Our telephone number is (800) 833-7110. Our internet web site address is http://www.globalcashaccess.com. The information on our web site is not part of this Annual Report on Form 10-K or our other filings with the United States Securities and Exchange Commission (“SEC”).

Our Business

Our cash access products and services enable three primary types of electronic payment transactions: ATM cash withdrawals, credit card cash advances and POS debit card transactions. As of December 31, 2006, patrons could complete any of these three transactions at any of our Casino Cash Plus 3-in-1 ATMs, Automated Cashier Machines (“ACMs”) or 3-in-1 Enabled QuickJack Plus devices. We own nearly all of these devices. In addition, patrons can complete credit card cash advances and POS debit card transactions at any of our QuikCash kiosks, all of which we own. We also provide check verification and warranty services to gaming establishments that cash patron checks. Commencing in the third quarter of 2006, through Arriva, we began offering the Arriva Card, a private-label revolving credit card aimed at consumers who perform cash advance transactions in gaming establishments.

ATM Cash Withdrawals

ATM cash withdrawal transactions represent the largest category of electronic payment transactions that we process, as measured by dollar and transaction volume. In an ATM cash withdrawal, a patron directly withdraws funds from his or her bank account by swiping an ATM card through one of our ATM-enabled devices. Our processor then routes the transaction request through an electronic funds transfer (“EFT”) network to the patron’s bank. Depending upon a number of factors, including the patron’s account balance and daily withdrawal limit (which is usually $300 to $500 during a 24-hour period and is determined by the patron’s bank), the bank will either decline or authorize the transaction. If the transaction is authorized, then the ATM-enabled device dispenses the cash to the customer. The patron’s bank account is debited by the amount of cash disbursed plus a service fee that we assess the patron for the use of our machine. The service fee is currently a fixed dollar amount and not a percentage of the transaction size. In most circumstances we share the majority of this service fee with our gaming establishment customer for the right to operate on its premises. We also receive a fee, we refer to as reverse interchange, from the patron’s bank for accommodating the bank’s customer.

Credit Card Cash Advances and POS Debit Card Transactions

Patrons can also obtain credit card cash advances and POS debit card transactions using many of our devices. A patron’s credit card cash advance limit is usually a sublimit of the total credit line and is set by the card issuing bank. These limits vary significantly and can be larger or smaller than the POS debit limit. A credit card cash advance transaction obligates the patron to repay the issuing bank over time on terms that are preset by the cardholder agreement. A patron’s POS debit card allows him or her to make cash withdrawals at the point of sale in an amount equal to the lesser of the amount of funds in his or her account or a daily limit that is generally five to ten times as large as the patron’s daily ATM limit. A POS debit card transaction immediately reduces the balance in the patron’s account.

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When a patron requests a credit card cash advance or POS debit card transaction, our processor routes the transaction request through one of the card associations (e.g., VISA or MasterCard) or EFT networks (e.g., Star, Interlink or Maestro) to the issuing bank. Depending upon several factors, such as the available credit or bank account balance, the transaction is either authorized or declined by the issuing bank. If authorized, the patron’s bank account is debited or their credit card balance is increased by an amount equal to the funds requested plus a service fee that we charge the patron. The service fee is a percentage of the transaction size. If the transaction is authorized, our machines inform the patron that the transaction has been approved. If the transaction involves one of the card associations that have permitted us to complete transactions at an ACM, cash is dispensed. Otherwise, our machines instruct the patron to proceed to the gaming establishment’s cashier to complete the transaction, because credit card cash advances and POS debit card transactions involving other card associations must currently be completed in face-to-face environments and a unique signature must be received in order to comply with rules of those card associations. Once at the cashier, the patron acknowledges payment of the fee and authorizes the transaction by placing his or her signature on a money order issued by our money order provider and made payable to the gaming establishment in an amount equal to the face amount and receives the face amount in cash. We remit the face amount to our money order provider and retain the fee. The gaming establishment deposits the money order in its own bank, and after a period of two to three days, the money order is presented to our money order provider for payment. In general, we pay the gaming establishment a portion of the service fee as a commission for the right to operate on their premises, although this payment as percentage of the fee is generally smaller for credit card cash advances and POS debit card transactions than for ATM withdrawals. We do not pay commissions in the United Kingdom. In addition, we are obligated to pay interchange fees to the issuing bank and processing costs related to the electronic payment transaction.

Check Verification and Warranty Services

Although the usage of checks relative to other forms of payment is declining, a significant number of patrons still cash checks at gaming establishments to fund their gaming play. When a patron presents a check at the cashier, the gaming establishment can (a) accept or deny the transaction based on its own customer information and at its own risk; (b) obtain third-party verification information about the check writer and the check to manage its risk; or (c) obtain a warranty on payment of the check which entitles the gaming establishment to reimbursement of the full face amount of the check if it is dishonored.

There are a number of check verification services. One such service is our Central Credit database, which is used primarily by gaming establishments to make credit issuing decisions. Central Credit maintains information on the check cashing history of many patrons. In general, we do not charge separately for check verification queries to our Central Credit database on a per transaction basis, but rather charge a fixed monthly subscription fee.

If a gaming establishment chooses to have a check warranted, it sends a request to a check warranty service provider, asking whether it will warrant the check. If the check warranty service provider warrants payment on the check, the gaming establishment is obligated to pay a fee for that service. The gaming establishment then pays the patron the face amount and deposits the check. If the check is dishonored by the patron’s bank, the gaming establishment invokes the warranty, and the check warranty service provider purchases the check from the gaming establishment for the face amount and then pursues collection activities on its own.

We currently provide check warranty services on two platforms: TeleCheck and Central Credit Check Warranty. TeleCheck is currently the larger of the two platforms as measured by face amount of checks warranted, although our Central Credit Check Warranty product has been growing more rapidly. Under our agreement with TeleCheck, we receive all of the check warranty revenue and we pay a portion of TeleCheck’s operating expenses and warranty expenses. Operating expenses are fixed at a percentage of check warranty revenues. Warranty expenses are defined as any amounts paid by TeleCheck to gaming establishments to purchase dishonored checks. Our agreement further provides that TeleCheck will pay us the actual collections realized within 120 days after a check is purchased, subject to the obligation to pay us a guaranteed minimum amount of dishonored checks. In our Central Credit Check Warranty product, we receive all of the warranty revenue and incur all of the warranty risk, collection responsibility and operating expenses. We use and pay certain third party services to assist us in the warranty decision and the collection processes.

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Central Credit

In addition to the three primary types of electronic payment transactions described above, a small number of gaming establishment patrons choose to access funds through credit extended by the gaming establishment. Central Credit is a gaming patron credit bureau specifically designed for the gaming industry to allow gaming establishments to improve their credit-making decisions. Our Central Credit database contains gaming patron credit history and transaction data on gaming patrons. Our gaming credit reports are comprised of information recorded from patron credit histories at hundreds of gaming establishments. We provide such information to gaming establishments, who use that data, among other things, to determine if or how much credit they will grant credit to a patron. At a gaming establishment’s request, we can augment the information provided in our gaming credit reports with traditional credit reports or bank ratings through our relationships with consumer credit bureaus and bank reporting agencies. We charge our customers for access to gaming patron credit reports on a monthly basis; our fees are a combination of a fixed minimum fee plus per-transaction charges for certain requests.

Other

We also market money transfer services that allow patrons to receive money transfers at gaming establishments and provide information services that automate cashier operations and enhance patron marketing activities. In the third quarter of 2006, we launched the Arriva Card, a credit card for consumers who perform cash advance transactions in gaming establishments. CIT Bank is the issuer of the card and provides the credit to the customers, while Arriva is the administrator and servicer of Arriva Card accounts. As servicer, we earn interest and other fees from customers related to the use of their Arriva Cards.

Our Products and Services

Our customer solutions consist of cash access products and services, information services, cashless gaming products and credit card servicing.

Cash Access Products and Services	Information Services	Cashless Gaming Products	Credit Card Servicing
• Casino Cash Plus 3-in-1 ATM	• Central Credit	• 3-in-1 Enabled QuickJack Plus	• Arriva Card
• QuikCash	• QuikCash Plus Web	• TODD
• ACM	• QuikReports	• EDITH
• Check verification and warranty	• QuikMarketing
• QuikCredit
• Money transfers

Cash Access Products and Services

We provide gaming establishments with the ability to enable their patrons to access cash through a variety of products and services.

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Casino Cash Plus 3-in-1 ATM is an unmanned, cash-dispensing machine that offers patrons a quick way to access cash through ATM cash withdrawals, POS debit card transactions and credit card cash advances using our patented “3-in-1 rollover” functionality. Statistics show that approximately 30% of standard ATM transactions taking place in gaming properties are denied because of bad Personal Identification Numbers (“PIN”), exceeded limits, insufficient funds, and other miscellaneous reasons. Our patented “3-in-1 rollover” functionality allows a gaming patron to easily convert an unsuccessful ATM cash withdrawal into a POS debit card transaction or a credit card cash advance. When a patron is denied a standard ATM transaction, our “3-in-1 rollover” functionality automatically provides the option of obtaining funds via a POS debit card transaction or a credit card cash advance. For authorized ATM transactions, the Casino Cash Plus 3-in-1 ATM dispenses cash to the patron. For successful POS debit card transactions and credit card cash advances, once the transaction is authorized, the Casino Cash Plus 3-in-1 ATM instructs the patron to proceed to the cashier who completes the transaction by undertaking certain procedures in accordance with the rules of the major card associations, printing the money order, and dispensing cash to the patron. By providing gaming patrons seamless access to three different transaction types, our “3-in-1 rollover” functionality provides gaming establishment patrons ease of access to their money and makes cash available to patrons for gaming within the gaming establishment. In addition to our own ATM, we have a strategic alliance with Capital One, N.A. (“Capital One”), pursuant to which we have incorporated our “3-in-1 rollover” functionality into Capital One ATMs that are located in gaming establishments. As of December 31, 2006 we had incorporated our “3-in-1 rollover” functionality into 92 Capital One ATMs that are located in gaming establishments.

QuikCash is the brand name of our stand-alone, non-ATM cash advance kiosks for the gaming industry. Our QuikCash kiosks are customer-activated terminals that provide patrons with access to credit card cash advances and POS debit card transactions. Available in countertop, wall-mount, freestanding and handheld models, our QuikCash terminals can be installed or used virtually anywhere in a gaming establishment. Once the transaction is authorized, the patron is instructed to proceed to the cashier who undertakes certain procedures in accordance with the rules of the major card associations, printing the money order, and dispensing cash to the patron. Our terminals provide gaming patrons with fast, reliable, and easily accessible sources of cash close to the areas within the gaming establishment where gaming activity is conducted.

Automated Cashier Machine (“ACM”) is an unmanned, cash-dispensing “virtual cashier” which was designed to provide gaming establishment patrons with credit card cash advances, POS debit card transactions, and ATM cash withdrawals as well as check cashing services without the need to visit the cashier after the initial “registration transaction.” Our ACMs provide gaming patrons the same cash access features as our Casino Cash Plus 3-in-1 ATMs while allowing gaming establishments to reduce the dependency on gaming establishment personnel to complete transactions. After an initial face-to-face enrollment transaction performed with the assistance of a gaming establishment’s cashier, our ACMs use biometric facial recognition technology, as a surrogate for face-to-face interaction with the cashier, to verify the patron’s identity. By eliminating the cashier interaction requirement, our ACMs have the potential to reduce transaction times, to improve the customer experience and to reduce a gaming establishment’s cashier labor costs. ATM transactions, check cashing transactions, POS debit card transactions and credit card cash advance involving one of the major card associations can be completed at the ACM without the assistance of a cashier. We assume chargeback liability for any credit card cash advance transaction in which we do not obtain a contemporaneous cardholder signature, which may result in increased chargeback liability. The use of biometric facial recognition is not an accepted surrogate for face-to-face interaction by other major card associations. We have been actively working with the card associations to achieve broader acceptance of biometric facial recognition as an approved transaction completion protocol. Some of our largest and most sophisticated customers have migrated to the ACM as the standard cash access platform in their gaming establishments.

Check verification and warranty services allow gaming establishments to manage or eliminate risk on patron checks that they cash. A gaming establishment can query our Central Credit database to review the check cashing history of a gaming establishment patron before deciding whether to cash the patron’s check. If the gaming establishment wants additional protection against loss, it can seek a warranty on payment of the check. We have an exclusive relationship with TeleCheck to market check warranty services to gaming establishments. As an alternative to TeleCheck’s check warranty service, we have developed our own Central Credit Check Warranty service that is based upon our Central Credit database, our proprietary patron transaction database, third-party risk analytics and actuarial assumptions.

QuikCredit is a service through which we provide lines of credit to patrons in gaming establishments that choose not to offer in-house credit. Our QuikCredit service allows a gaming establishment to increase the amount of cash available to the patron within the gaming establishment without incurring credit risk. To use QuikCredit, a gaming patron deposits a check payable to us with the gaming establishment. The patron’s check is deposited under deferred presentment terms, meaning the check will not be presented for payment for a specified period of time. A gaming establishment using QuikCredit then seeks an authorization from us. We currently query both our Central Credit database and the TeleCheck database to assess the patron’s credit risk. If the check and check writer satisfy risk criteria and underwriting guidelines, we issue an authorization to the gaming establishment to endorse the check over to the gaming establishment and to dispense the patron’s funds. If any authorized check is subsequently dishonored, we purchase the check from the gaming establishment for its face amount, thereby eliminating any collection risk to the gaming establishment. The maximum line of credit we extend is $5,000 per patron.

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Money transfer services are provided through a contractual relationship with Western Union Financial Services, Inc. (“Western Union”). We are the worldwide exclusive marketer to the gaming industry of Western Union’s electronic and paper-based systems for receiving funds transfers at gaming establishments. Western Union contracts directly with gaming establishments and we receive a monthly payment based upon the number of transactions completed.

Information Services

We market our information services to gaming establishments to improve credit decision-making, to automate cashier operations and to enhance patron marketing activities.

Improve Credit Decision-Making

Central Credit is the leading gaming patron credit bureau, and it allows gaming establishments to improve their credit making decisions. Our Central Credit database contains decades of gaming patron credit history and transaction data on millions of gaming patrons. Our gaming credit reports are comprised of information recorded from patron experiences at hundreds of gaming establishments. We provide such information to gaming establishments, who use that data, for among other things, to determine if or how much credit they will grant to a patron. To allow gaming establishments to improve their credit-making decisions, Central Credit offers a variety of tools, including underwriting of gaming patron credit requests, pre-approved credit screening and gaming credit reports. At a gaming establishment’s request, we can augment the information provided in our gaming credit reports with traditional credit reports or bank ratings through our relationships with consumer credit bureaus and bank reporting agencies.

Automated Cashier Operations

QuikCash Plus (“QCP”) Web is a proprietary browser-based, full service cash access transaction processing system for gaming establishment cashier operations that runs on a gaming establishment’s own computer hardware. Cashiers using QCP Web can process credit card cash advances, POS debit card transactions, check verification and warranty services and money transfer services online through a single terminal. Without QCP Web, gaming establishment cage operators are required to access multiple systems running on disparate hardware and software platforms. QCP Web reduces cage operating complexity, improves transaction times, saves space by eliminating multiple pieces of hardware and reduces training requirements for cage operators, resulting in lower operating costs for gaming establishments. QCP Web is delivered as an application service with a customizable user interface that allows gaming establishments to add additional workstations by simply connecting them to the application server. In addition, QCP Web can assist gaming establishments in satisfying legal reporting requirements by providing information necessary to complete required regulatory reports such as Currency Transaction Reports (“CTRs”) and Suspicious Activity Reports (“SARs”).

Enhance Patron Marketing

Using our proprietary patron transaction database, we provide patron marketing data to gaming establishments. Gaming establishment marketing professionals can use our patron data to develop, implement and refine their customer loyalty programs. Since marketing, including providing complimentary goods and services, is one of a gaming establishment’s largest cost items, we believe that gaming establishments find our patron marketing services helpful as they try to attract new patrons and to retain existing ones. Because we have data on patron cash access activity across multiple gaming establishments, we are uniquely able to help an operator understand how much of a patron’s cash access activity, in aggregate, is being done in other gaming establishments in order to gauge the patron’s loyalty to the gaming establishment.

QuikReports is a browser-based reporting tool that provides marketing professionals with real-time access to, and analysis of, information on patron cash access activity. We provide this information through a secure Internet connection at user-specified levels of detail ranging from aggregated summary information to individual cash access transactions. For example, an operator may use QuikReports to focus its marketing efforts on target patrons by generating a report of the patrons who accessed the greatest amounts of cash at the operator’s gaming establishment during a specified period, and comparing the amounts of cash accessed at the operator’s gaming establishments with the aggregate amounts of cash accessed at other gaming establishments that are part of our network. A gaming establishment may also use QuikReports to monitor or analyze the cash access activities of its patrons to determine peak periods, the relative popularity of various cash access methods, or the traffic volumes, at particular machines in particular locations.

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QuikMarketing. Through our QuikMarketing service, we query our proprietary patron transaction database using criteria supplied by the gaming establishment. We then distribute gaming establishment-supplied marketing materials to patrons in our database that match target patron criteria supplied by the gaming establishment. Our proprietary patron transaction database includes information that is captured from transactions we process in which personal information is available; ATM transactions are not included. As the applicable transaction volume increases, we continue to build existing patron profiles and add new patron profiles.

Cashless Gaming Products

A recent trend in gaming has been the movement towards cashless gaming as a more efficient means for gaming operators to manage their slot machine operations. Cashless gaming, also known as “ticket-in-ticket-out” (“TITO”), reduces the amount of cash utilized in slot machines by dispensing bar-coded tickets instead of cash for jackpots and cash-outs. To capitalize on the movement towards cashless gaming initiatives, we have developed, together with our strategic partners, products that facilitate an efficient means of accessing funds in a cashless gaming environment. Our cash access services are platform independent and our existing infrastructure has been designed to be adaptable to new platforms and/or operating environments.

3-in-1 Enabled QuickJack Plus is a multi-function patron kiosk which incorporates our “3-in-1 rollover” functionality for cash access into self-service kiosks for slot ticket redemption services provided by NRT Technology Corporation (“NRT”). When a patron presses the cash out button on a cashless slot machine, the patron receives the value of the winnings on a paper ticket dispensed from a printer embedded in the slot machine. The ticket can then be inserted into other slot machines or exchanged for cash at a QuickJack Plus kiosk. The availability of our cash access services on these slot ticket redemption devices provides us with additional points of contact with gaming patrons at locations that are closer to the slot machines than traditional cash access devices that are typically located on the periphery of the area within the gaming establishment where gaming activity is conducted. These additional points of contact provide gaming patrons with more opportunities to access their cash with less cashier involvement, thereby creating labor cost savings for gaming establishments. In addition, by incorporating our cash access services into QuickJack Plus, we enjoy the benefit of NRT’s existing relationships with gaming establishments and its sales and marketing efforts directed towards additional gaming establishments. We have the exclusive right to provide cash access services on self-service redemption devices serviced by NRT. We have a similar alliance with Western Money Systems, another provider of slot ticket and player point redemption kiosks, subject to completion of development and regulatory approval.

Ticket-Out Debit Device (“TODD”) is a cashless gaming product developed by IFT, our joint venture with IGT, that allows slot machine patrons to access funds without leaving the machines they are playing. When a slot machine is equipped with TODD technology, a slot machine patron swipes his or her POS debit card and enters his or her PIN and the requested transaction amount on a terminal mounted on the slot machine. If the transaction is approved, the patron’s funds are either credited to the slot machine for play at that machine or a bar-coded ticket is printed that may be used at any ticket-enabled slot machine. TODD-enabled slot machines offer patrons convenience and reduce the amounts of cash carried by patrons. Our cashless slot technology also reduces the cash-handling burden of gaming establishments. Our TODD cashless gaming product has been approved for use in only one gaming establishment and cannot be used at any other location until we receive approval from the appropriate authorities.

Electronic Debit Interactive Terminal Housing (“EDITH”) is a cashless gaming device developed by IFT that allows gaming patrons to purchase slot machine tickets from a customer-activated kiosk. EDITH is functionally similar to TODD, but instead of being deployed at an individual slot machine, EDITH is a compact stand-alone unit that can be placed almost anywhere in the gaming establishment. EDITH allows gaming establishment patrons to purchase slot tickets with their debit card. Patrons swipe their debit card, enter their PIN and request an amount. Upon approval of the transaction, a bar-coded slot ticket is dispensed from EDITH’s ticket printer. An optional receipt is also provided upon the patron’s request. The bar-coded slot ticket may then be inserted into a TITO-enabled slot machine or redeemed at a cashier station. EDITH was approved in July 2006 by Gaming Laboratories International, Inc. (“GLI”). Many Native American gaming establishments and certain state regulatory authorities rely on GLI for product certification. We plan to submit EDITH for approval in other gaming jurisdictions in the future.

Credit Card Servicing

The Arriva Card is a private label credit card issued by CIT Bank. The Arriva Card is structured specifically for use in gaming establishments and has many features not typically available with traditional credit cards, including better rates and terms on cash advances than most cards and an exclusive loyalty program. The Arriva Card also benefits gaming establishments by providing their patrons with a new source of credit, at no risk to the gaming establishment. The Arriva Card can be used in any gaming establishment in the United States and the Caribbean in which we provide cash advance services. The Arriva Card was first issued in July 2006. As of December 31, 2006, there were approximately 2,900 cardholders of the Arriva Card and more than $12.2 million in cash access transactions had been completed using the Arriva Card.

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Customer Service

We operate a customer service call center from our facility in Las Vegas, Nevada that is accessible 24 hours a day, 365 days a year. Our customer service representatives assist cashier personnel and gaming patrons in their use of our products and services. Through our use of third-party translation services, our customer service representatives can serve gaming establishment customers and patrons in approximately 150 different languages.

Intellectual Property

We believe that the ability to introduce and respond to technological innovation in the gaming industry will be an increasingly important qualification for the future success of any provider of cash access services. Our continued competitiveness will depend on the pace of our product development; our patent, copyright, trademark and trade secret protection; and our relationships with customers. Our business development personnel work with gaming establishments, our joint venture partners, our strategic partners and the suppliers of the financial services upon which our cash access services rely to design and develop innovative cash access products and services and to identify potential new solutions for the delivery and distribution of cash in gaming establishments.

We have two issued United States patents and three pending United States patent applications. We have ten United States trademark registrations, including two registered United States trademarks related to our ACM product and one registered United States trademark relating to our name. We have a total of 45 trademark registrations or pending registrations throughout the world. However, we rely principally on unregistered copyrights and trade secrets for protection of our intellectual property.

Our ACMs use biometric facial recognition technology and our patented “3-in-1 rollover” functionality to provide credit card cash advances, POS debit card transactions, ATM cash withdrawals, check cashing and money transfer services at a single, unmanned machine. These technologies are key differentiating technologies from our competitors.

Some of our systems, such as the software that implements our QCP Web and QuikReports products and the software that drives our ACM product, were developed by Infonox on the Web (“Infonox”), a corporation whose principals are family members of our director Karim Maskatiya, and are hosted and operated on an infrastructure platform that is owned by Infonox. We own all of the intellectual property developed for us by Infonox, and Infonox has granted us an exclusive license in the gaming industry to use its infrastructure platform to deliver our products and services to our customers.

Sales and Marketing

We sell and market our products and services to gaming establishments primarily through the use of a direct sales force. The target customers of our direct sales force are gaming establishments in the United States and in international markets where gaming is conducted. Our target customers include traditional land-based casinos, gaming establishments operated on Native American lands, racinos, riverboats, cruise ships with gaming operations, pari-mutuel wagering facilities and card rooms. In 2006, 2005 and 2004, respectively, revenues from our operations outside the United States comprised 3.0%, 3.4% and 3.2% of our revenues.

Our sales and marketing efforts are directed by 15 sales executives, each with business development responsibility for the gaming establishments in those regions. These senior sales executives target all levels of gaming establishment personnel, including senior executives, finance professionals, marketing staff and cashiers, and seek to educate them on the benefits of our cash access products and services.

The senior sales executives are supported by 28 field account managers, who provide on site customer service to most of our customers. These field account managers reside in the vicinity of the specific gaming establishments that they support to ensure that they respond to the customer service needs of those gaming establishments.

We also have joint sales efforts with a number of strategic partners, including NRT, Western Money Systems and Capital One, which allow us to market our cash access services to gaming establishments through channels other than our direct sales force.

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Competition

We compete with other providers of cash access services to the gaming industry. Our principal competitors in North America are Game Financial Corporation, a subsidiary of Fidelity National Information Services Inc. operating as GameCash; Global Payments Inc. operating as Cash & Win; and Cash Systems, Inc. We also compete with financial institutions, such as U.S. Bancorp and other regional and local banks that operate ATMs on the premises of gaming establishments. Some of these other providers and financial institutions have also established cooperative relationships with each other to expand their service offerings. In markets outside North America, we encounter competition from banks and other financial service companies established in those markets.

We face potential competition from gaming establishments that may choose to operate their own in-house cash access systems rather than outsource to us. In the past, some gaming establishments have operated their own in-house cash access systems. We believe that almost all gaming establishments, however, outsource their cash access service to third-party providers because providing these services is not a core competency of gaming establishment operators, and because gaming establishment operators are unable to achieve the same scale that can be obtained by third-party providers that deploy cash access services across multiple gaming establishments.

We may in the future also face competition from traditional transaction processors, such as First Data, that may choose to enter the gaming patron cash access services market. In connection with our redemption of First Data’s interest in us, First Data agreed not to compete with us prior to March 10, 2007. Given its familiarity with our business, operations and industry as a result of being our majority owner from inception until March 10, 2004, First Data could be a significant competitive threat now that this covenant not to compete has expired. In addition, we may in the future face potential competition from new entrants into the market for cash access products and related services and, subject to certain covenants made by some of the banks that sponsor us into the card associations, competition from such banks during and after expiration of our contracts with such banks. Some of these potential competitors may have a number of significant advantages over us, including greater name recognition and marketing power, longer operating histories, pre-existing relationships with current or potential customers and significantly greater financial, marketing and other resources and access to capital which allow them to respond more quickly to new or changing opportunities.

Regulation

Various aspects of our business are subject to gaming regulation and financial services regulation. Depending on the nature of the noncompliance, our failure to comply with these regulations may result in the suspension or revocation of any license or registration at issue, as well as the imposition of civil fines and criminal penalties.

Gaming Regulation

We are subject to a variety of gaming and other regulations in the jurisdictions in which we operate. As a general matter, we are regulated by gaming commissions or similar authorities at the state or tribal level, such as the New Jersey Casino Control Commission and New Jersey Division of Gaming Enforcement. In some jurisdictions, such as Nevada, we are considered a supplier of “associated equipment” and could be required by the regulatory authorities, in their discretion, to file a license application. In such event, any of our officers, directors or beneficial owners of our securities could be required to apply for a license or a finding of suitability. To date, we have not been required to file such an application. Most of the jurisdictions in which we operate distinguish between gaming-related suppliers and vendors, such as manufacturers of slot machine or other gaming devices, and non-gaming suppliers and vendors, such as food and beverage purveyors, construction contractors and laundry and linen suppliers. In these jurisdictions, we are typically characterized as a non-gaming supplier or vendor and we must obtain a non-gaming supplier’s or vendor’s license, qualification or approval. The licensure, qualification and approval requirements and the regulations imposed on non-gaming suppliers and vendors are generally less stringent than for gaming-related suppliers and vendors, and as such, we are often subject to a lesser degree of regulation than our customers that directly engage in gaming activities. However, some of the jurisdictions in which we do business do not distinguish between gaming-related and non-gaming related suppliers and vendors, and other jurisdictions categorize our services and/or products as gaming related, and we are subject to the same stringent licensing, qualification or approval requirements and regulations that are imposed upon vendors and suppliers that would be characterized as gaming-related in other jurisdictions. Most state and many tribal gaming regulators require us to obtain and maintain a permit or license to provide our services to gaming establishments. The process of obtaining such permits or licenses often involves substantial disclosure of information about us, our officers, directors and beneficial owners of our securities, and involves a determination by the regulators as to our suitability as a supplier or vendor to gaming establishments.

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The expansion of our business or the introduction of new cash access products or services may result in us being characterized as a gaming-related supplier or vendor in jurisdictions in which we are now a non-gaming related supplier or vendor. Our EDITH and TODD cashless gaming products, for example, interact with a gaming establishment’s slot system and operate in close physical proximity to slot machines, and are therefore much more closely connected to gaming activity than our other products and services that provide access to cash independent of any gaming equipment. These differences may result in a regulatory characterization of us as a gaming-related supplier or vendor, which would subject us to an increased regulatory burden which could include, but is not limited to: requiring the licensure or finding of suitability of any of our officers, directors, key employees or beneficial owners of our securities; the termination or disassociation with such officer, director, key employee or beneficial owner of our securities that fails to file an application or to obtain a license or finding of suitability; the submission of detailed financial and operating reports; submission of reports of material loans, leases and financing; and, requiring regulatory approval of some commercial transactions such as the transfer or pledge of equity interests in the company. These regulatory burdens are imposed upon gaming-related suppliers or vendors on an ongoing basis.

Gaming regulatory authorities have broad discretion and can require any beneficial holder of our securities, regardless of the number of shares of common stock or amount of debt securities owned, to file an application, be investigated, and be subject to a determination of suitability. If the beneficial holder of our securities who must be found suitable is a corporation, partnership, or trust, such entity must submit detailed business and financial information including a list of its officers, directors, partners and beneficial owners. Further disclosure by those officers, directors, partners and beneficial owners may be required. Under some circumstances and in some jurisdictions, an institutional investor, as defined in the applicable gaming regulations, that acquires a specified amount of our securities may apply to the regulatory authority for a waiver of these licensure, qualification or finding of suitability requirements, provided the institutional investor holds the voting securities for investment purposes only. An institutional investor will not be deemed to hold voting securities for investment purposes unless the securities were acquired and are held in the ordinary course of its business.

The changes in our ownership, management and corporate structure that resulted from the recapitalizations of our ownership in 2004 and our conversion from a limited liability company to a corporation in 2004, required us to notify many of the state and tribal gaming regulators under whose jurisdiction we operate. In many cases, those regulators have asked us for further information and explanation of those changes. To date, we have satisfied many of these inquiries, and are continuing to cooperate with those that are ongoing. Given the magnitude of the changes in our ownership that resulted from the recapitalizations, we were required to re-apply for new permits or licenses in some jurisdictions, but were not required to discontinue our operations during the period of re-application. In 2005 we notified many of the state and tribal gaming regulators under whose jurisdictions we operate of our initial public offering of common stock, which required further disclosures or re-applications for new permits or licenses, none of which required us to discontinue our operations in any such jurisdictions. In some jurisdictions we are in the process of obtaining licenses and have yet to receive final approval of such licenses from the applicable regulatory authority. In these jurisdictions, we operate under temporary licenses or without a license. We may not be issued a license in these jurisdictions.

Financial Services Regulation

Anti-Money Laundering. The USA PATRIOT Act of 2001 and its implementing federal regulations require us to establish and maintain an anti-money laundering program. Our anti-money laundering program includes: (1) internal policies, procedures, and controls designated to identify and report money laundering; (2) a designated compliance officer; (3) an ongoing employee training program; and (4) an independent audit function to test the program.

In addition, the cash access services that we provide are subject to recordkeeping and reporting obligations under the Bank Secrecy Act. Our gaming establishment customers and we are required to file a SAR with the U.S. Treasury Department’s Financial Crimes Enforcement Network to report any suspicious transaction relevant to a possible violation of law or regulation. To be reportable, the transaction must meet criteria that are designed to identify the hiding or disguising of funds derived from illegal activities. Our gaming establishment customers, in situations where our cash access services are provided through gaming establishment cashier personnel, and we, in situations where we provide our cash access services directly to patrons through satellite cages or booths that we staff and operate, are required to file a CTR of each deposit, withdrawal, exchange of currency or other payment or transfer by, through, or to us which involves a transaction in currency of more than $10,000 in a single day. Our QCP Web product can identify transactions that give rise to reporting obligations. When we issue or sell drafts for currency in amounts between $3,000 and $10,000, we maintain a record of information about the purchaser, such as the purchaser’s address, Social Security Number and date of birth. Finally, we maintain a record of each extension of credit by us in an amount in excess of $10,000, including the name and address of the person to whom the extension of credit is made, the amount, the nature and purpose of the credit, and the date of the loan.

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Following the events of September 11, 2001, the United States and other governments have imposed and are considering a variety of new regulations focused on the detection and prevention of money laundering and money transmitting to or from terrorists and other criminals. Compliance with these new regulations may impact our business operations or increase our costs.

Fund Transfers. Our POS debit card transactions and ATM services are subject to the Electronic Fund Transfer Act, which provides gaming patrons with rights with respect to disputes relating to unauthorized charges, charges that list the wrong date or amount, charges for goods and services that are not accepted or delivered as agreed, math errors and charges for which a cardholder asks for an explanation or written proof of transaction along with a claimed error or request for clarification. We have implemented the necessary policies and procedures in order to comply with the regulatory requirements for fund transfers.

Money Transmitter. Most states require a money transmitter license in order to issue the negotiable instruments that are used to complete credit card cash advance and POS debit card transactions. On November 27, 2006, we entered into an agreement with Integrated Payment Systems, Inc. (“IPS”), whereby IPS appointed us as IPS’s agent to use and sell IPS money orders in connection with credit card and point-of-sale debit card transactions consummated by us for patrons of gaming establishments. This agreement has a three year term. IPS holds the required money transmitter licenses and is our sole and exclusive provider of money orders. We are entitled to receive monthly commission payments from IPS for money orders used and sold by us and we are obligated to pay transaction fees per money order to IPS.

Credit Reporting. Our Central Credit gaming patron credit bureau services and Arriva Card program are subject to the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act of 2003, which provide patrons rights to access their credit files, dispute information contained in their credit files and add brief statements to their credit files in the event disputes are not resolved by our investigation. We continue to implement policies and procedures as well as adapt our business practices in order to comply with these laws and regulations. In addition to federal regulation, both our Central Credit gaming patron credit bureau services and our Arriva Card program are subject to the state credit reporting regulations which impose similar requirements to the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act of 2003.

Debt Collection. Although we currently outsource most of our debt collection efforts to third parties, we do engage in debt collection efforts for credit extended via the Arriva Card. We may engage in efforts to collect on our QuikCredit service, dishonored checks purchased by Central Credit pursuant to our check warranty services, returns from customer payments on their account with the Arriva Card and chargebacks on our cash advance products. All such collection practices are subject to the Fair Debt Collections Practices Act, which prohibits unfair, deceptive or abusive debt collection practices, as well as consumer-debt-collection laws and regulation adopted by the various states.

Privacy Regulations. Our collection of information from patrons who use our cash access services or apply for the Arriva Card are subject to the financial information privacy protection provisions of the Gramm-Leach-Bliley Act and its implementing federal regulations. We gather, as permitted by law, non-public, personally-identifiable financial information from patrons who use our cash access services, such as names, addresses, telephone numbers, bank and credit card account numbers, Social Security Numbers and income, credit histories and transaction information. The Gramm-Leach-Bliley Act requires us to safeguard and protect the privacy of such non-public personal information. Also, the Gramm-Leach-Bliley Act requires us to make disclosures to patrons regarding our privacy and information sharing policies and give patrons the opportunity to prevent us from releasing information about them to unaffiliated third parties in certain situations. In this regard, we provide patrons with a privacy notice, an opportunity to review our privacy policy, and an opportunity to opt out of specified types of disclosures. In addition to the federal Gramm-Leach-Bliley Act privacy regulations we are subject to state privacy regulations. State privacy regulations impose more stringent limitations on access and use of personal information. We continue to implement policies and programs as well as adapt our business practices in order to comply with state specific privacy laws and regulations.

ATM Operations. Our ATM services are subject to applicable state banking regulations in each jurisdiction in which we operate ATMs. These regulations require, among other things, that we register with the state banking regulators as an operator of ATMs, that we provide gaming patrons with notices of the transaction fees assessed upon use of our ATMs, that our transaction fees do not exceed designated maximums, that we offer gaming patrons a means of resolving disputes with us, and that we comply with prescribed safety and security requirements.

Check Cashing. In jurisdictions in which we serve as a check casher or agree to defer deposit of gaming patrons’ checks under our QuikCredit services, we are subject to the state licensing requirements and regulations governing check cashing activities. Generally, these regulations require us to obtain a license from the state’s banking regulators to operate as a check casher. Some states also impose restrictions on this activity such as restrictions on the amounts of service fees that may be imposed on the cashing of certain types of checks, requirements as to records that must be kept with respect to dishonored checks, and requirements as to the contents of receipts that must be delivered to gaming patrons at the time a check is cashed.

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Arriva Card. Although the Arriva Card is issued by CIT Bank, Arriva administers and services the Arriva Card accounts. If our relationship with CIT Bank is discontinued, we would be required to either find another licensed banking institution to issue the Arriva Card or we would have to become licensed in each jurisdiction in which we want to issue the Arriva Card. Our marketing and servicing of the Arriva Card is subject to state and federal laws, including those state and federal laws governing consumer lending, debt collection practices and credit reporting such as the Federal Truth in Lending Act and Regulation Z, the Equal Credit Opportunity Act and Regulation B, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act as well as the regulations related to such laws.

Lending. In those states in which we are deemed to operate as a short-term consumer or payday lender as a result of our QuikCredit services, we are subject to the various state regulations governing the terms of the loans. Typically, the state regulations limit the amount that a lender or service provider may lend or provide and, in some cases, the number of loans or transactions that a lender or service provider may make to any customer at one time, restrict the amount of finance or service charges or fees that the lender or service provider may assess in connection with any loan or transaction. The lender or service provider must also comply with various consumer disclosure requirements, which are typically similar or equivalent to the Federal Truth in Lending Act and corresponding federal regulations, in connection with the loans or transactions.

Network and Card Association Regulation. In addition to the governmental regulation described above, some of our services are also subject to rules promulgated by various payment networks, EFT networks and card associations. For example, we must comply with the Payment Card Industry (“PCI”) Data Security Standard. As of June 30, 2006 we were designated as a compliant service provider under the PCI Data Security Standard.

Other Regulation

When contracting with tribal owned or controlled gaming establishments, we become subject to tribal laws and regulations that may differ materially from the non-tribal laws and regulations under which we generally operate. In addition to tribal gaming regulations that may require us to provide disclosures or obtain licenses or permits to conduct our business on tribal lands, we may also become subject to tribal laws that govern our contracts. These tribal governing laws may not provide us with processes, procedures and remedies that enable us to enforce our rights as effectively and advantageously as the processes, procedures and remedies that would be afforded to us under non-tribal laws, or to enforce our rights at all, and may expose us to an increased risk of contract repudiation as compared to that inherent in dealing with non-tribal customers. Many tribal laws permit redress to a tribal adjudicatory body to resolve disputes; however, such redress is largely untested in our experience. We may be precluded from enforcing our rights against a tribal body under the legal doctrine of sovereign immunity.

We are also subject to a variety of gaming regulations and other laws in the international markets in which we operate. We expect to become subject to additional gaming regulations and other laws in the jurisdictions into which we expand our operations. Our expansion into new markets is dependent upon our ability to comply with the regulatory regimes adopted by such jurisdictions. For example, our entry into Macau SAR is subject to our receipt of approvals, licenses or waivers by or from the Monetary Authority of Macau, the Macau Gaming Commission and the Macau Gaming Inspection and Coordination Bureau. We may not receive all of such approvals, licenses or waivers in a timely manner or at all. If we do not receive all of such approvals, licenses or waivers we will not be able to undertake all of our proposed operations in Macau SAR. Similar difficulties in obtaining approvals, licenses or waivers from the monetary and gaming authorities of other jurisdictions, in addition to other potential regulatory and quasi-regulatory issues that we have not yet ascertained, may arise in other international jurisdictions into which we wish to enter.

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As we develop new services and new products, we may become subject to additional federal and state regulations. For example, in the event that we form or acquire a bank or industrial loan company, we would become subject to a number of additional banking and financial institution regulations, which may include the Bank Holding Company Act. These additional regulations could substantially restrict the nature of the business in which we may engage and the nature of the businesses in which we may invest.

Employees

As of December 31, 2006, we had 354 employees. We are not subject to any collective bargaining agreements and have never been subject to a work stoppage. We believe that we have maintained good relationships with our employees.

Available Information

Our Internet address is http://www.globalcashaccess.com. We make available free of charge in the “Investor Relations” portion of our website under “SEC Filings” our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the SEC. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding our filings at http://www.sec.gov.

ITEM 1A. RISK FACTORS

Risks Related to Our Business

If we are unable to maintain our current customers on terms that are favorable to us, our business, financial condition and operating results may suffer a material adverse effect.

We enter into contracts with our gaming establishment customers to provide our cash access products and related services. Most of our contracts have a term ranging from three to five years in duration and provide that we are the only provider of cash access products to these establishments during the term of the contract. However, some of our contracts are terminable upon 30 days advance notice and some of our contracts either become nonexclusive or terminable by our gaming establishment customers in the event that we fail to satisfy specific covenants set forth in the contracts, such as covenants related to our ongoing product development. We are typically required to renegotiate the terms of our customer contracts upon their expiration, and in some circumstances we may be forced to modify the terms of our contracts before they expire. When we have successfully renewed these contracts, these negotiations have in the past resulted in, and in the future may result in, financial and other terms that are less favorable to us than the terms of the expired contracts. In particular, we are often required to pay a higher commission rate to a gaming establishment than we previously paid in order to renew the relationship. Assuming constant transaction volume, increases in commissions or other incentives paid to gaming establishments would reduce our operating results. We may not succeed in renewing these contracts when they expire, which would result in a complete loss of revenue from that customer, either for an extended period of time or forever. As our contracts are often executed by one corporation for the provision of services at multiple gaming establishments, the loss of a single contract often results in the loss of multiple gaming establishments. If we are required to pay higher commission rates or agree to other less favorable terms to retain our customers or we are not able to renew our relationships with our customers upon the expiration of our contracts, our business, financial condition and operating results would be harmed.

Because of significant concentration among our top customers, the loss of a top customer could have a material adverse effect on our revenues and profitability.

For the year ended December 31, 2006, our five largest customers, Harrah’s Entertainment, Inc., MGM MIRAGE, Boyd Gaming Corporation, Station Casinos, Inc. and Mohegan Tribal Gaming, accounted for approximately 40.2% of our revenues. In the year ended December 31, 2005, these same properties accounted for 40.6% of our revenues. Our largest customer, Harrah’s Entertainment, Inc., accounted for 18.1% of our revenues in the year ended December 31, 2006. The loss of, or a substantial decrease in revenues from, any one of our top customers could have a material adverse effect on our business and operating results.

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Consolidation among operators of gaming establishments may also result in the loss of a top customer to the extent that customers of ours are acquired by our competitors’ customers.

Competition in the market for cash access services is intense, which could result in higher commissions or loss of customers to our competitors.

The market for cash access products and related services is intensely competitive, and we expect competition to increase and intensify in the future. We compete with other providers of cash access products and services such as Game Financial Corporation, a subsidiary of Fidelity National Information Services Inc. operating as GameCash; Global Payment Systems operating as Cash & Win; and Cash Systems, Inc. We compete with financial institutions such as U.S. Bancorp and other regional and local banks that operate ATMs on the premises of gaming establishments. In markets outside North America, we encounter competition from banks and other financial service companies established in those markets. We face potential competition from gaming establishments that may choose to operate cash access systems on their own behalf rather than outsource to us. We may in the future also face competition from traditional transaction processors, such as First Data, that may choose to enter the gaming patron cash services market. In connection with our redemption of First Data’s interest in us, First Data agreed not to compete with us prior to March 10, 2007. Given its familiarity with our specific industry and business and operations as a result of being our majority owner from inception until March 10, 2004, First Data could be a significant competitive threat now that this covenant not to compete has expired. In addition, we may in the future face potential competition from new entrants into the market for cash access products and related services and, subject to certain covenants made by some of the banks that sponsor us into the card associations, competition from such banks during and after expiration of our contracts with such banks. Some of our competitors and potential competitors have significant advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing and other resources and more ready access to capital which allow them to respond more quickly to new or changing opportunities. In addition, some providers of cash access products and services to gaming establishments have established cooperative relationships with financial institutions in order to expand their service offerings.

Other providers of cash access products and services to gaming establishments have in the past increased, and may in the future continue to increase, the commissions or other incentives they pay to gaming establishments in order to win those gaming establishments as customers and to gain market share. To the extent that competitive pressures force us to increase commissions or other incentives to establish or maintain relationships with gaming establishments, our business and operating results could be adversely affected.

Under our agreements with NRT and Western Money Systems, they are generally prohibited from providing their cash handling services on any device that provides cash access services of other providers. Upon the expiration or termination of our agreements with NRT and Western Money Systems, we may face competition from other providers of cash access services to the extent that NRT or Western Money Systems establishes cooperative relationships with other cash access service providers.

If we are unable to protect our intellectual property adequately, we may lose a valuable competitive advantage or be forced to incur costly litigation to protect our rights.

Our success depends on developing and protecting our intellectual property. We have entered into license agreements with other parties for intellectual property that is critical to our business. We rely on the terms of these license agreements, as well as copyright, patent, trademark and trade secret laws to protect our intellectual property. We also rely on other confidentiality and contractual agreements and arrangements with our employees, affiliates, business partners and customers to establish and protect our intellectual property and similar proprietary rights. We hold two issued patents and have three patent applications pending. These patent applications may not become issued patents. If they do not become issued patents, our competitors would not be prevented from using these inventions.

We have also entered into license agreements with other parties for the exclusive use of their technology and intellectual property rights in the gaming industry, such as our license to use portions of the software infrastructure upon which our systems operate from Infonox. We rely on these other parties to maintain and protect this technology and the related intellectual property rights. If our licensors fail to protect their intellectual property rights in material that we license and we are unable to protect such intellectual property rights, the value of our licenses may diminish significantly and our business could be significantly harmed. It is possible that third parties may copy or otherwise obtain and use our information and proprietary technology without our authorization or otherwise infringe on our intellectual property rights or intellectual property rights that we exclusively license. In addition, we may not be able to deter current and former employees, consultants, and other parties from breaching confidentiality agreements with us and misappropriating proprietary information from us or other parties. If we are unable to adequately protect our intellectual property or our exclusively licensed rights, or if we are unable to continue to obtain or maintain licenses for proprietary technology from other parties, including in particular Infonox, it could have a material adverse effect on the value of our intellectual property, our reputation, our business and our operating results.

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We may have to rely on costly litigation to enforce our intellectual property rights and contractual rights. For example, from 2004 to 2006 we pursued a claim against competitors of ours alleging the infringement of the patented “3-in-1 rollover”. By pursuing this litigation, we are exposed to the risk that defendants will attempt to invalidate our right to the subject intellectual property or otherwise limit its scope. If litigation that we initiate is unsuccessful, we may not be able to protect the value of our intellectual property and our business could be adversely affected. In addition, in the litigation we do initiate, the defendants may assert various counterclaims that may subject us to liability. In addition to losing the ability to protect our intellectual property, we may also be liable for damages. We may also face difficulty enforcing our rights in the QuikCash trademark because of the timing and sequence of some of the assignment and renewal actions relating to the trademark.

In addition, we may face claims of infringement that could interfere with our ability to use technology or other intellectual property rights that are material to our business operations. In the event a claim of infringement against us is successful, we may be required to pay royalties to use technology or other intellectual property rights that we had been using or we may be required to enter into a license agreement and pay license fees, or we may be required to stop using the technology or other intellectual property rights that we had been using. We may be unable to obtain necessary licenses from third parties at a reasonable cost or within a reasonable time. Any litigation of this type, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources.

We are subject to extensive rules and regulations of card associations, including MasterCard International, Visa International and Visa U.S.A., that are always subject to change, which may harm our business.

In 2006 and 2005, a substantial portion of our revenues were derived from transactions subject to the extensive rules and regulations of the leading card associations, Visa International and Visa U.S.A. (collectively “VISA”), and MasterCard International (“MasterCard”). From time to time, we receive correspondence from these card associations regarding our compliance with their rules and regulations. In the ordinary course of our business, we engage in discussions with the card associations, and the banks that sponsor us into the card associations, regarding our compliance with their rules and regulations. The rules and regulations do not expressly address some of the contexts and settings in which we process cash access transactions, or do so in a manner subject to varying interpretations. For example, neither of the major card associations has determined that our ability to process credit card cash advance transactions using biometric technology at an unmanned machine and without cashier involvement through our ACM complies with its regulations. One association has allowed us to conduct these transactions as long as we assume chargeback liability for any transaction in which we do not obtain a contemporaneous cardholder signature. An increase in the level of chargebacks could have a material adverse effect on our business or results of operations. The other association has allowed us to conduct a limited pilot test. Therefore, patrons still must complete these transactions at the cashier, which is less convenient to patrons and prevents gaming establishments from realizing potential cashier labor cost savings. As another example, in 2003, one of the major card associations informed our sponsoring bank that authorization requests originating from our systems needed to be encoded to identify our transactions as gambling transactions, even though our services do not directly involve any gambling activity. This resulted in a large number of card issuing banks declining all transactions initiated through our services. We resolved this issue by encoding the authorization requests with an alternative non-gambling indicator that the card association agreed was applicable. As another example, we must continue to comply with the PCI Data Security Standard. These examples only illustrate some of the ways in which the card association rules and regulations have affected us in the past or may affect us in the future; there are many other ways in which these rules and regulations may adversely affect us beyond the examples provided in this document.

The card associations’ rules and regulations are always subject to change, and the card associations may modify their rules and regulations from time to time. Our inability to anticipate changes in rules, regulations or the interpretation or application thereof may result in substantial disruption to our business. In the event that the card associations or our sponsoring banks determine that the manner in which we process certain types of card transactions is not in compliance with existing rules and regulations, or if the card associations adopt new rules or regulations that prohibit or restrict the manner in which we process certain types of card transactions, we may be forced to pay a fine, modify the manner in which we operate our business or stop processing certain types of cash access transactions altogether, any of which could have a material negative impact on our business and operating results.

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In both our credit card and POS debit card cash advance businesses, patrons are generally issued a negotiable instrument which is surrendered to the gaming establishment in exchange for cash. These transactions are classified by the card associations as “quasi-cash” transactions, and are identified to the card associations as such by the use of a specific merchant processing code. These merchant processing codes are unique to the respective card associations and the issuing banks use these codes as one of the factors they consider in determining whether to authorize such transactions. We have introduced EDITH, a new product that dispenses a bar-coded slot ticket based on a POS debit authorization. It has not yet been determined whether the associations will deem the slot ticket a negotiable instrument or not. If they do not, we may be required to route such transactions using a different merchant processing code, and the use of a different merchant processing code may result in lower approval rates and higher interchange expense than we experience with quasi-cash transactions. If approval rates for EDITH transactions are lower than approval rates for quasi-cash transactions, gaming establishment patrons may be dissuaded from using EDITH, resulting in the failure of our EDITH product to gain commercial acceptance.

We also process transactions involving the use of the proprietary credit cards such as those offered by Discover Card and American Express as well as other regional card issues in certain international markets. The rules and regulations of the proprietary credit card networks that service these cards present risks to us that are similar to those posed by the rules and regulations of VISA and MasterCard.

We have entered the consumer credit business through the provision of the Arriva Card through our wholly-owned subsidiary, Arriva. Our credit card is not part of any existing card association such as the VISA or MasterCard card associations. If, in the future, our card becomes part of a card association we will become subject to additional rules and regulations of these card associations.

Changes in interchange rates and other fees may affect our cost of revenues (exclusive of depreciation and amortization) and net income.

We pay credit card associations fees for services they provide in settling transactions routed through their networks, called interchange fees. In addition, we pay fees to participate in various ATM or POS debit card networks as well as processing fees to process our transactions. The amounts of these interchange fees are fixed by the card associations and networks in their sole discretion, and are subject to increase at any time. VISA and MasterCard both increased applicable interchange fees in April 2006. Also, in 2004, VISA’s Interlink network, through which we process a substantial portion of our POS debit card transactions, materially increased the interchange rates for those transactions. Since that date, the proportion of our POS debit card transactions that are routed on the Interlink network has increased, resulting in a decrease in profitability of our POS debit card business. Many of our contracts enable us to pass through increases in interchange or processing fees to our customers, but competitive pressures might prevent us from passing all or some of these fees through to our customers in the future. To the extent that we are unable to pass through to our customers all or any portion of any increase in interchange or processing fees, our cost of revenues (exclusive of depreciation and amortization) would increase and our net income would decrease, assuming no change in transaction volumes. Any such decrease in net income could have a material adverse effect on our financial condition and operating results. Additionally, the transformation of the ownership structure of Visa and MasterCard from private associations of issuing banks to publicly traded corporations may negatively impact the manner in which these card associations manage and determine interchange rates. This could have a material adverse effect on our business and operating results.

We receive fees from the issuers of ATM cards that are used in our ATMs, called reverse interchange fees. The amounts of these reverse interchange fees are fixed by electronic funds transfer networks, and are subject to decrease in their discretion at any time. Our contracts with gaming operators do not enable us to pass through to our customers the amount of any decrease in reverse interchange fees. To the extent that reverse interchange fees are reduced, our net income would decrease, assuming no change in transaction volumes, which may result in a material adverse effect on our operating results.

Our substantial indebtedness could materially adversely affect our operations and financial results and prevent us from obtaining additional financing, if necessary.

We have a significant amount of indebtedness. As of December 31, 2006, we had total indebtedness of $274.5 million in principal amount (of which $152.8 million consisted of senior subordinated notes and $121.7 million consisted of senior secured debt). Our substantial indebtedness could have important consequences. For example, it:

• makes it more difficult for us to satisfy our obligations with respect to either our senior secured debt or our senior subordinated notes, which, if we fail to do, could result in the acceleration of all of our debt;

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• increases our vulnerability to general adverse economic and industry conditions;

• may require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, which would reduce the availability of our cash flow to fund working capital, capital expenditures, expansion efforts and other general corporate purposes;

• limits our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• restricts our ability to pay dividends or repurchase our common stock;

• places us at a competitive disadvantage compared to our competitors that have less debt;

• restricts our ability to acquire businesses or technologies that would benefit our business;

• restricts our ability to engage in transactions with affiliates or create liens or guarantees; and

• limits, along with the financial and other restrictive covenants in our other indebtedness, among other things, our ability to borrow additional funds.

In addition, our senior secured credit facilities and the indenture for our senior subordinated notes contain financial and other restrictive covenants that limit our ability to engage in activities that we may believe to be in our long-term best interests. These restrictions include, among other things, limits on our ability to make investments, pay dividends, incur debt, sell assets, or merge with or acquire another entity. Our failure to comply with those covenants could result in an event of default, which if not cured or waived, could result in the acceleration of all of our debt. Certain matters may arise that require us to get waivers or modifications of these covenants. For example, as described more fully below, we may seek to obtain our own money transmitter licenses. These licenses may require us to provide letters of credit or surety bonds in excess of the amounts currently allowed under the credit facilities. We may address these risks by seeking modifications or waivers of our existing agreements, by refinancing those agreements, or both. If we are unable to get these matters waived, modified or refinanced, an event of default could occur, which if not cured or waived, could result in the acceleration of all of our debt.

Our senior secured debt currently bears interest at a rate that is based on the London Interbank Offering Rate (“LIBOR”), and is adjusted periodically to reflect changes in LIBOR. We are therefore exposed to the risk of increased interest expense in the event of any increase in LIBOR. The substantial amount of our senior secured debt magnifies this risk.

To service our indebtedness we will require a significant amount of cash, and our ability to generate cash flow depends on many factors beyond our control.

Our ability to generate cash flow from operations depends on general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Due to these factors, it is possible that our business will not generate sufficient cash flow from operations to enable us to pay our indebtedness as it matures and to fund our other liquidity needs. This would cause us to have to borrow money to meet these needs and future borrowing may not be available to us at all or in an amount sufficient to satisfy these needs. In such events, we will need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our indebtedness on commercially reasonable terms or at all. We could have to adopt one or more alternatives, such as reducing or delaying planned expenses and capital expenditures, selling assets, restructuring debt or obtaining additional equity or debt financing or joint venture partners. We may not be able to affect any of these financing strategies on satisfactory terms, if at all. Our failure to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms would have a material adverse effect on our business and our ability to satisfy our obligations with respect to our indebtedness.

The terms of our senior secured debt may require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, which will reduce the availability of our cash flow to fund working capital, capital expenditures, expansion efforts and other general corporate purposes.

Changes by M&C International and First Data to certain of their tax returns may have an impact on the value of a component of our deferred tax asset. In addition, changes in tax laws, regulations and interpretations may adversely affect our business.

In connection with the Recapitalization and Private Equity Restructuring that occurred in 2004, we recorded a deferred tax asset of $247.0 million. In connection with this deferred tax asset, we expect to pay a significantly lower amount in United States federal income taxes than we provide for in our income statements. Our calculation of the starting balance of the deferred tax asset is based upon information we received from M&C International and First Data about the gains they recorded in the Recapitalization and the Private Equity Restructuring. If M&C International or First Data change their calculation of the gains and file amended tax returns, we may be required to recalculate the starting balance of the deferred tax asset and the annual amortization thereof.

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Unanticipated changes in applicable income tax rates or laws or changes in our tax position could adversely impact our future results of operations. Our future effective tax rates could be affected by changes in the valuation of our deferred tax asset as a result of an audit or otherwise. Additionally, changes in tax laws or interpretations of such laws by domestic and foreign tax authorities could affect our results of operations.

Because of our dependence on a few providers, or in some cases one provider, for some of the financial services we offer to patrons, the loss of a provider could have a material adverse effect on our business or our financial performance.

We depend on a few providers, or in some cases one provider, for some of the financial services that we offer to patrons. The loss of any of these providers could have a material adverse effect on our business and financial performance.

Money Order Instruments. We currently rely on IPS to issue the negotiable instruments that are used to complete credit card cash advance and POS debit card transactions. Most states require a money transmitter license in order to issue the negotiable instruments that are used to complete credit card cash advance and POS debit card transactions. We do not hold any money transmitter licenses, but currently issue negotiable instruments as an agent of IPS, which holds the required money transmitter licenses. On November 27, 2006, we entered into an agreement with IPS for a term of three years. Under terms of this agreement, subject to limited exceptions, IPS is our sole and exclusive provider of money order instruments. On February 22, 2007, IPS’ parent company, First Data, announced that it had decided to gradually exit the business of issuing money order instruments over the next two to three years. We have been advised that our agreement will be honored until the expiration of the agreement in accordance with its terms on December 31, 2009. Prior to such date we will either be required to enter in an agency relationship with another third-party that holds the required money transmitter licenses or obtain our own money transmitter licenses. We may not be able to enter into an agreement for such an agency relationship on terms that are favorable to us prior to the expiration of our agreement with IPS or at all. If we are unable to enter into such agreement, we may be unable to provide our cash advance services which would have a material adverse effect on our business and financial performance.

We are also considering obtaining our own money transmitter licenses. Many of the regulatory authorities that issue money transmitter licenses would require the posting of letters of credit or surety bonds to guaranty our obligations with respect to the negotiable instruments we would issue to gaming establishments to consummate credit card cash advance and POS debit card transactions. To post these letters of credit or surety bonds, we may need to obtain certain amendments or waivers of the terms of our senior secured credit facilities and we may need to partially secure our obligations under our senior subordinated notes. We may not be able to obtain our own money transmitter licenses. If we are unable to obtain such licenses prior to the expiration of our contract with IPS, we may be unable to complete credit card cash advance and POS debit card transactions, which would have a material adverse effect on our business and financial performance.

Check Warranty Services. We rely on TRS Recovery Services, Inc. (formerly known as TeleCheck Recovery Services, Inc.) (“TeleCheck”) to provide many of the check warranty services that our gaming establishment customers contract with us to use when cashing patron checks. Unless extended pursuant to its terms, our contract with TeleCheck expires on March 30, 2008 and we are currently negotiating the terms of a new contract with TeleCheck. Unless we and TeleCheck mutually agree to a new contract, we will need to make alternative arrangements for the provision of check warranty services and we may not have any continuing interest in those contracts that are executed directly between the gaming establishments and TeleCheck which may have a significant impact on revenues derived from check services. We may not be able to make such alternative arrangements on terms that are as favorable to us as the terms of our contract with TeleCheck, or on any terms at all. In addition, our Central Credit check warranty service, as currently deployed, uses risk analytics provided by third-party providers.

Authorizations and Settlement. We rely on USA Payments and USA Payment Systems, each of which is affiliated with M&C International, to obtain authorizations for credit card cash advances, POS debit card transactions, ATM cash withdrawal transactions and to provide settle transaction files to card associations for some of these transactions.

Card Association Sponsorship. We rely on Bank of America Merchant Services, which is affiliated with Bank of America Corporation, for sponsorship into the Visa U.S.A. and MasterCard card associations for domestic transactions at no cost to us through September 2010. We also rely on a foreign bank in each foreign jurisdiction in which we operate, for example Banco Weng Hang in Macau SAR, to process transactions conducted in these jurisdictions through the Visa International and MasterCard card associations.

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ATM Cash Supply. We rely exclusively on Bank of America to supply cash for substantially all of our ATMs. Under our agreement, Bank of America is not obligated to supply us with more than $300 million in cash at any given time; however, to satisfy our ATM cash supply needs, Bank of America has regularly provided us with cash in excess of this limit. If Bank of America ever refuses to provide cash in excess of this $300 million limit, we would have an inadequate supply of cash for our ATMs.

Our agreement with Bank of America for the supply of ATM cash expires in June 2007. Upon the expiration of this agreement we need to obtain an adequate supply of cash for our ATMs from an alternate source. We may not be able to obtain such adequate supply of cash on terms that are favorable to us or at all. Our inability to obtain such adequate supply of cash from an alternate source would have a material adverse effect on our business and financial performance.

Software Development and System Support. We generally rely on Infonox, which is controlled by family members of our director Karim Maskatiya, and USA Payments and USA Payment Systems, each of which is affiliated with M&C International, for software development and system support. In addition, we rely on NRT for software development and system support related to 3-in-1 Enabled QuickJack Plus devices.

Product Development. We rely on our joint venture partner and strategic partners for some of our product development. For example, we are developing cashless gaming products through IFT, our joint venture with IGT. With our strategic partners NRT and Western Money Systems, we have jointly developed and are marketing self-service slot ticket and player point redemption kiosks that incorporate our cash access services. These activities have risks resulting from unproven combinations of disparate products and services, reduced flexibility in making design changes in response to market changes, reduced control over product completion schedules and the risk of disputes with our joint venture partners and strategic partners. In addition, if our cashless gaming products are unsuccessful, we could lose our entire investment in IFT.

Money Transfers. We rely on Western Union Financial Services, Inc. to facilitate money transfers.

Arriva Card. We rely on CIT Bank (“CIT”) and Fiserv Solutions, Inc. (“Fiserv”) for the issuance, underwriting and processing of our private label credit card. Our contracts with these providers are for varying terms and provide early termination rights in the event of our breach of or the occurrence of an event of default under these contracts. Replacing any of these or other products and services we obtain from third parties could be materially disruptive to our operations. We may not be able to enter into contracts or arrangements with alternate providers on terms and conditions as beneficial to us as the contracts or arrangements with our current providers, or at all. A change in our business relationships with any of these third-party providers or the loss of their services or failed execution on their part could adversely affect our business, financial condition, results of operations or cash flows.

Certain providers upon whom we are dependent are under common control with M&C International, the loss of which could have a material adverse effect on our business.

We depend on services provided by USA Payments and USA Payment Systems, each of which is affiliated with M&C International, to provide many of the financial services that we offer to patrons. The interests of M&C International or its principals may not coincide with the interests of the holders of our common stock and such principals may take action that benefits themselves or these entities to our detriment. For example, M&C International’s principals could cause any of these entities to take actions that impair the ability of these entities to provide us with the services they provide today or that reduce the importance of us to them in the future. M&C International’s principals could dispose of their interests in these entities at any time and the successor owner or owners of such interests may not cause such entities to treat us with the same importance as they treat us today. Any loss of the services of these entities could adversely impact our business. During the years ended December 31, 2006 and 2005, we incurred costs and expenses from USA Payments and USA Payment Systems of an aggregate of $4.2 million, and $4.0 million, respectively. We also depend on services provided by Infonox, which is controlled by family members of our director Karim Maskatiya. These familial relationships may provide Mr. Maskatiya with influence over Infonox, presenting the same risks with respect to Infonox as those described above with respect to USA Payments and USA Payment Systems.

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Our business depends on our ability to introduce new, commercially viable products and services in a timely manner.

Our ability to maintain and grow our business will depend upon our ability to introduce successful new products and services in a timely manner. Our product development efforts are based upon a number of complex assumptions, including assumptions relating to gaming patron habits, changes in the popularity and prevalence of certain types of payment methods, anticipated transaction volumes, the costs and time required to bring new products and services to market, and the willingness and ability of both patrons and gaming establishment personnel to use new products and services and bear the economic costs of doing so. Our new products and services may not achieve market acceptance if any of our assumptions are wrong, or for other reasons.

Our ability to introduce new products and services may also require regulatory approvals, which may significantly increase the costs associated with developing a new product or service and the time required to introduce a new product or service into the marketplace. In order to obtain these regulatory approvals we may need to modify our products and services which would increase our costs of development and may make our products or services less likely to achieve market acceptance.

For example, the commercial success of our TODD cashless gaming product and EDITH depends upon the continued viability of the cashless gaming market segment. A curtailment in the prevalence of cashless gaming opportunities as a result of legislative action, responsible gaming pressures or other factors beyond our control would threaten the commercial success of our cashless gaming products and services. TODD required extensive laboratory testing and certification and to date has only been approved for use in one gaming establishment, and EDITH has been approved by only one regulatory authority.

Our ability to grow our business through the introduction of new products and services depends in part on our joint development activities with third parties over whom we have little or no control. We have engaged in joint development projects with third parties in the past and we expect to continue doing so in the future. Joint development can magnify several risks for us, including the loss of control over development of aspects of the jointly developed products and disputes with our joint venture partners.

We may not be successful in our entry into the consumer credit business through the Arriva Card.

Through our wholly-owned subsidiary, Arriva, and together with CIT, a licensed banking institution, and Fiserv, a credit processing service organization, we have entered the consumer credit business through the issuance of the Arriva Card, a private label credit card. We have entered into an agreement with CIT whereby it issues the card, extends the credit to the cardholder, and maintains a revolving credit account for the cardholder. When a customer uses the Arriva Card for a transaction, CIT extends credit to the patron for the face amount of transaction and the fee charged by the gaming establishment and acquires the receivable from the customer. Arriva has the option to purchase the originated receivable from CIT at any time between three and 180 days from the date the customer first borrows using the Arriva Card. CIT has the right to require Arriva to purchase any receivables that have a first payment default, cardholder death or bankruptcy during the first 180 days from acquisition, and CIT will require Arriva to purchase the net amount of all such receivables 180 days after acquisition. This means that we will bear the credit risk of any cardholders’ non-payment.

The provision of the Arriva Card is a different business from the processing of credit card transactions. In our current credit card cash advance business, we assume no consumer credit risk other than chargeback risk, which we are exposed to in only an indirect way. Under the terms of our agreement with CIT, we will effectively bear the credit risk of providing credit to the consumer. We will bear the risk of making payment to merchants for all transactions using the card within a very short time of the transaction, and we will generally be able to recover those funds from the consumer no sooner than the end of the current monthly statement cycle. We may not be able to collect those funds from consumers due to non-payment of amounts owed, death or bankruptcy of the cardholder or the cards being used to perpetuate fraud. To the extent that we are unable to recover those funds we will record a loss, and if the loss is significant it could have a material adverse effect on our results of operations and financial condition.

The issuance of credit cards involves assessing an applicant’s creditworthiness to determine his or her ability and inclination to repay any funds borrowed using the card. We will effectively bear the risk of this assessment for each of the Arriva Cards issued by CIT. We have no experience in making such credit decisions. We may not be able to attract or retain qualified employees with consumer credit underwriting experience. Even if we are successful in attracting such employees, we may not make credit underwriting decisions that will result in tolerable credit losses.

The rate of defaults in consumer credit is influenced by many factors, most of which are beyond our ability to control and some of which are beyond our ability to forecast. Changes in economic measures, including but not limited to unemployment rates, interest rates, exchange rates, consumer confidence, and inflation may affect cardholders’ ability and willingness to repay amounts borrowed using the card. The fact that a consumer is or has been a creditworthy borrower in the past does not guarantee that he or she will continue to be so in the future.

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By providing the Arriva Card to consumers, we are subject to a variety of regulations that have not affected us in the past. While we have initially contracted with CIT for purposes of card issuance and receivables acceptance, such relationship may be discontinued at any time in accordance with the terms of our contract. If that were to happen, we would be required find another licensed banking institution or to become licensed in those jurisdictions in which we wanted the Arriva Card to be issued. We may not receive such licenses and, even if we do, we may be required to provide letters of credit or surety bonds to support our obligations in those markets and those letters of credit and surety bonds may reduce our overall borrowing capacity. By providing the Arriva Card to consumers, we also have become subject to a variety of state and federal laws governing collection practices, and such collection regulations may impede or even prevent our ability to collect amounts owed to us. These regulations include, but are not limited to, the Federal Truth in Lending Act and Regulation Z and the Equal Credit Opportunity Act and Regulation B. In addition, by providing the Arriva Card to consumers, we have become subject to an extensive array of federal and state statutes and regulations applicable to consumer lending including, but not limited to, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act.

The credit card business is very complex from an operational perspective in that it involves the mailing of statements and the receipt and posting of credits for many cardholders. We have no experience in the management of credit accounts. The credit card business also involves resolving inquiries from and providing customer service to cardholders. Our experience in doing these functions is on a scale much smaller than we may be exposed to if use of the Arriva Card grows. We have contracted with Fiserv, a company that has experience in managing large-scale credit card operations, but we may not be able to sustain such a relationship.

The credit card business may be perceived differently by investors from the business we currently perform and, even if we are successful in earning significant profits in the credit card business, investors may assign a lower valuation multiple to the credit card operations than to our historical business. This may result in a decrease in valuation of the Company, which may lead to a decline in the price of our common stock.

Conflicts of interest may arise in connection with the issuance of credit cards by Arriva to our officers and directors.

We have amended our corporate governance guidelines and code of business conduct to permit our officers and directors and their immediate family members to hold the Arriva Card. The use of the Arriva Card by our officers and directors, or their immediate family members, may be viewed as personal loans made by us to such individuals. The failure of any officer or director to fully and timely pay the balance on an Arriva Card account may create a conflict between such individual’s interest as a cardholder-debtor and such individual’s interest as an officer or director of the card issuer-creditor.

Our products and services are complex, depend on a myriad of complex networks and technologies and may be subject to software or hardware errors or failures that could lead to an increase in our costs, reduce our revenues or damage our reputation.

Our products and services, and the networks and third-party services upon which our products and services are based, are complex and may contain undetected errors or may suffer unexpected failures. We are exposed to the risk of failure of our proprietary computer systems, many of which are deployed, operated, monitored and supported by Infonox, which we do not control. We rely on Infonox to detect and respond to errors and failures in our proprietary computer systems. We rely on NRT for software development and system support of the 3-in-1 Enabled QuickJack Plus devices. We are exposed to the risk of failure of the computer systems that are owned, operated and managed by USA Payments Systems, which we do not control. USA Payment Systems owns the data centers through which most of our transactions are processed, and we rely on USA Payment Systems to maintain the security and integrity of our transaction data, including backups thereof. We also are exposed to the risk of failure of card association and electronic funds transfer networks that are used to process and settle our transactions. These networks, which are owned and operated by others, are subject to planned and unplanned outages and may suffer degradations in performance during peak processing times. Finally, we are subject to the risk of disruption to, or failure of, the telecommunications infrastructure upon which the interfaces among these systems are based. All of these systems and networks, upon which we rely to provide our services, are potentially vulnerable to computer viruses, physical or electronic break-ins, natural disasters and similar disruptions, which could lead to interruptions, delays, loss of data, public release of confidential data or the inability to complete patron transactions. The occurrence of these errors or failures, disruptions or unauthorized access could adversely affect our sales to customers, diminish the use of our cash access products and services by patrons, cause us to incur significant repair costs, result in our liability to gaming establishments or their patrons, divert the attention of our development personnel from product development efforts, and cause us to lose credibility with current or prospective customers or patrons.

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We may not successfully enter new markets.

If and as new and developing domestic markets develop, competition among providers of cash access products and services will intensify. If we attempt to enter these markets, we will have to expand our sales and marketing presence in these markets. In competitive bidding situations, we may not enjoy the advantage of being the incumbent provider of cash access products and services to gaming establishments in these new markets and developers and operators of gaming establishments in these new markets may have pre-existing relationships with our competitors. We may also face the uncertainty of compliance with new or developing regulatory regimes with which we are not currently familiar and oversight by regulators that are not familiar with us or our business. Each of these risks could materially impair our ability to successfully expand our operations into these new and developing domestic markets.

Attempting to enter international markets in which we have not previously operated may expose us to political, economic and regulatory risks not faced by businesses that operate only in the United States. The legal and regulatory regimes of foreign markets and their ramifications on our business are less certain. Our international operations will be subject to a variety of risks, including different regulatory requirements, trade barriers, difficulties in staffing and managing foreign operations, higher rates of fraud, fluctuations in currency exchange rates, difficulty in enforcing contracts, political and economic instability and potentially adverse tax consequences. For example, our proposed entry into Macau SAR is subject to our receipt of approvals, licenses or waivers by or from the Monetary Authority of Macau, the Macau Gaming Commission and the Macau Gaming Inspection and Coordination Bureau. We may not receive all of such approvals, licenses or waivers in a timely manner, or at all. If we do not receive all of such approvals, licenses or waivers we will not be able to undertake all of our proposed operations in Macau SAR. Similar difficulties in obtaining approvals, licenses or waivers from the monetary and gaming authorities of other jurisdictions, in addition to other potential regulatory and quasi-regulatory issues that we have not yet ascertained, may arise in other international jurisdictions into which we attempt to enter. In these new markets, our operations will rely on an infrastructure of financial services and telecommunications facilities that may not be sufficient to support our business needs, such as the authorization and settlement services that are required to implement electronic payment transactions and the telecommunications facilities that would enable us to reliably connect our networks to our products at gaming establishments in these new markets. These risks, among others, could materially adversely affect our business and operating results. In connection with our expansion into new international markets, we may forge strategic relationships with business partners to assist us. The success of our expansion into these markets therefore may depend in part upon the success of the business partners with whom we forge these strategic relationships. If we do not successfully form strategic relationships with the right business partners or if we are not able to overcome cultural differences or differences in business practices, our ability to penetrate these new international markets will suffer.

We are also subject to the risk that the domestic or international markets that we attempt to enter or expand into may not develop as quickly as anticipated, or at all. The development of new gaming markets is subject to political, social, regulatory and economic forces beyond our control. The expansion of gaming activities in new markets can be very controversial and may depend heavily on the support and sponsorship of local government. Changes in government leadership, failure to obtain requisite voter support in referendums, failure of legislators to enact enabling legislation and limitations on the volume of gaming activity that is permitted in particular markets may inhibit the development of new markets.

Our estimates of the potential future transaction volumes in new markets are based on a variety of assumptions which may prove to be inaccurate. To the extent that we overestimate the potential of a new market, incorrectly gauge the timing of the development of a new market, or fail to anticipate the differences between a new market and our existing markets, we may fail in our strategy of growing our business by expanding into new markets. Moreover, if we are unable to meet the needs of our existing customers as they enter markets that we do not currently serve; our relationships with these customers could be harmed.

We may encounter difficulties managing our growth, which could adversely affect our operating results.

We will need to effectively manage the expansion of our operations in order to execute our growth strategy of entering into new markets, expanding in existing markets and introducing new products and services. Growth will strain our existing resources. It is possible that our management, employees, systems and facilities currently in place may not be adequate to accommodate future growth. In this situation, we will have to improve our operational, financial and management controls, reporting systems and procedures. If we are unable to effectively manage our growth, our operations, financial results and liquidity may be adversely affected.

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We depend on key personnel and they would be difficult to replace.

We depend upon the ability and experience of two key members of senior management who have substantial experience with our operations and the gaming patron cash access industry. We are highly dependent on the involvement of Kirk Sanford, our President and Chief Executive Officer, and Harry Hagerty, our Chief Financial Officer. Other than Messrs. Sanford and Hagerty and Kathryn Lever, our General Counsel, none of our executive officers have employment agreements with us. The loss of Mr. Sanford or Mr. Hagerty would have a material adverse effect on our business. We currently have a $2.0 million key-man life insurance policy in effect on Mr. Sanford with the Company as the beneficiary.

Our future success depends upon our ability to attract, train and retain key managers involved in the development, operation and marketing of our products and services to gaming establishments. We may need to increase the number of key managers as we further develop our products and services and as we enter new markets and expand in existing markets. Our ability to enter into contracts with gaming establishments depends in large part on the relationships that our key managers have formed with management-level personnel of gaming establishments. Competition for individuals with such relationships is intense, and we may not be successful in recruiting such personnel. In addition, we may not be able to retain such individuals as they may leave our company and go to work for our competitors. Our sales efforts would be particularly hampered by the defection of personnel with long-standing relationships with management-level personnel of gaming establishments. If we are unable to attract or retain key personnel, our business, financial condition, operating results and liquidity could be materially adversely affected.

The loss of our sponsorship into the Visa U.S.A., Visa International and MasterCard card associations could have a material adverse effect on our business.

We cannot provide cash access services involving VISA cards and MasterCard cards in the United States without sponsorship into the Visa U.S.A. and MasterCard card associations. Bank of America Merchant Services currently sponsors us into the card associations at no cost to us. Bank of America Merchant Services began this sponsorship of us into the card associations in 1998 when it held a significant ownership interest in us. When Bank of America Merchant Services sold its interest in us in 2000, Bank of America Merchant Services agreed to continue its sponsorship of us at no cost to us conditioned upon First Data’s continued indemnification of Bank of America Merchant Services for any losses it may suffer as a result of such sponsorship. When we redeemed First Data’s ownership interest in us in 2004, First Data agreed to continue to indemnify Bank of America Merchant Services for any losses it may suffer as a result of sponsoring us into the card associations through September 2010. First Data will have the right to terminate its indemnification obligations prior to September 2010 in the event that we breach indemnification obligations that we owe to First Data, in the event that we incur chargebacks in excess of specified levels, in the event that we are fined in excess of specified amounts for violating card associations’ operating rules, or in the event that we amend the sponsorship agreement without First Data’s consent.

In the event that First Data terminates its indemnification obligations and as a result we lose our sponsorship by Bank of America Merchant Services into the card associations, we would need to obtain sponsorship into the card associations through another member of the card associations that is capable of supporting our transaction volume. We would not be able to obtain such alternate sponsorship on terms as favorable to us as the terms of our current sponsorship by Bank of America Merchant Services, which is at no cost to us. We may not be able to obtain alternate sponsorship at all. Our inability to obtain alternate sponsorship on favorable terms or at all would have a material adverse effect on our business, operating results and liquidity.

We cannot provide cash access services involving VISA cards and MasterCard cards outside of the United States without a processing agreement with or sponsorship into the Visa International and MasterCard card associations by a bank in each foreign jurisdiction in which we conduct cash access transactions. We are currently a party to processing agreements or sponsored into these card associations by foreign banks in each of the foreign jurisdictions in which we conduct cash access transactions. In the event that any foreign bank that currently is a party to such processing agreement or sponsors us into these card associations terminates such processing agreement or its sponsorship of us, we would need to obtain a processing agreement or sponsorship into the card associations through another foreign bank that is capable of supporting our transaction volume in the relevant jurisdiction. For example, in early 2005 we were notified that Bank of America is not authorized to sponsor us in some Caribbean markets. We paid a $25,000 fine to one of the card associations in connection with this non-compliant practice and entered into an alternate processing arrangement. We may not be able to obtain alternate sponsorship or processing arrangements in any region on terms as favorable to us as the terms of our current sponsorship by or processing arrangements with foreign banks, or at all. Our inability to obtain alternate sponsorship or processing arrangements on favorable terms or at all could have a material adverse effect on our business and operating results.

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An unexpectedly high level of chargebacks, as the result of fraud or otherwise, could adversely affect our cash advance business.

When patrons use our cash access services, we either dispense cash or produce a negotiable instrument that can be exchanged for cash. If a completed cash access transaction is subsequently disputed and if we are unsuccessful in establishing the validity of the transaction, we may not be able to collect payment for such transaction and such transaction becomes a chargeback. One of the major credit card associations has allowed us to complete credit card cash advance transactions at our ACMs so long as we assume chargeback liability for any transaction in which we do not obtain a contemporaneous cardholder signature, which may result in increased chargeback liability. An increased level of chargebacks could have a material adverse effect on our business or results of operations. Moreover, in the event that we incur chargebacks in excess of specified levels, First Data will have the right to terminate its indemnification obligations to Bank of America Merchant Services, and we could lose our no-cost sponsorship into the card associations. In addition, in the event that we incur chargebacks in excess of specified levels, we could be censured by the card associations by way of fines or otherwise.

In certain foreign regions in which we currently operate or may operate in the future, new card security features have been developed as a fraud deterrent. An example of such feature is known as chip-and-pin, which requires merchant terminals to be capable of obtaining an authorization through a chip-and-pin entry mode in addition to traditional magnetic stripe and keyed entry modes. Currently, we are in the process of upgrading our devices to accept these new technologies. In the interim, we are exposed to potential additional chargeback risks arising from our inability to fully integrate these new card security features. Additionally, we intend to provide our services in international markets in which we have not previously operated and have no experience as to chargebacks. Accordingly, we may be exposed to higher than anticipated chargeback liability, which could have a material adverse effect upon our business or results of operations.

A material increase in market interest rates or changing regulations could adversely affect our ATM business.

We obtain a supply of cash for our ATMs from Bank of America. Pursuant to our contract with Bank of America, we are obligated to pay a monthly fee that is based upon the amount of cash used to supply our ATMs and a market interest rate. Assuming no change in the amount of cash used to supply our ATMs, an increase in market interest rates will result in an increase in the monthly fee that we must pay to obtain this supply of cash, thereby increasing our ATM operating costs. Any increase in the amount of cash required to supply our ATMs would magnify the impact of an increase in market interest rates. An increase in interest rates may result in a material adverse effect on our financial condition and operating results. For the year ended December 31, 2006 and 2005, we paid approximately $15.7 million and $10.2 million, respectively, in aggregate fees to Bank of America for this supply of cash.

Our ATM services are subject to the applicable state banking regulations in each jurisdiction in which we operate ATMs. Our ATM services may also be subject to local regulations relating to the imposition of daily limits on the amounts that may be withdrawn from ATMs, the location of ATMs and our ability to surcharge cardholders who use our ATMs. These regulations may impose significant burdens on our ability to operate ATMs profitably in some locations, or at all. Moreover, because these regulations are subject to change, we may be forced to modify our ATM operations in a manner inconsistent with the assumptions upon which we relied when entering into contracts to provide ATM services at gaming establishments.

An unexpected increase in check warranty expenses could adversely affect our check warranty business.

We currently rely on TeleCheck to provide check warranty services to many of our customers. When a gaming establishment obtains an authorization from TeleCheck pursuant to its check warranty service, TeleCheck warrants payment on the patron’s check. If the patron’s check is subsequently dishonored upon presentment for payment, TeleCheck purchases the dishonored check from the gaming establishment for its face amount. Pursuant to the terms of our contract with TeleCheck, we share a portion of the loss associated with these dishonored checks. Although this contract limits the loss percentage of the dishonored checks to which we are exposed, there is no limit on the aggregate dollar amount to which we are exposed, which is a function of the face amount of checks warranted. TeleCheck manages and mitigates these dishonored checks through the use of risk analytics and collection efforts, including the additional fees that it is entitled to collect from check writers of dishonored checks. During the year ended December 31, 2006 and 2005, our warranty expenses with respect to TeleCheck’s check warranty service were $8.4 million and $10.8 million, respectively. We have no control over TeleCheck’s decision to warrant payment on a particular check and we have limited visibility into TeleCheck’s collection activities. As a result, we may incur an unexpectedly high level of check warranty expenses at any time, and if we do, we may suffer a material adverse effect to our business or results of operations.

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As an alternative to TeleCheck’s check warranty service, we have developed our own Central Credit check warranty service that is based upon our Central Credit gaming patron credit bureau database, our proprietary patron transaction database, third-party risk analytics and actuarial assumptions. If these risk analytics or actuarial assumptions are ineffective, we may incur an unexpectedly high level of check warranty expenses which may have a material adverse effect on our business or operating results.

We operate our business in regions subject to natural disasters, including hurricanes. We may suffer casualty losses as a result of a natural disaster, and any interruption to our business resulting from a natural disaster will adversely affect our revenues and results of operations.

We operate our business primarily through equipment, including Casino Cash Plus 3-in-1 ATMs, ACMs and QuikCash kiosks, which we install on the premises of gaming establishments and that patrons use to access cash for gaming. Accordingly, a substantial portion of our physical assets are located in locations beyond our direct control. Our business may be adversely affected by any damage to or loss of equipment that we install at gaming establishments or the cash contained therein resulting from theft, vandalism, terrorism, flood, fire or any other natural disaster. Any losses or damage that we suffer may not be subject to coverage under our insurance policies.

In addition to these casualty losses, our business is exclusive to gaming establishments and is dependent on consumer demand for gaming. In the event of a natural disaster, the operations of gaming establishments could be negatively impacted or consumer demand for gaming could decline, or both, and as a result, our business could be disrupted. For example, we believe that our revenues and results of operations in Louisiana and Mississippi were reduced in 2006 from what we would otherwise have expected as a result of Hurricanes Katrina and Rita, and that reduction may continue in the future. Any interruption to our business resulting from a natural disaster will adversely affect our revenues and results of operations. We do not carry any business interruption insurance.

Failure to maintain an effective system of internal control over financial reporting may lead to our inability to accurately report our financial results. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business, our reputation and the trading price of our stock.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports. If we cannot provide reliable financial reports, our business and operating results could be harmed. The Sarbanes-Oxley Act of 2002, as well as related rules and regulations implemented by the SEC, the New York Stock Exchange and the Public Company Accounting Oversight Board, have required changes in the corporate governance practices and financial reporting standards for public companies. These laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), have increased our legal and financial compliance costs and made many activities more time-consuming and more burdensome.

In 2006, the Company was required for the first time to comply with Section 404. As a result of our review of our internal reviews in connection with Section 404, we identified material weaknesses in our internal control over financial reporting. The material weaknesses mean that there is more than remote risk that a material misstatement of our annual or interim financial statements would not be prevented or detected

The material weaknesses, as described in Part II, Item 9A, could cause us to fail to meet our reporting obligations, cause investors to lose confidence in our reported financial information, cause a decline or volatility in our stock prices, cause a reduction in our credit ratings or tarnish our public perception. Also, increased expenses due to remediation costs and increased regulatory scrutiny are also possible. Moreover, we run the risk of further non-compliance by not successfully remediating the weaknesses in a timely manner, which could adversely affect our financial condition or results of operations. Inadequate internal control over financial reporting could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock and our reputation.

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We may make acquisitions or strategic investments, which involve numerous risks that we may not be able to address without substantial expense, delay or other operational or financial problems.

In order to obtain new customers in existing markets, expand our operations into new markets, or grow our business through the introduction of new products and services, we may consider acquiring additional businesses, technologies, products and intellectual property. For example, we may consider acquiring or forming a bank or other financial services company for the purpose of, among other things, issuing our own credit cards and/or using that bank’s vault cash to supply cash to our ATMs.

Acquisitions and strategic investments involve various risks, such as:

• difficulty integrating the technologies, operations and personnel from the acquired business;

• overestimation of potential synergies or a delay in realizing those synergies;

• disruption to our ongoing business, including the diversion of management’s attention and of resources from our principal business;

• inability to obtain the desired financial and strategic benefits from the acquisition or investment;

• loss of customers of an acquired business;

• assumption of unanticipated liabilities;

• loss of key employees of an acquired business; and

• entering into new markets in which we have limited prior experience.

Acquisitions and strategic investments could also result in substantial cash expenditures, the dilutive issuance of our equity securities, the incurrence of additional debt and contingent liabilities, and amortization expenses related to other intangible assets that could adversely affect our business, operating results and financial condition. Acquisitions and strategic investments may also be highly dependent upon the retention and performance of existing management and employees of acquired businesses for the day-to-day management and future operating results of these businesses.

We may incur penalties in connection with the administration of our benefit plans.

Certain of the health, welfare and retirement plans that we maintain for the benefit of our employees obligate us to file certain reports with the Department of Labor, Internal Revenue Service and the Pension Benefit Guaranty Corporation. Although we have filed the required reports for some of our benefit plans, we have not filed the required reports for others. As a result, we may incur penalties.

Risks related to the industry

Economic downturns, a decline in the popularity of gaming or changes in the demographic profile of gaming patrons could reduce the number of patrons that use our services or the amounts of cash that they access using our services.

We provide our cash access products and related services exclusively to gaming establishments for the purpose of enabling their patrons to access cash. As a result, our business depends on consumer demand for gaming. Gaming is a discretionary leisure activity, and participation in discretionary leisure activities has in the past and may in the future decline during economic downturns because consumers have less disposable income. Therefore, during periods of economic contraction, our revenues may decrease while some of our costs remain fixed, resulting in decreased earnings. Gaming activity may also decline based on changes in consumer confidence related to general economic conditions or outlook, fears of war, future acts of terrorism, or other factors. A reduction in tourism could also result in a decline in gaming activity. Finally, a legislature or regulatory authority may prohibit or significantly restrict gaming activities in its jurisdiction. A decline in gaming activity as a result of these or any other factors would have a material adverse effect on our business and operating results. Changes in consumer preferences could also harm our business. Gaming competes with other leisure activities as a form of consumer entertainment and may lose popularity as new leisure activities arise or as other leisure activities become more popular. In addition, gaming in traditional gaming establishments competes with Internet-based gaming for gaming patrons, and due to regulatory concerns, we have elected not to participate in the Internet gaming market at this time. The popularity and acceptance of gaming is also influenced by the prevailing social mores and changes in social mores could result in reduced acceptance of gaming as a leisure activity. To the extent that the popularity of gaming in traditional gaming establishments declines as a result of either of these factors, the demand for our cash access services may decline and our business may be harmed.

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Aside from the general popularity of gaming, the demographic profile of gaming patrons changes over time. The gaming habits and use of cash access services varies with the demographic profile of gaming patrons. For example, a local patron may visit a gaming establishment regularly but limit his or her play to the amount of cash that he or she brings to the gaming establishment. In contrast, a vacationing gaming patron that visits the gaming establishment infrequently may play much larger amounts and have a greater need to use cash access services. To the extent that the demographic profile of gaming patrons in the markets we serve either narrows or migrates towards patrons who use cash access services less frequently or for lesser amounts of cash, the demand for our cash access services may decline and our business may be harmed.

Changes in consumer willingness to pay a fee to access their funds could reduce the demand for our cash access products and services.

Our business depends upon the willingness of patrons to pay a fee to access their own funds on the premises of a gaming establishment. In most retail environments, consumers typically do not pay an additional fee for using non-cash payment methods such as credit cards, POS debit cards or checks. In order to access cash in a gaming establishment, however, patrons must pay service charges to access their funds. Gaming patrons could bring more cash with them to gaming establishments, or access cash outside of gaming establishments without paying a fee for the convenience of not having to leave the gaming establishment. To the extent that gaming patrons become unwilling to pay these fees for convenience or lower cost cash access alternatives become available, the demand for cash access services within gaming establishments will decline and our business could suffer.

The cash access industry is subject to change, and we must keep pace with the changes to successfully compete.

The demand for our products and services is affected by new and evolving technology and industry standards. Cash access services are based on existing financial services and payment methods, which are also continually evolving. Our future success will depend, in part, upon our ability to successfully anticipate, develop and introduce new cash access services based on emerging financial services and payment methods. Stored value cards, Internet-based payment methods and the use of portable consumer devices such as personal digital assistants and mobile telephones are examples of evolving payment technologies that could impact our business. Our future success will depend, in part, upon our ability to successfully develop and introduce new cash access products and services and to enhance our existing products and services to respond to changes in technology and industry standards on a timely basis. The products or services that we choose to develop may not achieve market acceptance or obtain any necessary regulatory approval. In addition, alternative products, services or technologies may replace our products and services or render them obsolete. If we are unable to develop new products or services or enhance existing products or services in a timely and cost-effective manner in response to technological or market changes, our business, financial condition and operating results may be materially adversely affected.

The cash access industry also changes based on changing consumer preferences. Our failure to recognize or keep pace with changing preferences could have a material adverse effect on our business, financial condition and operating results. For example, we have observed a decline in the volume of check cashing at gaming establishments over time as patron familiarity and comfort with credit card cash advances, POS debit card transactions and ATM cash withdrawal transactions has increased. To the extent that we continue to rely on check warranty services for a substantial portion of our business, a continued decline in check cashing volume could have a material adverse effect on our business, financial condition and operating results.

Growth of the gaming industry in any market is subject to political and regulatory developments that are difficult to anticipate.

We expect a substantial portion of our future growth to result from the general expansion of the gaming industry. The expansion of gaming activities in new markets can be very controversial and may depend heavily on the support of national and local governments. Changes in government leadership, failure to obtain requisite voter support in referenda, failure of legislators to enact enabling legislation and limitations on the volume of gaming activity that is permitted in particular markets may prevent us from expanding our operations into new markets. A failure by the gaming industry to expand at the rate that we expect could have a material adverse effect on our business, growth rates, financial condition, operating results and cash flows.

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The United Kingdom (“UK”) Gambling Act 2005 (the “Gambling Act”) has received Royal Assent and awaits an order of the UK Secretary of State entering it into force as law. As enacted, the Gambling Act could be interpreted to prohibit our provision of credit card cash advances and POS debit card transactions to patrons of gaming establishments located in the UK as early as September 2007. Such an interpretation would have a material adverse effect on our business, financial condition and operating results. We and certain of our gaming establishment customers in the UK are consulting with the UK Gambling Commission and the UK Department for Culture Media and Sport regarding the interpretation of the Gambling Act and the nature of any secondary regulations to be enacted by the Secretary of State for Culture, Media and Sport or conditions that may be imposed upon operators’ or premises’ licenses with a view to ensuring that services such as ours continue to be available in UK gambling establishments. If these efforts are not successful, we may be prohibited from providing one or more of our services in UK gaming establishments upon implementation of the Gambling Act.

We are subject to extensive governmental gaming regulation, which may harm our business.

We are subject to a variety of regulations in the jurisdictions in which we operate. Most of the jurisdictions in which we operate distinguish between gaming-related suppliers and vendors, such as manufacturers of slot machine or other gaming devices, and non-gaming suppliers and vendors, such as food and beverage purveyors, construction contractors and laundry and linen suppliers. In these jurisdictions, we are generally characterized as a non-gaming supplier or vendor and we must obtain a non-gaming supplier’s or vendor’s license, qualification or approval. The obtaining of these licenses, qualifications or approvals and the regulations imposed on non-gaming suppliers and vendors are typically less stringent than for gaming related suppliers and vendors. However, a few of the jurisdictions in which we do business do not distinguish between gaming-related and non-gaming related suppliers and vendors, and in those jurisdictions we currently are subject to the same stringent licensing, qualification and approval requirements and regulations that are imposed upon vendors and suppliers that would be characterized as gaming-related in other jurisdictions. Such requirements include licensure or finding of suitability for some of our officers, directors and beneficial owners of our securities. If regulatory authorities were to find any such officer, director or beneficial owner unsuitable, or if any such officer, director, or beneficial owner fails to comply with any licensure requirements, we would be required to sever our relationship with that person. Some public issuances of securities and other transactions by us also require the approval of regulatory authorities.

If we must obtain a gaming-related supplier’s or vendor’s license, qualification or approval because of the introduction of new products (such as products related to cashless gaming) or services or because of a change in the laws or regulations, or interpretation thereof, our business could be materially adversely affected. This increased regulation over our business could include, but is not limited to: requiring the licensure or finding of suitability in many jurisdictions of any officer, director, key employee or beneficial owner of our securities; the termination or disassociation with any officer, director, key employee or beneficial owner of our securities that fails to file an application or to obtain a license or finding of suitability; the submission of detailed financial and operating reports; submission of reports of material loans, leases and financing; and, requiring regulatory approval of some commercial transactions such as the transfer or pledge of equity interests in us.

Prior changes in our ownership, management and corporate structure, including the recapitalization of our ownership and our conversion from a limited liability company to a corporation in 2004, required us to notify many of the state and tribal gaming regulators under whose jurisdiction we operate. In many cases, those regulators have asked us for further information and explanation of these changes. To date, we have satisfied some of these inquiries, and are continuing to cooperate with those that are ongoing. Given the magnitude of the changes in our ownership that resulted from recapitalization, we were required to reapply for new permits or licenses in many jurisdictions but we were not required to discontinue our operation during the period of re-application. Any new gaming license or related approval that may be required in the future may not be granted, and our existing licenses may be revoked, suspended, limited or may not be renewed. In some jurisdictions we are in the process of obtaining licenses and have yet to receive final approval of such licenses from the applicable regulatory authority. In these jurisdictions, we operate under temporary licenses or without a license. We may not be issued a license in these jurisdictions.

Regulatory authorities at the federal, state, local and tribal levels have broad powers with respect to the licensing of gaming-related activities and may revoke, suspend, condition or limit our licenses, impose substantial fines and take other actions against us or the gaming establishments that are our customers, any one of which could have a material adverse effect on our business, financial condition and operating results. Any new gaming license or related approval that may be required in the future may not be granted, and our existing licenses may not be renewed or may be revoked, suspended or limited. If additional gaming regulations are adopted in a jurisdiction in which we operate, such regulations could impose restrictions or costs that could have a material adverse effect on our business. From time to time, various proposals are introduced in the legislatures of some of the jurisdictions in which we have existing or planned operations that, if enacted, could adversely affect the tax, regulatory, operational or other aspects of the gaming industry or cash access in the gaming industry. Legislation of this type may be enacted in the future.

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In addition, some of the new products and services that we may develop cannot be offered in the absence of regulatory approval of the product or service or licensing of us, or both. For example, our TODD cashless gaming product has to date only been approved for use at one gaming establishment and cannot be used at any other location until we receive approval from the appropriate authority in such additional location. These approvals could require that we and our officers, directors or ultimate beneficial owners obtain a license or be found suitable and that the product or service be approved after testing and review. We may fail to obtain any such approvals in the future.

When contracting with tribal owned or controlled gaming establishments, we become subject to tribal laws and regulations that may differ materially from the non-tribal laws and regulations under which we generally operate. In addition to tribal gaming regulations that may require us to provide disclosures or obtain licenses or permits to conduct our business on tribal lands, we may also become subject to tribal laws that govern our contracts. These tribal governing laws may not provide us with processes, procedures and remedies that enable us to enforce our rights as effectively and advantageously as the processes, procedures and remedies that would be afforded to us under non-tribal laws, or to enforce our rights at all. Many tribal laws permit redress to a tribal adjudicatory body to resolve disputes; however, such redress is largely untested in our experience. We may be precluded from enforcing our rights against a tribal body under the legal doctrine of sovereign immunity. A change in tribal laws and regulations or our inability to obtain required licenses or licenses to operate on tribal lands or enforce our contract rights under tribal law could have a material adverse effect on our business, financial condition and operating results.

A governmental shutdown of a gaming regulatory body in a jurisdiction where we operate may cause a disruption in our business and harm our operating results.

On July 5, 2006, Atlantic City casinos were forced to suspend their gaming operations due to the shutdown of the New Jersey Casino Control Commission. The New Jersey State government stopped non-essential governmental functions because the legislature had not adopted a new budget by the constitutional deadline. One such non-essential governmental function was the operation of the New Jersey Casino Control Commission, which regulates gaming in Atlantic City’s casinos. New Jersey State law prohibits the operation of casinos without the supervision of New Jersey Casino Control Commission employees, so the casinos were forced to suspend their gaming operations. Another shutdown of the New Jersey Casino Control Commission or a similar shutdown of a regulatory gaming body in another jurisdiction where we do business may disrupt our ability to do business and adversely affect our revenue and results of operations.

Many of the financial services that we provide are subject to extensive rules and regulations, which may harm our business.

Our Central Credit gaming patron credit bureau services are subject to the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act of 2003 and similar state laws. Our QuikCredit service and TeleCheck’s and our collection practices in connection with dishonored checks with respect to which TeleCheck or Central Credit has issued authorizations pursuant to TeleCheck’s or Central Credit’s check warranty service, are subject to the Fair Debt Collections Practices Act and applicable state laws relating to debt collection. All of our cash access services and patron marketing services are subject to the privacy provisions of state and federal law, including the Gramm-Leach-Bliley Act. Our POS debit card transactions and ATM withdrawal services are subject to the Electronic Fund Transfer Act. Our ATM services are subject to the applicable state banking regulations in each jurisdiction in which we operate ATMs. Our ATM services may also be subject to local regulations relating to the imposition of daily limits on the amounts that may be withdrawn from ATMs, the location of ATMs and our ability to surcharge cardholders who use our ATMs. The cash access services we provide are subject to recordkeeping and reporting obligations under the Bank Secrecy Act and the USA PATRIOT Act of 2001. In most gaming establishments, our cash access services are provided through gaming establishment cashier personnel, in which case the gaming establishments are required to file CTRs and SARs. In a limited number of gaming establishments, we provide our cash access services directly to patrons at satellite cashiers or booths that we staff and operate, in which case we are required to file CTRs and SARs on a timely basis. Additionally, as of December 31, 2006, IPS commenced required notification of FINCen as to our agency relationship with IPS, which relationship was not previously reported to FINCen. As a result of such notification, we are required to commence the filing of SARs with respect to transactions completed at all gaming establishment at which our cash access services are provided and may be required to additionally file SARs with respect to transactions completed during the six month period at all such gaming establishments. If we are found to be noncompliant in any way with these laws, we could be subject to substantial civil and criminal penalties. In jurisdictions in which we serve as a check casher or offer our QuikCredit service, we are subject to the applicable state licensing requirements and regulations governing check cashing activities and deferred deposit service providers. Our entry into the consumer credit business through the provision of the Arriva Card requires us to maintain a relationship with a licensed banking institution to issue Arriva Cards and subjects us to compliance with numerous state and federal laws governing consumer lending, debt collection practices and credit reporting. In addition, our relationship with IPS expires on December 31, 2009. On February 22, 2007, IPS’ parent company, First Data, announced that it will be exiting the official check and money order business over the course of the next two to three years. We are considering obtaining money transmitter licenses in many states, which would cause us to become subject to state licensing requirements and regulations governing money transmitters.

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In the event that any regulatory authority determines that the manner in which we provide cash access services, patron marketing services, gaming patron credit bureau services or private label credit cards is not in compliance with existing rules and regulations, or the regulatory authorities adopt new rules or regulations that prohibit or restrict the manner in which we provide cash access services, patron marketing services, gaming patron credit bureau services or private label credit cards, we may be forced to modify the manner in which we operate, or stop processing certain types of cash access transactions, providing patron marketing services, gaming patron credit bureau services or private label credit cards altogether. We may also be required to pay substantial penalties and fines if we fail to comply with applicable rules and regulations. For example, if we fail to file CTRs or SARs on a timely basis or if we are found to be noncompliant in any way with either the Bank Secrecy Act or the USA PATRIOT Act of 2001, we could be subject to substantial civil and criminal penalties. In addition, our failure to comply with applicable rules and regulations could subject us to private litigation. Any such actions could have a material adverse effect on our business, financial condition and operating results.

Following the events of September 11, 2001, the United States and other governments have imposed and are considering a variety of new regulations focused on the detection and prevention of money laundering and money transmitting to or from terrorists and other criminals. Compliance with these new regulations may impact our business operations or increase our costs.

As we develop new products and services, we may become subject to additional regulations. For example, in the event that we form or acquire a bank or industrial loan company, we would become subject to a number of additional banking and financial institution regulations, which may include the Bank Holding Company Act. These additional regulations could substantially restrict the nature of the business in which we may engage and the nature of the businesses in which we may invest. In addition, changes in current laws or regulations and future laws or regulations may restrict our ability to continue our current methods or operation or expand our operations and may have a material adverse effect on our business, results of operations and financial condition.

Finally, The UK Gambling Act has received Royal Assent and awaits an order of the UK Secretary of State entering it into force as law. As enacted, the Gambling Act could be interpreted to prohibit our provision of credit card cash advances and POS debit card transactions to patrons of gaming establishments located in the UK as early as September 2007. Such an interpretation would have a material adverse effect on our business, financial condition and operating results. We and certain of our gaming establishment customers in the UK are consulting with the UK Gambling Commission and the UK Department for Culture Media and Sport regarding the interpretation of the Gambling Act and the nature of any secondary regulations to be enacted by the Secretary of State for Culture, Media and Sport or conditions that may be imposed upon operators’ or premises’ licenses with a view to ensuring that services such as ours continue to be available in UK gambling establishments. If these efforts are not successful, we may be prohibited from providing one or more of our services in UK gaming establishments upon implementation of the Gambling Act.

If consumer privacy laws change, or if we are required to change our business practices, the value of our patron marketing services may be hampered.

Our patron marketing services depend on our ability to collect and use non-public personal information relating to patrons who use our products and services and the transactions they consummate using our services. We are required by applicable privacy legislation to safeguard and protect the privacy of such information, to make disclosures to patrons regarding our privacy and information sharing policies and, in some cases, to provide patrons an opportunity to “opt out” of the use of their information for certain purposes. The failure or circumvention of the means by which we safeguard and protect the privacy of information we gather may result in the dissemination of non-public personal information, which may harm our reputation and may expose us to liability to the affected individuals and regulatory enforcement proceedings or fines. Regulators reviewing our policies and practices may require us to modify our practices in a material or immaterial manner or impose fines or other penalties if they believe that our policies and practices do not meet the necessary standard. To the extent that our patron marketing services have in the past failed or now or in the future fail to comply with applicable law, our privacy policies or the notices that we provide to patrons, we may become subject to actions by a regulatory authority or patrons which cause us to pay monetary penalties or require us to modify the manner in which we provide patron marketing services. To the extent that patrons exercise their right to “opt out,” our ability to leverage existing and future databases of information would be curtailed. Consumer and data privacy laws are evolving, and due to recent high profile thefts and losses of sensitive consumer information from protected databases, we anticipate that such laws will be broadened in their scope and application, impose additional requirements and restrictions on gathering and using patron information or narrow the types of information that may be collected or used for marketing or other purposes or require patrons to “opt-in” to the use of their information for specific purposes, which will hamper the value of our patron marketing services.

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Responsible gaming pressures could result in a material adverse effect on our business and operating results.

Responsible gaming pressures can have a similar effect on us as governmental gaming regulation. Our ability to expand our business and introduce new products and services depends in part on the support of, or lack of opposition from, social responsibility organizations that are dedicated to addressing problem gaming. If we are unable to garner the support of responsible gaming organizations or if we face substantial opposition from responsible gaming organizations, we may face additional difficulties in sustaining our existing customer relationships, establishing new customer relationships, obtaining required regulatory approvals for new products or services, or providing our services into new markets each of which could have a material adverse effect on our business, financial condition and operating results.

Lawsuits could be filed against gaming establishments and other gaming related product and service providers on behalf of problem gamblers. We may be named in such litigation because we provide patrons the ability to access their cash in gaming establishments. This litigation could develop as individual complaints or as mass tort or class action claims. We would vigorously defend ourselves in any such litigation, and this defense could result in substantial expense to us and distraction of our management. The outcome of any such litigation would be substantially uncertain, and it is possible that our business, financial condition and operating results could be materially affected by an unfavorable outcome against either us or our gaming establishment customers.

Risk related to our capital structure

Our common stock has only been publicly traded since September 22, 2005 and we expect that the price of our common stock will fluctuate substantially.

There has only been a public market for our common stock since September 22, 2005. The market price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control, including those described above under “— Risks related to our business,” “— Risks related to the industry” and the following:

• our failure to maintain our current customers, including because of consolidation in the gaming industry;

• increases in commissions paid to gaming establishments as a result of competition;

• increases in interchange rates or processing or other fees paid by us or decreases in reverse interchange rates;

• actual or anticipated fluctuations in our or our competitors’ revenue, operating results or growth rate;

• our inability to adequately protect or enforce our intellectual property rights;

• any adverse results in litigation initiated by us or by others against us;

• our inability to make payments on our outstanding indebtedness as they become due or our inability to undertake actions that might otherwise benefit us based on the financial and other restrictive covenants contained in our senior secured credit facilities and the indenture for our senior subordinated notes;

• the loss of a significant supplier or strategic partner, or the failure of a significant supplier or strategic partner to provide the goods or services that we rely on them for;

• our inability to introduce successful, new products and services in a timely manner or the introduction of new products or services by our competitors that reduce the demand for our products and services;

• our failure to successfully enter new markets or the failure of new markets to develop in the time and manner that we anticipate;

• announcements by our competitors of significant new contracts or contract renewals or of new products or services;

• changes in general economic conditions, financial markets, the gaming industry or the payments processing industry;

• the trading volume of our common stock;

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• sales of common stock or other actions by our current officers, directors and stockholders;

• acquisitions, strategic alliances or joint ventures involving us or our competitors;

• future sales of our common stock or other securities;

• the failure of securities analysts to cover our common stock or changes in financial estimates or recommendations by analysts;

• our failure to meet the revenue, net income or earnings per share estimates of securities analysts or investors;

• additions or departures of key personnel;

• terrorist acts, theft, vandalism, fires, floods or other natural disasters; and

• rumors or speculation as to any of the above which we may be unable to confirm or deny due to disclosure restrictions imposed on us by law or which we otherwise deem imprudent to comment upon.

In addition, the stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular businesses. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.

Securities class action litigation is often brought against a company following a decline in the market price of its securities. The risk is especially acute for us because companies such as ours have experienced significant share price volatility in the past. As a result, we may in the future be a target of similar litigation. Securities litigation could result in substantial costs defending the lawsuit and divert management’s attention and resources, and could seriously harm our business and negatively impact our stock price.

Future sales of our common stock may cause the market price of our common stock to drop significantly, even if our business is doing well.

The market price of our common stock could decline as a result of sales of additional shares of our common stock by us or our stockholders or the perception that these sales could occur. Certain stockholders have the right to require us to register their shares of our common stock. If we propose to register any of our securities under the Securities Act of 1933 either for our own account or for the accounts of other stockholders, subject to some conditions and limitations, the holders of registration rights will be entitled to include their shares of common stock in the registered offering. In addition, holders of registration rights may require us on not more than five occasions to file a registration statement under the Securities Act of 1933 with respect to their shares of common stock. Further, the holders of registration rights may require us to register their shares on Form S-3 if and when we are eligible to use this form. We are required to pay the costs and expenses of the registration (other than underwriting discounts and commissions and fees) and sale of all such shares of common stock.

In the future, we will also issue additional shares or options to purchase additional shares to our employees, directors and consultants, in connection with corporate alliances or acquisitions, and in follow-on offerings to raise additional capital. Based on all of these factors, sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales could reduce the market price of our common stock. In addition, future sales of our common stock by our stockholders could make it more difficult for us to sell additional shares of our common stock or other securities in the future.

M&C International and entities affiliated with Summit Partners possess significant voting power and may take actions that are not in the best interests of our other stockholders.

As of December 31, 2006, M&C International and entities affiliated with Summit Partners owned or controlled shares representing, in the aggregate, approximately 43.4% of the outstanding shares of our common stock. Accordingly, M&C International and these entities affiliated with Summit Partners will exert substantial influence over all matters requiring approval of our stockholders, including the election and removal of directors and the approval of mergers or other business combinations. M&C International’s and these entities’ ownership may have the effect of delaying or preventing a change of control of our company or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. These actions may be taken even if other stockholders oppose them and even if they are not in the interests of other stockholders.

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Conflicts of interest may arise because some of our directors are also principals or partners of our controlling stockholders.

Two of our directors are principals of M&C International and two of our other directors are partners and members of various entities affiliated with Summit Partners. We depend on services provided by entities affiliated with M&C International or its principals to provide many of the financial services that we offer to patrons. Summit Partners and its affiliates may invest in entities that directly or indirectly compete with us or companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts between the interests of M&C International or Summit Partners, on the one hand, and the interests of our other stockholders, on the other hand, arise, these directors may not be disinterested.

Some provisions of our certificate of incorporation and bylaws may delay or prevent transactions that many stockholders may favor.

Some provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying, discouraging, or preventing a merger or acquisition that our stockholders may consider favorable or a change in our management or our Board of Directors. These provisions:

• divide our Board of Directors into three separate classes serving staggered three-year terms, which will have the effect of requiring at least two annual stockholder meetings instead of one, to replace a majority of our directors, which could have the effect of delaying of preventing a change in our control or management;

• provide that special meetings of stockholders can only be called by our Board of Directors, Chairman of the Board or Chief Executive Officer. In addition, the business permitted to be conducted at any special meeting of stockholders is limited to the business specified in the notice of such meeting to the stockholders;

• provide for an advance notice procedure with regard to business to be brought before a meeting of stockholders which may delay or preclude stockholders from bringing matters before a meeting of stockholders or from making nominations for directors at a meeting of stockholders, which could delay or deter takeover attempts or changes in management;

• eliminate the right of stockholders to act by written consent so that all stockholder actions must be effected at a duly called meeting;

• provide that directors may only be removed for cause with the approval of stockholders holding a majority of our outstanding voting stock;

• provide that vacancies on our Board of Directors may be filled by a majority, although less than a quorum, of directors in office and that our Board of Directors may fix the number of directors by resolution;

• allow our Board of Directors to issue shares of preferred stock with rights senior to those of the common stock and that otherwise could adversely affect the rights and powers, including voting rights and the right to approve or not to approve an acquisition or other change in control, of the holders of common stock, without any further vote or action by the stockholders; and

• do not provide for cumulative voting for our directors, which may make it more difficult for stockholders owning less than a majority of our stock to elect any directors to our Board of Directors. In addition, we are also subject to Section 203 of the Delaware General Corporation Law, which provides, subject to enumerated exceptions, that if a person acquires 15% or more of our voting stock, the person is an “interested stockholder” and may not engage in “business combinations” with us for a period of three years from the time the person acquired 15% or more of our voting stock.

These provisions may have the effect of entrenching our management team and may deprive our stockholders of the opportunity to sell shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a premium could reduce the price of our common stock.

If we fail to attract or retain independent directors, we may face unfavorable public disclosure, a halt in the trading of our common stock and delisting from the New York Stock Exchange.

Under the Sarbanes-Oxley Act of 2002 and the rules and regulations of the New York Stock Exchange, we are required to establish and maintain a board of directors consisting of a majority of independent directors and an audit committee consisting entirely of independent directors. A majority of our directors satisfy the applicable independence requirements. In the future, if we fail to maintain a board of directors consisting of a majority of independent directors, or fail to maintain independent audit committee members, we will fail to comply with the corporate governance listing requirements of the New York Stock Exchange and the SEC, which we would be required to publicly disclose, which may in turn cause a reduction in the trading price of our common stock. In addition, our failure to comply with these corporate governance listing requirements may also result in a halt in the trading of our common stock and the delisting of our common stock from the New York Stock Exchange, which may result in there being no public market for shares of our common stock.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our headquarters are located in a leased facility in Las Vegas, Nevada and consist of approximately 40,000 square feet of office space which is under a lease through April 2011. We operate remote sales offices in Atlantic City, New Jersey under a lease through August 2008 and in Macau SAR under a lease through March 2008. We believe that these facilities are adequate for our business as presently conducted.

ITEM 3. LEGAL PROCEEDINGS

We are also party to and threatened with various legal disputes and proceedings arising from the ordinary course of general business activities. Resolution of these matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows; however, the ultimate disposition of any litigation is uncertain.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock has traded on the New York Stock Exchange under the symbol “GCA” since September 23, 2005. Prior to that time, there was no public market for our stock. On March 15, 2007, there were 18 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.

The following table sets forth for the indicated periods, the high and low closing sale prices per share of our common stock:

	Price Range
	High		Low
2005:
Third Quarter (commencing September 23, 2005)	$	15.00	$	14.01
Fourth Quarter		14.93		12.65
2006:
First Quarter	$	17.52	$	14.45
Second Quarter		19.49		15.01
Third Quarter		15.79		13.79
Fourth Quarter		16.52		14.76

On March 15, 2007, the closing sale price of our common stock on the New York Stock Exchange was $15.45.

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Dividend Policy

We have never declared or paid any cash dividends on our capital stock and do not anticipate paying any dividends on our common stock in the foreseeable future. We currently intend to retain all our earnings to finance the growth and development of our business. Any future change in our dividend policy will be made at the discretion of our Board of Directors and will depend on contractual restrictions, our results of operations, earnings, capital requirements and other factors considered relevant by our Board of Directors. In addition, our senior secured credit facilities and the indenture governing our senior subordinated notes limit the ability of GCA to declare and pay cash dividends. Because we conduct our business entirely through GCA and its subsidiaries, as a practical matter these restrictions similarly limit our ability to pay dividends on our common stock.

Common Stock Repurchase Program

On February 6, 2007, the Company’s Board of Directors authorized the repurchase of up to $50.0 million of the Company’s issued and outstanding common stock, subject to compliance with any contractual limitations on such repurchases under the Company’s financing agreements in effect from time to time, including but not limited to those relating to the Company’s senior secured indebtedness and senior subordinated notes.

Stock Performance Graph

The line graph below compares the cumulative total stockholder return on our common stock with the cumulative total return of the Standard & Poor’s 500 Index and a Peer Group Index of companies that we believe operate in a similar manner to our operations for the fifteen months since our Company’s initial public offering of common shares. Our Peer Group Index is comprised of the common shares of the following companies: Euronet Worldwide Inc, Fidelity National Information Services, Inc., First Data Corporation, Global Payments Inc, International Game Technology and Shuffle Master Inc. The graph and table assume that $100 was invested on September 23, 2005 (the first day our common stock was publicly traded) in each of our common stock, the S&P 500 Index and our Peer Group Index, and that all dividends were reinvested. Research Data Group, Inc. furnished this data. Cumulative total stockholder returns for our common stock, the S&P 500 Index and our Peer Group are based on the calendar month end closing prices of the respective index.

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ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction with our audited consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Annual Report on Form 10-K. The selected consolidated financial data for the fiscal years ended December 31, 2006, 2005, 2004, 2003 and 2002 have been derived from our audited consolidated financial statements. Our selected consolidated financial data may not be indicative of our future financial condition or results of operations. The pro forma income tax amounts below have been calculated to reflect the taxes that would have been reported had we been subject to federal and state income taxes as a corporation during the periods presented.

	For the Years Ended December 31,
	2006			2005			2004			2003			2002
Income Statement Data:	(amounts in thousands, except per share)
Revenues
Cash advance	$	287,053		$	235,055		$	209,962		$	186,547		$	182,754
ATM		221,727			182,291			158,433			132,341			119,424
Check services		29,166			26,376			23,768			26,326			29,412
Central Credit and other revenues		10,202			10,358			10,840			10,500			10,303
Total revenues		548,148			454,080			403,003			355,714			341,893
Cost of revenues (exclusive of depreciation and amortization)		(389,251	)		(308,481	)		(270,095	)		(232,457	)		(216,649	)
Operating expenses		(63,812	)		(51,206	)		(45,339	)		(45,436	)		(57,658	)
Depreciation and amortization		(9,889	)		(12,109	)		(13,548	)		(14,061	)		(11,820	)
Operating income		85,196			82,284			74,021			63,760			55,766
Interest expense, net (1)		(42,031	)		(51,879	)		(32,025	)		(5,450	)		(4,933	)
Income before income tax (provision) benefit and minority ownership loss		43,165			30,405			41,996			58,310			50,833
Income tax (provision) benefit		(16,739	)		(7,953	)		212,422			(321	)		(1,451	)
Income before minority ownership loss		26,426			22,452			254,418			57,989			49,382
Minority ownership loss, net of tax (2)		183			139			137			400			1,040
Net income	$	26,609		$	22,591		$	254,555		$	58,389		$	50,422
Earnings per share
Basic	$	0.33		$	0.49		$	7.91		$	1.81		$	1.57
Diluted	$	0.32		$	0.30		$	3.56		$	0.82		$	0.71
Weighted average number of common shares outstanding:
Basic		81,641			45,643			32,175			32,175			32,175
Diluted		81,921			74,486			71,566			71,500			71,500
Pro forma computation related to conversion to corporation for income tax purposes
Income before income tax benefit (provision) and minority ownership loss—historical		N/A			N/A		$	41,996		$	58,310		$	50,833
Income tax provision—historical, exclusive of one-time tax benefit (3)		N/A			N/A			(10,443	)		(321	)		(1,451	)
Pro forma income tax provision—unaudited (4)		N/A			N/A			(4,600	)		(20,741	)		(16,940	)
Minority ownership loss — historical loss, net of tax		N/A			N/A			137			400			1,040
Pro forma net income		N/A			N/A		$	27,090		$	37,648		$	33,482
Pro forma earnings per share
Basic		N/A			N/A		$	0.84		$	1.17		$	1.04
Diluted		N/A			N/A		$	0.38		$	0.53		$	0.47
Balance Sheet Data:
(at end of period)
Cash and cash equivalents	$	40,919		$	35,123		$	49,577		$	23,423		$	57,584
Total assets		588,647			510,418			496,625			243,627			287,039
Total borrowings		274,480			321,412			478,250			—			—
Stockholders’ equity (deficiency) and members’ capital		132,157			94,484			(56,779	)		199,247			202,271
Other Data:
Net cash provided by operating activities	$	70,079		$	38,585		$	75,212		$	33,471		$	81,964
Net cash used in investing activities (5)		(17,061	)		(17,860	)		(4,861	)		(7,047	)		(9,750	)
Net cash used in financing activities		(46,761	)		(35,190	)		(43,950	)		(63,067	)		(52,333	)

41

	For the Years Ended December 31,
	2006		2005		2004		2003		2002
Other Data (unaudited):
Aggregate dollar amount processed (in billions):
Cash advance	$	5.7	$	4.7	$	4.2	$	3.8	$	3.6
ATM	$	12.3	$	9.9	$	8.4	$	6.9	$	6.2
Check warranty	$	1.3	$	1.1	$	0.9	$	1.0	$	1.2
Number of transactions completed (in millions):
Cash advance		10.4		9.1		8.8		8.1		8.2
ATM		69.2		58.9		53.2		45.7		42.5
Check warranty		5.1		4.7		4.3		4.9		6.4

(1)	Interest expense, net, includes interest income and loss on early extinguishment of debt.
(2)	Minority ownership loss, net of tax, represents the portion of the loss from operations of IFT that is attributable to the 40% ownership interest in IFT, which is not owned by us.
(3)	In connection with our conversion to a taxable corporate entity for United States income tax purposes, we recognized a net tax asset created by a step up in the tax basis of our net assets due to the Restructuring of Ownership and the Securities Purchase and Exchange Agreement. For purposes of determining the pro forma net income, the recognition of this one-time step up in basis has been excluded from our pro forma tax computation.
(4)	The pro forma unaudited income tax adjustments represent the tax effects that would have been reported had the Company been subject to United States federal and state income taxes as a corporation. Pro forma expenses are based upon the statutory income tax rates and adjustments to income for estimated permanent differences occurring during the period. Actual rates and expenses could have differed had the Company been subject to United States federal and state income taxes for all periods presented. Therefore, the unaudited pro forma amounts are for informational purposes only and are intended to be indicative of the results of operations had the Company been subject to United States federal and state income taxes for all periods presented.
	The following table presents the computation of the pro forma income tax expense for all the periods presented (amounts in thousands):

	For the Years Ended December 31,
	2006		2005		2004			2003			2002
Income before income taxes, as reported		N/A		N/A	$	41,996		$	58,310		$	50,833
Effective pro forma income tax rate		N/A		N/A		36.00	%		36.12	%		36.18	%
Pro forma income tax expense		N/A		N/A	$	15,119		$	21,062		$	18,391

(5) In 2004, net cash used in investing activities includes $1.0 million of non-compete payments to two former executives.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes contained herein and the information included in our other filings with the Securities and Exchange Commission. This discussion includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements in this Annual Report on Form 10-K other than statements of historical fact are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those projected or assumed in such forward-looking statements. Among the factors that could cause actual results to differ materially are the risk factors discussed under Item 1A. All forward-looking statements and risk factors included in this document are made as of the date of this report, based on information available to us as of such date. We assume no obligation to update any forward-looking statement or risk factor.

42

Overview

We are a provider of cash access products and related services to the gaming industry in the United States and several international markets. Our products and services provide gaming establishment patrons access to cash through a variety of methods, including ATM cash withdrawals, credit card cash advances, POS debit cash advances, check cashing and money transfers. In addition, we also provide products and services that improve credit decision-making, automate cashier operations and enhance patron marketing activities for gaming establishments.

We began our operations as a joint venture limited liability company among M&C International and entities affiliated with Bank of America Corporation and First Data in July 1998. In September 2000, Bank of America Corporation sold its entire ownership interest in us to M&C International and First Data. In March 2004, GCA issued $235 million in aggregate principal amount of 8 3/4% senior subordinated notes due 2012 and borrowed $260 million under senior secured credit facilities. Global Cash Access Holdings, Inc. was formed to hold all of the outstanding ownership interests of Global Cash Access, Inc. and has guaranteed the obligations under the senior secured credit facilities. A substantial portion of the proceeds of these senior subordinated notes and senior secured credit facilities were used to redeem all of First Data’s ownership interest in us and a portion of M&C International’s ownership interest in us through a recapitalization (the “Recapitalization”), in which Bank of America Corporation reacquired an ownership interest in us. In May 2004, we completed a private equity restructuring (the “Private Equity Restructuring”) in which M&C International sold a portion of its ownership interest in us to a number of private equity investors, including entities affiliated with Summit Partners, and we converted from a limited liability company to a Delaware corporation.

In September 2005, we completed an initial public offering of common stock. In connection with that offering, our various equity securities that were outstanding prior to the offering were converted into common stock. In addition, we became a guarantor, on a subordinated basis, of Global Cash Access, Inc.’s senior subordinated notes.

Other than insubstantial assets that are immaterial in amount and nature, the sole asset of Global Cash Access Holdings, Inc. is the capital stock of Global Cash Access, Inc. The consolidated financial data set forth and discussed below reflects our financial condition as if Global Cash Access, Inc. had been a wholly-owned subsidiary of Global Cash Access Holdings, Inc. during each of periods and at the dates presented.

In connection with our conversion from a limited liability company to a corporation for United States federal income tax purposes, we recognized deferred tax assets and liabilities from the expected tax consequences of differences between the book basis and tax basis of our assets and liabilities at the date of conversion into a taxable entity. Prior to our conversion to a corporation, we operated our business as a limited liability company that was treated as a pass through entity for United States federal income tax purposes, making our owners responsible for taxes on their respective share of our earnings. The pro forma information presented with our consolidated statements of income reflects the expected tax effects had we operated our business through a taxable corporation during all periods presented.

Principal Sources of Revenues and Expenses

We derive our revenues as follows:

Cash Advance. Cash advance revenues are comprised of transaction fees assessed to gaming patrons in connection with credit card cash advances and POS debit card transactions at the time the transactions are authorized. Such fees are based on a combination of a fixed amount plus a percentage of the face amount of the credit card cash advance or POS debit card transaction amount. The average amount disbursed per cash advance transaction has increased in recent years, contributing to our revenue growth. We expect this trend to continue.

ATM. ATM revenues are comprised of transaction fees in the form of cardholder surcharges assessed to gaming patrons in connection with ATM cash withdrawals at the time the transactions are authorized and reverse interchange fees paid to us by the patrons’ issuing banks. Cardholder surcharges are recognized as revenue when a transaction is initiated and reverse interchange is recognized as revenue on a monthly basis based on the total transactions occurring during the month. The cardholder surcharges assessed to gaming patrons in connection with ATM cash withdrawals are currently a fixed dollar amount and not a percentage of the transaction amount. The number of transactions completed at our ATMs and the average surcharge assessed to patrons have both increased in recent years, contributing to our revenue growth. We expect these trends to continue.

43

Check Services. Check services revenues are principally comprised of check warranty revenues and are generally based upon a percentage of the face amount of checks warranted. These fees are paid to us by gaming establishments. In some cases, gaming establishments pass on the fees to patrons. From 2002 to 2004, the face amount of checks warranted declined. In the fourth quarter of 2004, we introduced our Central Credit Check Warranty product, and its successful adoption in the marketplace has contributed to an increase in the face amount of checks warranted. This has been the principal reason that check services revenues increased in 2005 and 2006.

Central Credit and Other Revenues. Central Credit revenues are based upon either a flat monthly unlimited usage fee or a variable fee structure driven by the volume of patron credit histories generated, while other revenues are primarily based on a fee for specific service performed.

Our principal costs and expenses include:

Cost of Revenues (exclusive of Depreciation and Amortization). Cost of revenues are costs and expenses directly related to the generation of revenue and exclude depreciation and amortization. For cash advance, ATM and, to a much lesser extent, check services, we pay a commission to the gaming establishment at which the transaction occurs. Commissions are the largest component of cost of revenues (exclusive of depreciation and amortization). We expect commissions to increase as a percentage of revenue as new contracts are signed or existing contracts are renewed. We pay credit card associations and POS debit networks interchange fees for services they provide in routing transactions through their networks. In addition, we pay fees to participate in various ATM networks. The amounts of these interchange fees are determined by the card associations and networks in their sole discretion, and are subject to increase in their discretion from time to time. Many of our cash advance contracts enable us to pass through to our gaming establishment customers, who may in turn pass through to patrons, the amount of any increase in interchange or processing fees. In the past, the major card associations have increased interchange rates at least annually, and they may do so in the future. We pay connectivity and processing fees to our network services providers. We incur warranty expense when checks that we have warranted through our Central Credit check warranty service or that TeleCheck has warranted through its check warranty service are dishonored upon presentment for payment. Our contract with TeleCheck limits our warranty expense for checks warranted by TeleCheck to a maximum percentage of the total face amount of dishonored checks. We have no limits on warranty expense for our Central Credit check warranty service. Other cost of revenues (exclusive of depreciation and amortization) consists primarily of costs related to delivering our Central Credit service and our patron marketing activities.

Operating Expenses. Operating expenses consist primarily of salaries and benefits, armored carrier expenses, bank fees, legal expenses, telecommunications expenses and the cost of repair and maintenance on our cash access devices.

Interest Income. We generate interest income on the amount of cash in our bank accounts and on cash that is deposited into accounts to settle our credit card cash advance and POS debit card transactions.

Interest Expense. Interest expense includes interest incurred on our senior secured credit facilities and our senior subordinated notes, and the amortization of deferred financing costs. Interest expense also includes the cash usage fees associated with the cash used in our ATMs.

Loss on Early Extinguishment of Debt. Loss on early extinguishment of debt includes the redemption premiums paid to retire our borrowings and the write-off of the deferred financing costs related to retired borrowings.

Income Tax. Our earnings are subject to taxation under the tax laws of the jurisdictions in which we operate. Prior to our conversion to a Delaware corporation, our domestic earnings were not subject to taxation because we were organized as a Delaware limited liability company, which is a flow-through entity for tax purposes. Subsequent to our conversion to a Delaware corporation, our domestic earnings have been subject to corporate taxation.

Minority Interest, Net of Tax. We operate IFT, a joint venture with IGT. We own 60% of the equity interests of IFT and IGT owns 40% of the equity interests. The joint venture was formed to develop and market cash access products using slot tickets. The minority interest shown on the consolidated financial statements reflects the addition to our net income of the 40% of IFT’s losses that are attributable to IGT net of the expected tax benefit associated with those losses.

44

Results of Operations

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

The following table sets forth the condensed consolidated results of operations for the years ended December 31, 2006 and December 31, 2005 (amounts in thousands):

	December 31, 2006						December 31, 2005
	$			%			$			%
Revenues
Cash advance	$	287,053			52.4	%	$	235,055			51.8	%
ATM		221,727			40.5			182,291			40.1
Check services		29,166			5.3			26,376			5.8
Central Credit and other revenues		10,202			1.9			10,358			2.3
Total revenues		548,148			100.0			454,080			100.0
Cost of revenues (exclusive of depreciation and amortization)		(389,251	)		(71.0	)		(308,481	)		(67.9	)
Operating expenses		(63,812	)		(11.6	)		(51,206	)		(11.3	)
Depreciation and amortization		(9,889	)		(1.8	)		(12,109	)		(2.7	)
Operating income		85,196			15.5			82,284			18.1
Interest income (expense), net		(42,031	)		(7.7	)		(51,879	)		(11.4	)
Income before income tax provision and minority ownership loss		43,165			7.9			30,405			6.7
Income tax provision		(16,739	)		(3.1	)		(7,953	)		(1.8	)
Income before minority ownership loss		26,426			4.8			22,452			4.9
Minority ownership loss, net of tax		183			0.0			139			0.0
Net income	$	26,609			4.9	%	$	22,591			5.0	%

Total Revenues

Total revenues for the year ended December 31, 2006 were $548.1 million, an increase of $94.1 million, or 20.7%, as compared to the year ended December 31, 2005. This increase was primarily due to the reasons described below.

Cash Advance. Cash advance revenue for the year ended December 31, 2006 was $287.1 million, an increase of $52.0 million, or 22.1%, as compared to the year ended December 31, 2005. This increase was primarily comprised of a 19.4% increase in credit card cash advance revenue and a 47.3% increase in POS debit card transaction revenue. The total amount of cash disbursed increased 22.2% from $4.7 billion to $5.7 billion and the number of transactions completed increased 14.4% from 9.1 million to 10.4 million. Revenue per cash advance transaction increased 6.8%, from $25.78 to $27.53.

ATM. ATM revenue for the year ended December 31, 2006 was $221.7 million, an increase of $39.4 million, or 21.6%, as compared to the year ended December 31, 2005. The increase was primarily attributable to a 17.4% increase in the number of transactions from 58.9 million to 69.2 million. Revenue per ATM transaction increased 3.9% from $3.09 to $3.21. There was a 24.0% increase in the total amount of cash disbursed from $9.9 billion to $12.3 billion.

Check Services. Check services revenue for the year ended December 31, 2006 was $29.2 million, an increase of $2.8 million, or 10.6%, as compared to the year ended December 31, 2005. The face amount of checks warranted increased 17.8% from $1.1 billion to $1.3 billion. The number of checks warranted increased 8.5% from 4.7 million to 5.1 million, while the average face amount per check increased from $242.08 to $262.70. Revenue as a percent of face amount was 2.09% in 2006 as compared to 2.19% for the year ended December 31, 2005, while revenue per transaction increased 3.4% from $5.31 to $5.49.

45

Central Credit and Other. Central Credit and other revenues for the year ended December 31, 2006, were $10.2 million, a decrease of $0.2 million, or 1.5%, as compared to the year ended December 31, 2005. The decrease was primarily a result of pricing concessions given to certain customers in connection with the signing of new contracts for cash access services.

Costs and Expenses

Cost of Revenues (exclusive of Depreciation and Amortization). Cost of revenues (exclusive of depreciation and amortization) increased 26.2% from $308.5 million to $389.3 million. The largest component of cost of revenues (exclusive of depreciation and amortization) is commissions, which increased 26.9% in 2006 as contracts were signed or renewed at higher commission rates than experienced in 2005. The second-largest component of cost of revenues (exclusive of depreciation and amortization) is interchange, which increased 26.0%, primarily due to the increase in cash advance transactions and volume. Warranty expenses, the third-largest component of cost of revenues (exclusive of depreciation and amortization) increased 14.8%. This increase was the result of the increased face amount of checks warranted, offset in part by a lower level of losses on check warranted in 2006. We expect that commissions and interchange will continue to increase, and we expect that in 2007 cost of revenues (exclusive of depreciation and amortization) will increase at a rate faster than revenues.

Operating Expenses. Operating expenses for the year ended December 31, 2006 were $63.8 million, an increase of $12.6 million, or 24.6%, as compared to the year ended December 31, 2005. Included in operating expenses in 2006 is $9.1 million in non-cash stock based compensation expense that was not recorded as expense in prior years, due to our grant of restricted stock in 2006 and our adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123(R), Share-Based Payment, for equity awards to our employees, in 2006. Excluding the stock-based compensation expense in 2006, operating expenses in 2006 were $54.7 million, an increase of 6.8% over $51.2 million in 2005. Operating expenses increased in 2006 principally due to increases in expenses as a result of increased staffing and increased insurance expenses from our conversion to a public company. We also incurred additional payroll expenses from the addition of new booth locations. In 2006, the Company incurred $0.7 million of expenses in connection with a registered offering of common stock by certain of our shareholders and $0.2 million in expenses related to the settlement of litigation with a former customer. We expect that operating expenses will increase in 2007 at a rate of growth lower than the rate of growth in cost of revenues (exclusive of depreciation and amortization).

Depreciation and Amortization. Depreciation expense for the year ended December 31, 2006 was $4.4 million, a decrease of $2.4 million, or 35.9%, as compared to the year ended December 31, 2005. The decrease was primarily due to a certain fixed assets acquired as part of various acquisitions in 2000 and 2001, becoming fully depreciated in 2005 yet remaining in service. Amortization expense, which relates principally to computer software, customer contracts and our acquisition of the 3-in 1 rollover patent in the third quarter of 2005, increased $0.2 million from $5.3 million to $5.5 million in 2006 as compared to 2005.

Primarily as a result of the factors described above, operating income for the year ended December 31, 2006 was $85.2 million, an increase of $2.9 million, or 3.5%, as compared to the year ended December 31, 2005.

Interest Income (Expense), Net. Interest income (expense), net, was $42.0 million in 2006, a decrease of $9.9 million, or 19.0%, from $51.9 million in 2005. Interest income was $3.5 million in 2006, an increase of $1.7 million, or 91.9%, as compared to 2005, due primarily to higher interest rates in 2006 as compared to 2005. Interest expense for the year ended December 31, 2006, was $42.1 million, a decrease of $2.1 million, or 4.7%, as compared to December 31, 2005. Interest expense on borrowings (including amortization of deferred financing costs) was $26.4 million in 2006 as compared to $33.9 million in 2005. The decrease in interest expense was largely due to a lower average amount of outstanding indebtedness in 2006. The cash usage fee for cash used in our ATMs is included in interest expense. ATM cash usage fees were $15.7 million in 2006 as compared to $10.2 million in 2005, an increase of $5.4 million or 53.2%. The increase resulted primarily from increases in LIBOR on which those funds are priced to 5.4% in 2006 as compared to 3.7% in 2005. The average balance of ATM cash in 2006 was $289.2 million, compared to $276.9 million in 2005. In both 2006 and 2005, we incurred losses on early extinguishment of debt. The 2006 loss was $3.4 million resulting from the write-off of deferred financing fees from our refinancing of our senior secured indebtedness. The 2005 loss was $9.5 million which was comprised of a $7.2 million premium paid to retire $82.25 million of the Company’s senior subordinated notes and the write-off of $2.3 million of capitalized debt issuance costs associated with the retired notes. Assuming a constant level of LIBOR, we expect that interest income (expense), net will decline in 2007 as a result of lower anticipated levels of outstanding indebtedness.

Primarily as a result of the foregoing, income before income tax provision and minority ownership loss was $43.2 million for the year ended December 31, 2006, an increase of $12.8 million, or 42.0%, as compared to the prior year.

46

Income Tax. Income tax expense was $16.7 million for the year ended December 31, 2006. The increase in income tax expense during 2006 is primarily attributable to the higher level of taxable income as well as a higher effective US federal tax rate. The higher effective rate of 38.7% in 2006 was due the non-deductibility of the stock offering expenses incurred by the Company on behalf of certain selling shareholders as well as the non-deductibility of expense related to certain equity awards granted to our employees. Based on our belief that pretax income in 2007 will be higher than it was in 2006, we anticipate an effective tax rate of approximately 38.0% in 2007.

Primarily as a result of the foregoing, income before minority ownership loss was $26.4 million for the year ended December 31, 2006, an increase of $4.0 million, or 17.7%, as compared to the prior year.

Minority Ownership Loss, net of Tax. Minority ownership loss, net of tax, attributable to IFT for the year ended December 31, 2006 was $183 thousand, an increase of $44 thousand or 31.7% from $139 thousand for the year ended December 31, 2005. We expect that IFT will record a loss in 2007 as well.

Primarily as a result of the foregoing, net income was $26.6 million for the year ended December 31, 2006, an increase of $4.0 million, or 17.8%, as compared to the prior year.

47

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

The following table sets forth the condensed consolidated results of operations for the years ended December 31, 2005 and December 31, 2004 (amounts in thousands):

	December 31, 2005						December 31, 2004
	$			%			$			%
Revenues
Cash advance	$	235,055			51.8	%	$	209,962			52.1	%
ATM		182,291			40.1			158,433			39.3
Check services		26,376			5.8			23,768			5.9
Central Credit and other revenues		10,358			2.3			10,840			2.7
Total revenues		454,080			100.0			403,003			100.0
Cost of revenues (exclusive of depreciation and amortization)		(308,481	)		(67.9	)		(270,095	)		(67.0	)
Operating expenses		(51,206	)		(11.3	)		(45,339	)		(11.3	)
Depreciation and amortization		(12,109	)		(2.7	)		(13,548	)		(3.4	)
Operating income		82,284			18.1			74,021			18.4
Interest income (expense), net		(51,879	)		(11.4	)		(32,025	)		(7.9	)
Income before income tax (provision) benefit and minority ownership loss		30,405			6.7			41,996			10.4
Income tax (provision) benefit		(7,953	)		(1.8	)		212,422			52.7
Income before minority ownership loss		22,452			4.9			254,418			63.1
Minority ownership loss, net of tax		139			0.0			137			0.0
Net income	$	22,591			5.0	%	$	254,555			63.2	%
Income before income tax (provision) benefit and minority ownership loss							$	41,996			10.4	%
Pro forma provision for income taxes								(15,043	)		(3.7	)
Minority ownership loss, net of tax								137			0.0
Pro forma net income							$	27,090			6.7	%

Total Revenues

Total revenues for the year ended December 31, 2005 were $454.1 million, an increase of $51.1 million, or 12.7%, as compared to the year ended December 31, 2004. This increase was primarily due to the reasons described below.

Cash Advance. Cash advance revenue for the year ended December 31, 2005 was $235.1 million, an increase of $25.1 million, or 12.0%, as compared to the year ended December 31, 2004. This increase was primarily due to a 12.7% increase in credit card cash advance revenue and a 5.6% increase in POS debit card transaction revenue. The total amount of cash disbursed increased 10.5% from $4.2 billion to $4.7 billion and the number of transactions completed increased 3.2% from 8.8 million to 9.1 million. Revenue per cash advance transaction increased 8.5%, from $23.76 to $25.78.

ATM. ATM revenue for the year ended December 31, 2005 was $182.3 million, an increase of $23.9 million, or 15.1%, as compared to the year ended December 31, 2004. The increase was primarily attributable to a 10.8% increase in the number of transactions from 53.2 million to 58.9 million. Revenue per ATM transaction increased 3.7% from $2.98 to $3.09. There was a 17.7% increase in the total amount of cash disbursed from $8.4 billion to $9.9 billion.

Check Services. Check services revenue for the year ended December 31, 2005 was $26.4 million, an increase of $2.6 million, or 11.0%, as compared to the year ended December 31, 2004. The face amount of checks warranted increased 20.0% from $0.9 billion to $1.1 billion. The number of checks warranted increased 7.7% from 4.3 million to 4.7 million, while the average face amount per check increased from $217.20 to $242.08. Revenue as a percent of face amount was 2.19% in 2005 as compared to 2.40% for the year ended December 31, 2004, and revenue per transaction increased 1.9% from $5.21 to $5.31. The increases in our check services business were directly attributable to the Central Credit Check Warranty product that was introduced in 2005. This product expands upon the services offered in our existing TeleCheck warranty product, and has allowed us to obtain some larger check cashing accounts.

48

Central Credit and Other. Central Credit and other revenues for the year ended December 31, 2005, were $10.4 million, a decrease of $0.5 million, or 4.4%, as compared to the year ended December 31, 2004. The decrease was primarily a result of pricing concessions given to certain customers in connection with the signing of new contracts for cash access services.

Costs and Expenses

Cost of Revenues (exclusive of Depreciation and Amortization). Cost of revenues (exclusive of depreciation and amortization) increased 14.2% from $270.1 million to $308.5 million. The largest component of cost of revenues (exclusive of depreciation and amortization) is commissions, and commissions increased 11.4% in 2005 as contracts were signed or renewed at higher commission rates than experienced in 2004. Included within commission expense is $1.6 million in commission payments to two customers regarding contract terms and conditions that we consider to be unusual in nature. The second-largest component of cost of revenues (exclusive of depreciation and amortization) is interchange; interchange expenses increased 19.8%. Warranty expenses, the third-largest component of cost of revenues (exclusive of depreciation and amortization) increased 35.6%. This increase was primarily the result of the introduction of the Central Credit Check Warranty Product that began full scale operations in 2005.

Operating Expenses. Operating expenses for the year ended December 31, 2005 were $51.2 million, an increase of $5.9 million, or 12.9%, as compared to the year ended December 31, 2004. This increase was primarily due to additional staffing requirements to support the Company’s additional responsibilities of being a publicly traded entity. Operating expenses for 2005 also included significant legal expenses associated with the Company’s patent infringement lawsuit regarding its “3-in-1 rollover” patent. For year ended December 31, 2005, legal fees incurred in this effort were $2.1 million.

Depreciation and Amortization. Depreciation expense for the year ended December 31, 2005 was $6.8 million, a decrease of $1.1 million, or 13.5%, as compared to the year ended December 31, 2004. The decrease was primarily due to a certain fixed assets acquired as part of various acquisitions in 2000 becoming fully depreciated in 2005 yet remaining in service. Amortization expense, which relates principally to computer software and customer contracts, decreased $0.4 million from $5.7 million to $5.3 million, as a result of certain capitalized software projects becoming fully amortized.

Primarily as a result of the factors described above, operating income for the year ended December 31, 2005 was $82.3 million, an increase of $8.3 million, or 11.2%, as compared to the year ended December 31, 2004.

Interest Income (Expense), Net. Interest Income (Expense), net, was $51.9 million in 2005, an increase of $19.9 million, or 62.0%, from $32.0 million in 2004. Interest income was $1.8 million in 2005, an increase of $0.5 million, or 37.7%, as compared to 2004. Interest expense for the year ended December 31, 2005, was $44.2 million, an increase of $10.8 million, or 32.5%, as compared to December 31, 2004. Interest expense on borrowings (including amortization of deferred financing costs) was $33.9 million in 2005 as compared to $27.6 million in 2004. The cash usage fee for cash used in our ATMs is included in interest expense. ATM cash usage fees were $10.2 million in 2005 as compared to $5.7 million in 2004, an increase of $4.5 million or 79.0%. The increase resulted primarily from increases in LIBOR on which those funds are priced. The loss on early extinguishment of debt of $9.5 million in 2005 was a result of the $7.2 million premium paid to retire $82.25 million of the Company’s senior subordinated notes and the write-off of $2.3 million of capitalized debt issuance costs associated with these borrowings.

Primarily as a result of the foregoing, income before income tax benefit (provision) and minority ownership loss was $30.4 million for the year ended December 31, 2005, a decrease of $11.6 million, or 27.6%, as compared to the prior year.

Income Tax. Income tax expense of $8.0 million for the year ended December 31, 2005, represents foreign income tax expense of $1.2 million, United States state and federal income tax expense of $9.9 million, and the benefit associated with the final adjustment to the value of the deferred tax asset created by the Recapitalization and the Private Equity Restructuring of $3.1 million.

Our determination of the amount of the deferred tax asset depended upon the gain reported by the sellers in both the Recapitalization and the Private Equity Restructuring. This adjustment was derived from information contained in the former partners’ final 2004 partnership income tax returns filed with the Internal Revenue Service in the fourth quarter of 2005.

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Primarily as a result of the foregoing, income before minority ownership loss was $22.5 million for the year ended December 31, 2005, a decrease of $232.0 million, or 91.2%, as compared to the prior year.

Minority Ownership Loss, net of Tax. Minority ownership loss attributable to IFT for the year ended December 31, 2005 was $139 thousand, an increase of $2 thousand from $137 thousand for the year ended December 31, 2004.

Primarily as a result of the foregoing, net income was $22.6 million for the year ended December 31, 2005, a decrease of $232.0 million, or 91.1%, as compared to the prior year.

Critical Accounting Policies

The preparation of our financial statements in conformity with United States GAAP requires us to make estimates and assumptions that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in our consolidated financial statements. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the financial condition and results of operations, and which require management to make its most difficult and subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain. Based on this definition, we have identified our critical accounting policies as those addressed below. We also have other key accounting policies that involve the use of estimates, judgments and assumptions. You should review the notes to our consolidated financial statements for a summary of these policies. We believe that our estimates and assumptions are reasonable, based upon information presently available; however, actual results may differ from these estimates under different assumptions or conditions.

Goodwill. We have approximately $156.8 million in net unamortized goodwill on our consolidated balance sheet at December 31, 2006 resulting from our acquisition of other businesses. Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, was adopted in 2002 and requires an annual review of goodwill and other non-amortizing intangible assets for impairment. We completed our initial assessment for impairment of goodwill and determined that no impairment was necessary at that time. Our most recent annual assessment was performed as of October 1, 2006 and it was determined that no impairment adjustment was necessary at that time. The annual evaluation of goodwill and other non-amortizing intangible assets requires the use of estimates about future operating results of each reporting unit to determine their estimated fair value. Changes in forecasted operations can materially affect these estimates, which could significantly affect our results of operations.

Income Taxes. We are subject to income taxes in the United States as well as various states and foreign jurisdictions in which we operate. We account for income taxes under SFAS No. 109, Accounting for Income Taxes, whereby deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or income tax returns. Deferred tax assets and liabilities are determined based upon differences between financial statement carrying amounts of existing assets and their respective tax bases using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled.

The effect on the income tax provision and deferred tax assets and liabilities of a change in rates is recognized in income in the period that includes the enactment date. We believe that it is more likely than not that we will be able to utilize our deferred tax assets. Therefore we have not provided any valuation allowance against our recorded deferred tax assets.

Revenue Recognition. We recognize revenue when evidence of an arrangement exists, services have been rendered, our price is fixed or determinable and collectibility is reasonably assured. We evaluate our revenue streams for proper timing of revenue recognition.

Cash advance revenue is comprised of upfront patron transaction fees assessed at the time the transaction is initiated and a percentage of the face amount of the cash advance. Cash advance revenue is recognized at the point that a negotiable money order instrument is generated by the gaming establishment cashier.

ATM revenue is comprised of upfront patron transaction fees assessed at the time the transaction is initiated and a percentage of interchange fees paid by the patron’s issuing bank. These issuing banks share the interchange revenue, or reverse interchange, with us to cover the costs we incur to acquire the ATM transaction. Upfront patron transaction fees are recognized when a transaction is authorized and reverse interchange is recognized on a monthly basis.

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Check services revenue is generally contractually based upon a percentage of the face amount of total checks warranted. Check services revenue is recognized on a monthly basis.

Central Credit revenue is based upon either a flat monthly unlimited usage fee or a variable fee structure driven by the volume of patron credit histories generated. This revenue is recognized on a monthly basis. Revenue derived from our patron marketing products and services is recognized upon completion of services.

Recently Issued Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123(R), Share-Based Payment, which establishes accounting standards for all transactions in which an entity exchanges its equity instruments for goods and services. We adopted SFAS No. 123(R) on January 1, 2006. SFAS No. 123(R) requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the date of the grant. The standard requires grant date fair value to be estimated using either an option-pricing model, which is consistent with the terms of the award, or a market observed price, if such a price exists. Such cost must be recognized over the period during which an employee is required to provide service in exchange for the award, that is, the requisite service period (which is usually the vesting period). The standard also requires us to estimate the number of instruments that will ultimately be issued, rather than accounting for forfeitures as they occur. As a result of adopting SFAS No. 123(R) in 2006 we recognized $7.0 million of non-cash stock option expense, which is recorded in operating expenses in the 2006 consolidated statements of income.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, amending APB 29 (“SFAS No. 153”), which treated nonmonetary exchanges of similar productive assets as an exception from fair value measurement. SFAS No. 153 replaces this exception with a general exception from fair value measurement for exchanges of nonmonetary assets that do not have commercial substance. Nonmonetary exchanges have commercial substance if the future cash flows of an entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company adopted this standard in 2006 and it did not have a material impact on our results of operations, financial position or cash flows.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (“SFAS No. 154”), requiring retrospective application to prior-period financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS No. 154 also redefines “restatement” as the revising of previously issued financial statements to reflect correction of errors made. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company adopted SFAS No. 154 in 2006 and it did not have a material impact on our results of operations, financial position or cash flows.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets — an amendment of SFAS No. 140 (“SFAS No. 156”). This Statement requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract; requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable; permits an entity to choose either of the Amortization or Fair Value subsequent measurement methods for each class of separately recognized servicing assets and servicing liabilities; and requires separate presentation of servicing assets and servicing liabilities measured at fair value in the statement of financial position. SFAS No. 156 is effective for fiscal years beginning after September 15, 2006. The Company adopted SFAS No. 156 on January 1, 2007 with no material effect on the consolidated financial statements.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 provides guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition of tax positions. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), which clarifies the definition of fair value whenever another standard requires or permits assets or liabilities to be measured at fair value. Specifically, the standard clarifies that fair value should be based on the assumptions market participants would use when pricing the asset or liability, and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS No. 157 does not expand the use of fair value to any new circumstances. SFAS No. 157 also requires expanded financial statement disclosures about fair value measurements, including disclosure of the methods used and the effect on earnings. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

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In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB No. 108”). SAB No. 108 eliminates the diversity in practice surrounding how public companies quantify financial statement misstatements and establishes an approach that requires quantification and assessment of misstatements based on the effects of the misstatements on each of the Company’s financial statements and the related footnote disclosures. Adoption of SAB No. 108 by the Company, which was effective for fiscal years ending after November 15, 2006, did not have a material impact on the consolidated financial statements.

Liquidity and Capital Resources

Cash Flows

The following table summarizes our cash flows for the years ended December 31, 2006 and 2005, respectively:

	Years Ended December 31,
	2006			2005
Net cash provided by operating activities	$	70,079		$	38,585
Net cash used in investing activities		(17,061	)		(17,860	)
Net cash used in financing activities		(46,761	)		(35,190	)
Net effect of exchange rates on cash and cash equivalents		(461	)		11
Net increase (decrease) in cash and cash equivalents		5,796			(14,454	)
CASH AND CASH EQUIVALENTS—Beginning of period		35,123			49,577
CASH AND CASH EQUIVALENTS—End of period	$	40,919		$	35,123

Our principal source of liquidity is cash flows from operating activities, which were $70.1 million and $38.6 million for the years ended December 31, 2006 and 2005, respectively. The 2006 increase in net income of $4.0 million contributed to the increase in cash from operating activities, along with the change in our settlement receivables (net of settlement payables) of $13.7 million in 2006. Our cash flows from operating activities are influenced by changes in settlement and receivables and the timing of payments related to settlement liabilities. As a result, our cash flows from operating activities have changed and may in the future change substantially based upon the timing of our settlement liability payments. The change in accrued expenses and accounts payable was $6.6 million for 2006 and cash from operating activities included $9.1 million in non-cash stock based compensation as a result of non cash compensation expense recorded from our restricted stock awards and from adoption of SFAS No. 123(R) in 2006. Additionally, $8.7 million of the change in operating cash flows was the result of changes in our deferred income tax asset and $2.4 million in increases to our provision for bad debts was principally the result of increases in the warranty expense reserves related to our Central Credit check warranty product.

Net cash used in investing activities totaled $17.1 million and $17.9 million for the years ended December 31, 2006 and 2005, respectively. Included in net cash used in investing activities were funds spent on software and software development in the amounts of $1.5 million and $0.6 million, and funds spent on the procurement of cash access equipment, computer and other hardware in the amounts of $14.2 million and $6.5 million for the years ended December 31, 2006 and 2005, respectively. Additionally in 2006, we had $1.4 million in cash and cash equivalents that was reclassified as restricted cash and cash equivalents as a result minimum deposit requirements of $0.4 million for certain of our sponsorship agreements in the Caribbean, and $1.0 million in minimum cash balances required pursuant to the Revolving Loan Product Program Agreement entered into in March 2006 between CIT and Arriva. In 2005 we paid $10.0 million for the purchase of the “3-in-1 rollover” patent from USA Payments. We have met our capital requirements to date through cash flows from operating activities.

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Net cash used in financing activities was $46.8 million and $35.2 million for the years ended December 31, 2006 and 2005, respectively. Net cash used in financing activities in 2006 is the result of $48.5 million in net repayments on borrowings (which include debt repayments, payments for debt issuance costs and borrowings under our senior secured credit facility) primarily due to the refinancing in the fourth quarter of 2006. Additionally, in 2006, we received proceeds of $1.5 million from employees related to stock options exercises under our equity compensation programs and $0.2 million in minority capital contributions. In 2005, we completed an initial public offering of our common stock that resulted in net proceeds, after underwriting discounts and commissions, of $128.9 million. We utilized these proceeds and existing cash balances to repay $157.2 million in scheduled and voluntary debt principal and debt issuance costs incurred in connection with the amendment of our senior secured credit facility.

Borrowings

On November 1, 2006, GCA and Holdings entered into a Second Amended and Restated Credit Agreement with certain lenders, Bank of America, as Administrative Agent and Wachovia Bank, N.A., as Syndication Agent (the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement amended and restated the First Amended and Restated Credit Agreement that previously governed the terms of GCA’s existing senior secured credit facilities to provide for a $100.0 million term loan facility and a $100.0 million five-year revolving credit facility, with a $25.0 million letter of credit sublimit and a $5.0 million swingline loan sublimit. The Second Amended and Restated Credit Agreement also contains an increase option permitting GCA to arrange with existing lenders and/or new lenders for them to provide up to an aggregate of $150.0 million in additional term loan or revolving credit commitments.

The Second Amended and Restated Credit Agreement significantly amended and restated the terms of the First Amended and Restated Credit Agreement to, among other things, reduce the rate at which interest accrues on certain borrowings under the senior secured credit facilities and modify certain other terms, conditions, provisions and covenants in connection with the senior secured credit facilities.

Principal, together with accrued and unpaid interest, is due on the maturity date, November 1, 2011. GCA may prepay the loans and terminate the commitments at any time, without premium or penalty, subject to certain qualifications set forth in the Second Amended and Restated Credit Agreement. Furthermore, the Second Amended and Restated Credit Agreement contains mandatory prepayment provisions which, under certain circumstances, obligate GCA to apply defined portions of its cash flow to prepayment of the senior secured credit facilities.

Pursuant to the Second Amended and Restated Credit Agreement, the senior secured credit facilities continue to be secured by substantially all of the assets of the Company, GCA and GCA’s wholly-owned domestic subsidiaries other than Arriva, and will continue to be guaranteed by the Company and all of GCA’s wholly-owned domestic subsidiaries other than Arriva.

The Second Amended and Restated Credit Agreement contains customary affirmative and negative covenants, financial covenants, representations and warranties and events of defaults, which are subject to important exceptions and qualifications, as set forth in the Second Amended and Restated Credit Agreement.

The Second Amended and Restated Credit Agreement resulted in the write-off of $3.4 million of remaining capitalized deferred financing costs associated with the First Amended and Restated Credit Agreement in the fourth quarter of 2006. As of December 31, 2006, the remaining capitalized deferred financing costs associated with the Second Amended and Restated Credit Agreement were $1.4 million.

On March 10, 2004, we completed a private placement offering of $235.0 million of 8³/₄% senior subordinated notes due 2012 (the “Notes”). All of Global Cash Access, Inc.’s existing and future domestic wholly owned subsidiaries are guarantors of the Notes on a senior subordinated basis. In addition, effective upon the closing of our initial public offering of common stock, Holdings guaranteed, on a subordinated basis, all of Global Cash Access, Inc.’s obligations under the Notes.

Interest on the Notes accrues based upon a 360-day year comprised of twelve 30-day months and is payable semiannually on March 15^th and September 15^th. On October 31, 2005, $82.25 million or 35% of these Notes were redeemed at a price of 108.75% of face, out of the net proceeds from our initial public offering. The Company may redeem all or a potion of the Notes at redemption prices of 104.375%, on or after March 15, 2008, 102.188% on or after March 15, 2009, or 100.000% on or after March 15, 2010.

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The following is a summary of our contractual cash obligations as of December 31, 2006, including our senior subordinated notes and our senior secured credit facilities:

Contractual Cash Obligations					2 - 3		4 - 5		After
	Total		1 Year		Years		Years		5 Years
	(amounts in thousands)
Long-term debt obligations	$	274,480	$	1,000	$	2,000	$	118,730	$	152,750
Estimated interest obligations (1)		112,372		21,526		42,874		41,289		6,683
Operating lease obligations		2,126		518		974		634		—
Purchase obligations (2)		17,362		2,731		4,682		4,682		5,267
Total cash obligations (3)	$	406,340	$	25,775	$	50,530	$	165,335	$	164,700

(1) Estimated interest payments are computed using the interest rate in effect at December 31, 2006 multiplied by the principal balance outstanding after scheduled principal amortization payments. For the senior secured credit facility and the senior subordinated notes the rates assumed are 6.73% and 8.75%, respectively.

(2) Included in purchase obligations are minimum transaction processing services from USA Payments, a company controlled by the principals of M&C, minimum volume originations and operating expenses under our agreements with CIT and minimum account maintenance charges under our Fiserv agreement.

(3) We have entered into three year employment contracts with certain of our executive officers that will expire over the next two years. Significant contract provisions include minimum annual base salaries, bonus compensation, and non-compete provisions. These contracts are “at will” employment agreements, under which the employee or we may terminate employment. If we terminate any of these employees without cause, then we are obligated to pay the employee severance benefits as specified in their individual contract. As of December 31, 2006, minimum aggregate severance benefits totaled $1.8 million. We have excluded these obligations under employment contracts from the totals presented in this table as the amount and timing of the amount settled in cash is not known.

Deferred Tax Asset

At December 31, 2006, we had a net deferred income tax asset of a $191.7 million. We recognized a deferred tax asset upon our conversion from a limited liability company to a corporation on May 14, 2004. Prior to that time, all tax attributes flowed through to the members of the limited liability company. The principal component of the deferred tax asset is a difference between our income for financial accounting and tax purposes. This difference results from a significant balance of Acquired Goodwill (approximately $686 million) which is recorded for tax purposes but not for accounting purposes. This asset is amortized over 15 years for tax purposes, resulting in annual pretax income being $45.7 million lower for tax purposes than for financial accounting purposes. At an estimated effective tax rate of 38%, this results in tax payments being approximately $17.4 million less than the provision for income taxes shown on the income statement for financial accounting purposes. This is an expected aggregate of $214.4 million in cash savings over the remaining 13 year life of the deferred tax asset related to the conversion.

Other Liquidity Needs and Resources

On September 23, 2005, we completed an initial public offering of 9.0 million shares of common stock, and on October 12, 2005, the underwriters exercised their over allotment option to purchase an additional 1.1 million shares of our common stock. The total proceeds to us from the offering (after deducting underwriting discounts and commissions) were $130.9 million. We used $90.3 million of these proceeds to redeem senior subordinated notes (including a redemption premium and accrued interest), $10.0 million to acquire ownership of the “3-in-1 rollover” patent, and $20.0 million to voluntarily prepay amounts due under the term loan portion of our senior secured credit facility. In December 2005, the remaining $10.5 million of the initial public offering proceeds and cash balances on hand were utilized to prepay an additional $15.0 million of amounts due under the term loan portion of our senior secured credit facility.

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Bank of America supplies us with currency needed for normal operating requirements of our ATMs pursuant to a Treasury Services Agreement. Under the terms of this agreement, we pay a monthly cash usage fee based upon the product of the average daily dollars outstanding in all ATMs multiplied by the average LIBOR one-month United States dollar deposits for each day that rate is published in that month plus a margin of 25 basis points. We are therefore exposed to interest rate risk to the extent that applicable LIBOR increases. As of December 31, 2006, the rate in effect, inclusive of the 25 basis points margin, was 5.7%, and the currency supplied by Bank of America pursuant to this agreement was $396.8 million.

We need supplies of cash to support our foreign operations. For some foreign jurisdictions, such as the United Kingdom, applicable law and cross-border treaties allow us to transfer funds between our domestic and foreign operations efficiently. For other foreign jurisdictions, we must rely on the supply of cash generated by our operations in those foreign jurisdictions, and the cost of repatriation is prohibitive. For example, CashCall, the subsidiary through which we operate in Canada, generates a supply of cash that is sufficient to support its operations, and all cash generated through such operations is retained by CashCall. As we expand our operations into new foreign jurisdictions, we must rely on treaty-favored cross-border transfers of funds, the supply of cash generated by our operations in those foreign jurisdictions or alternate sources of working capital.

We operate IFT, a joint venture with IGT. We own 60% of the equity interests of IFT and IGT owns 40%. The joint venture was formed to develop and market cash access products using slot tickets. Pursuant to the terms of our agreement with IGT, we are obligated to contribute up to our pro rata share of $10.0 million in capital to IFT. Our obligation to contribute additional capital in IFT is conditioned upon capital calls, the necessity of which are determined in our sole discretion. As of December 31 2006, we had contributed a total of $4.0 million in IFT.

We believe that borrowings available under our senior secured credit facilities, together with our anticipated operating cash flows, will be adequate to meet our anticipated future requirements for working capital, capital expenditures and scheduled interest payments on the Notes and under our senior secured credit facilities for the next 12 months and for the foreseeable future. Although no additional financing is currently contemplated, we may seek, if necessary or otherwise advisable and to the extent permitted under the indenture governing the Notes and the terms of the senior secured credit facilities, additional financing through bank borrowings or public or private debt or equity financings. We cannot ensure that additional financing, if needed, will be available to us, or that, if available, the financing will be on terms favorable to us. The terms of any additional debt or equity financing that we may obtain in the future could impose additional limitations on our operations and/or management structure. We also cannot ensure that the estimates of our liquidity needs are accurate or that new business developments or other unforeseen events will not occur, resulting in the need to raise additional funds.

Off-Balance Sheet Arrangements

Bank of America Amended Treasury Services Agreement. We obtain currency to meet the normal operating requirements of our domestic ATMs and ACMs pursuant to the Amendment of the Treasury Services Agreement with Bank of America. Under this agreement, all currency supplied by Bank of America remains the sole property of Bank of America at all times until it is dispensed, at which time Bank of America obtains an interest in the corresponding settlement receivable. Because it is never an asset of ours, supplied cash is not reflected on our balance sheet. At December 31, 2006, the total currency obtained from Bank of America pursuant to this agreement was $396.8 million. Because Bank of America obtains an interest in our settlement receivables, there is no liability corresponding to the supplied cash reflected on our balance sheet. The fees that we pay to Bank of America for cash usage pursuant to the Amendment of the Treasury Services Agreement are reflected as interest expense in our financial statements. Foreign gaming establishments supply the currency needs for the ATMs located on their premises.

Arriva. The Arriva Card is a private-label revolving credit card that provides gaming patrons with access to credit in gaming establishments. Pursuant to the Receivables Sale Agreement and the Revolving Loan Product Program Agreement entered into in March 2006 between CIT and Arriva, CIT is the legal issuer of the Arriva Cards marketed by Arriva.

When a customer uses the Arriva Card for a transaction, CIT extends credit to the patron for the face amount of transaction and the fee charged by the gaming establishment and acquires the receivable from the customer. On a monthly basis, CIT is entitled to receive Interim Interest, which is a fee based on the average balance of receivables multiplied by an interest rate. The interest rate is computed based upon the amount of time that CIT has this receivable outstanding. As of December 31, 2006, the interest is determined as the one-month LIBOR plus 225 basis points, or approximately 7.6 %. Arriva has the option to purchase the originated receivable from CIT at any time between three and 180 days (the “Holding Period”) from the date the customer first borrows using the card. CIT has the right to require Arriva to purchase any receivables that have a first payment default, cardholder death or bankruptcy during the first 180 days from acquisition, and CIT will require Arriva to purchase the net amount of all such receivables 180 days after acquisition. Arriva is entitled to receive all fees and interest income associated with the receivable. These are included within Other Revenues in the consolidated statements of income and the receivables from the patrons for this revenue are recorded as part of other receivables, net in the consolidated balance sheets.

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As of December 31, 2006, CIT had $9.9 million in outstanding receivables from transactions performed on Arriva Cards. For the year ended December 31, 2006, Arriva has purchased $0.1 million in receivables from CIT for customer receivables that have had a first payment default, cardholder death or bankruptcy during the first 180 days from acquisition.

Additionally, Arriva is required to pay CIT an origination fee for the extension of credit on receivables. This origination fee is computed as the principal amount of the extension of credit multiplied by 0.25%. In the first year of the program Arriva is committed to paying $100 thousand in minimum origination fees. In each subsequent year, this minimum origination fee is increased to $200 thousand.

Senior Secured Credit Facility — As of December 31, 2006, we have $3.0 million in standby letters of credit outstanding as collateral security for First Data related to a Sponsorship Indemnification Agreement whereby First Data agreed to continue its guarantee of performance for us to Bank of America for our sponsorship as a Bank Identification Number and Interbank Card Association licensee under the applicable VISA and MasterCard rules. GCA has agreed to indemnify First Data and its affiliates against any and all losses and expenses arising from its indemnification obligations pursuant to that agreement. Additionally, we had $0.1 million in standby letters of credit issued and outstanding as collateral on surety bonds for certain licenses held related to our Nevada check cashing licenses.

Effects of Inflation

Our monetary assets, consisting primarily of cash and receivables, are not significantly affected by inflation. Our non-monetary assets, consisting primarily of our deferred tax asset, goodwill and other intangible assets, are not affected by inflation. We believe that replacement costs of equipment, furniture and leasehold improvements will not materially affect our operations. However, the rate of inflation affects our operating expenses, such as those for salaries and benefits, armored carrier expenses, telecommunications expenses and equipment repair and maintenance services, which may not be readily recoverable in the financial terms under which we provide our cash access products and services to gaming establishments and their patrons.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to foreign currency exchange risk. We operate and conduct business in foreign countries and, as a result, are exposed to movements in foreign currency exchange rates. Our exposure to foreign currency exchange risk related to our foreign operations is not material to our results of operations, cash flows or financial position. At present, we do not hedge this risk. At present, we do not hold any derivative securities of any kind.

Bank of America supplies us with currency needed for normal operating requirements of our domestic ATMs and ACMs pursuant to the Amendment of the Treasury Services Agreement. Under the terms of this agreement, we pay a monthly cash usage fee based upon the product of the average daily dollars outstanding in all ATMs and ACMs multiplied by the average LIBOR for one-month United States dollar deposits for each day that rate is published in that month plus a margin of 25 basis points. We are therefore exposed to interest rate risk to the extent that applicable LIBOR increases. As of December 31, 2006, the rate in effect, inclusive of the 25 basis points margin, was 5.7% and the currency supplied by Bank of America pursuant to this agreement was $396.8 million. Based upon the average outstanding amount of currency to be supplied by Bank of America pursuant to this agreement during 2006, which was $289.2 million, each 1% increase in applicable LIBOR would have a $2.9 million impact on income before taxes and minority ownership loss over a 12-month period. Foreign gaming establishments supply the currency needs for the ATMs located on their premises.

Our senior secured credit facilities bear interest at rates that can vary over time. We have the option of having interest on the outstanding amounts under these credit facilities paid based on a base rate (equivalent to the prime rate) or based on the Eurodollar rate (equivalent to LIBOR). We have historically elected to pay interest based on the one month United States dollar LIBOR, and we expect to continue to pay interest based on LIBOR of various maturities. Our interest expense on these credit facilities is the applicable LIBOR plus a margin of 137.5 basis points for the term loan portion and LIBOR plus 137.5 basis points for the revolving credit portion. At December 31, 2006, we had $21.7 million drawn under the revolving credit portion and we had $100.0 million outstanding under the term loan portion at an interest rate, including the margin, of approximately 6.7%. Based upon the outstanding balance on the term loan of $121.7 million on December 31, 2006, each 1% increase in applicable LIBOR would add an additional $1.2 million of interest expense over a 12-month period.

When a customer uses the Arriva Card for a transaction, CIT extends credit to the patron for the face amount of transaction and the fee charged by the gaming establishment and acquires the receivable from the customer. On a monthly basis, CIT is entitled to receive Interim Interest, which is a fee based on the average balance of receivables multiplied by an interest rate. The interest rate is computed based upon the Holding Period. The interest is determined as the one-month LIBOR plus 225 basis points, or approximately 7.6 % at December 31, 2006. We are therefore exposed to interest rate risk to the extent that applicable LIBOR increases. As of December 31, 2006, CIT had $9.9 million in outstanding receivables from transactions performed on Arriva Cards. Each 1% increase in applicable LIBOR would have a $0.1 million impact on income before taxes and minority ownership loss over a 12-month period.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		58
Consolidated Balance Sheets as of December 31, 2006 and 2005		59
Consolidated Statements of Income and Comprehensive Income for the three years ended December 31, 2006		60-61
Consolidated Statement of Stockholders’ (Deficiency) Equity for the three years ended December 31, 2006		62
Consolidated Statements of Cash Flows for the three years ended December 31, 2006		63-64
Notes to Consolidated Financial Statements		65-99

57

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Global Cash Access Holdings, Inc.
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheets of Global Cash Access Holdings, Inc. and Subsidiaries (the “Company”) as of December 31, 2006 and 2005, and the related consolidated statements of income and comprehensive income, stockholders’ (deficiency) equity, and cash flows for each of the three years in the period ended December 31, 2006. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Global Cash Access Holdings, Inc. and Subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, on January 1, 2006, the Company changed its method of accounting for share-based compensation to conform to Statement of Financial Accounting Standards No. 123(R), Share-Based Payment.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 30, 2007 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of material weaknesses.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada
March 30, 2007

58

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
(amounts in thousands, except share amounts)

	2006			2005
ASSETS
Cash and cash equivalents		40,919			35,123
Restricted cash and cash equivalents		1,350			—
Settlement receivables		137,091			60,164
Other receivables, net		12,848			7,355
Prepaid and other assets		9,488			10,959
Property, equipment and leasehold improvements, net		20,454			10,579
Goodwill, net		156,755			156,756
Other intangibles, net		18,001			22,006
Deferred income taxes, net		191,741			207,476
Total assets	$	588,647		$	510,418
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Settlement liabilities	$	138,242		$	59,782
Accounts payable		26,282			20,413
Accrued expenses		17,383			14,178
Borrowings		274,480			321,412
Total liabilities		456,387			415,785
COMMITMENTS AND CONTINGENCIES (NOTE 6)
MINORITY INTEREST		103			149
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 500,000 shares authorized and 82,313 and 81,554 shares outstanding at December 31, 2006 and 2005, respectively		82			82
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at December 31, 2006 and 2005, respectively		—			—
Additional paid in capital		139,515			128,886
Accumulated deficit		(9,601	)		(36,210	)
Accumulated other comprehensive income		2,161			1,726
Total stockholders’ equity		132,157			94,484
Total liabilities and stockholders’ equity	$	588,647		$	510,418

See notes to consolidated financial statements.

59

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004
(amounts in thousands, except earnings per share amounts)

	2006			2005			2004
REVENUES:
Cash advance	$	287,053		$	235,055		$	209,962
ATM		221,727			182,291			158,433
Check services		29,166			26,376			23,768
Central Credit and other revenues		10,202			10,358			10,840
Total revenues		548,148			454,080			403,003
Cost of revenues (exclusive of depreciation and amortization)		(389,251	)		(308,481	)		(270,095	)
Operating expenses		(63,812	)		(51,206	)		(45,339	)
Amortization		(5,520	)		(5,295	)		(5,672	)
Depreciation		(4,369	)		(6,814	)		(7,876	)
OPERATING INCOME		85,196			82,284			74,021
INTEREST INCOME (EXPENSE), NET
Interest income		3,484			1,815			1,318
Interest expense		(42,098	)		(44,165	)		(33,343	)
Loss on early extinguishment of debt		(3,417	)		(9,529	)		—
Total interest income (expense), net		(42,031	)		(51,879	)		(32,025	)
INCOME BEFORE INCOME TAX (PROVISION) BENEFIT AND MINORITY OWNERSHIP LOSS		43,165			30,405			41,996
INCOME TAX (PROVISION) BENEFIT		(16,739	)		(7,953	)		212,422
INCOME BEFORE MINORITY OWNERSHIP LOSS		26,426			22,452			254,418
MINORITY OWNERSHIP LOSS, NET OF TAX		183			139			137
NET INCOME		26,609			22,591			254,555
Foreign currency translation		435			(224	)		209
COMPREHENSIVE INCOME	$	27,044		$	22,367		$	254,764
Earnings per share
Basic	$	0.33		$	0.49		$	7.91
Diluted	$	0.32		$	0.30		$	3.56
Weighted average number of common shares outstanding:
Basic		81,641			45,643			32,175
Diluted		81,921			74,486			71,566

See notes to consolidated financial statements.

60

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(amounts in thousands, except earnings per share amounts)

	2004
PRO FORMA COMPUTATION RELATED TO CONVERSION TO CORPORATION FOR INCOME TAX PURPOSES
Income before income tax (provision) benefit and minority ownership loss — historical	$	41,996
Income tax provision — historical, exclusive of tax benefit, net		(10,443	)
Pro forma income tax provision (unaudited)		(4,600	)
Minority ownership loss — historical loss, net of tax		137
PRO FORMA NET INCOME (UNAUDITED)	$	27,090
Pro forma earnings per share:
Basic	$	0.84
Diluted	$	0.38
Pro forma weighted average number of common shares outstanding
Basic		32,175
Diluted		71,566

See notes to consolidated financial statements.

61

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ (DEFICIENCY) EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(amounts in thousands, except shares)

	Common Stock -					Common Stock -					Preferred Stock -						Preferred Stock -
	Series A					Series B					Series A						Series B						Additional					Other
	Number of					Number of					Number of						Number of						Paid in		Accumulated			Comprehensive			Members'
	Shares			Amount		Shares			Amount		Shares			Amount			Shares			Amount			Capital		Deficit			Income			Capital			Total
BALANCE—December 31, 2003		—		$	—		—		$	—		—		$	—			—		$	—		$	—	$	—		$	1,741		$	197,506		$	199,247
Net income before change in tax status																																227,121			227,121
Foreign currency translation																													209						209
Distributions to members																																(73,028	)		(73,028	)
Deemed distributions to members																																(3,166	)		(3,166	)
Deemed contributions from members																																964			964
Redemption of membership units																																(435,560	)		(435,560	)
Change in tax status from a limited liability company to a corporation on May 14, 2004		31,775,250			32		399,750			—		31,720,000			32			7,605,000			8			—		(86,235	)					86,163			—
Net income after change in tax status		—			—		—			—		—			—			—			—			—		27,434			—			—			27,434
BALANCE—December 31, 2004		31,775,250		$	32		399,750		$	—		31,720,000		$	32			7,605,000		$	8		$	—	$	(58,801	)	$	1,950		$	—		$	(56,779	)
Net income																										22,591									22,591
Foreign currency translation																													(224	)					(224	)
Conversion of all series shares into common A shares		39,724,750			40		(399,750	)		—		(31,720,000	)		(32	)		(7,605,000	)		(8	)													—
Offering of common stock		10,053,568			10		—			—		—			—			—			—			128,886		—			—			—			128,896
BALANCE—December 31, 2005		81,553,568		$	82		—		$	—		—		$	—			—		$	—		$	128,886	$	(36,210	)	$	1,726		$	—		$	94,484
Net income																										26,609									26,609
Foreign currency translation																													435						435
Non-cash compensation expense																								9,141											9,141
Restricted stock grants		619,747			—																														—
Restricted stock cancellations		(10,500	)		—																														—
Exercise of stock options		149,709			—		—			—		—			—			—			—			1,488		—			—			—			1,488
BALANCE—December 31, 2006		82,312,524		$	82		—		$	—		—		$	—			—		$	—		$	139,515	$	(9,601	)	$	2,161		$	—		$	132,157

See notes to consolidated financial statements.

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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004
(amounts in thousands)

	2006			2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	26,609		$	22,591		$	254,555
Adjustments to reconcile net income to cash provided by operating activities:
Amortization of financing costs		1,584			1,942			1,618
Amortization of intangibles		5,520			5,295			5,672
Depreciation		4,369			6,814			7,876
(Gain)loss on sale or disposal of assets		(6	)		47			179
Loss on early extinguishment of debt		3,417			9,529			—
Provision for bad debts		6,483			4,068			—
Deferred income taxes		15,899			7,228			(214,665	)
Minority ownership loss		(287	)		(218	)		(213	)
Stock-based compensation		9,141			—			—
Changes in operating assets and liabilities:
Settlement receivables		(76,654	)		(30,029	)		(9,815	)
Other receivables, net		(10,503	)		(7,097	)		(659	)
Prepaid and other assets		(1,906	)		(1,093	)		(475	)
Settlement liabilities		78,188			17,837			18,995
Accounts payable		5,867			(178	)		2,588
Accrued expenses		2,358			1,849			9,556
Net cash provided by operating activities		70,079			38,585			75,212
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, equipment and leasehold improvements		(14,195	)		(7,098	)		(3,261	)
Purchase of other intangibles		(1,516	)		(10,762	)		(1,600	)
Changes in restricted cash and cash equivalents		(1,350	)		—			—
Net cash used in investing activities		(17,061	)		(17,860	)		(4,861	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facility and senior subordinated notes		121,730			—			484,087
Repayments under credit facility		(168,662	)		(74,588	)		(16,750	)
Repayments from early retirement of senior subordinated notes		—			(89,446	)		—
Debt issuance costs		(1,557	)		(331	)		(3,000	)
Proceeds from sale of stock		—			128,895			—
Proceeds from exercise of stock options		1,488			—			—
Minority capital contributions		240			280			300
Redemption of membership interests and distributions to partners		—			—			(508,587	)
Net cash used in financing activities		(46,761	)		(35,190	)		(43,950	)

(continued)

63

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004
(amounts in thousands)

	2006			2005			2004
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	$	(461	)	$	11		$	(247	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		5,796			(14,454	)		26,154
CASH AND CASH EQUIVALENTS—Beginning of period		35,123			49,577			23,423
CASH AND CASH EQUIVALENTS—End of period	$	40,919		$	35,123		$	49,577
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during year for:
Interest	$	38,735		$	43,610		$	25,689
Income taxes	$	410		$	2,334		$	407
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Contribution related to forgiveness of related party payable							$	964
Distribution related to forgiveness of related party receivable							$	3,166
Debt issuance costs treated as a reduction of credit facility proceeds							$	10,913

See notes to consolidated financial statements.

64

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND BASIS OF PRESENTATION

Global Cash Access Holdings, Inc. is a holding company, the principal asset of which is the capital stock of Global Cash Access, Inc. Unless otherwise indicated, the terms “the Company,” “Holdings,” “we,” “us” and “our” refer to Global Cash Access Holdings, Inc. together with its consolidated subsidiaries. Holdings was formed on February 4, 2004, for the purpose of holding all of the outstanding capital stock of Global Cash Access, Inc. (formerly known as Global Cash Access, L.L.C.) (“GCA”) and to guarantee the obligations under our senior secured credit facilities (see further discussion at Note 7). On May 14, 2004, the Company converted from a limited liability company to a corporation under the laws of Delaware and became known as Global Cash Access Holdings, Inc. Prior to May 14, 2004, the Company operated as a limited liability company and was known as Global Cash Access Holdings L.L.C. The accompanying consolidated financial statements present the operations of the Company as if Holdings had been in existence for all periods presented.

GCA is a financial services company that provides cash access products and services to the gaming industry. The Company’s cash access products and services allow gaming patrons to access funds through a variety of methods, including credit card cash advances, point-of-sale debit card cash advances, automated teller machine (“ATM”) withdrawals, check cashing transactions and money transfers. These services are provided to patrons at gaming establishments directly by the Company or through one of its consolidated subsidiaries. GCA’s subsidiaries include: CashCall Systems Inc. (“CashCall”), Global Cash Access (BVI), Inc. (“BVI”), Arriva Card, Inc. (“Arriva”), Global Cash Access Switzerland A.G. (“GCA Switzerland”), Innovative Funds Transfer, LLC, formerly known as QuikPlay, LLC (“IFT”), Global Cash Access (HK) Ltd. (“GCA HK”) and GCA (Macau) S.A. (“GCA Macau”).

The Company also wholly owns and operates one of the leading credit reporting agencies in the gaming industry, Central Credit, LLC (“Central”), and provides credit reporting information services to gaming establishments and credit-reporting history on gaming patrons to the various gaming establishments. Central operates in both international and domestic gaming markets.

Commencing in the third quarter of 2006, the Company, through its subsidiary, Arriva, began offering a credit card aimed at consumers who perform cash advance transactions in gaming establishments.

The accompanying consolidated financial statements include the accounts of Holdings and its consolidated subsidiaries: GCA, CashCall, Central, BVI, Arriva, GCA Switzerland, IFT, GCA HK and GCA Macau.

CashCall is a corporation incorporated under the laws of Ontario, Canada and is directly owned by GCA. CashCall provides consumer cash access to gaming establishments in Canada through credit and debit card cash advance transactions. On August 30, 2001, GCA established a United Kingdom branch to provide credit and debit card cash advance and ATM withdrawal transactions to gaming patrons in the United Kingdom. The branch did not initiate these transactions until early 2002 when the regulatory approval to perform these types of transactions in gaming establishments was granted by Parliament.

IFT, formerly known as QuikPlay, LLC, is a joint venture formed on December 6, 2000, owned 60% by GCA and 40% by International Game Technology (“IGT”). IGT is one of the largest manufacturers of gaming equipment in the United States. As GCA is the managing member of this entity, IFT has been consolidated in the Company’s consolidated financial statements for all periods presented.

The Company provides some services in conjunction with companies wholly owned by First Data Corporation (“First Data”), including Integrated Payment Systems, Inc. and IPS Canada, Inc. (collectively, “IPS”), TRS Recovery Services, Inc., and TeleCheck Services, Inc., (collectively “TeleCheck”), and Western Union Financial Services, Inc. (“Western Union”). Prior to March 10, 2004, First Data owned 67% of the Company (see further discussion at Restructuring of Ownership below). GCA is a money transfer agent for Western Union, a wholly owned subsidiary of First Data. Western Union contracts directly with the gaming establishments and provides GCA commissions on the transactions processed by the gaming establishment. These commissions are included as part of other revenues in the accompanying consolidated statements of income.

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On November 27, 2006, the Company entered into a Master Service Agreement with IPS for a term of three years. Pursuant to this agreement IPS allows the Company to continue to use and sell IPS money orders in connection with credit card and point-of-sale debit card transactions consummated by the Company for patrons of gaming establishments. The Company pays a monthly fee to IPS based upon the total amount of money orders that were issued and presented for payment. The expenses incurred related to this portion of the agreement are included within operating expenses in the accompanying consolidated statements of income. The Company receives interest income from IPS for money orders used and sold by the Company that have not been paid by IPS. The interest paid by IPS is included in interest income in the accompanying consolidated statements of income. All settlement funds from card associations in connection with credit card and point-of-sale debit card transactions consummated by the Company in which IPS money orders are used or sold are handled in the manner prescribed by an agreement of even date among the Company, IPS and Wachovia Bank, N.A. The Master Service Agreement provides that IPS is the Company’s sole and exclusive provider of money orders within the United States.

The Company markets check authorization services to gaming establishments pursuant to the TeleCheck Marketing Agreement dated July 9, 1998, as amended March 10, 2004 and further amended effective November 20, 2006. GCA, through TeleCheck, provides gaming establishments who are merchant subscribers check warranty services. GCA provides marketing and customer service to the gaming establishment on behalf of TeleCheck. Because GCA controls the primary customer relationship and GCA can choose to offer check warranty products other than those of TeleCheck (including our own), we view TeleCheck as our agent with respect to these services. Under the TeleCheck Marketing Agreement, as amended, GCA receives the monthly fee charged to gaming establishments, net of actual warranty losses and operating expenses reported by TeleCheck. GCA records the gross monthly fee charged to the gaming establishments in check services revenue. The actual warranty losses billed by TeleCheck are recorded as part of cost of revenues (exclusive of depreciation and amortization). At month end, GCA estimates a liability for unpresented warranty claims and adjusts the month end accrual and warranty expense as necessary. The operating expenses invoiced by TeleCheck are recorded as part of operating expenses.

Restructuring of Ownership

On December 10, 2003, the principal owners of GCA, First Data Financial Services, LLC (“FDFS”) and FDFS Holdings, LLC (both of which are subsidiaries of First Data) and M&C International (“M&C”), entered into a restructuring agreement with the principals of M&C. This restructuring agreement and the subsequent amendments provided for the recapitalization of GCA’s membership so that all of the membership units in GCA were contributed to Holdings. GCA is a wholly owned subsidiary of Holdings.

Pursuant to the Restructuring of Ownership, all of the membership units in Holdings owned by FDFS Holdings, LLC were redeemed for an aggregate amount of $435.6 million. Additionally, some of M&C’s membership units in Holdings were redeemed for $38.0 million.

Immediately prior to the redemption of First Data’s and M&C’s membership units in Holdings, M&C sold to Bank of America Corporation a portion of M&C’s membership units in Holdings for an aggregate purchase price of $20.2 million. Additionally as part of the Restructuring of Ownership, a $12.1 million distribution was made to M&C that was paid directly to Bank of America for settlement of a loan between Bank of America and M&C.

Upon the consummation of the restructuring transaction, which was completed on March 10, 2004, Holdings was approximately 95% owned by M&C and approximately 5% owned by a wholly owned subsidiary of Bank of America Corporation.

Securities Purchase and Exchange Agreement

On April 21, 2004, and as amended on May 13, 2004, Holdings and the owners of Holdings entered into a Securities Purchase and Exchange Agreement (“Securities Purchase Agreement”) whereby equity interests in Holdings were sold to private equity investors for an aggregate purchase price of $316.4 million. Under the terms of the Securities Purchase Agreement, approximately 55% of the equity interests in Holdings held by M&C were sold to the investors. The Company did not receive any proceeds under the private equity restructuring.

66

Additionally, Holdings agreed, among other things, to convert from a limited liability company to a corporation organized under the laws of Delaware (the “Conversion”), and the members of Holdings agreed to exchange membership units in Holdings for various classes of common and preferred stock. Upon the consummation of the security purchase transaction, Holdings was approximately 55% owned by the private equity investors, 40% owned by M&C and 5% owned by Bank of America.

On May 14, 2004, the Company changed its tax classification from a limited liability company to a taxable corporation organized under the laws of Delaware. In accordance with generally accepted accounting principles, upon conversion to a taxable entity the Company recorded an income tax benefit to establish a net deferred tax asset attributed to differences between the financial reporting and the income tax basis of assets and liabilities (see further discussion in Note 10). The consolidated statements of income have been expanded to reflect the unaudited pro forma impact had the Company been a taxable entity for all periods presented.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements presented for the years ended December 31, 2006, 2005 and 2004 and as of December 31, 2006 and 2005 include the accounts of Global Cash Access Holdings, Inc. and its subsidiaries. As part of the Restructuring of Ownership on March 10, 2004, an affiliated company, CashCall, was contributed to GCA by the former owners. The financial statements also include CashCall as a combined entity for the period prior to its contribution on March 10, 2004 because it was under common control.

All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications within the consolidated financial statements have been made in the prior years in order to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all balances on deposit in banks and financial institutions. The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash and cash equivalents. Such balances may at times exceed the federal insurance limits. However, the Company periodically evaluates the creditworthiness of these institutions to minimize risk.

Restricted Cash and Cash Equivalents

As part of certain of our sponsorship agreements in the Caribbean, we are required to maintain minimum deposits of $350 thousand as collateral for any potential chargeback loss activity occurring as a result of the se sponsorship arrangements. Additionally, pursuant to the Revolving Loan Product Program Agreement entered into in March 2006 between CIT Bank (“CIT”) and Arriva, Arriva agreed to maintain a balance of $1.0 million in cash and cash equivalents at all times this agreement is in effect.

ATM Funding Agreements

The Company obtains all of the cash required to operate its ATMs through various ATM Funding Agreements more fully described in Note 3. Some gaming establishments provide the cash utilized within the ATM (“Site-Funded”). The receivables generated for the amount of cash dispensed from transactions performed at our ATMs are owned by GCA and GCA is liable to the gaming establishment for the face amount of the cash dispensed. In the consolidated balance sheets, the amount receivable for transactions processed on these ATM transactions is included within settlement receivables and the amount due to the location for the face amount of dispensing transactions is included within settlement liabilities. As of December 31, 2006 and 2005, the Company operated 626 and 203 ATMs, respectively that were Site-Funded.

For our non-Site Funded locations, GCA obtains the necessary cash to service these machines through an Amended Treasury Services Agreement with Bank of America. Under the terms of this agreement, neither the cash utilized within the ATMs nor the receivables generated for the amount of cash dispensed through transactions on the ATMs are owned or controlled by GCA. Therefore, these amounts have been excluded from the consolidated balance sheets. We are charged a cash usage fee for the cash used in these ATMs, which is included as interest expense in the consolidated statements of income.

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Settlement Receivables and Settlement Liabilities

In the credit and debit card cash advance transactions provided by GCA and CashCall, the gaming establishment is reimbursed for the cash disbursed to gaming patrons through a check issued by IPS. IPS is a licensed issuer of payment instruments that is wholly owned by First Data. Pursuant to the agreement with IPS, GCA indemnifies IPS for any losses incurred in conjunction with credit and debit card cash advance transactions, and thus, assumes all of the risks and rewards. GCA receives reimbursement from the patron’s credit or debit card issuer for the transaction in an amount equal to the check issued to the gaming establishment plus the cash advance fee charged to the patron. This reimbursement is included within the settlement receivables on the consolidated balance sheets. GCA then remits to IPS the amount of the check issued to the gaming establishment. The amount of unpaid checks is included within settlement liabilities on the consolidated balance sheets.

Warranty Receivables

In the check services transactions provided by Central, Central warrants check cashing transactions performed at gaming establishments. If a gaming establishment accepts a payroll or personal check from a patron that we warrant, Central is obligated to reimburse the property for the full face value of the dishonored check. All amounts paid out to the gaming establishment related to these items result in a warranty receivable from the patron. This amount is recorded in other receivables, net on the consolidated balance sheets. On a monthly basis, Central evaluates the collectibility of the outstanding balances and establishes a reserve for the face amount of the expected losses on these returned items. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the consolidated statements of income.

A summary activity of the reserve for warranty losses as of December 31, 2006 and 2005 is as follows (amounts in thousands):

Balance, December 31, 2003	$	—
Warranty expense provision		30
Charge offs against reserve		—
Balance, December 31, 2004	$	30
Warranty expense provision		2,968
Charge offs against reserve		—
Balance, December 31, 2005	$	2,998
Warranty expense provision		6,483
Charge offs against reserve		—
Balance, December 31, 2006	$	9,481

Unamortized Debt Issuance Costs

Debt issuance costs incurred in connection with the issuance of the senior secured credit facility and the senior subordinated notes are capitalized and amortized to interest expense based upon the related debt agreements using the straight-line method which approximates the effective interest method. Unamortized debt issuance costs are included in prepaid and other assets on the consolidated balance sheets.

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are stated at cost, less accumulated depreciation, computed using the straight-line method over the lesser of the estimated life of the related assets, generally three to five years, or the related lease term. Amounts charged to expense for depreciation of property, equipment and leasehold improvements were approximately $4.4 million, $6.8 million, and $7.9 million, for the years ended December 31, 2006, 2005, and 2004, respectively. Accumulated depreciation was $36.2 million and $31.8 million as of December 31, 2006 and 2005, respectively.

Repairs and maintenance costs are expensed as incurred.

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Upon sale or retirement, the costs and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the consolidated statements of income.

Property, equipment and leasehold improvements are reviewed for impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable. Impairment is indicated when undiscounted future cash flows do not exceed the asset’s carrying value. As of December 31, 2006, the Company does not believe any of its property, equipment, or leasehold improvements are impaired.

Goodwill

Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations.

The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets, which addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. This Statement also addresses how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. In 2002, in connection with its initial application, the Company ceased amortization of goodwill, and tested the goodwill balances for impairment. The Company does not believe that any of its goodwill is impaired as of December 31, 2006 based upon the results of our annual impairment testing.

Goodwill attributable to our principal business lines consists of the following at December 31, (amounts in thousands):

	2006		2005
Cash Advance	$	93,252	$	93,253
Credit Reporting		39,470		39,470
ATM		24,033		24,033
Total	$	156,755	$	156,756

Other Intangible Assets

Other intangible assets consist primarily of customer contracts (rights to provide processing services to clients) acquired through business combinations and acquisitions, capitalized software development costs and the acquisition cost of our patent related to the “3-in-1 rollover” technology acquired in 2005. The acquisition cost of the 3-in-1 rollover patent will be amortized over its remaining legal life of 12 years. Excluding the patent, other intangibles are amortized on a straight-line basis over periods ranging from 3 to 10 years.

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Other intangibles consist of the following as of December 31, (in thousands):

	2006			2005
Customer contracts	$	34,516		$	34,516
Computer software		13,797			12,342
Patents		10,000			10,000
Covenants not to compete		60			1,180
		58,373			58,038
Less accumulated amortization		(40,372	)		(36,032	)
Total	$	18,001		$	22,006

Amortization expense related to these intangibles totaled approximately $5.5 million, $5.3 million, and $5.7 million for the years ended December 31, 2006, 2005, and 2004, respectively.

At December 31, 2006 the anticipated amortization expense related to other intangible assets, assuming no subsequent impairment of the underlying assets, is as follows (in thousands):

2007	$	5,187
2008		3,173
2009		2,223
2010		1,675
2011		811
Thereafter		4,932
Total	$	18,001

The Company accounts for the costs related to computer software developed or obtained for internal use in accordance with the American Institute of Certified Public Accountants Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use (“SOP 98-1”). SOP 98-1 establishes that computer software costs that are incurred in the preliminary project stage should be expensed as incurred. Costs incurred in the application development phase and any upgrades and enhancements that modify the existing software and result in additional functionality are capitalized and amortized over their useful lives, generally not to exceed three years. These costs consist of outside professional fees related to the development of our systems. The Company capitalized $1.3 million, $0.6 million, and $0.6 million, of development costs for the years ended December 31, 2006, 2005 and 2004, respectively.

Chargebacks

The Company has established an allowance for chargebacks on credit and debit card cash advance transactions based upon past experience with losses arising from disputed charges by customers. Management periodically reviews the recorded balance to ensure the recorded amount adequately covers the expected losses to be incurred from disputed charges. The recorded allowance for chargebacks is included within accrued expenses on the consolidated balance sheets and had a balance of $0.5 million and $0.5 million as of December 31, 2006 and 2005, respectively. The Company expensed $0.3 million, $0.8 million, and $0.1 million in chargeback losses on credit and debit card cash advance transactions for the years ended December 31, 2006, 2005, and 2004, respectively.

Net Warranty Liability

The net warranty liability represents the cost to cover the estimated unreceived and uncollectible returned checks that TeleCheck has warranted as of December 31, 2006 and 2005. GCA is obligated to reimburse TeleCheck for all warranted items paid on the Company’s behalf. The Company had $0.5 million accrued for net warranty liability as of December 31, 2006 and 2005.

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To determine the net warranty liability, the Company determines the estimated gross warranty liability by applying the historical reimbursement percentage to the actual warranted checks for the month. The historical loss rate on reimbursed items is then applied to the difference between the estimated gross warranty liability and the actual warranty reimbursements processed within the month to arrive at the net warranty liability.

The Company evaluates the recorded balance of the net warranty liability on a monthly basis to ensure that the recorded amount adequately covers the expected expense that will arise in future periods from losses on warranty presentments. The Company evaluates this accrual for adequacy based upon the expected warranty presentments compared to the revenue recorded for the comparable periods.

Fair Values of Financial Instruments

The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument.

The carrying amount of cash and cash equivalents, other receivables, net, settlement receivables and settlement liabilities approximates fair value due to the short-term maturities of these instruments. The fair value of GCA’s borrowings are estimated based on quoted market prices for the same issue or in instances where no market exists the quoted market prices for similar issues with similar terms are used to estimate fair value. The fair values of all other financial instruments, including amounts outstanding under the ATM funding agreements, approximate their book values as the instruments are short-term in nature or contain market rates of interest. The following table presents the fair value and carrying value of GCA’s borrowings (amounts in thousands):

	Fair Value		Carrying Value
December 31, 2006:
Senior secured credit facility (1)	$	121,730	$	121,730
Senior subordinated notes	$	159,815	$	152,750
December 31, 2005:
Senior secured credit facility	$	170,770	$	168,662
Senior subordinated notes	$	162,488	$	152,750

(1) - GCA completed the financing pursuant to the Second Amended and Restated Credit Facility in November 2006. Due to proximity to year end, the fair value of this debt has been estimated to be equal to the par value.

Revenue Recognition

The Company recognizes revenue when evidence of an arrangement exists, services have been rendered, the price is fixed or determinable and collectibility is reasonably assured. The Company evaluates its revenue streams for proper timing of revenue recognition.

Cash advance revenue is comprised of the fee charged to patrons for credit and debit card cash advances. Revenue recognition occurs at the point an IPS check is generated by the gaming establishment cage for the patron’s transaction or cash is dispensed from an ATM.

ATM revenue is comprised of upfront patron transaction fees or surcharges assessed at the time the transaction is initiated and a percentage of interchange fees paid by the patron’s issuing bank. These issuing banks share the interchange revenue (reverse interchange) with GCA to cover the cost incurred by GCA to acquire the ATM transaction. Upfront patron transaction fees are recognized when a transaction is initiated and reverse interchange is recognized on a monthly basis based on the total transactions occurring during the month.

In general, check service revenue is comprised of a fee based upon a percentage of the face amount of total checks warranted, and is recognized on a monthly basis.

Credit reporting revenue is based upon either a flat monthly unlimited usage fee or a variable fee structure driven by the volume of patron credit histories generated. This revenue is recognized on a monthly basis based on the total transactions occurring during the month. Revenue derived from our patron marketing products and services is recognized upon completion of services.

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Cost of Revenues (Exclusive of Depreciation and Amortization)

The cost of revenues (exclusive of depreciation and amortization) represent the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are commissions paid to gaming establishments, interchange fees paid to credit and debit card networks, transaction processing fees to our transaction processor and check cashing warranties.

Advertising Costs

The Company expenses advertising costs as incurred. Total advertising expense, included in operating expenses in the consolidated statements of income, was $0.6 million, $1.2 million, and $0.7 million for the years ended December 31, 2006, 2005, and 2004, respectively.

Income Taxes

As a result of the change in tax classification resulting from the conversion of the Company’s organization as a limited liability company to a corporation in 2004, the Company is no longer a pass-through entity for U.S. income tax purposes. Income tax expense includes U.S. and international income taxes, plus the provision for U.S. taxes on undistributed earnings of international subsidiaries not deemed to be permanently invested. Since it is management’s practice and intent to reinvest the earnings in the international operations of our foreign subsidiaries, U.S. federal income taxes have not been provided on the undistributed earnings of those subsidiaries. Some items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes.

Foreign Currency Translation

Foreign currency denominated assets and liabilities for those foreign entities for which the local currency is the functional currency are translated into U.S. dollars based on exchange rates prevailing at the end of each year. Revenues and expenses are translated at average exchange rates during the year. The effects of foreign exchange gains and losses arising from these translations are included as a component of other comprehensive income on the consolidated statements of income. Translation adjustments on intercompany balances of a long-term investment nature are recorded as a component of accumulated other comprehensive income on the Company’s consolidated balance sheets.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in consolidated financial statements and accompanying notes. Significant estimates incorporated in the consolidated financial statements include the estimated useful lives for depreciable and amortizable assets, estimated cash flows in assessing the recoverability of long-lived assets, and estimated liabilities for warranty expense, chargebacks, litigation, claims and assessments. Actual results could differ from these estimates.

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Earnings Applicable to Common Stock

In accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 128, Earnings per Share, basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflect the effect of potential common stock, which consists of convertible preferred stock and assumed stock option exercises. The weighted-average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows at December 31, (amounts in thousands):

	2006		2005		2004
Weighted average number of common shares outstanding — basic		81,641		45,643		32,175
Potential dilution from conversion of preferred shares		—		28,551		39,325
Potential dilution from equity grants (1)		280		292		66
Weighted average number of common shares outstanding — diluted		81,921		74,486		71,566

(1) — The potential dilution excludes stock options to acquire 4,016,684, 3,786,640, and 655,731 shares of common stock at December 31, 2006, 2005 and 2004, respectively, and 554,076 shares of unvested restricted stock at December 31, 2006 as the application of the treasury stock method, as required by SFAS No. 128, makes them anti-dilutive.

Stock-Based Compensation

On January 1, 2006, the Company adopted the Financial Accounting Standards Board (“FASB”) SFAS No. 123(R), Share Based Payment (“SFAS No. 123(R)”), and SEC Staff Accounting Bulletin No. 107, Share-Based Payment (“SAB No. 107”). SFAS No. 123(R) is a revision of SFAS No. 123, and supersedes Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, (“APB No. 25”) and its related implementation guidance. This statement addresses all forms of share-based payment awards including shares issued under employer stock purchase plans, stock options, restricted stock, and stock appreciation rights.

Under SFAS No. 123(R) and SAB No. 107, share-based payment awards result in a cost that will be measured at fair value on the award’s grant date. Stock options expected to be exercised currently and in future periods are measured at fair value using the Black-Scholes model with the expense associated with these awards being recognized on the straight-line basis over the awards’ vesting period. Forfeitures are estimated at the time of grant, with such estimate updated periodically and with actual forfeitures recognized currently to the extent they differ from the estimates. The Company is using the modified prospective transition method and accordingly, prior period amounts have not been restated.

Through December 31, 2005, as permitted by SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of FASB Statement No. 123, the Company followed the provisions of APB No. 25 and related interpretations in accounting for its employee stock-based compensation. Accordingly, the intrinsic value method is used to determine the compensation expense recognized. No compensation expense was recognized because the exercise price of the stock options was equal to the market price of the stock on the date of grant.

The adoption of SFAS No. 123(R) resulted in incremental stock-based compensation expense. For the year ended December 31, 2006, the incremental stock-based compensation expense caused income before income tax provision and minority loss to decrease by $9.1 million and net income to decrease by $6.8 million. For the year ended December 31, 2006, basic and diluted earnings per share were decreased by $0.08 per share. In addition, SFAS No. 123(R) requires the excess tax benefits from stock option exercises, tax deductions in excess of the tax benefits recorded for compensation cost recognized, to be classified as a financing activity. There were no excess tax benefits recognized in 2006 because of the utilization of our net operating loss carryforward.

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The following table illustrates the effect on the net income if the Company had applied the fair-value recognition provisions of SFAS No. 123 to the options granted to our employees and recorded the compensation expense, for the years ended December 31, 2005 and 2004 (amounts in thousands):

	2005		2004
Net income, as reported	$	22,591	$	254,555
Less: total stock-based compensation determined under fair-value based method for all awards, net of tax		3,870		206
Pro forma net income	$	18,721	$	254,349
Earnings per share:
Basic, as reported	$	0.49	$	7.91
Basic, pro forma	$	0.41	$	7.91
Diluted, as reported	$	0.30	$	3.56
Diluted, pro forma	$	0.25	$	3.56

The estimated per share weighted-average fair value of stock options granted during 2006, 2005 and 2004 was $7.33, $7.27 and $4.27, respectively. We have estimated the fair value of options granted at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions in the years ended December 31,:

	2006			2005			2004
Risk-free interest rate		4.8	%		3.8	%		4.4	%
Expected life of options (in years)		6.3			6.0			6.0
Expected volatility of Holdings’ stock price		37.3	%		50.0	%		50.0	%
Expected dividend yield		0.0	%		0.0	%		0.0	%

The expected life (estimated period of time outstanding) of options granted was estimated using the expected exercise behavior of employees. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility was based on an estimate of the volatility for similar companies within our industry. The expected dividend yield is based on historical information, that the Company did not have dividends in prior years.

Stock-based compensation related to time-based restricted shares is calculated based on the closing market price of the Company’s common stock on the date of grant, reduced by the present value of dividends expected to be paid, if any, on the Company’s common stock prior to vesting of the restricted stock. The Company granted 619,747 shares of common stock to employees and non-employees directors in 2006. The weighted-average per share fair value of these time-based restricted stock grants was $16.95 per share during the year ended December 31, 2006.

Arriva

The Arriva Card is a private-label revolving credit card that provides gaming patrons with access to credit in gaming establishments. Pursuant to the Receivables Sale Agreement and the Revolving Loan Product Program Agreement entered into in March 2006 between CIT and Arriva, CIT is the legal issuer of the Arriva Card marketed by Arriva.

When a customer uses the Arriva Card for a transaction, CIT extends credit to the patron for the face amount of transaction and the fee charged by the gaming establishment and acquires the receivable from the customer. On a monthly basis, CIT is entitled to receive Interim Interest, which is a fee based on the average balance of receivables multiplied by an interest rate. The interest rate is computed based upon the Holding Period. As of December 31, 2006, the interest is determined as the one-month London InterBank Offered Rate (“LIBOR”) plus 225 basis points, or approximately 7.6 %. During the year ended December 31, 2006, Arriva incurred $0.1 million in Interim Interest which is included in cost of revenues (exclusive of depreciation and amortization) in the consolidated income statements. Arriva has the option to purchase the originated receivable from CIT at any time between three and 180 days from the date the customer first borrows using the card. CIT has the right to require Arriva to purchase any receivables that have a first payment default, cardholder death or bankruptcy during the first 180 days from acquisition, and CIT will require Arriva to purchase the net amount of all such receivables 180 days after acquisition. Arriva is entitled to receive all fees and interest income associated with the receivable. These are included within other revenues in the consolidated statements of income and the receivables from patrons for this revenue are recorded as part of other receivables, net in the consolidated balance sheets.

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As of December 31, 2006, CIT had $9.9 million in outstanding receivables from transactions performed on Arriva Cards. For the year ended December 31, 2006, Arriva has purchased $0.1 million in receivables from CIT for customer receivables that have had a first payment default, cardholder death or bankruptcy during the first 180 days from acquisition.

Additionally, Arriva is required to pay CIT an origination fee for the extension of credit on receivables. This origination fee is computed as the principal amount of the extension of credit multiplied by 0.25%. In the first year of the program Arriva is committed to paying $100 thousand in minimum origination fees. In each subsequent year, this minimum origination fee is increased to $200 thousand.

Recently Issued Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R), which establishes accounting standards for all transactions in which an entity exchanges its equity instruments for goods and services. We adopted SFAS No. 123(R) on January 1, 2006. SFAS No. 123(R) requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the date of the grant. The standard requires grant date fair value to be estimated using either an option-pricing model, which is consistent with the terms of the award, or a market observed price, if such a price exists. Such cost must be recognized over the period during which an employee is required to provide service in exchange for the award, that is, the requisite service period (which is usually the vesting period). The standard also requires us to estimate the number of instruments that will ultimately be issued, rather than accounting for forfeitures as they occur. As a result of adopting SFAS No. 123(R) in 2006 we recognized $7.0 million of non-cash stock option expense, which is recorded in operating expenses in the 2006 consolidated statements of income.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, amending APB 29 (“SFAS No. 153”), which treated nonmonetary exchanges of similar productive assets as an exception from fair value measurement. SFAS No. 153 replaces this exception with a general exception from fair value measurement for exchanges of nonmonetary assets that do not have commercial substance. Nonmonetary exchanges have commercial substance if the future cash flows of an entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company adopted this standard in 2006 and it did not have a material impact on our results of operations, financial position or cash flows.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (“SFAS No. 154”), requiring retrospective application to prior-period financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS No. 154 also redefines “restatement” as the revising of previously issued financial statements to reflect correction of errors made. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company adopted SFAS No. 154 in 2006 and it did not have a material impact on our results of operations, financial position or cash flows.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets — an amendment of SFAS No. 140 (“SFAS No. 156”). This Statement requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract; requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable; permits an entity to choose either of the Amortization or Fair Value subsequent measurement methods for each class of separately recognized servicing assets and servicing liabilities; and requires separate presentation of servicing assets and servicing liabilities measured at fair value in the statement of financial position. SFAS No. 156 is effective for fiscal years beginning after September 15, 2006. The Company adopted SFAS No. 156 on January 1, 2007 with no material effect on the consolidated financial statements.

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In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 provides guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition of tax positions. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), which clarifies the definition of fair value whenever another standard requires or permits assets or liabilities to be measured at fair value. Specifically, the standard clarifies that fair value should be based on the assumptions market participants would use when pricing the asset or liability, and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS No. 157 does not expand the use of fair value to any new circumstances. SFAS No. 157 also requires expanded financial statement disclosures about fair value measurements, including disclosure of the methods used and the effect on earnings. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB No. 108”). SAB No. 108 eliminates the diversity in practice surrounding how public companies quantify financial statement misstatements and establishes an approach that requires quantification and assessment of misstatements based on the effects of the misstatements on each of the Company’s financial statements and the related footnote disclosures. Adoption of SAB No. 108 by the Company, which was effective for fiscal years ending after November 15, 2006, did not have a material impact on the consolidated financial statements.

3. ATM FUNDING AGREEMENTS

Bank of America Amended Treasury Services Agreement

On March 8, 2004, GCA entered into an Amendment of the Treasury Services Agreement with Bank of America, N.A. that allowed for the Company to utilize up to $300 million in funds owned by Bank of America to provide the currency needed for normal operating requirements for the Company’s ATMs. The amount provided by Bank of America can be increased above $300 million at the option of Bank of America. At December 31, 2006 and 2005, the outstanding balance of ATM cash utilized by GCA from Bank of America was $396.8 million and $377.1 million, respectively. For use of these funds, the Company pays Bank of America a cash usage fee equal to the average daily balance of funds utilized multiplied by the one-month LIBOR rate plus 25 basis points. For the years ended December 31, 2006, 2005 and 2004, the cash usage fees incurred by the Company were $15.7 million, $10.2 million and $5.7 million, respectively. The cash usage fee is included within interest expense on the Company’s consolidated statements of income. The rate in effect at December 31, 2006, to compute the cash usage fee was 5.67%.

The Company is required to maintain insurance to protect the Company and Bank of America from risk of loss on the cash utilized in the ATMs. The Company is self insured related to this risk. For the years ended December 31, 2006, 2005, and 2004 the Company has incurred no losses related to this self insurance.

Site Funded ATMs

The Company operates ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. GCA is required to reimburse the customer for the amount of cash dispensed from these Site Funded ATMs. The Site Funded ATM liability is included within settlement liabilities in the accompanying consolidated balance sheets and was $53.7 million and $16.6 million as of December 31, 2006 and 2005, respectively. The Company operated 626 and 203 ATMs, respectively, at those Site Funded ATMs.

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4. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements consist of the following as of December 31, (in thousands):

	2006			2005
ATM equipment	$	44,866		$	32,505
Cash advance equipment		6,733			5,405
Office, computer and other equipment		2,791			2,274
Leasehold and building improvements		2,226			2,150
		56,616			42,334
Less accumulated depreciation		(36,162	)		(31,755	)
Total	$	20,454		$	10,579

5. BENEFIT PLANS

Defined Contribution Plan

The Company has a retirement savings plan (the “401(k) Plan”) under Section 401(k) of the Internal Revenue Code covering its employees. The 401(k) Plan allows employees to defer up to the lesser of the Internal Revenue Code prescribed maximum amount or 100% of their income on a pre-tax basis through contributions to the plan. As a benefit to employees, the Company matches a percentage of these employee contributions. Expenses related to the matching portion of the contributions to the 401(k) plan were $0.4 million, $0.3 million and $0.3 million for the years ended December 31, 2006, 2005, and 2004, respectively.

Equity Incentive Awards

In January 2005, the Company adopted the 2005 Stock Incentive Plan (the “2005 Plan”) to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and thus to promote the success of the Company’s business. As of December 31, 2006, the Company had reserved 6,288,222 shares of common stock for the grant of stock options and other equity incentive awards under the 2005 Plan. On the first business day of each fiscal year beginning with the fiscal year commencing on January 1, 2006, annual increases will be added to the 2005 Plan equal to the lesser of: 3,800,000 shares, 3% of all outstanding shares of our common stock immediately prior to such increase, or a lesser amount determined by our Board of Directors.

The 2005 Plan is administered by the Compensation Committee but may be administered by our Board of Directors or a committee thereof. The administrator has the authority to select individuals who are to receive options or other equity incentive awards under the 2005 Plan and to specify the terms and conditions of options or other equity incentive awards granted, the vesting provisions, the term and the exercise price.

Generally, options and restricted stock granted under the 2005 Plan (other than those granted to non-employee directors) will vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest in equal portions over the following 36 months, such that all shares are vested after four years. Unless otherwise provided by the administrator, an option granted under the 2005 Plan generally expires 10 years from the date of grant. Stock options are issued at the closing market price on the date of grant.

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A summary of award activity under the Company’s 2005 Plan as of December 31, 2006 and changes during the years then ended are as follows:

	Stock Option –		Number of Common Shares
	Weighted Average								Equity Awards
	Exercise Price		Stock Options			Restricted Stock			Available
	(Per Share)		Granted			Granted			for Grant
Adoption of 2005 Plan — January 6, 2005		N/A		—			—			3,841,615
Stock options granted	$	13.99		3,504,430			—			(3,504,430	)
Stock options exercised		N/A		—			—			—
Stock options canceled	$	13.99		(147,500	)		—			147,500
Balance outstanding — December 31, 2005	$	13.99		3,356,930			—			484,685
Additional authorized shares		N/A		—			—			2,446,607
Granted	$	16.01		375,000			619,747			(994,747	)
Exercised	$	13.99		(49,709	)		(6,250	)		—
Forfeited or canceled	$	13.99		(57,086	)		(10,500	)		67,586
Balance outstanding — December 31, 2006	$	14.20		3,625,135			602,997			2,004,131

In addition to the 2005 Plan, the Company has granted our Chief Financial Officer options to acquire 722,215 shares of common stock as part of his employment agreement in 2004 (“Hagerty Option). These options have an exercise price of $8.05 per share and expire 10 years from the date of grant. Under the terms of the Hagerty Option, 25% of the shares subject to the Hagerty Option vested on July 12, 2005 and 1/48 of the shares subject to the Hagerty Option vest on the 12th day of each month thereafter. In the event of the termination of Mr. Hagerty’s employment with the Company without “cause” or for “good reason”, all of the shares subject to the Hagerty Option shall immediately vest. In addition, all of the shares subject to the Hagerty Option will immediately vest upon the acquisition or change in control of the Company.

During 2006, Mr. Hagerty exercised vested options to acquire 100,000 shares of common stock. At December 31, 2006, there are options to acquire 622,215 shares of common stock outstanding under the Hagerty Option.

Stock Options

Stock options granted typically vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest in equal portions over the following 36 months, such that all shares are vested after four years and allow the option holder to purchase stock over specified periods of time, generally ten years, from the date of grant, at a fixed price equal to the market value on date of grant.

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The following tables summarize additional information regarding the options that have been granted under the 2005 Plan and the option grants to our Chief Financial Officer upon commencement of his employment in 2004:

	Number of			Weighted Avg.		Weighted
	Common			Exercise Price		Average Life	Aggregate
	Shares			(Per Share)		Remaining	Intrinsic Value
Balance outstanding — December 31, 2004		722,215		$	8.05
Granted		3,504,430		$	13.99
Exercised		—			N/A
Canceled		(147,500	)	$	13.99
Balance outstanding — December 31, 2005		4,079,145		$	12.94		$	27,502
Granted		375,000		$	16.01
Exercised		(149,709	)	$	10.02
Canceled		(57,086	)	$	13.99
Balance outstanding — December 31, 2006		4,247,350		$	13.30	8.2 years	$	29,103
Balance exercisable — December 31, 2006		1,804,324		$	12.90	8.0 years	$	12,281

	Options Outstanding					Options Exercisable
			Weighted
			Average	Weighted				Weighted
			Remaining	Average				Average
	Number		Contract	Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		Life	Prices		Exercisable		Price
$8.05		622,215	7.7 years	$	8.05		336,338	$	8.05
$13.00 - $13.99		3,180,135	8.1 years	$	13.99		1,436,736	$	13.99
$14.00 - $14.99		110,000	8.8 years	$	14.07		31,250	$	14.00
$15.00 - $15.99		155,000	9.5 years	$	15.22		—		N/A
$16.00 - $16.99		115,000	9.8 years	$	16.08		—		N/A
$18.00 - $18.99		65,000	9.3 years	$	18.94		—		N/A
		4,247,350					1,804,324

The weighted-average grant-date fair value per share of the options granted during the years ended December 31, 2006, 2005 and 2004 was $7.33, $7.27 and $4.27, respectively.

During the year ended December 31, 2006, we received $1.5 million in cash from the exercise of stock options. The total intrinsic value of options exercised during the year ended December 31, 2006, was $0.8 million. During the year ended December 31, 2006, we recorded $7.0 million in non-cash compensation expense related to options granted that are expected to vest. As of December 31, 2006, there was $14.4 million in unrecognized compensation expense related to options expected to vest. That cost is expected to be recognized on a straight-line basis over a weighted average period of 2.15 years. There were no stock option exercises in 2005.

Restricted Stock

The Company began issuing restricted stock to employees in the first quarter of 2006. The vesting provisions are similar to those applicable to stock options. Because these restricted shares are issued primarily to employees of the Company, many of the shares issued will be withheld by the Company to satisfy the statutory withholding requirements applicable to the restricted stock grants. Therefore, as these awards vest the actual number of shares outstanding as a result of the restricted stock awards is reduced. Prior to vesting, the restricted stock has rights to the dividends declared and voting rights, therefore they are considered issued and outstanding.

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In March 2006, the Company awarded 619,747 shares of time-based restricted common stock to employees. These shares will vest over a period of four years. A summary of non-vested share awards for the Company’s time-based restricted shares as of December 31, 2006 and changes during the year is as follows:

				Weighted
	Shares			Average Grant
	Outstanding			Date Fair Value
Balance — December 31, 2005		—			—
Granted		619,747		$	16.95
Vested		(6,250	)	$	16.95
Canceled		(10,500	)	$	16.95
Balance — December 31, 2006		602,997		$	16.95

During the year ended December 31, 2006, 6,250 shares of time-based restricted shares vested. There were no time-based restricted shares vested during the years ended December 31, 2005 or 2004. During the years ended December 31, 2006, we recorded $2.1 million in non-cash compensation expense related to the restricted stock granted that is expected to vest. As of December 31, 2006, there was $7.7 million in unrecognized compensation expense related to time-based restricted shares expected to vest. That cost is expected to be recognized on a straight-line basis over a weighted average period of 3.1 years.

On February 6, 2007, our Board of Directors approved the grant of an additional 0.7 million shares of restricted stock to employees and certain non-employee members of the Company’s Board of Directors. These shares will vest over a four year period. The total value of the award at the date of grant is $11.3 million.

6. COMMITMENTS AND CONTINGENCIES

Lease Obligations

The Company leases office facilities and operating equipment under cancelable and noncancelable agreements. Total rent expense was approximately $0.5 million, $0.5 million, and $0.6 million, for the years ended December 31, 2006, 2005, and 2004, respectively.

At December 31, 2006, the minimum aggregate rental commitment under all non-cancelable operating leases for the years then ending was (in thousands):

2007	$	518
2008		499
2009		475
2010		475
2011		159
Thereafter		—
Total	$	2,126

Litigation Claims and Assessments

The Company is threatened with or named as a defendant in various lawsuits in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that the final resolution of any threatened or pending litigation is not likely to have a material adverse effect on the financial position, results of operations or cash flows of the Company.

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Canadian Goods and Services Tax (“GST”). In April 2004, CashCall was notified through one of its customers that the Canadian Revenue Agency (“CRA”) Appeals Division had taken a position, on audit of the customer’s two locations, that the customer was liable for GST tax on commissions it received in connection with the cash advance services provided by CashCall. The CRA’s position is disputed by both CashCall and the customer based upon their interpretation of the Canadian Excise Tax Act (“ETA”). Under the ETA, a supply of goods or services is taxable unless it is specifically identified as an exempt transaction specifically in the ETA. Included within this listing of exempt transactions are “financial services” transactions.

The preliminary position taken by CRA is that the advancement of funds by the gaming establishment to gaming patrons in consideration for receipt of a negotiable instrument issued by CashCall is not an exempt financial services transaction. Therefore, the ETA would require the customer to collect Goods and Services Tax (“GST”) from CashCall and remit it to the CRA. On audit the CRA assessed GST of $0.6 million on one of the customer’s locations and $1.1 million on the other customer location. In December 2004, the Company paid the amount assessed to the customer, and the customer remitted the tax to the CRA. In February 2005, the Company filed a refund claim for taxes paid in error with CRA. This claim was denied as expected, and the Company is currently defending the rebate claim through the assessment process, the appeals process and then through court, if necessary.

The Company believes the transactions performed in Canada are financial services transactions specifically exempted by the ETA and therefore not GST taxable. As the Company has paid these obligations and as there is uncertainty related to the ability to recover these amounts through the refund claim and appeals process, the Company has deemed it appropriate to expense this payment and accrue for a liability related to future payments for this customer. Accordingly, in the years ended December 31, 2006 and 2005, the Company has recorded $43 thousand and $83 thousand, respectively, in operating expenses related to this potential tax exposure in the accompanying consolidated income statements.

Compliance Letters from MasterCard International, Inc. and Visa U.S.A. In the normal course of business, the Company routinely receives letters from MasterCard International, Inc. and Visa U.S.A. (the “Associations”) regarding non-compliance with various aspects of the respective Associations bylaws and regulations as they relate to transaction processing. The Company is periodically involved in discussions with its sponsoring bank and the Associations to resolve these issues. It is the opinion of management that all of the issues raised by the Associations will be resolved in the normal course of business and related changes to the bankcard transaction processing, if any, will not result in material adverse impact to the financial results of the Company.

Patent Infringement Litigation. On October 22, 2004, we and USA Payments, as co-plaintiffs, filed a complaint in United States District Court, District of Nevada against U.S. Bancorp d/b/a U.S. Bank, Certegy Inc., Certegy Check Services, Inc., Game Financial Corporation and GameCash, Inc. alleging the infringement of the patented “3-in-1 rollover” functionality. In this litigation, we were seeking an injunction against future infringement of the patent and recovery of damages as a result of past infringement of the patent. Effective August 31, 2006, all ongoing lawsuits between us, U.S. Bancorp d/b/a U.S. Bank, Certegy Inc., Certegy Check Services, Inc., Game Financial Corporation and GameCash, Inc. were settled. The parties entered into a confidential Settlement and Patent License Agreement and Release, whereby no party is obligated to pay money and the claims and counterclaims were released.

Commitments

Registration Agreement. The Company and some of its stockholders are party to a Registration Agreement. The Registration Agreement provides the stockholders with rights to cause the Company to register their shares of Common Stock on a registration statement filed with the Securities and Exchange Commission. Under the terms of this agreement, some holders of registration rights may require the Company to file a registration statement under the Securities Act at the Company’s expense with respect to their shares of Common Stock. Under this agreement, the Company has agreed to bear all registration and offering expenses (other than underwriting discounts and commissions and fees), and specific fees and disbursements of counsel of the holders of registration rights. The Company has agreed to indemnify the holders of registration rights against specific liabilities under the Securities Act.

USA Payments Processing Commitments. The Company obtains transaction processing services from USA Payments, a company controlled by the principals of M&C, pursuant to the Amended and Restated Agreement for Electronic Payment Processing. Under terms of this agreement, GCA is obligated to pay USA Payments $2.3 million annually in fixed monthly processing fees and minimum annual transaction volume fees through the termination of this agreement in March 2014.

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Arriva Origination Commitments. Arriva entered into separate agreements with CIT and with Fiserv Solutions, Inc. (“Fiserv”), which were effective March 14, 2006 and August 10, 2006, respectively. These agreements govern the issuance, underwriting and processing of our private label credit card. Under the terms of the agreements with CIT, Arriva is committed to pay CIT a minimum of $0.2 million in consumer origination fees and $0.1 million in other operating expenses during the first 18 months of the term. After meeting these commitments, Arriva may cancel these agreements at any time during the first 18 months of the term without any additional penalty. Under the terms of the agreement with Fiserv, Arriva is also committed to pay $0.5 million in monthly operating expenses if the arrangement is terminated during the first 18 months of the term.

Innovative Funds Transfer, LLC Required Capital Investment. Pursuant to the terms of our agreement with International Game Technology (“IGT”), we are obligated to invest up to our pro rata share of $10.0 million in capital to IFT. Our obligation to invest additional capital in IFT is conditioned upon capital calls, which are in our sole discretion. As of September 30, 2006, we had invested a total of $4.0 million in IFT, and are committed to invest up to $2.0 million in additional capital investments if required.

First Data Sponsorship Indemnification Agreement. On March 10, 2004, GCA and First Data entered into a Sponsorship Indemnification Agreement whereby First Data agreed to continue their guarantee of performance for us to Bank of America for our sponsorship as a Bank Identification Number and Interbank Card Association licensee under the applicable VISA and MasterCard rules. GCA has agreed to indemnify First Data and its affiliates against any and all losses and expenses arising from its indemnification obligations pursuant to that agreement. As collateral security for prompt and complete performance if GCA’s obligations under this agreement GCA was required to cause a letter a credit in the amount of $3.0 million to be issued to First Data to cover any indemnified amounts not paid under terms of this agreement. The required amount of this letter of credit will be adjusted annually based upon the underlying cash advance volume covered by the Sponsorship Indemnification Agreement.

7. BORROWINGS

Senior Secured Credit Facility

On November 1, 2006, GCA and Holdings entered into a Second Amended and Restated Credit Agreement with certain lenders, Bank of America, N.A., as Administrative Agent and Wachovia Bank, N.A., as Syndication Agent, (the “Second Amended and Restated Credit Agreement”).

The Second Amended and Restated Credit Agreement significantly amended and restated the terms of GCA’s existing senior secured credit facilities to provide for a $100.0 million term loan facility and a $100.0 million five-year revolving credit facility, with a $25.0 million letter of credit sublimit and a $5.0 million swingline loan sublimit. The Second Amended and Restated Credit Agreement also contains an increase option permitting GCA to arrange with existing lenders and/or new lenders to provide up to an aggregate of $150.0 million in additional term loan or revolving credit commitments.

Borrowings under the Second Amended and Restated Credit Agreement bear interest at LIBOR plus an Applicable Margin which is based on the Company’s Senior Leverage Ratio (as defined). At December 31, 2006, the Applicable Margin was 137.5 basis points and the effective rate of interest was 6.70%. Principal, together with accrued and unpaid interest, is due on the maturity date, November 1, 2011. GCA may prepay the loans and terminate the commitments at any time, without premium or penalty, subject to certain qualifications set forth in the agreement. Furthermore, the Second Amended and Restated Credit Agreement contains mandatory prepayment provisions which, under certain circumstances, obligate GCA to apply portions of its Excess Cash Flow (as defined) to prepayment of the senior secured credit facilities.

As of December 31, 2006, the scheduled quarterly amortization payments on the term loan portion of the Second Amended and Restated Credit Agreement are $250 thousand through September 30, 2010 with the remaining balance of the term loan and any outstanding amounts under the revolving credit loans due to be repaid on November 1, 2011.

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Pursuant to the Second Amended and Restated Credit Agreement, the senior secured credit facility continues to be secured by substantially all of the assets of the Company, GCA and GCA’s wholly-owned domestic subsidiaries other than Arriva, and will continue to be guaranteed by the Company and all of GCA’s wholly-owned domestic subsidiaries other than Arriva.

The Second Amended and Restated Credit Agreement contains customary affirmative and negative covenants, financial covenants, representations and warranties and events of defaults, which are subject to important exceptions and qualifications, as set forth in the Second Amended and Restated Credit Agreement. Additionally, we have a covenant related to our allowable capital expenditures. The Company believes it was in compliance with all of its debt covenants that were applicable as of December 31, 2006.

As of December 31, 2006, the Company had $100.0 million in borrowings under the term loan, $21.7 million under the revolving portion and $3.1 million in letters of credits issued and outstanding. The letters of credits issued and outstanding reduce amounts available under the revolving portion of the Second Amended and Restated Credit Agreement.

Prior to November 1, 2006, the Company’s senior secured credit facility was provided pursuant to the Amended and Restated Credit Agreement (the “First Amended and Restated Credit Agreement”). This facility provided for a term loan portion of borrowings and a revolving loan portion of borrowings. As of December 31, 2005, the Company had $168.6 million in borrowings under the term loan and $3.1 million in letters of credits issued and outstanding, which reduced amounts available under the revolving portion of the First Amended and Restated Credit Agreement. Interest expense, under the terms of the First Amended and Restated Credit Agreement, was generally determined based upon LIBOR plus an applicable margin. As of December 31, 2005, the applicable margin was 175 basis points and the interest rate applicable to the term loan was 6.64%.

Senior Subordinated Notes

On March 10, 2004, GCA completed a private placement offering of $235 million 8.75% Senior Subordinated Notes due March 15, 2012 (the “Notes Offering”). On October 14, 2004, we completed an exchange offer of the notes for registered notes of like tenor and effect. The Notes Offering resulted in proceeds to the Company of $228.3 million net of issuance costs and offering expenses. Interest on the notes accrues based upon a 360-day year comprised of twelve 30-day months and is payable semiannually on March 15th and September 15th. Proceeds of the Notes Offering were utilized to finance in part the Restructuring of Ownership and pay related fees and expenses.

All of the Company’s existing and future domestic wholly owned subsidiaries are guarantors of the notes on a senior subordinated basis. Under terms of the indenture, up to 35% of these notes may be redeemed before March 15, 2007, at a price of 108.75% of face, out of the net proceeds from an equity offering. In October 2005, the Company redeemed $82.25 million of these notes plus $7.2 million of redemption premium, with the proceeds of its initial public offering (“IPO”) of equity securities (see discussion on initial public offering in Note 8). The Company may redeem all or a portion of the notes at redemption prices of 104.375% on or after March 15, 2008, 102.188% on or after March 15, 2009 or 100.000% on or after March 15, 2010.

As of December 31, 2006 and 2005, the Company had $152.8 million in borrowings outstanding under the Notes Offering.

Loss on Early Extinguishment of Debt

In November 2006, completion of the refinancing related to the Second Amended and Restated Credit Agreement resulted in the write-off of $3.4 million, representing all of the remaining capitalized deferred financing costs associated with the First Amended and Restated Credit Agreement. These amounts have been included within the loss on early extinguishment of debt.

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In October 2005, the Company completed the redemption of $82.25 million of the senior subordinated notes. The redemption premium of $7.2 million and the write-off of the $2.3 million of capitalized debt issuance costs associated with this portion of the senior subordinated notes have been included within the loss on early extinguishment of debt.

Minimum Aggregate Repayment Schedule

At December 31, 2006, the minimum aggregate repayment (excluding excess cash flow payments) for all borrowings for the years then ending was (in thousands):

2007	$	1,000
2008		1,000
2009		1,000
2010		1,000
2011		117,730
Thereafter		152,750
Total	$	274,480

At December 31, 2006, the Company believes it is in compliance with all debt covenants related to the Second Amended and Restated Credit Agreement and the Senior Subordinated Notes.

8. CAPITAL STOCK

In September 2005, the Company completed an initial public offering of 16,064,157 shares of common stock at $14.00 per share. Existing stockholders sold 7,064,157 of these shares and the remaining 9,000,000 shares were sold by the Company. In October 2005, the underwriters exercised their option to purchase an additional 1,053,568 shares of stock from the Company and 1,165,656 shares of stock from the existing stockholders. The net proceeds to the Company from this combined equity offering were $130.9 million after deducting underwriting discounts. On October 31, 2005, the Company used $90.3 million of the net proceeds to repay $82.25 million of Senior Subordinated Notes and to pay a redemption premium and accrued interest on the repaid notes. Also on October 31, 2005, the Company used $20.0 million of the IPO proceeds to repay $20.0 million of the term loan portion of the First Amended and Restated Credit Agreement.

Preferred Stock. The amended and restated certificate of incorporation allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences.

Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non-cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non-assessable. As of December 31, 2006 we had 82,312,524 shares of common stock outstanding (including 602,997 shares of nonvested restricted stock) and had no shares of preferred stock outstanding.

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Common Stock Repurchase Program. On February 6, 2007, the Company’s Board of Directors authorized the repurchase of up $50.0 million of the Company’s issued and outstanding common stock, subject to compliance with any contractual limitations on such repurchases under the Company’s financing agreements in effect from time to time, including but not limited to those relating to the Company’s senior secured indebtedness and senior subordinated notes.

9. RELATED PARTY TRANSACTIONS

M&C International (“M&C”) is the owner of approximately 23.5% of the outstanding equity interests of the Company. Two members of our Board of Directors are principals of M&C. The Company made payments for software development costs and system maintenance to Infonox on the Web (“Infonox”) pursuant to agreements with Infonox. At the time we entered into these agreements and during the periods presented, Infonox was controlled by the principals of M&C and family members of one of our directors. These family members now own approximately 60% of the ownership interests, and hold two of the three director seats, of Infonox. The software development costs are capitalized and reflected in intangible assets in the consolidated balance sheets and the system maintenance is classified in operating expenses in the consolidated statements of income.

On October 9, 2006, GCA and Infonox, entered into a Joint Amendment to the Amended and Restated Software License Agreement and the Consulting Agreement that have been in effect since May 31, 2000 (collectively the “Infonox Agreements”). Under terms of the Infonox Agreements, both parties have agreed that they will comply with and adhere to the payment card industry (“PCI”) data security standard (“DSS”) in effect from time to time and shall implement and maintain appropriate measures designed to meet the objectives of PCI DSS.

The Company obtains transaction processing services from USA Payments, a company controlled by the principals of M&C, pursuant to the Amended and Restated Agreement for Electronic Payment Processing. Under terms of this agreement, GCA pays a fee to USA Payments for transaction processing services, which is reflected in cost of revenues (exclusive of depreciation and amortization), and pays other directly identifiable operating expenses that are included within operating expenses in the consolidated statements of income. Pursuant to this agreement, GCA is obligated to pay USA Payments a monthly fixed processing fee and transaction fees that total $2.3 million annually through the termination of this agreement in March 2014. Additionally, we reimburse USA Payments for invoices related mainly to gateway fees and other processing charges incurred on behalf of the Company from unrelated third parties. These expenses are also classified as part of cost of revenues (exclusive of depreciation and amortization). In September 2005, the Company acquired the 3-in-1 patent from USA Payments for $10.0 million.

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The following table represents the transactions with related parties for the years ended December 31, (amounts in thousands):

Description of Transaction	2006			2005			2004
Infonox on the Web:
Software development costs and maintenance expense	$	1,976		$	1,588		$	1,624
USA Payments & USA Payments Systems:
Transaction processing charges		2,908			2,835			2,513
Pass through billing related to gateway fees, telecom and other items		1,312			1,206			1,533
Sublease income earned for leasing out corporate office space for backup servers		(18	)		(18	)		(18	)
Acquisition of 3-in-1 Patent		—			10,000			—

The following table details the amounts receivable from or (liabilities to) these related parties that are recorded as part of other receivables, net, accounts payable or accrued expenses in the consolidated balance sheets as of December 31, (amounts in thousands):

	2006			2005
M&C and related companies	$	42		$	11
Total included within receivables, other	$	42		$	11
USA Payment Systems	$	(149	)	$	(345	)
Infonox on the Web		(633	)		(171	)
Total included within accounts payable and accrued expenses	$	(782	)	$	(516	)

10. INCOME TAXES

Pursuant to the Securities Purchase and Exchange Agreement, the Company was required to convert from limited liability company, which was a pass-through entity for U.S. income tax purposes, to a corporation. The conversion of the Company was completed on May 14, 2004.

The result of this conversion was to recognize deferred tax assets and liabilities from the expected tax consequences of temporary differences between the book and tax basis of the Company’s assets and liabilities at the date of conversion into a taxable entity. The net tax asset recorded was principally generated from the step up in tax basis created from the implied value of the Restructuring of Ownership and the Securities Purchase and Exchange Agreement.

For the year ended December 31, 2004, the Company recorded a net tax benefit of $212.4 million from establishing a net deferred tax asset and recording income tax expense on operations since we became a taxable entity. This benefit was estimated based upon information provided by the partners at the time of the transactions, and was updated throughout 2004 and 2005 as additional information surrounding the transaction was made known. For the year ended December 31, 2005, the Company recorded a $3.1 million income tax benefit. This adjustment was derived from information contained in the former partners’ final 2004 partnership income tax returns filed with the Internal Revenue Service in the fourth quarter of 2005.

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The following table presents the domestic and foreign components of pretax income and recorded income tax expense for the years ended December 31, (amounts are in thousands):

	2006			2005			2004
Components of pretax income:
Domestic	$	38,275		$	24,967		$	37,690
Foreign		4,890			5,438			4,306
Consolidated, before minority ownership loss	$	43,165		$	30,405		$	41,996
(Provision) benefit for income taxes:
Domestic	$	(15,585	)	$	(6,770	)	$	214,084
Foreign		(1,257	)		(1,262	)		(1,738	)
Consolidated (1)	$	(16,842	)	$	(8,032	)	$	212,346
Income tax benefit from minority ownership loss		103			79			76
(Provision) benefit for income taxes, before minority ownership loss	$	(16,739	)	$	(7,953	)	$	212,422

(1) - The consolidated (provision) benefit for income tax total includes the income tax benefit from minority ownership loss of $0.1 million for each of the years ended December 31, 2006, 2005 and 2004.

The Company’s income tax (provision) benefit consists of the following components as of December 31, (amounts are in thousands):

	2006			2005			2004
Current	$	(1,257	)	$	(1,262	)	$	(1,738	)
Deferred		(15,585	)		(6,770	)		214,084
Total (provision) benefit for income taxes	$	(16,842	)	$	(8,032	)	$	212,346

As of December 31, 2006 the Company has approximately $11.6 million accumulated federal net operating losses. The net operating losses can be carried forward and applied to offset taxable income for 20 years and will expire in 2025.

As of December 31, 2006, the Company had approximately $3.9 million in foreign tax credits available. Foreign tax credits can be offset against future taxable income subject to certain limitations for a period of 10 years. Approximately $1.9 million, $1.0 million and $1.0 million will expire in 2014, 2015 and 2016, respectively.

The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes for the years ended December 31, 2006 and 2005 are as follows:

	2006			2005
Federal statutory rate		35.00	%		35.00	%
Effect of:
Foreign provision		(0.07	)		(0.51	)
State/Province income tax		1.05			0.98
Non-deductible compensation cost		2.13			0.00
Final adjustment to 2004 incorporation tax asset		0.00			(9.95	)
Non-deductible expenses and other items		0.65			0.75
Effective tax rate		38.76	%		26.27	%

Substantially all of the difference between our statutory tax rate of 35% and our effective tax rate of (505.6)% for the year ended December 31, 2004 resulted from the recognition of the net deferred tax asset recorded in connection with our change in tax classification to a corporation in 2004.

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The following table outlines the principal components of deferred tax items at December 31, (amounts in thousands):

	2006			2005
Deferred tax assets related to:
Property, equipment and leasehold improvements	$	603		$	991
Sales allowances		3,857			1,198
Foreign tax credits		3,872			3,158
Net operating losses		3,939			7,690
Stock options FAS 123(R) expense		2,269			—
Intangibles		178,190			195,793
Total deferred income tax assets		192,730			208,830
Deferred tax liabilities related to:
Accrued expenses		(45	)		347
Other		1,034			1,007
Total deferred income tax liabilities		989			1,354
Deferred income taxes, net	$	191,741		$	207,476

Deferred taxes have not been provided on unrepatriated earnings in the amount of approximately $4.4 million of our investments in our foreign subsidiaries. These earnings are considered permanently reinvested, as it is management’s intention to reinvest foreign profits to finance foreign operations.

11. PRO FORMA INCOME TAX INFORMATION (UNAUDITED)

The pro forma unaudited income tax adjustments represent the tax effects that would have been reported had the Company been subject to U.S. federal and state income taxes as a corporation. Pro forma expenses are based upon the statutory income tax rates and adjustments to income for estimated permanent differences occurring during the period. Actual rates and expenses could have differed had the Company been subject to U.S. federal and state income taxes for all periods presented. Therefore, the unaudited pro forma amounts are for informational purposes only and are intended to be indicative of the results of operations had the Company been subject to U.S. federal and state income taxes as a corporation for all periods presented.

The following table presents the computation of the unaudited pro forma income tax expense for the year ended December 31, (amounts in thousands):

	2004
Income before income taxes, as reported	$	41,996
Effective pro forma income tax rate		36.00	%
Pro forma income tax expense	$	15,119

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12. SEGMENT INFORMATION

Operating segments as defined by SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision-making group consists of the Chief Executive Officer and Chief Financial Officer. The operating segments are reviewed separately because each represents products that can be, and often are, sold separately to our customers.

The Company operates in four distinct business segments: (i) cash advance, (ii) ATM, (iii) check services, and (iv) credit reporting services. The addition in 2006 of the Arriva Card, a private-label credit card, will likely become a separate business line when it becomes significant. Currently the Arriva operations are included in the “Other” column. Also in the “Other” lines of business category, none of which exceed the established materiality for segment reporting, include Western Union, direct marketing and IFT, among others.

These segments are monitored separately by the Chief Executive Officer and Chief Financial Officer for performance against our internal forecast and are consistent with our internal management reporting. The Company’s internal management reporting does not allocate overhead or depreciation and amortization expenses to the respective business segments. For the segment information presented below, these amounts have been allocated to the respective segments based upon relation to the business segment (where identifiable) or on respective revenue contribution.

The Company’s business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations.

Major customers— On June 13, 2005, our largest customer, Harrah’s Entertainment, Inc. (“Harrah’s”) completed its acquisition of Caesars Entertainment, Inc. (“Caesars”), another customer of ours. For the years ended December 31, 2006, 2005, and 2004, the combined revenues from all segments for this customer, assuming it had been combined for all periods presented, would have been approximately $97.9 million, $81.3 million, and $82.2 million, respectively, representing 18.1%, and 17.9% and 20.4% of the Company’s total consolidated revenues, respectively. On a historical basis, the combined revenues from all segments from Harrah’s only, for the year ended December 31, 2004, was $47.2 million, representing 11.7% of the Company’s total revenues.

On April 25, 2005, MGM MIRAGE (“MGM”) acquired Mandalay Resort Group (“Mandalay”). Prior to December 2005, the Company did not have any cash advance revenue or ATM revenue from MGM, but did provide services to Mandalay. For the years ended December 31, 2006, 2005 and 2004, the combined revenues from all segments for MGM, assuming it had been combined for all periods presented, would have been approximately $53.8 million, $30.8 million and $28.0 million, respectively, representing 9.9%, 6.8% and 7.0%, of the Company’s total consolidated revenues, respectively.

89

The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. The tables below present the results of operations, total assets, and long-lived assists by operating segment as of, and for the years ended (amounts in thousands):

	Cash						Check			Credit
	Advance			ATM			Services			Reporting			Other			Total
December 31, 2006
Revenues	$	287,053		$	221,727		$	29,166		$	8,511		$	1,691		$	548,148
Depreciation and amortization		(3,904	)		(5,283	)		(21	)		(78	)		(603	)		(9,889	)
Operating income (loss)		43,142			31,161			9,110			4,482			(2,699	)		85,196
Interest income		3,484			—			—			—			—			3,484
Interest expense		(13,842	)		(29,775	)		(1,406	)		(410	)		(82	)		(45,515	)
Income taxes		(12,771	)		(590	)		(2,981	)		(1,576	)		1,179			(16,739	)
Minority ownership loss		—			—			—			—			183			183
Net income (loss)	$	20,013		$	796		$	4,723		$	2,496		$	(1,419	)	$	26,609
December 31, 2005
Revenues	$	235,055		$	182,291		$	26,376		$	8,867		$	1,491		$	454,080
Depreciation and amortization		(4,283	)		(7,191	)		(36	)		(103	)		(496	)		(12,109	)
Operating income		41,246			28,579			7,437			4,959			63			82,284
Interest income		1,815			—			—			—			—			1,815
Interest expense		(17,569	)		(33,380	)		(1,971	)		(663	)		(111	)		(53,694	)
Income taxes		(7,401	)		2,865			(1,968	)		(1,547	)		98			(7,953	)
Minority ownership loss		—			—			—			—			139			139
Net income (loss)	$	18,091		$	(1,936	)	$	3,498		$	2,749		$	189		$	22,591
December 31, 2004
Revenues	$	209,962		$	158,433		$	23,768		$	9,368		$	1,472		$	403,003
Depreciation and amortization		(4,803	)		(7,869	)		(17	)		(364	)		(495	)		(13,548	)
Operating income		39,981			20,256			9,681			4,100			3			74,021
Interest income		1,318			—			—			—			—			1,318
Interest expense		(14,394	)		(16,576	)		(1,630	)		(642	)		(101	)		(33,343	)
Income taxes		129,020			87,434			(2,899	)		(1,245	)		112			212,422
Minority ownership loss		—			—			—			—			137			137
Net income	$	155,925		$	91,114		$	5,152		$	2,213		$	151		$	254,555

	December 31,		December 31,
Total Assets	2006		2005
Cash advance	$	359,024	$	320,688
ATM		177,278		142,626
Check services		5,310		3,886
Credit reporting		46,872		43,162
Other		164		56
Total assets	$	588,647	$	510,418

90

13. SUBSEQUENT EVENTS

Common Stock Repurchase Program. On February 6, 2007, the Company’s Board of Directors authorized the repurchase of up $50.0 million of the Company’s issued and outstanding common stock, subject to compliance with any contractual limitations on such repurchases under the Company’s financing agreements in effect from time to time, including but not limited to those relating to the Company’s senior secured indebtedness and senior subordinated notes.

Restricted Share Grants. On February 6, 2007, our Board of Directors approved the grant of 0.7 million shares of restricted stock to employees and certain non-employee members of the Company’s Board of Directors. These shares will vest over a four year period. The total value of the award at the date of grant was $11.3 million.

14. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter		Year
	(amounts in thousands, except earnings per share)
2006
Revenue	$	129,835	$	133,576	$	142,852	$	141,885	$	548,148
Operating income		20,627		20,214		22,163		22,192		85,196
Net income		6,963		6,279		7,815		5,552		26,609
Earnings per share: (1)
Basic	$	0.09	$	0.08	$	0.10	$	0.07	$	0.33
Diluted	$	0.09	$	0.08	$	0.10	$	0.07	$	0.32
2005
Revenue	$	109,666	$	112,460	$	116,595	$	115,359	$	454,080
Operating income		21,872		20,958		18,170		21,284		82,284
Net income		7,340		6,643		4,486		4,122		22,591
Earnings per share: (1)
Basic	$	0.23	$	0.21	$	0.12	$	0.05	$	0.49
Diluted	$	0.10	$	0.09	$	0.06	$	0.05	$	0.30
2004
Revenue	$	97,370	$	97,711	$	106,170	$	101,752	$	403,003
Operating income		18,069		14,944		21,645		19,363		74,021
Net income		14,103		214,462		6,694		19,296		254,555
Earnings per share: (1)
Basic	$	0.44	$	6.67	$	0.21	$	0.60	$	7.91
Diluted	$	0.20	$	3.00	$	0.09	$	0.27	$	3.56

(1) — The sum of the quarterly per share amounts may not equal the annual amount reported, as per share amounts are computed independently for each quarter and for the full year.

15. GUARANTOR INFORMATION

In March 2004, GCA issued $235 million in aggregate principal amount of 8³/4% senior subordinated notes due 2012 (the “Notes”). There were $152.8 million in Notes outstanding at December 31, 2006 and 2005. The Notes are guaranteed by all of the GCA’s existing domestic wholly-owned subsidiaries. In addition, effective upon the closing of the Company’s initial public offering of common stock, Holdings guaranteed, on a subordinated basis, GCA’s obligations under these Notes. These guarantees are full, unconditional, joint and several. CashCall, BVI, GCA Switzerland, GCA HK, and GCA Macau, all wholly owned non-domestic subsidiaries, and IFT, a consolidated joint venture, do not guarantee the Notes. The following consolidating schedules present separate unaudited condensed financial statement information on a combined basis for the parent only, the issuer, as well as the Company’s guarantor subsidiaries and non-guarantor subsidiaries and affiliate, as of and for the years ended December 31, 2006 and December 31, 2005.

91

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING SCHEDULE — BALANCE SHEET INFORMATION
DECEMBER 31, 2006
(amounts in thousands)

							Combined
					Combined		Non-		Elimination
	Parent		Issuer		Guarantors		Guarantors		Entries *			Consolidated
ASSETS
Cash and cash equivalents	$	—	$	35,022	$	2,176	$	3,721	$	—		$	40,919
Restricted cash and cash equivalents		—		350		1,000		—		—			1,350
Settlement receivables		—		138,145		445		3,554		(5,053	)		137,091
Other receivables, net		—		18,513		31,060		445		(37,170	)		12,848
Prepaid and other assets		—		9,403		2		83		—			9,488
Investment in subsidiaries		121,365		72,353		—		—		(193,718	)		—
Property, equipment and leasehold improvements, net		—		20,046		26		382		—			20,454
Goodwill, net		—		116,573		39,471		711		—			156,755
Other intangibles, net		—		17,274		527		200		—			18,001
Deferred income taxes, net		—		191,741		—		—		—			191,741
TOTAL	$	121,365	$	619,420	$	74,707	$	9,096	$	(235,941	)	$	588,647
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES:
Settlement liabilities	$	—	$	136,217	$	5,053	$	2,025	$	(5,053	)	$	138,242
Accounts payable		—		25,656		59		567		—			26,282
Accrued expenses		—		61,435		1,087		1,660		(46,799	)		17,383
Borrowings		—		274,480		—		—		—			274,480
Total liabilities		—		497,788		6,199		4,252		(51,852	)		456,387
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		—		103		—		—		—			103
STOCKHOLDERS’ EQUITY		121,365		121,529		68,508		4,844		(184,089	)		132,157
TOTAL	$	121,365	$	619,420	$	74,707	$	9,096	$	(235,941	)	$	588,647

 * Eliminations include intercompany investments and management fees

92

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING SCHEDULE — BALANCE SHEET INFORMATION
DECEMBER 31, 2005
(amounts in thousands)

							Combined
					Combined		Non-			Elimination
	Parent		Issuer		Guarantors		Guarantors			Entries *			Consolidated
ASSETS
Cash and cash equivalents	$	—	$	32,237	$	276	$	2,610		$	—		$	35,123
Settlement receivables		—		59,236		—		928			—			60,164
Other receivables, net		—		7,318		22,737		37			(22,737	)		7,355
Prepaid and other assets		—		10,947		—		12			—			10,959
Investment in subsidiaries		94,484		66,707		—		—			(161,191	)		—
Property, equipment and leasehold improvements, net		—		10,485		3		91			—			10,579
Goodwill, net		—		116,574		39,471		711			—			156,756
Other intangibles, net		—		21,714		128		164			—			22,006
Deferred income taxes, net		—		207,476		—		—			—			207,476
TOTAL	$	94,484	$	532,694	$	62,615	$	4,553		$	(183,928	)	$	510,418
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES:
Settlement liabilities	$	—	$	59,017	$	—	$	765		$	—		$	59,782
Accounts payable		—		20,103		70		240			—			20,413
Accrued expenses		—		37,529		58		(671	)		(22,738	)		14,178
Borrowings		—		321,412		—		—			—			321,412
Total liabilities		—		438,061		128		334			(22,738	)		415,785
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		—		149		—		—			—			149
STOCKHOLDERS’ EQUITY (DEFICIT)		94,484		94,484		62,487		4,219			(161,190	)		94,484
TOTAL	$	94,484	$	532,694	$	62,615	$	4,553		$	(183,928	)	$	510,418

 * Eliminations include intercompany investments and management fees

93

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING SCHEDULE — STATEMENT OF INCOME INFORMATION
YEAR ENDED DECEMBER 31, 2006
(amounts in thousands)

									Combined
						Combined			Non-
	Parent		Issuer			Guarantors			Guarantors			Eliminations *			Consolidated
REVENUES:
Cash advance	$	—	$	281,733		$	—		$	5,320		$	—		$	287,053
ATM		—		221,727			—			—			—			221,727
Check services		—		18,345			10,821			—			—			29,166
Central Credit and other revenues		26,609		6,851			8,887			98			(32,243	)		10,202
Total revenues		26,609		528,656			19,708			5,418			(32,243	)		548,148
Cost of revenues (exclusive of depreciation and amortization)		—		(377,114	)		(9,069	)		(3,068	)		—			(389,251	)
Operating expenses		—		(57,002	)		(5,451	)		(1,930	)		571			(63,812	)
Amortization		—		(5,259	)		(167	)		(94	)		—			(5,520	)
Depreciation		—		(4,317	)		(7	)		(45	)		—			(4,369	)
OPERATING INCOME (LOSS)		26,609		84,964			5,014			281			(31,672	)		85,196
INTEREST INCOME (EXPENSE), NET
Interest income		—		3,325			7			152			—			3,484
Interest expense		—		(42,098	)		—			—			—			(42,098	)
Loss on early extinguishment of debt		—		(3,417	)		—			—			—			(3,417	)
Total interest income (expense) , net		—		(42,190	)		7			152			—			(42,031	)
INCOME (LOSS) BEFORE INCOME TAX PROVISION AND MINORITY OWNERSHIP LOSS		26,609		42,774			5,021			433			(31,672	)		43,165
INCOME TAX PROVISION		—		(16,348	)		—			(391	)		—			(16,739	)
INCOME (LOSS) BEFORE MINORITY OWNERSHIP LOSS		26,609		26,426			5,021			42			(31,672	)		26,426
MINORITY OWNERSHIP LOSS		—		183			—			—			—			183
NET INCOME (LOSS)	$	26,609	$	26,609		$	5,021		$	42		$	(31,672	)	$	26,609

 * Eliminations include earnings on subsidiaries and management fees

94

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING SCHEDULE — STATEMENT OF INCOME INFORMATION
YEAR ENDED DECEMBER 31, 2005
(amounts in thousands)

									Combined
						Combined			Non-
	Parent		Issuer			Guarantors			Guarantors			Eliminations *			Consolidated
REVENUES:
Cash advance	$	—	$	230,157		$	—		$	4,898		$	—		$	235,055
ATM		—		182,291			—			—			—			182,291
Check services		—		22,716			3,660			—			—			26,376
Central Credit and other revenues		22,591		8,193			8,867			85			(29,378	)		10,358
Total revenues		22,591		443,357			12,527			4,983			(29,378	)		454,080
Cost of revenues (exclusive of depreciation and amortization)		—		(302,104	)		(3,287	)		(3,090	)		—			(308,481	)
Operating expenses		—		(46,971	)		(3,404	)		(1,449	)		618			(51,206	)
Amortization		—		(5,167	)		(90	)		(38	)		—			(5,295	)
Depreciation		—		(6,788	)		(1	)		(25	)		—			(6,814	)
OPERATING INCOME (LOSS)		22,591		82,327			5,745			381			(28,760	)		82,284
INTEREST INCOME (EXPENSE), NET
Interest income		—		1,713			—			102			—			1,815
Interest expense		—		(44,165	)		—			—			—			(44,165	)
Loss on early extinguishment of debt		—		(9,529	)		—			—			—			(9,529	)
Total interest income (expense) , net		—		(51,981	)		—			102			—			(51,879	)
INCOME (LOSS) BEFORE INCOME TAX PROVISION AND MINORITY OWNERSHIP LOSS		22,591		30,346			5,745			483			(28,760	)		30,405
INCOME TAX PROVISION		—		(7,894	)		—			(59	)		—			(7,953	)
INCOME (LOSS) BEFORE MINORITY OWNERSHIP LOSS		22,591		22,452			5,745			424			(28,760	)		22,452
MINORITY OWNERSHIP LOSS		—		139			—			—			—			139
NET INCOME (LOSS)	$	22,591	$	22,591		$	5,745		$	424		$	(28,760	)	$	22,591

 * Eliminations include earnings on subsidiaries and management fees

95

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING SCHEDULE — STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2006
(amounts in thousands)

										Combined
							Combined			Non-
	Parent			Issuer			Guarantors			Guarantors			Eliminations *			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	26,609		$	26,609		$	5,021		$	42		$	(31,672	)	$	26,609
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Amortization of financing costs					1,584												1,584
Amortization of intangibles					5,259			167			94						5,520
Depreciation					4,317			7			45						4,369
Gain on sale or disposal of assets					(6	)											(6	)
Loss on early extinguishment of debt					3,417												3,417
Provision for bad debts								6,483									6,483
Deferred income taxes					15,899												15,899
Equity income		(26,609	)		(5,063	)								31,672			—
Minority ownership loss					(287	)											(287	)
Stock-based compensation					9,141												9,141
Changes in operating assets and liabilities:
Settlement receivables					(78,621	)		(2,186	)		(2,639	)		6,792			(76,654	)
Other receivables, net					(19,211	)		(15,141	)		(858	)		24,707			(10,503	)
Prepaid and other assets					(1,833	)		(1	)		(72	)					(1,906	)
Settlement liabilities					76,965			5,053			1,223			(5,053	)		78,188
Accounts payable					5,552			(10	)		325						5,867
Accrued expenses					22,950			3,103			2,751			(26,446	)		2,358
Net cash provided by operating activities		—			66,672			2,496			911			—			70,079
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, equipment and leasehold improvements					(13,830	)		(30	)		(335	)					(14,195	)
Purchase of other intangibles					(820	)		(566	)		(130	)					(1,516	)
Changes in restricted cash and cash equivalents					(350	)		(1,000	)								(1,350	)
Investments in subsidiaries		(1,488	)		(1,360	)								2,848			—
Net cash used in investing activities		(1,488	)		(16,360	)		(1,596	)		(465	)		2,848			(17,061	)

 * Eliminations include intercompany investments and management fees (Continued)

96

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE — STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2006
(amounts in thousands)

								Combined
						Combined		Non-
	Parent		Issuer			Guarantors		Guarantors		Eliminations *			Consolidated
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facility				121,730										121,730
Repayments under credit facility				(168,662	)									(168,662	)
Debt issuance costs				(1,557	)									(1,557	)
Exercise of stock options		1,488												1,488
Minority capital contributions											240			240
Capital contributions				1,488			1,000		600		(3,100	)		—
Net cash provided by (used in) financing activities		1,488		(47,001	)		1,000		600		(2,860	)		(46,761	)
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		—		(526	)		—		65		—			(461	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		—		2,785			1,900		1,111		—			5,796
CASH AND CASH EQUIVALENTS—Beginning of period		—		32,237			276		2,610		—			35,123
CASH AND CASH EQUIVALENTS—End of period	$	—	$	35,022		$	2,176	$	3,721	$	—		$	40,919

 * Eliminations include intercompany investments and management fees

97

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING SCHEDULE — STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2005
(amounts in thousands)

										Combined
							Combined			Non-
	Parent			Issuer			Guarantors			Guarantors			Eliminations *			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	22,591		$	22,591		$	5,745		$	424		$	(28,760	)	$	22,591
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Amortization of financing costs		—			1,942			—			—			—			1,942
Amortization of intangibles		—			5,167			90			38			—			5,295
Depreciation		—			6,788			1			25			—			6,814
Loss on sale or disposal of assets		—			47			—			—			—			47
Loss on early extinguishment of debt		—			9,529			—			—			—			9,529
Provision for bad debts		—			4,068			—			—			—			4,068
Deferred income taxes		—			6,645			—			583			—			7,228
Equity income		(22,591	)		(6,169	)		—			—			28,760			—
Minority ownership loss		—			(218	)		—			—			—			(218	)
Changes in operating assets and liabilities:
Settlement receivables		—			(29,681	)		—			(348	)		—			(30,029	)
Other receivables, net		864			(5,649	)		(5,786	)		(18	)		3,492			(7,097	)
Prepaid and other assets		—			(1,092	)		(1	)		—			—			(1,093	)
Settlement liabilities		—			17,685			—			152			—			17,837
Accounts payable		—			202			(306	)		(74	)		—			(178	)
Accrued expenses		—			7,161			58			(1,878	)		(3,492	)		1,849
Net cash (used in) provided by operating activities		864			39,016			(199	)		(1,096	)		—			38,585
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, equipment and leasehold improvements		—			(6,962	)		(4	)		(132	)		—			(7,098	)
Purchase of other intangibles		—			(10,393	)		(183	)		(186	)		—			(10,762	)
Investments in subsidiaries		(130,459	)		(700	)		—			—			131,159			—
Net cash used in investing activities		(130,459	)		(18,055	)		(187	)		(318	)		131,159			(17,860	)

 * Eliminations include intercompany investments and management fees (Continued)

98

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SCHEDULE — STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2005
(amounts in thousands)

										Combined
							Combined			Non-
	Parent			Issuer			Guarantors			Guarantors			Eliminations *			Consolidated
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under credit facility		—			(74,588	)		—			—			—			(74,588	)
Repayments from early retirement of senior subordinated notes		—			(89,446	)		—			—			—			(89,446	)
Debt issuance costs		—			(331	)		—			—			—			(331	)
Proceeds from equity offering		128,895			—			—			—			—			128,895
Minority capital contributions		—			280			—			—			—			280
Capital contributions		—			130,459			—			700			(131,159	)		—
Net cash provided by (used in) financing activities		128,895			(33,626	)		—			700			(131,159	)		(35,190	)
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		—			(135	)		—			146			—			11
NET DECREASE IN CASH AND CASH EQUIVALENTS		(700	)		(12,800	)		(386	)		(568	)		—			(14,454	)
CASH AND CASH EQUIVALENTS—Beginning of period		700			45,037			662			3,178			—			49,577
CASH AND CASH EQUIVALENTS—End of period	$	—		$	32,237		$	276		$	2,610		$	—		$	35,123

 * Eliminations include intercompany investments and management fees

99

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Exchange Act Rules 13a — 15(e) and 15d — 15(e)) that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) promulgated under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the design and operating effectiveness of our disclosure controls and procedures as of December 31, 2006, as defined in Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation our Chief Executive Officer and Chief Financial Officer concluded that, because of the material weaknesses in our internal control over financial reporting described below, as of December 31, 2006 our disclosure controls and procedures were not effective.

Notwithstanding management’s assessment that our internal control over financial reporting was ineffective as of December 31, 2006 and the material weaknesses described below, we believe that the consolidated financial statements included in this Annual Report on Form 10-K correctly present in all material respects our financial position, results of operations and cash flows for the fiscal years covered therein.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of an issuer’s financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Internal control over financial reporting includes policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of an issuer’s assets;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that an issuer’s receipts and expenditures are being made only in accordance with authorizations of its management and directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of an issuer’s assets that could have a material effect on the financial statements.

100

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, the application of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that compliance with the policies or procedures may deteriorate.

As required by Rule 13a-15(c) promulgated under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2006. Management’s assessment was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Our assessment identified deficiencies that were determined to be material weaknesses.

A material weakness is a significant control deficiency, or combination of significant control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Because of the material weaknesses described below, management concluded that our internal control over financial reporting was not effective as of December 31, 2006.

The specific material weaknesses identified by management as of December 31, 2006 are described as follows:

• Ineffective controls related to staffing in finance and accounting: During 2006, we had a high level of turnover of personnel in our finance and accounting staff, which resulted in certain controls not operating effectively as of December 31, 2006. This material weakness did not result in a material adjustment to our 2006 consolidated financial statements but did contribute significantly to the following internal control deficiencies each of which is considered to be a material weakness:

• Ineffective control related to the reconciliation and analysis of accounts: The control designed to ensure the timely and accurate preparation, review and approval of account analyses and reconciliations did not operate effectively. Specifically, certain reconciliations and analyses were not performed in a timely manner.

• Ineffective controls related to the financial reporting close process: Certain controls designed to ensure the timely and accurate preparation, review and approval of our accounts and financial statements did not operate effectively. Specifically, 1) systematic controls were not in place to segregate the preparation and review of journal entries, 2) certain journal entries were not properly reviewed and approved in accordance with Company policy, 3) certain checklists were not maintained or reviewed and approved by appropriate finance and accounting personnel, and 4) we were unable to adhere to our pre-determined closing and reporting calendar.

• Ineffective controls related to income taxes: Certain controls designed to ensure the timely and accurate calculation of our provision for income taxes did not operate effectively. Certain matters affecting our income tax provision were not identified on a timely basis by finance and accounting personnel. Further, our process to timely and accurately quantify temporary differences did not operate effectively.

• Ineffective controls related to the accounts payable process: Certain controls designed to ensure the timely and accurate disbursement of Company funds did not operate effectively. Specifically, 1) certain disbursements were not properly reviewed for appropriate coding and cut-off and 2) the vendor master file was not reviewed by finance and accounting management for pertinence and accuracy.

• Inadequate controls related to commissions: We did not have appropriate internal control design related to how we calculate the amount of commissions we pay our customers. Specifically, 1) internal controls over commission set-up did not include a comparison of commission rates to contractual terms and 2) there was an ineffective process to determine the appropriate commission type and amount. In addition, some of the databases and applications used to maintain transaction records and perform certain commission computations were maintained by a third party, and appropriate controls to monitor and approve changes and to limit access were not in place.

101

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued a report on management’s assessment of our internal control over financial reporting which is set forth below.

Changes in Internal Control

Based on the evaluation required by Rule 13a-15(d) of the Exchange Act, there were no changes to our internal control over financial reporting during the quarter ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Remediation Plan

We have undertaken efforts to remediate the material weaknesses identified in our internal control over financial reporting described above, including developing the specific remediation initiatives described below. The implementation of these initiatives is a priority in 2007. Even though we have commenced these efforts, there can be no assurance that we will complete the remediation, that we will do so on a timely basis, and, even if we do so that the remediation efforts will eliminate the identified material weaknesses. In addition, it is possible that we or our independent auditors may identify other material weaknesses in future periods.

Inadequate Staffing in Finance and Accounting

We have undertaken to increase both the number of people and the experience and training of our finance and accounting staff. We are also planning to increase the number of people working in our information systems department, since much of the data used by the finance and accounting staff is generated by our information systems. We filled the vacancy in our Assistant Controller position in November 2006, and during 2007 have filled other vacancies in accounts payables and in financial accounting. We intend to fill all other open positions as quickly as possible. In addition, we plan to create and fill several new positions. We believe that filling the existing and new positions will assist us in remediating the control weaknesses identified that resulted from inadequate accounting and finance staffing.

We will put in place specific procedures and checklists for our financial close process. Those procedures will identify what information needs to be made available to specific individuals in finance and accounting and the timetable for that information availability. Those procedures will also define specific review and approval procedures for routine closing activities, including reconciliation of all material balance sheet accounts. We believe that the use of these procedures and checklists will allow us to more efficiently and predictably manage our financial close process and to make financial information related to accounting periods available to management on a more timely basis.

We are in the process of converting to a new accounting software system that has capabilities unavailable in our former system. The availability of these capabilities should increase the productivity of our staff in finance and accounting, as they will be required to spend less time on tasks that will be automated by the new system.

With respect to the material weakness in computing our provision for income taxes, we will review our capabilities with respect to income taxes. We will also integrate the tax area more closely into our planning activities so that the tax impact of certain anticipated activities or events might be known on a more timely basis.

Additionally, with respect to the ineffective controls related to the accounts payable process, we have hired a new supervisor of our accounts payable department who has, in turn, hired new staff. In addition, we expect our accounts payable department to benefit from the conversion to our new accounting system.

Inadequate Controls Related to Commissions

During 2007, we plan to redesign the system of controls governing our commission calculation systems. Specifically, we plan to standardize to the extent practical the language in customer agreements. We plan to bring the management of the commission system and responsibility for the databases and applications containing customer information in house. We plan to enhance the design of control procedures for the entry or change of data in the commission database. We also plan to institute regular reporting comparing the amount of commissions calculated to the amounts paid, and review those reports regularly for accuracy. Finally, we plan to implement periodic audits of our controls over commission payments.

102

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Global Cash Access Holdings, Inc.
Las Vegas, Nevada

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Global Cash Access Holdings, Inc. and Subsidiaries (the “Company”) did not maintain effective internal control over financial reporting as of December 31, 2006, because of the effect of the material weaknesses identified in management’s assessment based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission(“COSO”). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weaknesses have been identified and included in management’s assessment:

Ineffective controls related to staffing in finance and accounting: During 2006, the Company had a high level of turnover of personnel in its finance and accounting staff, which resulted in certain controls not operating effectively as of December 31, 2006. This material weakness did not result in a material adjustment to its 2006 consolidated financial statements but did contribute significantly to the following internal control deficiences each of which is considered to be a material weakness:

Ineffective control related to the reconciliation and analysis of accounts: The control designed to ensure the timely and accurate preparation, review and approval of account analyses and reconciliations did not operate effectively. Specifically, certain reconciliations and analyses were not performed in a timely manner.

Ineffective controls related to the financial reporting close process: Certain controls designed to ensure the timely and accurate preparation, review and approval of our accounts and financial statements did not operate effectively. Specifically, 1) systematic controls were not in place to segregate the preparation and review of journal entries, 2) certain journal entries were not properly reviewed and approved in accordance with Company policy, 3) certain checklists were not maintained or reviewed and approved by appropriate finance and accounting personnel, and 4) the Company was unable to adhere to their pre-determined closing and reporting calendar.

103

Ineffective controls related to income taxes: Certain controls designed to ensure the timely and accurate calculation of the Company’s provision for income taxes did not operate effectively. Certain matters affecting its income tax provision were not identified on a timely basis by finance and accounting personnel. Further, the Company’s process to timely and accurately quantify temporary differences did not operate effectively.

Ineffective controls related to the accounts payable process: Certain controls designed to ensure the timely and accurate disbursement of Company funds did not operate effectively. Specifically, 1) certain disbursements were not properly reviewed for appropriate coding and cut-off and 2) the vendor master file was not reviewed by finance and accounting management for pertinence and accuracy.

Inadequate controls related to commissions: The Company did not have appropriate internal control design related to how they calculate the amount of commissions they pay to their customers. Specifically, 1) internal controls over commission set-up did not include a comparison of commission rates to contractual terms and 2) there was an ineffective process to determine the appropriate commission type and amount. In addition, some of the databases and applications used to maintain transaction records and to limit access perform certain commission computations were maintained by a third party, and appropriate controls to monitor and approve changes and to limit access were not in place.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2006, of the Company and this report does not affect our report on such consolidated financial statements.

In our opinion, management’s assessment that the Company did not maintain effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, because of the effect of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2006, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2006 of the Company and our report dated March 30, 2007, expressed an unqualified opinion, and included an explanatory paragraph related to the adoption of SFAS No. 123(R), Share-Based Payment, on those consolidated financial statements.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada
March 30, 2007

104

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding our directors, executive officers and corporate governance required by this Item is incorporated by reference to the section entitled “Proposal One — Election of Class II Directors” in the Company’s Definitive Proxy Statement in connection with the 2007 Annual Meeting of Stockholders (the “Proxy Statement”), which will be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended December 31, 2006. Information required by Item 405 of Regulation S-K is incorporated by reference to the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement. Information required by 10A-3(d) of the Exchange Act is incorporated by reference to the section entitled “Board and Corporate Governance Matters” in the Proxy Statement.

We have adopted a Code of Business Conduct and Ethics that is designed to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. The Code of Business Conduct and Ethics is available on our website at www.globalcashaccess.com. To the extent required by law, any amendments to, or waivers from, any provision of the Code of Conduct will be promptly disclosed to the public. To the extent permitted by such legal requirements, we intend to make such public disclosure by posting the relevant material on our website in accordance with SEC rules.

On March 30, 2007, our Chief Executive Officer certified to the New York Stock Exchange that he was not aware of any violation by us of the New York Stock Exchange Corporate Governance listing standards as of that date. On March 23, 2006, our Chief Executive Officer certified to the New York Stock Exchange that he was not aware of any violation by us of the New York Stock Exchange Corporate Governance listing standards as of that date.

We have filed, as an exhibit to this Annual Report on Form 10-K, the certification required by Section 302 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder regarding the quality of our public disclosure.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this Item is incorporated by reference to the section entitled “Executive Compensation,” “Directors’ Compensation” and “Report of Compensation Committee” in the Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding security ownership of certain beneficial owners and management is incorporated by reference to the section entitled “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement. Information regarding the Company’s equity compensation plans is incorporated by reference to the section entitled “Equity Compensation Plans” in the Proxy Statement.

105

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this Item is incorporated by reference to the section entitled “Transactions with Related Persons” in the Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this item is incorporated by reference to the section entitled “Audit and Non-Audit Fees” in the Proxy Statement.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Annual Report on Form 10-K:

1.	Financial Statements Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2006 and 2005 Consolidated Statements of Income and Comprehensive Income for the three years ended December 31, 2006 Consolidated Statement of Stockholders’ Equity (Deficiency) for the three years ended December 31, 2006 Consolidated Statements of Cash Flows for the three years ended December 31, 2006 Notes to Consolidated Financial Statements
2.	Financial Statement Schedules
	All schedules have been omitted as they are either not required or not applicable or the required information is included in the consolidated financial statements or notes thereto.
3.	See Item 15(b)

106

(b) Exhibits:

Exhibit
Number			Exhibit Description
	3.1	(1)	Amended and Restated Certificate of Incorporation
	3.2	(1)	Amended and Restated Bylaws
	4.2	(1)	Indenture relating to $235,000,000 aggregate principal amount of 8 3/4% Senior Subordinated Notes due 2012
	4.3	(1)	Form of 8 3/4% Senior Subordinated Notes due 2012
	4.4	(1)	Assumption Agreement, dated as of June 7, 2004, by Global Cash Access, Inc. and the Subsidiary Guarantors named therein
	4.5	(1)	Supplemental Indenture by and among Global Cash Access Holdings, Inc., Global Cash Access, Inc., GCA Access Card, Inc., Central Credit, LLC and The Bank of New York Trust Company, N.A. and form of notation of Guarantee by Global Cash Access Holdings, Inc.
	4.6	(1)	Supplemental Indenture by and among Global Cash Access, Inc., GCA Access Card, Inc., Central Credit, LLC and The Bank of New York Trust Company, N.A. and notation of Guarantee by GCA Access Card, Inc.
	10.1	(1)	Lease Agreement, dated as of March 8, 2000, by and between Global Cash Access, L.L.C. and American Pacific Capital Gateway Bldg D Co., L.L.C.
	10.4	(1)	Guaranty, dated as of March 10, 2004, among GCA Holdings, L.L.C., the guarantors from time to time party hereto and Bank of America, N.A., as Administrative Agent
	10.5	(1)	Security Agreement including First and Second Amendments thereto, dated as of March 10, 2004, among the loan parties from time to time party thereto and Bank of America, N.A., as Collateral Agent
	10.6	(1)	Pledge Agreement, dated as of March 10, 2004, among the loan parties from time to time party thereto and Bank of America, N.A., as Collateral Agent
	10.7	(1)	Membership Unit Redemption Agreement, dated as of March 10, 2004, between FDFS Holdings, LLC and GCA Holdings, L.L.C.
	10.8	(1)	Sponsorship Agreement, dated as of November 1999, by and between BA Merchant Services, Inc. and Global Cash Access, L.L.C., as amended by Amendment Number 1 to the Sponsorship Agreement, dated as of September 2000, among BA Merchant Services, Global Cash Access, L.L.C. and First Data Corporation
	10.9	(1)	Sponsorship Indemnification Agreement, dated as of March 10, 2004, by and between Global Cash Access, L.L.C. and First Data Corporation
	10.10	(1)	Amended and Restated Software License Agreement, dated as of March 10, 2004, between Infonox on the Web and Global Cash Access, L.L.C.
	10.11	(1)	Professional Services Agreement, dated as of March 10, 2004, between Infonox on the Web and Global Cash Access, L.L.C.
	10.12	(1)	Patent License Agreement, dated as of March 10, 2004, between USA Payments and Global Cash Access, L.L.C.

107

Exhibit
Number			Exhibit Description
	10.13	(1)	Amended and Restated Electronic Payment Processing Agreement, dated as of March 10, 2004, between Global Cash Access, L.L.C., USA Payments Inc. and USA Payment Systems, Inc.
	10.14	(1)	Letter Agreement Relating to Technology, dated May 13, 2004, among Global Cash Access, L.L.C., USA Payments, USA Payment Systems and Infonox on the Web
	10.15	(1)	Automated Teller Machine Sponsorship Agreement by and between Global Cash Access, L.L.C. and Western Union Bank, dated as of November 12, 2002, and First Amendment to Automated Teller Machine Sponsorship Agreement, dated as of March 10, 2004, between Global Cash Access, L.L.C. and First Financial Bank
	10.16	(1)	Membership Unit Purchase Agreement, dated as of March 10, 2004, by and among Bank of America Corporation, M&C International and GCA Holdings, L.L.C.
	10.17	(1)	Amendment to Treasury Services Terms and Conditions Booklet—ATM Cash Services, dated as of March 8, 2004, by and between Global Cash Access, L.L.C. and Bank of America, N.A.
	10.18	(1)	Limited Liability Company Agreement of QuikPlay, LLC, dated as of December 6, 2000, between Global Cash Access, L.L.C. and IGT
	10.19	(1)	Registration Agreement, dated as of May 13, 2004, by and among GCA Holdings, L.L.C., the Investors named therein, M&C International and Bank of America Corporation
	10.20	(1)	Stockholders Agreement, dated as of May 13, 2004, by and among GCA Holdings, L.L.C., the Investors named therein, M&C International and Bank of America Corporation
	10.21	(1)	Investor Rights Agreement, dated as of May 13, 2004, by and among GCA Holdings, L.L.C., the Investors named therein and M&C International
	10.22	(1)	Noncompete Agreement, dated as of May 14, 2004, by and between GCA Holdings, Inc. and Kirk Sanford
	*10.23	(1)	Employment Agreement, dated as of July 12, 2004, by and between Global Cash Access, Inc. and Harry C. Hagerty
	*10.24	(1)	Notice of Stock Option Award and Stock Option Award Agreement, dated as of September 1, 2004, by and between GCA Holdings, Inc. and Harry C. Hagerty
	*10.25	(1)	Global Cash Access Holdings, Inc. 2005 Stock Incentive Plan
	*10.26	(1)	Employment Agreement, dated as of March 22, 2005, by and between Global Cash Access, Inc. and Kirk Sanford
	*10.27	(1)	Form of Indemnification Agreement between Global Cash Access Holdings, Inc. and each of its executive officers and directors
	10.28	(1)	Patent Purchase and License Agreement, dated as of March 22, 2005, by and between Global Cash Access, Inc. and USA Payments
	10.29	(1)	Termination and Consent, dated as of March 16, 2005, by and among Global Cash Access Holdings, Inc. and the other parties thereto
	10.30	(1)	Amended and Restated Credit Agreement, dated as of April 13, 2005, by and among Global Cash Access Holdings, Inc., Global Cash Access, Inc., the banks and other financial institutions from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Swingline Lender and L/C Issuer, as amended by Amendment No. 1 thereto
	*10.32	(1)	Employment Agreement, dated as of September 12, 2005, by and between Global Cash Access, Inc. and Kathryn S. Lever

108

Exhibit
Number			Exhibit Description
	*10.33	(2)	Amendment No. 1 to Employment Agreement, dated as of March 16, 2006, by and between Global Cash Access, Inc. and Kirk E. Sanford
	*10.34	(3)	Amendment No. 1 to Employment Agreement, dated as of March 16, 2006, by and between Global Cash Access, Inc. and Harry C. Hagerty
	*10.35	(4)	Amendment No. 1 to Employment Agreement, dated as of March 16, 2006, by and between Global Cash Access, Inc. and Kathryn S. Lever
	+10.36		Master Service Agreement, dated as of November 27, 2006, by and between Global Cash Access, Inc. and Integrated Payment Systems, Inc.
	10.37	(5)	Second Amended and Restated Credit Agreement, dated as of November 1, 2006, by and among Global Cash Access Holdings, Inc., Global Cash Access, Inc., the banks and other financial institutions from time to time party thereto, Bank of America, N.A., as Administrative Agent, and Wachovia Bank, N.A., as Syndication Agent
	12.1		Computation of ratio of earnings to fixed charges
	21.1		Subsidiaries of the Registrant
	23.1		Consent of Deloitte & Touche LLP
	24.1		Power of Attorney (see page 110)
	31.1		Certification of Kirk E. Sanford, Chief Executive Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2		Certification of Harry C. Hagerty, Chief Financial Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1		Certification of Kirk E. Sanford, Chief Executive Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2		Certification of Harry C. Hagerty, Chief Financial Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Incorporated by reference to the same numbered exhibit of the Company’s Registration Statement on Form S-1 (Registration No. 333-123514) filed September 22, 2005.
(2)	Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed March 17, 2006.
(3)	Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed March 17, 2006.
(4)	Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed March 17, 2006.
(5)	Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed November 7, 2006.

*	Management contracts or compensatory plans or arrangements.
+	Confidential treatment has been requested with regard to certain portions of this document.

(c) See Item 15(a)(2).

109

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

GLOBAL CASH ACCESS HOLDINGS, INC.
By:	/s/ Kirk Sanford
	Kirk Sanford
	President and Chief Executive Officer (Principal Executive Officer)

Dated: March 30, 2007

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kirk Sanford and Harry C. Hagerty, and each of them, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the registrant in the capacities and on the date indicated.

Signature	Title	Date
/s/ Kirk Sanford Kirk Sanford	President and Chief Executive Officer (Principal Executive Officer) and Director	March 30, 2007
/s/ Harry C. Hagerty Harry C. Hagerty	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	March 30, 2007
/s/ Karim Maskatiya Karim Maskatiya	Director	March 30, 2007
/s/ Robert Cucinotta Robert Cucinotta	Director	March 30, 2007
/s/ Walter G. Kortschak Walter G. Kortschak	Director	March 30, 2007
/s/ Charles J. Fitzgerald Charles J. Fitzgerald	Director	March 30, 2007
/s/ E. Miles Kilburn E. Miles Kilburn	Director	March 30, 2007
/s/ William H. Harris William H. Harris	Director	March 30, 2007
/s/ Geoff Judge Geoff Judge	Director	March 30, 2007
/s/ Fred C. Enlow Fred C. Enlow	Director	March 30, 2007

110

EXHIBIT INDEX

Exhibit
Number	Exhibit Description
10.36	Master Service Agreement, dated as of November 27, 2006, by and between Global Cash Access, Inc. and Integrated Payment Systems, Inc.
12.1	Computation of ratio of earnings to fixed charges
21.1	Subsidiaries of the Registrant
23.1	Consent of Deloitte & Touche LLP
24.1	Power of Attorney (see page 110)
31.1	Certification of Kirk E. Sanford, Chief Executive Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Harry C. Hagerty, Chief Financial Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Kirk E. Sanford, Chief Executive Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Harry C. Hagerty, Chief Financial Officer of Global Cash Access Holdings, Inc. dated March 30, 2007 in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

111

EX-10.36

INTEGRATED PAYMENT SYSTEMS INC.
MASTER SERVICE AGREEMENT

This Master Service Agreement (“Agreement”) is between INTEGRATED PAYMENT SYSTEMS INC., a Delaware corporation having a principal office at 12500 East Belford Avenue, Englewood, Colorado 80112 (“IPS”) and Global Cash Access, Inc., a Delaware corporation having its principal office at 3525 East Post Road, Suite 120, Las Vegas, Nevada 89120 (“Client”).

Recitals

IPS issues official checks, money orders and other payment instruments through financial and other institutions. Client desires to use and sell Payment Instruments (as defined in Part A) and to subscribe to other services offered by IPS as specified below.

Agreement

Now, therefore, in consideration of the mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledge, the parties agree the foregoing recitals are true and correct and as follows:

1. Subscription. Client hereby subscribes to IPS’ Payment Instrument service as further described in the Additional Terms and Conditions, Part A: Description of IPS’ Payment Instruments Service, Part B: Description of IPS’ Payment Instruments Commission Structure and Exhibit A: Trust Agreement, all attached hereto, and the Service Requirements provided to Client, and IPS agrees to provide such services to Client, upon the terms and conditions hereof and thereof.

2. Term. The initial term of this Agreement shall be three (3) years (the “Initial Term”), commencing on the earlier of January 1, 2007 or the date Client uses or sells its first Payment Instrument under this Agreement. Unless otherwise terminated in accordance with the terms hereof or upon not less than one hundred eighty (180) calendar days’ written notice, this Agreement shall automatically renew in accordance with the provisions of Section 8 of the Additional Terms and Conditions hereto.

3. Notices. All notices delivered in accordance with the provisions of Section 10 of the attached Additional Terms and Conditions shall be addressed as follows, as amended from time to time by the applicable party:

	If to Client:	If to IPS:
Company:	Global Cash Access, Inc.	Integrated Payment Systems Inc.
	3525 East Post Road, Suite 120	12500 East Belford Avenue
	Las Vegas, NV 89120	Englewood, CO 80112
Attention:	President & CEO	Rod Esch
	General Counsel & EVP	President
Facsimile:	(702) 262-5039	(720) 332-0096
With a copy to:
	Morrison & Foerster LLP	Integrated Payment Systems Inc.
	755 Page Mill Road	12500 East Belford Avenue
	Palo Alto, CA 94304	Englewood, CO 80112
Attention:	Timothy J. Harris	General Counsel
Facsimile:	(650) 494-0892	(720) 332-0096

THIS AGREEMENT INCORPORATES THE TERMS AND CONDITIONS PRINTED ABOVE, AND ON THE ATTACHMENTS HERETO WHICH ARE MADE A PART OF THIS AGREEMENT.

GLOBAL CASH ACCESS, INC.		Accepted by IPS as of the 27th day of November, 2006
		(the “Effective Date”).
By:	/s/ Kirk Sanford
Title: President & CEO
Print Name: Kirk Sanford

INTEGRATED PAYMENT SYSTEMS INC.
By:	/s/ Rodney J. Esch
Title:	President
Print Name:	Rodney J. Esch

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Additional Terms and Conditions

1. Representations. Each party represents and warrants to the other party that: (a) the execution, delivery, and performance by such party of this Agreement: (i) is within such party’s corporate powers, (ii) does not violate or create a default under Legal Requirement (as defined in Part A), or such party’s Certificate or Articles of Incorporation or By-Laws, or any other organizational documents or any contractual provision binding on or affecting such party or its property, and (iii) has been duly authorized by all necessary corporate action; and (b) this Agreement constitutes legal, valid and binding obligations of such party, enforceable against such party in accordance with the respective terms and conditions hereof, except as enforcement may be subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Legal Requirement affecting creditors rights generally, and (ii) general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).

2. Legal Compliance. Each party shall comply with all Legal Requirements applicable to its business. In the event a “State Schedule A” is attached to this Agreement, each party shall comply with the provisions of said Schedule A to the extent required by applicable state law(s), subject to the limitations of applicable federal law(s). Client shall specifically comply (and shall cause its officers, principals and employees to comply) with all federal, state and local laws and regulations applicable to Client’s business and to Client’s use of the Services, as the same may be amended from time to time, including but not limited to: (a) state licensing laws; (b) the Bank Secrecy Act (31 U.S.C. §5311 et. seq., and its implementing regulations, 31 C.F.R. Part 103); (c) the IRS’ cash reporting requirements (26 U.S.C. 60501) and related regulations; (d) state currency reporting requirements; (e) federal or state anti-money laundering laws and all rules and regulations promulgated thereunder (e.g., 18 U.S.C. §§ 1956 and 1957); (f) all applicable state money transfer or sale of checks laws and regulations; (g) all applicable federal and state privacy laws and regulations; (h) the USA Patriot Act; and (i) all applicable federal and state laws regulating access for the disabled, including but not limited to the Americans with Disabilities Act.

3. Special Bank Secrecy Act and Anti-Money Laundering Guideline Requirements. Client will be required to establish an Anti-Money Laundering Compliance Program. Client’s program must include the following elements:

a) Client must appoint an employee as Compliance Officer to oversee its program.
(I) The Compliance Officer will be responsible to: (a) establish company wide policies and procedures; (b) provide for employee compliance training; (c) monitor compliance; (d) provide for proper record keeping; (e) fulfill any other duties required by law or IPS policy; and (f) serve as the primary contact between the Client and IPS or the U.S./State Government concerning compliance matters.
(ii) In preparation for training and to begin with the establishment of a Compliance Program, Client shall provide the Compliance Officer information below:

Compliance Officer Name:	Job Title:
Address:
Phone:	Fax:

b) If Client has multiple locations, then in addition to a Client Compliance Officer, an employee must be designated at each location as an On-Site Compliance Delegate.
(I) The On-Site Compliance Delegate will be the location contact for IPS and U.S./State Government concerning site-specific compliance matters.
(ii) If the Compliance Delegate represents multiple locations, he/she will be asked to provide specific on-site compliance Delegate information for each location.

c) Client will provide each location with a proposed “Anti-Money Laundering Compliance Program” booklet as a resource for building a compliance program. After training, Client must document that a compliance program is in place to monitor, track, and ensure compliance with all governmental laws in your geography, including but not limited to the provisions of the U.S. Patriot Act of 2001, the Bank Secrecy Act and/or policy including the following:
(i) Filing of Currency Transaction Reports for any cash transaction or series of transactions by single consumer in a single day greater than $10,000.00.

(ii) Identifying and reporting of transactions and/or a series of transactions by a single consumer in a single day that amount to $2,000.00 or more AND are suspicious.

(iii)	Insuring that proper identification and information is collected on same day money order sales of any individual totaling $3,000.00 or more (Money Order Log).
(iv)	Insuring that proper identification and information is recorded on same day money transfer sales to any individual totaling $3,000 or more.
(v)	Meeting record retention requirements.
(vi)	Maintaining a plan to provide and document on-going employee compliance training.

d) Client hereby agrees to provide full cooperation with governmental or IPS compliance audits.

4. Confidentiality. During both the Term as defined in Section 9 hereof, and thereafter, notwithstanding termination of this Agreement, neither party shall, unless otherwise required by Legal Requirement, either directly or indirectly disclose, disseminate or otherwise make available to any third party any confidential information that was obtained as a result of the relationship created by this Agreement, including the terms and conditions of this Agreement.

5. Exclusivity. Client agrees that during the Term, IPS shall be Client’s sole and exclusive provider of money orders within the United States. Nothing in this Section 5 shall preclude Client from generating or issuing its own money orders or other payment instruments in any other jurisdiction or within the United States in accordance with any federal, state or local licenses it may acquire and/or require to do so.

6. Financial Statements; Audit and Inspection. Upon written request, and subject to Legal Requirement, each party agrees to supply the other party with current interim (quarterly) and annual (year end) financial reports and statements. Each party agrees that, subject to applicable Legal Requirement, upon not less than thirty (30) calendar days’ notice, the other party shall have the right to audit or inspect that portion and only that portion of those books and records which directly and wholly relate to such party’s performance of its duties or obligations hereunder. The obligations set forth in this Section 6 shall also apply to any wholly owned subsidiaries of Client as identified in Exhibit “C” hereto, which may use or sell Payment Instruments hereunder.

7. Advertising. Each party shall obtain written approval from the other party prior to any reference to or use of such other party’s name, logo, trademarks, service marks, copyrights or any other proprietary classification of such other party or its Affiliates in any advertising, promotional or instructional material provided by or for a party. IPS hereby grants Client a limited, nonexclusive and nontransferable license to (a) establish a hyperlink on the Client website to the IPS OfficialCheck.com website; and (b) subject to IPS’ prior written consent, use IPS’ name, marks and logo (“IPS Marks”) for the sole and limited purpose of (i) reference in Client’s quarterly industry newsletter and corporate brochure, (ii) reference in Client’s annual report, (iii) reference in all documents required to be disclosed in accordance with Legal Requirement, (iv) implementing such hyperlink, and (v) all activities incidental to the forgoing. Client will post the credit line “Integrated Payment Systems is a registered trademark of Integrated Payment Systems Inc. and is used with permission” or other similar text as approved or reasonably required by IPS in reasonable proximity to such hyperlink, if any, to IPS on Client’s website; provided, however, nothing herein express or implied shall require Client to establish such hyperlink. Nothing contained herein gives Client any ownership rights in the IPS Marks.

8. Indemnification. Each party shall reimburse, indemnify and hold the other party, their directors, officers, employees, representatives, subsidiaries, parents, Affiliates and assigns harmless from all losses, claims, demands, actions, suits, proceedings or judgments, including costs, expenses and reasonable attorneys’ fees assessed against such other party resulting, in whole or in part, from actions or omissions, whether done negligently or otherwise, by the indemnifying party, or its agents, directors, officers, employees or representatives, arising out of the violation of this Agreement. Client shall further indemnify IPS from any liability incurred as a result of IPS’ stopping payment on any Payment Instrument, upon IPS’ receipt of a stop payment order from Client pursuant to IPS’ stop payment Service Requirements, or for dishonoring or returning any Payment Instrument. The indemnification obligations set forth herein above shall survive the termination of this Agreement.

9. Term and Early Termination. (a) This Agreement shall become effective on the Effective Date and shall continue through the Initial Term, and upon expiration of the Initial Term, this Agreement shall continue in effect (the “Additional Term” and, together with the Initial Term, the “Term”) until terminated by either party by a written notice delivered to the other not less than 180 days prior to the designated termination date; and (b) During the Term, a party (the “nondefaulting party”) may terminate this Agreement upon written

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notice to the other party (the “defaulting party”) of such breach and in the event such breach is not cured within thirty (30) calendar days after the delivery date of such notice in the event that: (i) there is a material adverse change in the defaulting party’s financial condition, business or prospects that would materially impact the defaulting party’s ability to perform its obligations hereunder; or (ii) the defaulting party fails to materially comply with any of the terms and conditions of this Agreement and all Exhibits, Amendments and Addenda attached hereto (without limiting the generality of the foregoing, an act by Client which exceeds the authority granted herein shall be a material violation), or (iii) any representation or information provided to the nondefaulting party by the defaulting party is materially false or misleading at the time of such disclosure. Notwithstanding the preceding provisions of this Section 8, no such cure period shall apply to Client’s obligation to remit the Face Value of all Payment Instruments it uses or sells hereunder to IPS, in accordance with the provisions and requirements set forth in Section 7 of Part A of this Agreement.

10. Limitation of Damages. (a) EXCEPT FOR IPS’ OBLIGATION TO HONOR PAYMENT INSTRUMENTS THAT ARE PROPERLY PAYABLE; AND NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IPS’ MONETARY LIABILITY TO CLIENT UNDER THIS AGREEMENT SHALL BE LIMITED TO THE LESSER OF ONE MILLION DOLLARS ($1,000,000) OR THE AMOUNT OF ACTUAL DAMAGES SUFFERED BY CLIENT.
(b) IN NO EVENT SHALL IPS, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUB-CONTRACTORS, BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS, CONSEQUENTIAL, SPECIAL, INDIRECT, EXEMPLARY, INCIDENTAL, PUNITIVE OR ANY OTHER SIMILAR DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(c) EXCEPT FOR CLIENT’S OBLIGATION TO (I) TIMELY AND PROPERLY FUND PAYMENT INSTRUMENTS THAT IT USES OR SELLS HEREUNDER; (II) ASSUME FULL LIABILITY FOR THE FACE VALUE OF ANY PAYMENT INSTRUMENTS LOST BY, STOLEN FROM, MISAPPROPRIATED FROM OR SEIZED FROM CLIENT AND SUBSEQUENTLY PAID BY IPS; (III) ASSUME FULL LIABILITY FOR ANY ACTIONS TAKEN BY IPS ON CLIENT’S REQUEST TO STOP PAYMENT ON ANY PAYMENT INSTRUMENT OR FOR IPS’ DISHONORING OR RETURNING ANY PAYMENT INSTRUMENT HEREUNDER AND NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, CLIENT’S MONETARY LIABILITY TO IPS UNDER THIS AGREEMENT SHALL BE LIMITED TO THE LESSER OF ONE MILLION DOLLARS ($1,000,000) OR THE AMOUNT OF ACTUAL DAMAGES SUFFERED BY IPS.
(d) EXCEPT FOR CLIENT’S ASSUMPTION OF FULL LIABILITY FOR ANY ACTIONS TAKEN BY IPS ON CLIENT’S REQUEST TO STOP PAYMENT ON ANY PAYMENT INSTRUMENT OR FOR IPS’ DISHONORING OR RETURNING ANY PAYMENT INSTRUMENT HEREUNDER, CLIENT, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS SHALL NOT BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS, CONSEQUENTIAL, SPECIAL, INDIRECT, EXEMPLARY, INCIDENTAL, PUNITIVE OR ANY OTHER SIMILAR DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

11. Notices. Unless otherwise agreed to by the parties in writing, all notices, requests or other communications hereunder shall be in writing and shall be sent by first class mail postage prepaid, facsimile with receipt confirmed, receipted courier service or shall be personally delivered, to the other party at its respective address as specified on the first page of this Agreement, or to each party, at such other address or addresses as shall be designated, from time to time, in a written notice to the other party. All such notices, requests and communications if communicated as set forth above shall be effective when sent or personally delivered.

12. Waiver of Jury Trial. IPS and Client irrevocably waive any and all rights they may have to a trial by jury in any judicial proceeding involving any claim relating to this Agreement.

13. No Third-Party Beneficiaries. Nothing contained in this Agreement is intended to confer nor shall confer upon any person (other than the parties

hereto) any rights, benefits or remedies of any kind or character whatsoever, and no such person shall be deemed a third-party beneficiary under or by reason of this Agreement.

14. Assignment. The rights and obligations of Client under this Agreement are personal and not assignable either voluntarily or by operation of law, without the prior written consent of IPS, which consent shall not be unreasonably withheld; provided, however, IPS agrees that Client may assign the Agreement upon notice to, but without necessity of consent of, IPS, (a) to any Affiliate (as defined in Part A) that has those approvals and licenses required by Legal Requirement necessary to fulfill its obligations hereunder, (b) in connection with the sale of all or substantially all of the stock or assets of Client, or the merger of Client with an unAffiliated third party; provided any such assignment does not otherwise result in a violation of this Agreement by Client; provided further, however, the assignee’s financial condition, as measured by net worth (defined as total assets minus total liability, as both are defined by Generally Accepted Accounting Principles), is materially and reasonably sufficient for the fulfillment of such assignee’s duties and obligations hereunder. IPS may assign any of its rights or obligations under this Agreement to any Affiliate that is not a direct competitor of GCA upon notice to Client but without the consent of Client; provided any such assignment does not otherwise result in a violation of this Agreement by IPS. An assignment by IPS to any non-Affiliated party shall require the prior written consent of Client, which consent shall not be unreasonably withheld. Additionally, IPS may designate any other person or entity as its agent to perform or render assistance to IPS in the performance of the services to be provided by IPS hereunder. Any assignment in violation of this subsection shall be null and void. All provisions contained in this Agreement shall extend to and be binding upon the parties hereto or their respective successors and permitted assigns.

15. Governing Law; Severability. The laws of the State of New York, excluding the rules on conflicts of laws, shall govern the interpretation, validity, enforcement and any claim or controversy arising from this Agreement. If any provision of this Agreement shall be determined to be illegal, unenforceable or invalid under any Legal Requirement, such provision shall be deemed void and the remainder of this Agreement shall continue in full force and effect. In such case, the parties shall in good faith attempt to modify or substitute such provision consistent with the original intent of the parties.

16. Entire Agreement. This Agreement, including all Exhibits, Amendments and Addenda attached hereto, constitutes the entire Agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous proposals, agreements, representations, and understandings, whether written or oral, between the parties with respect to the subject matter hereof. No change, termination, modification, or waiver of any term or condition of this Agreement shall be valid unless in writing signed by each party. A party’s waiver of a breach of any term or condition in this Agreement shall not be deemed a waiver of any subsequent breach of the same or another term or condition.

17. Attorneys’ Fees. In the event of any action for the breach of this Agreement or misrepresentation by any party, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and expenses incurred in such action.

18. Force Majeure. Neither party shall be responsible for any failure to fulfill its obligations hereunder due to causes beyond its reasonable control, including (to the extent each such instance listed is in fact beyond its reasonable control) acts or omissions of government or military authority, acts of God, disruption of telecommunication facilities, shortages of materials, transportation delays, fires, floods, labor disturbances, riots or wars, mechanical or power failure, computer malfunctions (including network connectivity failures), strikes, labor difficulties, or acts of credit network authorities. Upon the occurrence of such an event, and so long as no other breach of this Agreement by such party has occurred and is continuing, the performance of such party’s obligations shall be suspended during, but not longer than, the period of existence of such event and period thereafter reasonably required to perform such obligation. The parties shall each use their reasonable efforts to minimize the consequences of such event. Notwithstanding the preceding provisions of this Section 17, no such Force Majeure relief shall apply to Client’s obligation to remit the Face Value of all Payment Instruments it uses or sells hereunder to IPS, in accordance with the provisions and requirements set forth in Section 7 of Part A of this Agreement. The provisions of this Section shall survive any termination or expiration of this Agreement.

19. PCI DSS Compliance. IPS acknowledges and agrees that, in connection with fulfilling its obligations hereunder, IPS may gain access to and/or acquire the ability to transmit, store or process Cardholder account and/or transaction information (collectively, “Cardholder Data”). To the extent that IPS has access to, or possession of, Cardholder Data, IPS covenants, agrees, represents and warrants as set forth in this Section, all of which shall be undertaken at IPS’ sole cost and expense, and all of which shall survive the expiration or earlier

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termination of this Agreement. IPS will comply with and adhere to the payment card industry (“PCI”) data security standard (“DSS”) in effect from time to time and shall implement and maintain appropriate measures designed to meet the objectives of PCI DSS. In the event a PCI representative or PCI authorized third-party seeks to conduct a security audit or review of IPS at any time, including, without limitation, after an alleged or actual security intrusion, for the purpose of validating IPS’ status, effectiveness or compliance with the PCI DSS, IPS will fully cooperate with such audit or review. IPS (a) is solely responsible for, and will ensure, the integrity, security and confidentiality of Cardholder Data, (b) will protect against any anticipated unauthorized access, threats or hazards to the integrity, security or confidentiality of Cardholder Data; and (c) will only disclose or use the Cardholder Data for those permitted purposes required for the performance of its covenants and obligations under this Agreement and, in any event, only in accordance with Legal Requirement. Upon the reasonable request of Client, IPS shall promptly provide Client with information regarding IPS’ security measures. IPS shall immediately advise Client as to any threatened, suspected or actual compromise of the integrity, security or confidentiality of Cardholder Data and will thereafter diligently keep Client advised as to the status and process of same. IPS will maintain a recovery plan designed to minimize risks associated with any unplanned interruption of IPS’ operations or business or any unplanned inaccessibility to Cardholder Data, which recovery plan IPS will promptly deploy upon any such unplanned interruption or inaccessibility. IPS will immediately, and in no event later than twenty-four (24) hours after the occurrence of any such unplanned interruption or inaccessibility, advise Client as to any such unplanned interruption or inaccessibility. IPS agrees that its obligations under this Section are required and that monetary damages may be inadequate to compensate Client for any breach of any covenant or agreement set forth in this Section and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Client shall be entitled to seek injunctive relief in any required jurisdiction against the threatened breach of this Section or the continuation of any such breach.

20. Privileged Licenses. Client and its Affiliates may be subject to and exist because of privileged licenses issued by governmental authorities responsible for or involved in the regulation of gaming activities (“Gaming Authorities”). If IPS is requested by any Gaming Authority to provide any information and obtain any approval, IPS shall, at Client’s sole expense, provide all requested information and apply for and obtain all approvals required or requested of IPS by such Gaming Authority and if IPS fails to provide any such information and/or obtain any such approval, and if Client or any of Client’s Affiliates are directed to cease business with IPS by the Gaming Authorities, or if Client shall in good faith determine, in Client’s reasonable judgment, that IPS is or may engage in any activity or relationship that could or does jeopardize Client’s or its Affiliates’ privileged licenses in any jurisdiction, then (a) IPS shall terminate any relationship with the person who is the source of such issue, or (b) IPS shall cease the activity or relationship creating the issue to Client’s reasonable satisfaction, or (c) if such activity or relationship is not subject to cure as set forth in the foregoing provisions (a) and (b), as determined by Client in its reasonable discretion, or if Client is required to do so by any Gaming Authority, notwithstanding any other provision hereof, Client shall terminate this Agreement and its relationship with IPS without further obligation to IPS.

21. Counterparts. This Agreement may be executed by the parties in multiple counterparts, each of which shall be considered an original and both of which together shall constitute one and the same Agreement. Any party may deliver an executed copy of this Agreement and an executed copy of any documents contemplated hereby by facsimile transmission to another party, and such delivery shall have the same force and effect as any other delivery of a manually signed copy of this Agreement or such other document.

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Client Name: Global Cash Access, Inc.

Part A: DESCRIPTION OF IPS’ PAYMENT INSTRUMENTS SERVICE:

1. Definitions. Except as otherwise set forth herein, the following terms shall be defined as follows:

a.	“Affiliate” means another person or entity that directly, or indirectly through one or more intermediaries, controls or owns, is controlled, owned by, or is under common control or ownership with, such person or entity. As used in this definition, “control” means the direct or indirect power to direct or cause the direction of the management, affairs or policies of such Person, whether by contract or otherwise and, in any event, any person or entity beneficially owning more than fifty percent (50%) of the equity interests in such person or entity shall be deemed to control that person or entity.
b.	“Card Association” means VISA U.S.A. Inc., VISA International, MasterCard International or any other association, network or issuer having proprietary rights to, and clearing and oversight responsibilities with respect to, credit cards.
c.	“Clearings” means the aggregate face value of Payment Instruments used and sold by Client that are presented for payment.
d.	“Client Printed Payment Instrument” means a Payment Instrument, printed on Secure Document Paper, that has not been pre-printed by IPS, upon which Client has printed IPS issued serial numbers and additional check stock information, and that is sold or used by Client hereunder.
e.	“Face Value” means the United States denominated dollar amount imprinted on the Payment Instrument in the “Pay the Sum” of field of the Payment Instrument.
f.	“Legal Requirement” means, without limitation, any and all foreign, federal, state and local laws, statutes, rules, regulations, codes, ordinances, plans, orders, judgments, decrees, writs, injunctions, notices, decisions or demand letters issued, entered or promulgated pursuant to any foreign, federal, state or local law applicable to their respective businesses, IPS’ provision of its services contemplated hereby, or any of the transactions contemplated hereby.
g.	“Payment Instrument” means an IPS money order used or sold by Client hereunder.
h.	“Pre-Printed Payment Instrument” means a Payment Instrument pre-printed by IPS on Secure Document Paper, which includes IPS issued serial numbers and additional check stock information, and that is sold or used by Client hereunder.
i.	” Prime Rate” means the rate of interest publicly announced as the base rate on corporate loans by large U.S. money center commercial banks, as published by the Federal Reserve Board (http://www.federalreserve.gov/releases/h15/data/Daily/H15_FF_O.txt), or in the event such rate is not published thereon, as published in The Wall Street Journal.
j.	“Properly Payable Payment Instrument” means a Payment Instrument used or sold by Client hereunder that has been fully funded by Client in accordance with the terms, conditions and provisions of this Agreement, reported as having been used or sold by Client, properly presented for payment through the Federal Reserve Board check clearing system and for which no timely and proper stop payment order has been received from Client pursuant to IPS’ stop payment Service Requirements.

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k.

“Secure Document Paper” means IPS’ standard financial paper stock supplied to Client by IPS, containing IPS’ standard security features sold or used by Client hereunder, or financial paper stock acquired by Client from a third party vendor, at Client’s sole cost and expense, in a form containing standard security features that are reasonably approved by IPS and that fully meets IPS’ Service Requirements, that is utilized for the production of a Payment Instrument by Client hereunder.

l.

“Service Requirements” includes any operations manuals, written procedures, user guides, reference manuals, policies, rules or regulations, all as may be amended from time to time by IPS.

2. Relationship.

Upon the terms and conditions hereof, IPS appoints Client and its wholly owned subsidiaries identified on Exhibit “C”, as its agent(s) to use or sell Payment Instruments. IPS and Client shall agree on the form of the Payment Instruments from time to time used and sold by Client. Client shall not use or sell any Payment Instruments pursuant to this Agreement unless the following appears on the face of the Payment Instrument: “Issued by Integrated Payment Systems Inc.” Client shall not use or sell any Payment Instruments pursuant to this Agreement unless IPS’ 800 phone number appears on the Payment Instrument, preferably on the back of the Payment Instrument. Neither Client nor IPS shall appoint any subagents hereunder. IPS agrees and acknowledges that Client is in the business of using or selling Payment Instruments at establishments operating restricted and nonrestricted gaming, games of chance, betting and similar activities, as expressly authorized by Gaming Authorities, within the United States or Canada (the “Locations”) and IPS hereby expressly agrees that Client shall use and sell Payment Instruments at or through the Locations. Subject to, and without limiting the foregoing, Client shall not use or sell Payment Instruments at or through any entity that is not a party to this Agreement or is otherwise agreed to by IPS pursuant to the provisions of this Agreement. Except or otherwise agreed, IPS will supply Client with the blank Payment Instruments that Client is permitted to use or sell. Client shall limit its use of Payment Instruments to those uses a mutually agreed upon from time to time and as reasonably approved in writing as “Payment Instrument” applications by IPS.

3. Obligations of Client.

a. Client shall report each Payment Instrument sold by it hereunder in a sales report that is electronically transmitted to IPS by 3:00 p.m. Mountain Time on the next Banking Business Day following the sale of such Payment Instrument. Upon IPS’ receipt of a Payment Instrument presented for payment that is printed on IPS’ Secure Document Paper and either shows Client’s preprinted name or bears a serial number indicating that it was issued hereunder, and that has not appeared on a sales report, IPS will report the details of such Payment Instrument to Client in a report that is electronically transmitted to Client not later than 10:00 a.m. Mountain Time on the date that the Payment Instrument is required to be honored or dishonored. Client shall notify IPS whether or not the Payment Instrument is a valid Payment Instrument sold by Client prior to 12:00 p.m. Mountain Time on such date. If Client fails to inform IPS whether or not the Payment Instrument was in fact issued prior to 12:00 p.m. Mountain Time on the date the item is required to be paid, IPS may, in its sole and absolute discretion, elect to return the item and Client shall be responsible for all loss, liability, and damages arising out of the return of the Payment Instrument. Notwithstanding anything else set forth herein to the contrary, Client’s failure to comply with the provisions of this Section 3(a.) shall not constitute a default hereunder and IPS’ sole remedy for Client’s failure to so comply shall be Client’s responsibility and associated indemnification obligations for all loss(es), liability, and damages arising out of the return of the Payment Instrument.

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b. Client may only sell Payment Instruments in connection with credit card and point-of-sale debit card transactions consummated by Client in which the settlement funds to be received by Client from the applicable Card Association are at least equal to the Face Value of Payment Instruments used or sold hereunder. All settlement funds shall be handled in the manner prescribed in the Account Settlement Agreement of even date herewith (the “Settlement Agreement”) by and among Client, IPS and Wachovia Bank, N.A., which is hereby identified as Exhibit “A” and attached hereto and made a part hereof. Client agrees that the only instructions it shall deliver to Wachovia Bank, N.A. shall be those instructions contemplated by and delivered pursuant to the provisions of the Settlement Agreement, and shall relate solely to the Face Value to be disbursed to IPS and the Settlement Funds (as defined in the Settlement Agreement) to be disbursed to Client, all in accordance with the provisions of the Settlement Agreement, and Client agrees that it shall endeavor, on a good faith basis, to provide Wachovia Bank, N.A. with accurate instructions. Any other form of instructions provided to Wachovia Bank, N.A., relating to the Settlement Agreement, shall required the prior mutual written consent of the parties hereto.

c.	Client, as soon as practicable, shall inform IPS by written notice of all Locations to be opened or closed at which Payment Instruments are used or sold hereunder. Upon delivery of Payment Instruments to Client, Client shall safeguard and protect all unused and unsold Payment Instruments as if entrusted with any form of negotiable instrument for safekeeping. If Client is utilizing Secure Document Paper provided by IPS hereunder, Client hereby agrees that it will conduct a physical audit of all unused and unsold Payment Instruments, at least twice a year during the Term, and reconcile the physical audit of all such unused and unsold Payment Instruments to IPS’ inventory records. Upon completion, Client shall provide the inventory audit results to IPS via the OfficialCheck.com website or by manual delivery. Client acknowledges and agrees that its books and records may be subject to inspection by any applicable state regulatory authority.
d.	IPS hereby grants Client the authority and ability to produce Client Printed Payment Instruments, on the Secure Document Paper, subject to all of IPS’ requirements. Client shall produce Client Printed Payment Instruments only within the serial number range or ranges provided by IPS in a corresponding data file. Client shall safeguard and protect such serial numbers as it would any Payment Instrument. If Client prints Payment Instruments with duplicate serial numbers or serial numbers outside the range provided by IPS, Client shall pay an additional fee to IPS, as set forth in the IPS Fee Schedule which is hereby identified as Exhibit “B” and attached hereto and made a part hereof.
e.	To ensure efficient processing by IPS of the Payment Instruments used and sold hereunder and its compliance with Legal Requirements, IPS will, from time to time and in its reasonable discretion, issue written operations manuals which shall be included as part of the Service Requirements. Client shall use or sell Payment Instruments only in accordance with such Service Requirements. In the event IPS’ Service Requirements or operational procedures ever conflict with the rules imposed by the Card Association, Client will so notify IPS of any such conflict in writing and IPS will, on a good-faith, commercially reasonable basis, and at the sole cost and expense of Client, cooperate with Client in an effort to align or adjust its Service Requirements or operational procedures accordingly.

4. Obligations of IPS.

a.

IPS shall pay Client the amounts described in Part B: Description of IPS’ Payment Instruments Commission Structure.

b.

Immediately following the Effective Date, IPS will either, as applicable (i) at its expense, arrange for the printing of Pre-Printed Payment Instruments, on IPS’ Secure Document Paper, showing Client’s name, if applicable, or (ii) provide Client with appropriate serial numbers for use by Client in producing Client Printed Payment Instruments. Client shall pay IPS the actual cost per item for specific branch identification, or custom designed Pre-Printed Payment Instruments that differ from IPS’ Secure Document Paper. If Client requests any change in the appearance of the Pre-Printed Payment Instruments already printed for Client, Client agrees to reimburse IPS for IPS’ actual cost of printing those Pre-Printed Payment Instruments that Client has not used or sold. If IPS requests any change in the appearance of any custom designed Pre-Printed Payment Instruments already approved and printed for Client, unless such changes need to be effectuated by virtue of any Legal Requirements, IPS agrees to reimburse Client for the actual cost paid by Client for printing the Pre-Printed Payment Instruments that Client has not used or sold. IPS will arrange for distribution, at IPS cost and expense, of the Payment Instruments to Client at those Locations designated by Client.

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c.	IPS shall provide, at IPS’ cost and expense (except as may otherwise be set forth in Exhibit B), reasonable assistance to Client in tracing lost or stolen Payment Instruments and will provide Client with its standard retrieval, photocopying and other imaging services, as applicable, with respect to Payment Instruments used or sold by Client. Client agrees to use such services in a commercially reasonable manner and only to the extent reasonably required in the conduct of its business.
d.	IPS will, to the extent legally permitted, stop payment on any Payment Instruments at Client’s request, provided that, (i) Client has provided notice of the stop payment to IPS in the manner prescribed by IPS in its Service Requirements; and (ii) IPS has had a commercially reasonable amount of time to act on the stop payment request before presentment of the Payment Instrument(s) in question.
e.	IPS shall, as required by Legal Requirement, escheat all Payment Instruments not presented for payment.

5. Safekeeping and Liability for Loss.

Client shall be absolutely liable to IPS for the Face Value of any Payment Instruments, in all circumstances, where such Payment Instruments have been delivered to Client and are lost, stolen, misappropriated, seized or forfeited from Client and subsequently paid by IPS. Such circumstances may include, but are not limited to: (i) the loss, theft, misappropriation, seizure or forfeiture of Payment Instruments caused, in whole or in part, by the dishonesty and/or negligence of Client; or (ii) the loss, theft, misappropriation, seizure or forfeiture of the Payment Instruments caused, in whole or in part, by the failure of Client to safeguard the Payment Instruments in accordance with this Agreement; or (iii) the loss, theft, misappropriation, seizure or forfeiture of the Payment Instruments caused by a disappearance that Client cannot explain; or (iv) the seizure or forfeiture of Payment Instruments as a direct or indirect result of Client’s involvement in criminal activity or in a transaction or attempted transaction involving criminally derived property or the proceeds of criminally derived property. As used in this subsection, the term “Client” shall include any officer, employee, representative, or agent of Client. For purposes of this section, the definition of “Payment Instruments” shall include Pre-Printed Payment Instruments and the serial numbers provided by IPS to Client for printing on Client Printed Payment Instruments. Client shall assume all liability and risk of loss for the conduct and performance of any third party vendor as contemplated under this Section 5.

6. Alterations and Liability for Loss.

Subject to Section 5 above, IPS assumes responsibility, for payment of the amount by which a raised or altered Payment Instrument exceeds the Face Value of any such instrument and Client shall have no liability therefor in its capacity as agent of IPS hereunder, unless (i) Client issued the Payment Instrument but did not report the Payment Instrument in accordance with Section 3(a) above; or (ii) Client’s own act or omission contributed to or permitted the raising or altering. In the event Payment Instruments are printed on financial paper that has been provided to Client by a third party vendor other than IPS, and notwithstanding anything in this Agreement to the contrary, the parties hereto agree that Client, on behalf of itself, its customers and any third party vendor providing such goods or services to Client, or Client’s customers, shall assume all responsibility, liability and risk of loss for: (a) any defects, errors or omissions associated with the utilization of any mechanism or system to print such Payment Instruments, including, without limitation, laser printing; and (b) any such Payment Instruments which have been lost or stolen; and (c) any such Payment Instruments which have been raised or altered, provided Client contributed directly or indirectly to such raising or altering (as used in this subsection 6(c), the term “Client” shall include any officer, employee, representative, or agent of Client). Client shall assume all liability and risk of loss for the conduct and performance of any third party vendor as contemplated under this Section 6.

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7. Treatment and Default in Payment of Face Value.

In the event that the Face Value is not delivered to IPS at the times and in the manner required hereunder and by the Settlement Agreement, IPS shall demand by written notice delivered in accordance with the terms of the Settlement Agreement, the immediate wire transfer of the required Face Value. In the event that the Face Value is not delivered to IPS prior to 12:00 p.m. Mountain Time on the following Banking Business Day, then IPS may, at its option (i) suspend Client’s ability to sell or use Payment Instruments as of 3:00 p.m. Mountain Time on the same Banking Business Day (the “Suspension Deadline”) and, in the event Client does not suspend its sale or use of Payment Instruments by the Suspension Deadline, terminate this Agreement; provided, however, if IPS receives confirmation of the wiring of the Face Value prior to the Suspension Deadline, the requirement that Client suspend its sale or use of Payment Instruments shall be automatically vacated; (ii) exercise any legal and/or equitable remedies available for which it shall be entitled to reimbursement of reasonable attorneys’ fees and expenses; (iii) dishonor any Payment Instrument used or sold by Client after the Suspension Deadline; (iv) satisfy the amount owed from any funds which may be due and owing to Client; and/or (v) assess a late charge on the amount of the payment due for each day Client fails to make such payment equal to the greater of $25.00 or interest thereon at the rate of two percentage points (2%) above the Prime Rate in effect at that time. If at any time the aggregate amount of Clearings exceeds the aggregate amount of the Face Value that Client has remitted to IPS (the “Excessive Clearings”), IPS shall provide Client with written notice of same and Client shall in accordance with the instructions of IPS, cause the amount specified by IPS as required to cover the Excessive Clearings to be wired to the Settlement Account; provided, however, if the Excessive Clearings are greater than $200,000.00, Client shall cause such wire to be sent for credit on the same Banking Business Day of receipt of such notice, and if the Excessive Clearings are less than or equal to $200,000.00, Client shall cause such wire to be sent for credit within three (3) Banking Business Days of receipt of such notice. Notwithstanding the preceding provisions of this Section 7, no delayed remittance schedule or Suspension Deadline shall apply, unless the delay in Client’s remittance of the required Face Value amount to IPS is solely and exclusively attributable to the failure of Wachovia Bank, N.A. to receive the required settlement funds. Therefore, if the delayed remittance schedule and/or Suspension Deadline do not apply, all of the IPS optional remedies, set forth in clauses (i) through (v) of this Section 7, including the right to terminate this Agreement, shall apply.

8. Modifications of Remittance, Reporting and Commission Payment Procedures.

IPS may change the provisions hereof regarding remittance, reporting and commission payments, including the amount thereof, on a commercially reasonable, good faith basis, on one hundred eighty (180) days prior written notice to Client. Before the conclusion of this one hundred eighty (180) day period, Client may terminate this Agreement upon thirty (30) days prior written notice to IPS. If Client elects to so terminate this Agreement, the changes shall not take effect.

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9. Effect of Termination.

Upon termination of this Agreement, Client shall (a) immediately cease using and selling Payment Instruments, (b) return or destroy, as directed by IPS, and reimburse IPS for the actual unreimbursed cost of printing incurred by IPS for all Payment Instruments that Client has not used or sold prior to termination and for the cost of destroying any remaining warehoused inventory of such Payment Instruments held by IPS, (c) return to IPS any equipment and other property provided by IPS in accordance with the terms of this Agreement, free and clear of liens and encumbrances within ninety (90) Banking Business Days from the date of termination and (d) remit to IPS all Face Value and other amounts due to IPS in accordance with the terms of this Agreement and/or the Trust Agreement, as applicable, within one (1) Banking Business Day from the date of termination.

10. Miscellaneous.

The parties agree that in lieu of the Settlement Agreement described in Subsection 3(b.) of Part A hereof, Client shall have the option to (a) provide IPS with a one-day pre-funding amount of Face Value funds that represents the one-day average Face Value of Payment Instruments that are used or sold by Client hereunder, which amount would be re-calculated and adjusted each calendar month during the term of this Agreement, in accordance with IPS’ requirements and procedures or (b) a letter of credit in an amount acceptable to IPS, that would also be subject to a regular periodic review and adjustment by IPS, as applicable; provided, however, IPS shall not require the letter of credit to be issued in an amount that is more than an amount equal to the greatest amount of Face Value of items paid by IPS on any Banking Business Day during the three hundred sixty five (365) calendar day period immediately preceding the issuance date of such letter of credit.

11. Conflict.

In the event of any conflict between the terms of this Agreement and the terms of the Settlement Agreement, the terms of this Agreement shall govern and control.

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Client Name: Global Cash Access, Inc.

Part B: DESCRIPTION OF IPS’ PAYMENT INSTRUMENTS COMMISSION STRUCTURE:

1. Definitions. Except as otherwise set forth herein, the following terms shall be defined as follows:

a.	“Average Commission Rate” means, with respect to each applicable use of Payment Instruments, an amount calculated as follows: (i) sum total of the Commission Rate for each of the days in such calendar month, (ii) divided by the sum of the number of days in such calendar month.
b.	“Average Daily Balance” means, with respect to each applicable use of Payment Instruments, an amount calculated as follows: (i) total the Daily Balances for each of the days in such calendar month, (ii) divided by the sum calculated in of the number of days in such calendar month.
c.	“Banking Business Day” means a day (other than a Saturday, Sunday, Federal holiday or other day that financial institutions are authorized or required to be closed for business) on which UBOC is open for business.
d.	“Commission Rate” means, with respect to each applicable use of Payment Instruments, a floating rate equal to the rate set forth below. Commission Rates paid by IPS and IPS Fees paid by Client shall vary depending upon the use of the Payment Instrument as follows:

Use Of Payment Instrument	Commission Rate	IPS Fee
Money Orders	Federal Funds Rate (Payable on U.S. Items Only)	Per Attached Exhibit B

e.	“Daily Balance” means, with respect to each applicable use of Payment Instruments, an amount equal to the Face Value of all Payment Instruments used or sold by Client through the end of such day which have not yet been honored by IPS or escheated as required by Legal Requirement but with respect to which a sum equal to the Face Value of such Payment Instruments has been remitted to IPS. Remittances received by IPS after 12:00 p.m., Mountain Time, on any Banking Business Day, shall not be credited to Client until the next Banking Business Day.
f.	“IPS Fee” means a fee paid to IPS in the amount set forth in subparagraph e. above for each Payment Instrument used or sold by Client.
g.	“Federal Funds Rate” means the floating rate publicly announces as the Federal Funds Rate as published by the Federal Reserve Board (http://www.federalreserve.gov/releases/h15/data/Daily/H15_FF_O.txt), or in the event such rate is not published thereon, as published in The Wall Street Journal.

2. Commission Calculation.

a. IPS shall pay to Client a commission payment for each Payment Instrument (payable on U.S. items only) used or sold, calculated in accordance with the terms hereof. At the end of each calendar month the commission payment to be delivered to Client shall be calculated, with respect to use and sale of Payment Instruments, by multiplying the sum of the Average Daily Balance during that month times that month’s Average Commission Rate, divided by the number of calendar days in the year, times the number of calendar days in that month. Such monthly commission payment shall be made within fifteen (15) Banking Business Days of the beginning of the following calendar month and shall continue to be made until the later of the expiration or earlier termination of this Agreement or the delivery of all such commission payments accrued hereunder, as calculated as of the date of such expiration or termination of this Agreement. IPS’ obligation to pay the required final commission payment shall continue until such final amount is actually paid. The amount of the commission payment shall be adjusted to reflect prior and current period adjustments in accordance with IPS’ Service Requirements.

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b. Client shall pay IPS the fees set forth in Exhibit B, which amounts shall be deducted by IPS from the monthly commission payment described above. IPS may also deduct certain additional fees or other amounts due hereunder from the commission payment described above associated with PUAs, late wire remittance penalties, and for any additional special requests made by Client as may be mutually identified and agreed to by the parties. In the event there are additional fees or charges due and payable by Client to IPS that are not specifically set forth or otherwise contemplated above, IPS shall deliver an invoice detailing all of such fees and charges to Client, together with any reasonably required supporting documentation, and Client shall pay such invoice within thirty (30) calendar days of receipt thereof by check or money order.

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EXHIBIT A

SETTLEMENT AGREEMENT

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EXHIBIT B

FEE SCHEDULE

[OMITTED PURSUANT TO CONFIDENTIAL TREATMENT
REQUEST; FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]

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EXHIBIT C

CLIENT’S WHOLLY OWNED SUBSIDIARIES

Name	Address
CashCall Systems Inc.	3525 East Post Road, Suite 120
	Las Vegas, NV 89120

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STATE SCHEDULE A

With respect to Clients participation in IPS’ Payment Instruments program, this Exhibit A applies to any of Clients locations in the states listed below.

CALIFORNIA, IDAHO, INDIANA, MAINE, MARYLAND, MINNESOTA, NEW YORK, NORTH CAROLINA, OREGON, TENNESSEE, WYOMING

Client and IPS are subject to supervision, regulation and disciplinary action, including but not limited to termination of the Agreement, by or at the direction of the Director (as defined below). Client hereby consents to the Director’s inspection of the books and records of Client, with or without prior written notice to IPS or Client.

As used in this Exhibit A, “Director” means the following for each of the states listed below:

California — Commissioner of Financial Institutions
Idaho — Director of the Idaho Department of Finance
Indiana — Director of Indiana Department of Financial Institutions
Maine — Director of Office of Consumer Credit Regulation within the Department of Professional and Financial Regulation
Maryland — Bank Commissioner of the Department of Licensing and Regulation
Minnesota — Commissioner of Commerce
New York — Superintendent of the New York State Banking Department
North Carolina — Commissioner of Banks of the Sate of North Carolina
Oregon — Director of the Department of Consumer and Business Services
Tennessee — Tennessee Commissioner of Financial Institutions
Wyoming — State Banking Commissioner

CALIFORNIA, DISTRICT OF COLUMBIA, ILLINOIS,

IOWA, MARYLAND, NEW JERSEY, VERMONT,

WASHINGTON, TEXAS

Client will perform all services in compliance with the Act (as defined below) and any rules, regulations or orders issued thereunder, as amended from time to time.

As used in this Exhibit A, “the Act” means the following for each of the states listed below:

California — Division 16 of the California Payment Instruments Law
District of Columbia — Money Transmissions Law, Chapter 12 of Title 26 of the District of Columbia Code
Illinois — the laws of the State of Illinois and the United States, including without limitation, Illinois Transmitters

of Money Act, 205 Illinois Compiled Statutes Section 657
Iowa — Iowa Uniform Money Services Act, Chapter 533C of the Iowa Code
Maryland — Maryland Money Transmission Act, Md. Code Ann., Fin. Inst. Sections 12-401 to 12-431
New Jersey — New Jersey Money Transmitters Act, New Jersey Statutes, Title 17, Chapter 15C.
Vermont — Chapter 79, Title 8 of the Vermont Statutes
Washington — Washington Uniform Money Services Act, Revised Code of Washington, Title 19, Chapter 19.230
Texas — All laws and regulations of the State of Texas, including, but not limited to, the posting of the following notice to consumers as required under Title 7, Section 29.12 of the Texas Administrative Code:

“Complaints concerning the sale of checks activities should be directed to:

Texas Department of Banking
2601 North Lamar Boulevard
Austin, Texas 78705
1-877-276-5554 (toll free)
www.banking.state.tx.us”

ILLINOIS
This Agreement is conditioned on Client receiving approval from the State of Illinois to operate as a Money Transfer Agent in that State and shall not take effect unless and until such approval is received. In the event such approval is denied or not received, this Agreement shall be null and void. If such approval is revoked, IPS may immediately terminate this Agreement upon written notice, any other provision of this Agreement notwithstanding.

NEW YORK
Client is prohibited from acting on behalf of the consumer as a courier for the transmission of money, and no Money Order sold may be retained by Client. All Money Orders sold must be given by the Client to the purchasers of the instruments for their own delivery to the beneficiary.

NORTH CAROLINA
IPS shall issue a certificate of authority for each location at which it conducts licensed activities in North Carolina through authorized delegates such as Client. The certificate shall be posted in public view at each location of Client in North Carolina and shall state as follows: “Money transmission on behalf of IPS is conducted at this location pursuant to the Money Transmitters Act.”

1

STATE SCHEDULE A

ARIZONA STATE STATUTE

6-1201. Definitions
In this chapter, unless the context otherwise requires:
1. “Authorized delegate” means a person designated by the licensee under Section 6-1208.
2. “Check cashing” means exchanging for compensation a check, debit card payment order, draft, money order, traveler’s check or payment instrument of a licensee for money delivered to the presenter at the time and place of the presentation.
3. “Control” means ownership of fifteen per cent or more of a licensee or controlling person, or the power to vote fifteen per cent or more of the outstanding voting securities of a licensee or controlling person. For the purpose of determining the percentage controlled by any one person, that person’s interest shall be aggregated with the interest of any other person controlled by that person or an officer, partner or authorized delegate of that person, or by a spouse, parent or child of that person.
4. “Controlling person” means a person directly or indirectly in control of a licensee.
5. “Engage in the business” means conducting activities regulated under this chapter more than ten times in any calendar year for compensation or in the expectation of compensation. For purposes of this paragraph, “compensation” means any fee, commission or other benefit.
6. “Foreign money exchange” means exchanging for compensation money of the United States government or a foreign government to or from money of another government at a conspicuously posted exchange rate at the time and place of the presentation of the money to be exchanged.
7. “Licensee” means a person licensed under this chapter.
8. “Location” means a place of business at which activity regulated by this chapter occurs.
9. “Money” means a medium of exchange that is authorized or adopted by a domestic or foreign government as a part of its currency and that is customarily used and accepted as a medium of exchange in the country of issuance.
10. “Money accumulation business” means obtaining money from a money transmitter as part of any activity that is carried on for financial gain if the money that is obtained by all persons acting in concert in the activity, in amounts of one thousand dollars or more, totals over fifty thousand dollars in the preceding twelve-month period. Money accumulation business does not include a person who is subject to the reporting requirements under 31 United States Code Section 5313. The exception that is established by 31 United States Code Section 5331, subsection (c), paragraph 1 does not apply to persons who are engaged in the money accumulation business.
11. “Money Transmitter” means a person who is located or doing business in this state, including a check casher and a foreign money exchanger, and who does any of the following:

(a) Sells or issues payment instruments.

(b) Engages in the business of receiving money for the transmission of or transmitting money.

(c) Engages in the business of exchanging payment instruments or money into any form of money or payment instrument.

(d) Engages in the business of receiving money for obligors for the purpose of paying that obligor’s bills, invoices or accounts.

(e) Meets the definition of a bank, financial agency or financial institution as prescribed by 31 United States Code Section 5312 or 31 Code of Federal Regulations Section 103.11.

12. “Outstanding payment instruments” means unpaid payment instruments whose sale has been reported to a licensee.
13. “Payment instrument” means a check, draft, money order, traveler’s check or other instrument or order for the transmission or payment of money sold to one or more persons whether or not that instrument or order is negotiable. Payment instrument does not include an instrument that is redeemable by the issuer in merchandise or service, a credit card voucher or a letter of credit.
14. “Permissible investment” means any of the following:

(a) Money on hand or on deposit in the name of the licensee.

(b) Certificates of deposit or other debt instruments of a bank, savings and loan association or credit union.

(c) Bills of exchange or time drafts that are drawn on and accepted by a bank, otherwise known as banker’s acceptances, and that are eligible for purchase by member banks of the Federal Reserve System.

(d) Commercial paper bearing a rating of one of the three highest grades as defined by a nationally recognized organization that rates these securities.

(e) Securities, obligations or other instruments whose payment is guaranteed by the general taxing authority of the issuer, of the United States or of any state or by any other governmental entity or any political subdivision or instrumentality of a governmental entity and that bear a rating of one of the three highest grades by a nationally recognized investment service organization that has been engaged regularly in rating state and municipal issues for at least five years.

(f) Stocks, bonds or other obligations of a corporation organized in any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico or the several territories organized by Congress that bear a rating of one of the three highest grades by a nationally recognized investment service organization that has been engaged regularly in rating corporate securities for at least five years.

(g) Any receivable that is due to a licensee from its authorized delegate pursuant to a contract between the licensee and authorized delegate as prescribed in Section 6-1208 if the amount of investment in those receivables does not exceed ninety per cent of the total amount of those receivables after subtracting the amount of those receivables that are past due or doubtful of collection.

15. “Responsible individual” means a person who is employed by a licensee and who has principal active management authority over the business of the licensee in this state that is regulated under this chapter.
16. “Trade or business” has the same meaning prescribed in Section 162 of the Internal Revenue Code of 1954 and includes the money accumulation business.
17. “Transmitting money” means the transmission of money by any means including transmissions within this country or to or from locations abroad by payment instrument, wire, facsimile, internet or any other electronic transfer, courier or otherwise.
18. “Traveler’s check” means an instrument identified as a traveler’s check on its face or commonly recognized as a traveler’s check and issued in a money multiple of United States or foreign currency with a provision for a specimen signature of the purchaser to be completed at the time of purchase and a countersignature of the purchaser to be completed at the time of negotiation.

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6-1202. License required
A. A person shall not sell or issue payment instruments, engage in the business of receiving money for transmission or transmitting money, engage in the business of exchanging payment instruments or money into any form of money or payment instrument or engage in the business of receiving money for obligors for the purpose of paying that obligor’s bills, invoices or accounts without first obtaining a license as provided in this chapter or becoming an authorized delegate of a licensee with respect to those activities. A licensee is under the jurisdiction of the department. A person who is not licensed under this chapter or who is not an authorized delegate of a licensee with respect to those activities is presumed to be engaged in a business that is regulated by this chapter and that requires a license if he advertises, solicits or holds himself out as being in the business of selling or issuing payment instruments, of receiving money for transmission or transmitting money or of converting one form of money to another form of money.
B. No person other than a corporation organized and in good standing under the laws of the state of its incorporation or, if a corporation organized under the laws of a country other than the United States and in good standing under the laws of the country of its incorporation and authorized to do business in this state, may apply for or be issued a license as provided in this chapter.
C. A person engages in business activity regulated by this chapter in this state if any of the following applies:

1. Conduct constituting any element of the regulated activity occurs in this state.

2. Conduct occurs outside this state and constitutes an attempt, offer or conspiracy to engage in the activity within this state and an act in furtherance of the attempt, offer or conspiracy occurs within this state.

3. As part of a business activity described by this section a person knowingly transmits money into this state or makes payments in this state without disclosing the identity of each person on whose behalf money was transmitted or payment was made.

6-1203. Exemptions
A. This chapter does not apply to:

1. The United States or any department or agency of the United States.

2. This state, including any political subdivision of this state.

B. This chapter does not apply to the following if engaged in the regular course of their respective businesses, except that the provisions of Article 2 of this chapter apply to:

1. A bank, financial institution holding company, credit union, savings and loan association or savings bank, whether organized under the laws of any state or the United States when the term “Money Transmitter” is used.

2. A person who engages in check cashing or foreign money exchange and engages in other activity regulated under this chapter only as an authorized delegate of a licensee acting within the scope of the contract between the authorized delegate and the licensee.

3. A person licensed pursuant to chapter 5, 6, 7 or 8 of this title, chapter 9, article 2 of this title, chapter 12.1 of this title or title 32, chapter 9.

6-1204. Application for License; Fees
A. Each application for a license shall be made in writing, under oath and in the form prescribed by the superintendent. The application shall contain at least the following:

1. Copies of the articles of incorporation for the applicant, a listing of all trade names or fictitious names used by the applicant and other information concerning the corporate status of the applicant.

2. The address of the applicant’s principal place of business, the address of each location where the applicant intends to transact business in this state, including any branch offices, and the name and address of each location of any authorized delegates.

3. For each executive officer and director of the applicant and for each executive officer and director of any controlling person, unless the controlling person is a publicly traded company on a recognized national exchange and has assets in excess of four hundred million dollars, a statement of personal history in the form prescribed by the superintendent.

4. An identification statement for each branch manager and responsible individual including all of the following:

(a) Name and any aliases or previous names used.

(b) Date and place of birth.

(c) Alien registration information, if applicable.

(d) Employment history and residence addresses for the preceding fifteen years.

(e) Social security number.

(f) Criminal convictions, excluding traffic offenses.

5. The name and address of each authorized delegate.

6. The identity of any account in any financial institution through which the applicant intends to conduct any business regulated under this chapter.

7. A financial statement audited by a licensed independent certified public accountant.

6-1205. Bond Required; Conditions; Notice; Cancellation; Substitution
A. Each application for a license shall be accompanied by and each licensee shall maintain at all times a bond executed by the licensee as principal and a surety company authorized to do business in this state as surety. The bond shall be in the amount of twenty-five thousand dollars for a licensee with five or fewer authorized delegates and locations, one hundred thousand dollars for a licensee with more than five but fewer than twenty-one authorized delegates and locations and an additional five thousand dollars for each authorized delegate and location in excess of twenty but fewer than two hundred one authorized delegates and locations, to a maximum of two hundred fifty thousand dollars and an additional five thousand dollars for each authorized delegate and location in excess of two hundred authorized delegates and locations, to a maximum of five hundred thousand dollars.

B. The bond shall be conditioned on the faithful compliance of the licensee, including its directors, officers, authorized delegates and employees, with this chapter. The bond shall be payable to any person injured by the wrongful act, default, fraud or misrepresentation of the licensee, his authorized delegates or his employees or to the state for the benefit of the person injured. Only one bond is required for any licensee irrespective of the number of officers, directors, locations, employees or authorized delegates of that licensee.

C. The bond shall remain in effect until cancelled by the surety, which cancellation may be had only after thirty days’ written notice to the superintendent. That cancellation does not affect any liability incurred or accrued during the thirty-day period.

D. In lieu of the bond prescribed in this section, an applicant for a license or a licensee may deposit with the superintendent cash or alternatives to cash acceptable to the superintendent in the amount of the required bond. Notwithstanding § 35-155, subsection E, the principal amount of the deposit shall be released only on written authorization of the superintendent or on the order of a court of competent jurisdiction. The principal amount of the deposit shall not be released to the licensee before the expiration of five years from the first occurrence of any of the following:

1. The date of substitution of a bond for a cash alternative unless the superintendent determines in his discretion that the bond constitutes adequate security for all past, present or future obligations of the licensee. After that determination, the cash alternative may be immediately released.

2. The surrender of the license.

3. The revocation of the license.

4. The expiration of the license.

E. Notwithstanding subsections A through D of this section, if the required amount of the bond is reduced, whether by change in the number of authorized delegates or locations or by legislative action, a cash deposit in lieu of that bond shall not be correspondingly reduced but shall be maintained at the higher amount until the expiration of three years from the effective date of the reduction in the required amount of that bond unless the superintendent in his discretion determines otherwise.

EXECUTION
11/27/06

6-1205.01. Net Worth Requirements
A. Each applicant for a license shall have and each licensee shall maintain at all times a net worth of at least one hundred thousand dollars, calculated according to generally accepted accounting principles.

B. Any licensee who is engaged in the business regulated under this chapter at more than one location pursuant to Section 6-1207 or through authorized delegates pursuant to Section 6-1208 shall have an additional net worth of fifty thousand dollars for each location or authorized delegate located in this state, as applicable, to a maximum of five hundred thousand dollars.

C. A licensee whose business conducts a total of more than five hundred thousand dollars in transactions that involve transmitting money in an amount of one thousand dollars or more during the preceding year shall maintain net worth in addition to the amounts required by subsections a and b of this section. The additional net worth shall be not less than ten per cent of the total of such transactions conducted in this state, calculated according to generally accepted accounting principles to a maximum of five hundred thousand dollars.

6-1206. Issuance of License; Renewal
A. On the filing of a complete application, the superintendent shall investigate the financial condition and responsibility, financial and business experience, character and general fitness of the applicant. In his discretion, the superintendent may conduct an on-site investigation of the applicant, the reasonable cost of which shall be borne by the applicant. The superintendent shall issue a license to an applicant if the superintendent finds that all of the following conditions are met:

1. The applicant has complied with §§ 6-1204, 6-1205 and 6-1205.01.

2. The competence, experience and integrity of the officers, directors and controlling persons and any proposed management personnel indicate that it would be in the interest of the public to permit such person to participate in the affairs of a licensee.

3. The applicant has paid the required license fee.

B. The superintendent shall approve or deny every application for an original license within one hundred twenty days after the date an application is complete, which period may be extended by the written consent of the applicant. The superintendent shall notify the applicant of the date on which the application is determined to be complete. In the absence of approval or denial of the application or consent to the extension of the one hundred twenty day period, the application is deemed approved and the superintendent shall issue the license effective as of the first business day after that one hundred twenty day period or any extended period.

C. A licensee shall pay a renewal fee as prescribed in § 6-126 on or before November 1 of each year. The renewal fee shall be accompanied by a renewal application in the form prescribed by the superintendent. A license for which no renewal fee and application have been received by November 1 shall be suspended. A licensee may renew a suspended license no later than December 1 of the year of expiration by paying the renewal fee plus one hundred dollars for each day the renewal fee and application were not received by the superintendent. A license expires on December 1 of each year, unless earlier renewed, surrendered or revoked. A license shall not be granted to the holder of an expired license or to an incorporator, director or officer of the holder of an expired license except on compliance with the requirements provided in this article for an original license.

6-1207. Principal and Branch Offices; Notices
A. A licensee shall designate and maintain a principal place of business for the transaction of business regulated by this chapter. If a licensee maintains one or more places of business in this state, the licensee shall designate a place of business in this state as its principal place of business for purposes of this section. The license shall specify the address of the principal place of business and shall designate a responsible individual for its principal place of business.

B. If a licensee maintains one or more locations in this state in addition to a principal place of business, and those locations are to be under the control of the licensee and not under the control of authorized delegates as prescribed in § 6-1208, the licensee shall obtain a branch office license from the superintendent for each additional location by filing an application as required by the superintendent at the time the licensee files its license application. If branch offices are added by the licensee, the licensee shall file with the superintendent an application for a branch office license with the licensee’s next quarterly fiscal report prescribed by § 6-1211. The superintendent shall issue a branch office license if the superintendent determines that the licensee has complied with the provisions of this subsection. The license shall indicate on its face the address of the branch office and shall designate a manager for each branch office to oversee that office. The superintendent may disapprove the designated manager then or at any later time if the superintendent finds that the competence, experience and integrity of the branch manager warrants disapproval. A person may be designated as the manager for more than one branch. The licensee shall submit a fee as prescribed in § 6-126 for each branch office license.

C. A licensee shall prominently display the money transmitter license in its principal place of business and the branch office license in each branch office. Each authorized delegate shall prominently display at each location a notice in a form prescribed by the superintendent that indicates that the authorized delegate is an authorized delegate of a licensee under this chapter.

D. The address of the principal place of business or any branch office is changed, the licensee shall immediately notify the superintendent of the change. The superintendent shall endorse the change of address on the license for a fee as prescribed in § 6-126.

6-1208. Authorized Delegates of Licensee; Reports
A. A licensee may conduct the business regulated under this chapter at one or more locations in this state through authorized delegates designated by the licensee.

B. Each contract between a licensee and an authorized delegate shall require the authorized delegate to operate in full compliance with the law and shall contain as an appendix a current copy of this chapter. The licensee shall provide each authorized delegate with operating policies and procedures sufficient to permit compliance by the delegate with the provisions of title 13, chapter 23 and this chapter and rules adopted pursuant to this chapter. The licensee shall promptly update the policies and procedures to permit compliance with those laws and rules.

C. An authorized delegate is not liable for any obligation imposed on its licensee by this chapter with respect to the business for which it is a delegate. On suspension or revocation of a license or the failure of a licensee to renew its license, the superintendent shall notify all delegates of the licensee who are on record with the department of the department’s action. On receipt of this notice, an authorized delegate shall immediately cease to operate as a delegate of that licensee.

6-1209. Cease and Desist Orders; Examinations
A. In addition to his authority under § 6-137, the superintendent may issue an order to cease and desist against a licensee, requiring the licensee to cease conducting its business through an authorized delegate and to take appropriate affirmative action, pursuant to § 6-137, if the superintendent finds that:

1. The authorized delegate has violated, is violating or is about to violate any applicable law or rule or order of the superintendent.

2. The authorized delegate has failed to cooperate with an examination or investigation by the superintendent or the attorney general authorized by this title.

3. The competence, experience, integrity or overall moral character of the authorized delegate or any controlling person of the authorized delegate indicates that it would not be in the interest of the public to permit that person to participate in the business regulated under this chapter.

EXECUTION
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4. The financial condition of the authorized delegate is such that it might prejudice the interests of the public in the conduct of the business regulated under this chapter.

5. The authorized delegate has engaged, is engaging or is about to engage in any unsafe or unsound act, practice or transaction or an act, practice or transaction that constitutes a violation of this title or of any rule or order of the superintendent.

B. Any business for which a license is required by this chapter conducted by an authorized delegate outside the scope of authority conferred in the contract between the authorized delegate and the licensee is unlicensed activity. An authorized delegate of a licensee holds in trust for the benefit of the licensee all monies received from the sale or delivery of the licensee’s payment instruments or monies received for transmission. If an authorized delegate commingles any such monies with any monies or other property owned or controlled by the authorized delegate, a trust against all commingled proceeds and other monies or property owned or controlled by the authorized delegate is imposed in favor of the licensee in an amount equal to the amount of the proceeds due the licensee. C. An authorized delegate is subject to examination by the superintendent at the discretion of the superintendent. The licensee is responsible for the payment of an assessment for the examination of its authorized delegates to the extent that the examination relates to the activities conducted by the authorized delegate on behalf of the licensee. That assessment shall be made at the rate set by the superintendent for examination of an enterprise pursuant to § 6-125, subsection B, and payment of that assessment shall be made as prescribed by § 6-125.

6-1210. Suspension or Revocation of Licenses
The superintendent may suspend or revoke a license if the superintendent finds any of the following:
1. The licensee has made a material misstatement or suppressed or withheld information on an application for a license or any document required to be filed with the superintendent.

2. A fact or condition exists that, if it had existed or had been known at the time the licensee applied for its license, would have been grounds for denying the application.

3. The licensee is insolvent as defined in § 47-1201.

4. The licensee has violated any provision of title 13, chapter 23, this chapter or rules adopted pursuant to this chapter or any order of the superintendent.

5. An authorized delegate of the licensee has violated any provision of title 13, chapter 23, this chapter or rules adopted thereunder or any order of the superintendent as a result of a course of negligent failure to supervise or as a result of the willful misconduct of the licensee.

6. The licensee refuses to permit the superintendent or the attorney general to make any examination authorized by this title.

7. The licensee knowingly fails to make any report required by this chapter.

8. The licensee fails to pay a judgment entered in favor of a claimant, plaintiff or creditor in an action arising out of the licensee’s business regulated under this article within thirty days after the judgment becomes final or within thirty days after expiration or termination of a stay of execution or other stay of proceedings, whichever is later. If execution on the judgment is stayed by court order, operation of law or otherwise, proceedings to suspend or revoke the license for failure of the licensee to comply with that judgment may not be commenced by the superintendent under this subsection until thirty days after that stay.

9. The licensee has been convicted in any state of a felony or of any crime involving a breach of trust or dishonesty.

6-1211. Reports
Each licensee shall file with the superintendent within forty-five days after the end of each fiscal quarter a consolidated financial statement including a balance sheet, income and expense statements and a list of all authorized delegates, branch managers, responsible individuals and locations within this state that have been added or terminated by the licensee within the fiscal quarter. Information regarding branch managers and responsible individuals shall include the information prescribed in § 6-1204, subsection A, paragraph 4. For locations and authorized delegates, the licensee shall include the name and street address of each location and authorized delegate.

6-1212. Permissible Investments
A. Every licensee shall maintain at all times permissible investments that comply with either of the following:

1. A market value computed in accordance with generally accepted accounting principles of not less than the aggregate amount of all of its outstanding payment instruments.

2. A net carrying value computed in accordance with generally accepted accounting principles of not less than the aggregate amount of all of its outstanding payment instruments, provided the market value of these permissible investments is at least ninety-five per cent of the net carrying value.

B. Notwithstanding any other provision of this chapter, the superintendent, with respect to any particular licensee or all licensees, may limit the extent to which any class of permissible investments as defined in § 6-1201 may be considered a permissible investment, except for money and certificates of deposit. The superintendent may by rule prescribe or by order allow other types of investments which the superintendent determines to have substantially equivalent safety as other permissible investments to be considered a permissible investment under this chapter.

6-1213. Records
A. Each licensee shall keep and use in its business books, accounts and records in accordance with generally accepted accounting principles that will enable the superintendent to determine whether that licensee is complying with the provisions of this chapter. Each licensee and authorized delegate shall preserve its records for at least five years after making the final entry on any transaction. Each authorized delegate shall keep records as required by the superintendent.

B. For each authorized delegate, the licensee shall maintain records that demonstrate that the licensee conducted a reasonable background investigation of each authorized delegate. A licensee shall preserve those records for at least five years after the authorized delegate’s most recent designation by the licensee. For an authorized delegate designated after November 1, 1991, the records shall be available at all times, and for an authorized delegate designated on or before November 1, 1991, the records shall be available at all times after November 1, 1992.

C. The records of the licensee regarding the business regulated under this chapter shall be maintained at its principal place of business or, with notice to the superintendent, at another location designated by the licensee. If the records are maintained outside this state, the superintendent may require that the licensee make those records available to the superintendent at his office not more than five business days after demand. The superintendent may further require that those records be accompanied by an individual who is available to answer questions regarding those records and the business regulated under this chapter. The superintendent may require the appearance of a specific individual or may request the licensee to designate an individual knowledgeable with regard to the records and the business. The individual appearing with the records shall be available to the superintendent for up to three business days.

EXECUTION
11/27/06

D. On-site examinations of records prescribed by this chapter may be conducted in conjunction with representatives of other state agencies or agencies of another state or of the federal government as determined by the superintendent. In lieu of an on-site examination, the superintendent may accept the examination report of an agency of this state or of another state or of the federal government or a report prepared by an independent licensed certified public accountant. Joint examination or acceptance of an examination report shall not be deemed a waiver of examination assessments provided by law, and joint reports and reports accepted under this subsection are considered an official report of the department for all purposes. Information obtained by examinations prescribed by this article shall be disclosed only as provided in § 6-129.

6-1214. Liability of Licensees
Each licensee is liable for the payment of all moneys covered by payment instruments that it sells or issues in any form in this state whether directly or through an authorized delegate and whether as a maker or drawer or as money received for obligors or for transmission by any means whether or not that instrument is a negotiable instrument under the laws of this state.

6-1215. Notice of Source of Instrument; Transaction Records
A. Every payment instrument sold by a licensee directly or through an authorized delegate shall bear the name of the licensee and a unique consecutive number clearly stamped or imprinted on it.

B. For every transaction involving the receipt of money from a customer, the licensee or authorized delegate who receives the money shall maintain written records of the transaction. The records may be reduced to computer or other electronic medium. The records collectively shall contain the name of the licensee, the street address of the location where the money was received, the name and street address of the customer if reported to the licensee or authorized delegate, the approximate date of the transaction, the name or other information from which, together with other contemporaneous records, the superintendent can determine the identity of those employees of the licensee or authorized delegate who may have conducted the transaction and the amount of the transaction. The information required by this section shall be available through the licensee or authorized delegate who received the money for at least five years from the date of the transaction.

6-1216. Acquisition of control
A. A person shall not directly or indirectly acquire control of a licensee or controlling person without the prior written approval of the superintendent, except as otherwise provided by this section.

B. An application for approval to acquire control of a licensee shall be in writing in a form prescribed by the superintendent and shall be accompanied by information as the superintendent may require. The application shall be accompanied by the fee prescribed in § 6-126. The superintendent shall act on the application within one hundred twenty days after the date on which the application is complete, unless the applicant consents in writing to an extended period. An application that is not denied or approved within that period shall be deemed approved as of the first business day after the expiration of that period.

C. The superintendent shall deny the application to acquire control of a licensee if he finds that the acquisition of control is contrary to law or determines that disapproval is reasonably necessary to protect the interest of the public. In making that determination, the superintendent shall consider both of the following:

1. Whether the financial condition of the person that seeks to control the licensee might jeopardize the financial condition of the licensee or prejudice the interests of the public in the conduct of the business regulated under this chapter.

2. Whether the competence, experience, integrity and overall moral character of the person that seeks to control the licensee, or the officers, directors and controlling persons of the person that seeks to control the licensee, indicate that it would not be in the interest of the public to permit that person to control the licensee.

D. Nothing in this section prohibits a person from negotiating or entering into agreements subject to the condition that the acquisition of control will not be effective until approval of the superintendent is obtained.
E. This section does not apply to any of the following persons or transactions:

1. A registered dealer who acts as an underwriter or member of a selling group in a public offering of the voting securities of a licensee or controlling person of a licensee.

2. A person who acts as proxy for the sole purpose of voting at a designated meeting of the security holders of a licensee or controlling person of a licensee.

3. A person who acquires control of a licensee or controlling person of a licensee by devise or descent.

4. A person who acquires control of a licensee or controlling person as a personal representative, custodian, guardian, conservator, trustee or any other officer appointed by a court of competent jurisdiction or by operation of law.

5. A pledgee of a voting security of a licensee or controlling person who does not have the right, as pledgee, to vote that security.

6. A person or transaction that the superintendent by rule or order exempts in the public interest.

F. Before filing an application for approval to acquire control, a person may request in writing a determination from the superintendent as to whether that person will be deemed in control on consummation of a proposed transaction. If the superintendent determines in response to that request that the person will not be in control within the meaning of this chapter, the superintendent shall enter an order to that effect and the proposed transaction is not subject to the requirements of this section.

6-1217. Appointment of Superintendent as Agent for Service of Process; Forwarding of Process; Consent to Jurisdiction
A. A licensee, an authorized delegate or a person who knowingly engages in business activities that are regulated under this chapter with or without filing an application is deemed to have done both of the following:

1. Consented to the jurisdiction of the courts of this state for all actions arising under this chapter.

2. Appointed the superintendent as his lawful agent for the purpose of accepting service of process in any action, suit or proceeding that may arise under this chapter.

B. Within three business days after service of process upon the superintendent, the superintendent shall transmit by certified mail copies of all lawful process accepted by the superintendent as an agent to that person at its last known address. Service of process shall be considered complete three business days after the superintendent deposits the copies of the documents in the United States mail.

6-1218. Prohibited Transactions
A person shall not engage in conduct requiring a license under this chapter as an authorized delegate of a principal if that principal is not licensed under this chapter. A person who does so shall be deemed to be the principal seller, issuer or actor, and not merely an authorized delegate, and is liable to the holder, remitter or customer as the principal.

6-1219. Violation; Classification
A person who refuses to permit any lawful investigation by the superintendent, a county attorney or the attorney general or who refuses to make records available to the superintendent, a county attorney or the attorney general pursuant to Section 6-1241, Subsection H is guilty of a class 6 felony.

EXECUTION
11/27/06

6-1241. Reports to the Attorney General; Violation; Classification
A. Within thirty days after any transaction or series or pattern of transactions that is conducted or attempted by, at or through the business and that involves or aggregates five thousand dollars or more in funds or other assets, each licensee and authorized delegate of a licensee and each money transmitter shall file with the attorney general’s office in a form prescribed by the attorney general a report of the transaction or series or pattern of transactions if the licensee, authorized delegate or money transmitter knows, suspects or has reason to suspect that the activity either:

1. Involves funds that are derived from illegal activities, is intended or conducted in order to hide or disguise funds or other assets that are derived from illegal activities, including, without limitation, the ownership, nature, source, location or control of the funds or other assets, as part of a plan to violate or evade any law or regulation or to avoid any transaction reporting requirement under this chapter or may constitute a possible money laundering violation under Section 13-2317 or other racketeering violation as defined in Section 13-2301.

2. Has no business or apparent lawful purpose or is not the sort of activity in which the particular customer would normally be expected to engage and the licensee, authorized delegate or money transmitter knows of no reasonable explanation for the activity after examining the available facts, including the background and possible purpose of the activity.

B. A licensee, authorized delegate or money transmitter that is required to file a report regarding business conducted in this state pursuant to the Currency and Foreign Transactions Reporting Act (31 United States Code Sections 5311 through 5326, including any special measures that are established under 31 United States Code Section 5318a, and 31 Code of Federal Regulations Part 103 or 12 Code of Federal Regulations Section 21.11) shall file a duplicate of that report with the attorney general.

C. All persons who are engaged in a trade or business and who receive more than ten thousand dollars in money in one transaction or who receive more than ten thousand dollars in money through two or more related transactions shall complete and file with the attorney general the information required by 31 United States Code Section 5331 and the Federal Regulations relating to this Section concerning reports relating to cash received in trade or business.

D. A licensee, authorized delegate or money transmitter that is regulated under the Currency and Foreign Transactions Reporting Act (31 United States Code Section 5325 and 31 Code of Federal Regulations part 103) and that is required to make available prescribed records to the secretary of the United States department of treasury on request at any time shall follow the same prescribed procedures and create and maintain the same prescribed records relating to each transaction.

E. In addition to the requirements under subsection d of this Section and in connection with each transaction that involves transmitting money in an amount of one thousand dollars or more, whether sending or receiving, a licensee or, for transactions conducted through an authorized delegate, an authorized delegate shall retain a record of each of the following:

1. The name and social security or taxpayer identification number, if any, of the individual presenting the transaction and the person and the entity on whose behalf the transaction is to be effected.

2. The type and number of the customer’s verified photographic identification, as described in 31 Code of Federal Regulations Section 103.28.

3. The customer’s current occupation.

4. The customer’s current residential address.

5. The customer’s signature.

F. Subsection e of this Section does not apply to transactions by which the licensee’s customer is making a bill payment either to a commercial creditor pursuant to a contract between the licensee and the commercial creditor or to a utility company.

G. Each licensee shall create records that reflect the provision of updated operating policies and procedures pursuant to Section 6-1208, subsection b and of instruction that promotes compliance with this chapter, title 13, chapter 23 and 31 United States Code Section 5318, including the identification of the provider and the material and instruction that was provided.

H. On request of the attorney general, a county attorney or the superintendent, a licensee, authorized delegate or money transmitter shall make any records that are created pursuant to this Section available to the attorney general, a county attorney or the superintendent at any time.

I. A licensee or, for transactions conducted through an authorized delegate, an authorized delegate shall maintain any customer identification records that are created pursuant to subsection e of this Section for three years. After three years, the licensee or, for transactions conducted through an authorized delegate, the authorized delegate shall deliver the customer identification records to the attorney general. The attorney general shall make the records available on request to the superintendent or a county attorney but shall not otherwise distribute the customer identification records without a court order. The customer identification records shall not be used for any purpose other than for criminal and civil prosecution and the prevention and detection of fraud and other criminal conduct.

J. If the superintendent or the Attorney General finds that reasonable grounds exist for requiring additional record keeping and reporting in order to carry out the purposes of this chapter and to prevent the evasion of this chapter, the superintendent or the Attorney General may:

1. Issue an order requiring any group of licensees, authorized delegates or money transmitters in a geographic area to do any of the following:

(a) Obtain information regarding transactions that involve total dollar amounts or denominations of five hundred dollars or more, including the names of any persons participating in those transactions.

(b) Maintain records of that information for at least five years and make those records available to the attorney general and the superintendent.

(c) File a report with the attorney general and the superintendent regarding any transaction in the manner prescribed in the superintendent’s order.

2. Issue an order exempting any group of licensees or authorized delegates from the requirements of subsection e of this Section based on the geographic area, the volume of business conducted, the record of compliance with the reporting requirements of this chapter and other objective criteria.

K. An order issued pursuant to subsection J of this Section is not effective for more than one hundred eighty days unless renewed after finding that reasonable grounds exist for continuation of the order.

L. The timely filing of a report required by this Section with the appropriate federal agency shall be deemed compliance with the reporting requirements of this section, unless the attorney general has notified the superintendent that reports of that type are not regularly and comprehensively transmitted by that federal agency to the attorney general.

M. This chapter does not preclude a licensee, authorized delegate, money transmitter, financial institution or person engaged in a trade or business from instituting contact with and disclosing customer financial records to appropriate state or local law enforcement agencies if the licensee, authorized delegate, money transmitter, financial institution or person has information that may be relevant to a possible violation of any criminal statute or to the evasion or attempted evasion of any reporting requirement of this chapter.

N. A licensee, authorized delegate, money transmitter, financial institution, person engaged in a trade or business or director, officer, employee, agent or authorized delegate of any of them that keeps or files a record as prescribed by this Section, that communicates or discloses information or records under subsection M of this Section or that requires another to make any such disclosure is not liable to any person under any law or rule of this State or any political subdivision of this state or under any contract or other legally enforceable agreement, including any arbitration agreement, for the disclosure or for the failure to provide notice of the disclosure to the person who is the subject of the disclosure or to any other person who is identified in the disclosure this subsection shall be construed to be consistent with 31 United States Code Section 5318 (g)(3).

EXECUTION
11/27/06

O. The attorney general may report any possible violations indicated by analysis of the reports required by this chapter to any appropriate law enforcement agency for use in the proper discharge of its official duties. If an officer or employee of this state or any political subdivision of this state receives a report pursuant to 31 United States Code Section 5318(g), the report shall be disclosed only as provided in 31 United States Code Section 5318(g). A person who releases information received pursuant to this subsection except in the proper discharge of official duties is guilty of a class 2 misdemeanor.

P. The requirements of this Section shall be construed to be consistent with the requirements of the currency and foreign transactions reporting act, 31 United States Code Sections 5311 through 5326 and Federal Regulations prescribed under those sections unless the context otherwise requires.

6-1242. Investigations
A. The attorney general may conduct investigations within or outside this state to determine if a licensee, authorized delegate, money transmitter, financial institution or person engaged in a trade or business has failed to file a report required by this article or has engaged or is engaging in an act, practice or transaction that constitutes a money laundering violation as provided in § 13-2317.

B. On request of the attorney general, all licensees, authorized delegates, money transmitters and financial institutions shall make their books and records available to the attorney general during normal business hours for inspection and examination in connection with an investigation pursuant to this section.

AGENT:

Signature:

Name:

Title:

EXECUTION
11/27/06

EX-12.1

EXHIBIT 12.1

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	2006		2005		2004		2003		2002
Interest expense per financial statements (1)	$	42,098	$	44,165	$	33,343	$	6,762	$	6,216
Interest expense related to rent (2)		164		167		187		421		553
Total fixed charges	$	42,262	$	44,332	$	33,530	$	7,183	$	6,769
Net income per financial statements	$	26,609	$	22,591	$	254,555	$	58,389	$	50,422
Interest expense		42,098		44,165		33,343		6,762		6,216
Minority loss		183		139		137		400		1,040
Total earnings	$	68,890	$	66,895	$	288,035	$	65,551	$	57,678
Ratio of earnings to fixed charges		1.6 x		1.5 x		8.6 x		9.1 x		8.5 x

(1)	Interest expense includes interest expense on ATM funding arrangements, borrowings and the amortization of capitalized debt issuance costs related to all borrowings.
(2)	One-third of all rental expense is deemed to be interest.

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF GLOBAL CASH ACCESS HOLDINGS, INC.

Name	Jurisdiction of Incorporation or Organization
Global Cash Access, Inc.	Delaware
CashCall Systems Inc.	Ontario, Canada
Innovative Funds Transfer, LLC*	Delaware
Central Credit, LLC	Delaware
Global Cash Access (BVI) Inc.	British Virgin Islands
Arriva Card, Inc.	Delaware
Global Cash Access Switzerland A.G.	Switzerland
Global Cash Access (HK) Ltd.	Hong Kong
GCA (Macau) S.A.	Macau SAR
Global Cash Access (Belgium) S.A.	Belgium
Global Cash Access (UK) Limited	United Kingdom

* joint venture

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements Nos. 333-131904 and 333-140878 on Form S-8 of our report on the consolidated financial statements dated March 30, 2007 (which report expresses an unqualified opinion and includes an explanatory paragraph related to the adoption of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment) and of our report on internal control over financial reporting dated March 30, 2007 (which report expresses an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of material weaknesses) appearing in this Annual Report on Form 10-K of Global Cash Access Holdings, Inc. for the year ended December 31, 2006.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada
March 30, 2007

EX-31.1

EXHIBIT 31.1

GLOBAL CASH ACCESS HOLDINGS, INC.
CERTIFICATION

I, Kirk E. Sanford, certify that:

1. I have reviewed this annual report on Form 10-K of Global Cash Access Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 30, 2007	By:	/s/ Kirk E. Sanford
		Kirk E. Sanford Chief Executive Officer

EX-31.2

EXHIBIT 31.2

GLOBAL CASH ACCESS HOLDINGS, INC.
CERTIFICATION

I, Harry C. Hagerty, certify that:

1.	I have reviewed this annual report on Form 10-K of Global Cash Access Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 30, 2007	By:	/s/ Harry C. Hagerty
		Harry C. Hagerty Chief Financial Officer

EX-32.1

EXHIBIT 32.1

GLOBAL CASH ACCESS HOLDINGS, INC.
CERTIFICATION

In connection with the periodic report of Global Cash Access Holdings, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2006 as filed with the Securities and Exchange Commission (the “Report”), I, Kirk E. Sanford, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Dated: March 30, 2007	By:	/s/ Kirk E. Sanford
		Kirk E. Sanford Chief Executive Officer

EX-32.2

EXHIBIT 32.2

GLOBAL CASH ACCESS HOLDINGS, INC.
CERTIFICATION

In connection with the periodic report of Global Cash Access Holdings, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2006 as filed with the Securities and Exchange Commission (the “Report”), I, Harry C. Hagerty, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Dated: March 30, 2007	By:	/s/ Harry C. Hagerty
		Harry C. Hagerty Chief Financial Officer