CKNN Cash Systems (MM)

PRELIMINARY COPY
SUBJECT TO COMPLETION
DATED JUNE 26, 2008

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
AUGUST 7, 2008

          The Annual Meeting of Stockholders of Cash Systems, Inc. (the “Company”) will be held at the Hampton Inn, 4975 Dean Martin Drive, Las Vegas, Nevada 89118, on Thursday, August 7, 2008, at 10:00 a.m. (Pacific Daylight Time), for the following purposes:

1. To elect four (4) directors of the Company for the ensuing year.

2. To ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008.

3. To consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of June 13, 2008, among the Company, Global Cash Access, Inc. and Card Acquisition Subsidiary, Inc., a wholly owned subsidiary of Global Cash Access, Inc., a copy of which Agreement is attached as Appendix A to the Proxy Statement accompanying this notice, pursuant to which, among other things, Card Acquisition Subsidiary, Inc. will merge with and into the Company and each issued and outstanding share of Company common stock will be converted into the right to receive cash in the amount of $0.50.

4. To consider and vote upon a proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies if there appear to be insufficient votes at the time of the Annual Meeting to adopt and approve the Agreement and Plan of Merger and the merger contemplated thereby.

5. To take action upon any other business that may properly come before the Annual Meeting or any postponement or adjournment thereof.

          Only stockholders of record shown on the books of the Company at the close of business on June 30, 2008 will be entitled to vote at the Annual Meeting or any adjournment thereof. Each stockholder is entitled to one vote per share of common stock on all matters to be voted on at the Annual Meeting.

          Our Board of Directors has determined that the transactions contemplated by the merger agreement are advisable and fair to, and in the best interest of, the Company and it stockholders. Accordingly, our Board of Directors has approved the merger agreement and the transactions contemplated thereby, including the merger, and recommends that you vote FOR the proposal to adopt and approve the merger agreement and the merger contemplated thereby. Our Board of Directors also recommends that you vote FOR the other annual meeting proposals, all of which are described in detail in the accompanying Proxy Statement. Approval of the other annual meeting proposals is not a condition to the merger.

          It is important that all stockholders vote. We cannot complete the merger unless the merger agreement is adopted and approved by holders of a majority of our outstanding shares. We urge you to sign and return the enclosed proxy card as promptly as possible, regardless of whether you plan to attend the Annual Meeting in person. If you do attend the meeting, you may then withdraw your proxy and vote in person. In order to facilitate the providing of adequate accommodations, please indicate on the proxy card whether you plan to attend the Annual Meeting.

          This notice, Proxy Statement and enclosed proxy are sent to you by order of the Board of Directors.

Carmalen Gillilan, Secretary

Dated: July [*], 2008
Las Vegas, Nevada

TABLE OF CONTENTS

GENERAL INFORMATION			1
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THE MERGER			3
SUMMARY			7
Parties to the Merger Agreement			7
The Merger Agreement			7
Appraisal Rights			11
Material United States Federal Income Tax Consequences of the Merger			11
Litigation Related to the Merger			11
FORWARD-LOOKING STATEMENTS			13
RISK FACTORS			14
PROPOSAL #1 — ELECTION OF DIRECTORS			15
CORPORATE GOVERNANCE			17
EXECUTIVE OFFICERS OF THE COMPANY			20
COMPENSATION DISCUSSION AND ANALYSIS			21
COMPENSATION COMMITTEE REPORT			25
EXECUTIVE COMPENSATION			26
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			36
AUDIT COMMITTEE REPORT			39
PROPOSAL #2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			40
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			42
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			42
PROPOSAL #3 — ADOPTION AND APPROVAL OF THE MERGER AGREEMENT			43
PARTIES TO THE MERGER AGREEMENT			43
Cash Systems, Inc.			43
Global Cash Access, Inc.			43
Card Acquisition Subsidiary, Inc.			43
THE MERGER			44
Background of the Merger			44
Reasons for the Merger			50
Recommendation of Our Board of Directors			51
Opinion of Deutsche Bank Securities Inc.			51
Material United States Federal Income Tax Consequences of the Merger			54
Appraisal Rights			56
Accounting Treatment			59
Regulatory Matters			59
Litigation Related to the Merger			59
THE MERGER AGREEMENT			60
The Merger			60
Effective Time			60
Merger Consideration			60
Company Stock Options, Senior Secured Notes and Warrants			61
Certificate of Incorporation and Bylaws			61
Directors and Officers			61
Representations and Warranties			61
Covenants Relating to the Conduct of Our Business Pending the Merger			63
Acquisition Proposals			65
Additional Agreements			67
Termination of the Merger Agreement			68
Fees and Expenses			69
Conditions to the Merger			70
Amendment; Waiver			71
INTERESTS OF CERTAIN PERSONS IN THE MERGER			72
PROPOSAL #4 — ADJOURNMENT OF ANNUAL MEETING			74
STOCKHOLDER PROPOSALS			75
OTHER BUSINESS			75
WHERE YOU CAN FIND MORE INFORMATION			75
ANNUAL REPORT			76
APPENDIX A     AGREEMENT AND PLAN OF MERGER			A-1
APPENDIX B     OPINION OF DEUTSCHE BANK SECURITIES INC.			B-1
APPENDIX C     SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW			C-1

PROXY STATEMENT
For
Annual Meeting of Stockholders
To Be Held August 7, 2008

GENERAL INFORMATION

          This Proxy Statement is furnished by the Board of Directors of Cash Systems, Inc., a Delaware corporation (the “Company”), to holders of the Company’s common stock in connection with a solicitation of proxies by the Board of Directors for use at the Annual Meeting of Stockholders to be held on August 7, 2008 (the “Annual Meeting”), and at any postponement or adjournment thereof, for the purposes set forth in the attached Notice of Annual Meeting of Stockholders. The Company expects that this Proxy Statement and the accompanying materials will first be mailed to stockholders on or about July [*], 2008. The Board of Directors of the Company has fixed June 30, 2008 as the record date for determining stockholders entitled to vote at the Annual Meeting. At the close of business on June 30, 2008, [*] shares of the Company’s common stock were issued and outstanding. Such common stock is the only outstanding class of stock of the Company. Each share of common stock is entitled to one vote on each matter to be voted upon at the Annual Meeting. Holders of the common stock are not entitled to cumulative voting rights.

          Any proxy delivered pursuant to this solicitation is revocable at the option of the person giving the proxy at any time before it is exercised. A proxy may be revoked, prior to its exercise, by executing and delivering a later-dated proxy via the internet or telephone or by mail, by delivering written notice of the revocation of the proxy to the Company’s Secretary prior to the Annual Meeting, or by attending and voting at the Annual Meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy. The shares represented by a proxy will be voted in accordance with the stockholder’s directions if the proxy is duly submitted and not validly revoked prior to the Annual Meeting. If no directions are specified on a duly submitted proxy, the shares will be voted, in accordance with the recommendations of the Board of Directors, FOR the election of the directors nominated by the Board of Directors, FOR the ratification of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008, FOR the proposal to adopt and approve the Agreement and Plan of Merger, dated as of June 13, 2008 (the “merger agreement”), among the Company, Global Cash Access, Inc. (“GCA”), and Card Acquisition Subsidiary, Inc., a wholly-owned subsidiary of Global Cash Access, Inc. (“Merger Sub”), and to approve the merger of Card Acquisition Subsidiary, Inc. with and into the Company contemplated by the merger agreement, and FOR the proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies if there appear to be insufficient votes at the time of the Annual Meeting to adopt and approve the merger agreement and the merger contemplated thereby, and in accordance with the discretion of the persons appointed as proxies on any other matters properly brought before the Annual Meeting and any postponements or adjournments thereof.

          The presence of the holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting, present in person or represented by proxy, is necessary to constitute a quorum. The four director nominees receiving the most votes will be elected. The affirmative vote of a majority of those shares present in person or represented by proxy and entitled to vote on those proposals at the Annual Meeting is required to ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008 and to approve the proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies if there appear to be insufficient votes at the time of the Annual Meeting to adopt and approve the merger agreement and the merger contemplated thereby. The affirmative vote of a majority of the outstanding common stock is required to approve the proposal to adopt and approve the merger agreement and the merger contemplated thereby. Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A “broker non-vote” occurs when a bank, broker or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because that

holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

     Abstentions will not have any effect on the vote for directors, but will be considered a vote AGAINST the proposal to ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008, AGAINST the proposal to adopt and approve the merger agreement and the merger contemplated thereby, and AGAINST the proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies if there appear to be insufficient votes at the time of the Annual Meeting to adopt and approve the merger agreement and the merger contemplated thereby. Broker non-votes will not have any effect on the vote for directors, the proposal to ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008, or the proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies if there appear to be insufficient votes at the time of the Annual Meeting to adopt and approve the merger agreement and the merger contemplated thereby, but will be considered a vote AGAINST the proposal to adopt and approve the merger agreement and the merger contemplated thereby.

          If your shares of common stock are registered in the name of a bank or brokerage firm, you may be eligible to vote your shares electronically via the internet or telephone. A large number of banks and brokerage firms are participating in the ADP Investor Communication Services online program. This program provides eligible stockholders who receive a paper copy of the Proxy Statement the opportunity to vote via the internet or telephone. If your bank or brokerage firm is participating in ADP’s program, your proxy will provide instructions. If your voting form does not refer to internet or telephone information, please complete and return the paper proxy card in the postage paid envelope provided.

          The cost of soliciting proxies, including preparing, assembling and mailing the proxies and soliciting material, will be borne by the Company. The Company will also request brokerage firms, banks, nominees, custodians and other fiduciaries to forward proxy materials to the beneficial owners of shares of common stock as of June 30, 2008, and will provide for reimbursement for the cost of forwarding the proxy materials in accordance with customary practice. Directors, officers and regular employees of the Company may, without compensation other than their regular compensation, solicit proxies personally or by the internet, telephone or facsimile. The Company has retained the services of Computershare Trust Company, N.A. to assist in the distribution and tabulation of proxies at an estimated cost of $[*], plus certain out-of-pocket expenses.

          The mailing address of the principal executive office of the Company is 7350 Dean Martin Drive, Suite 309, Las Vegas, NV 89139.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THE MERGER

           The following questions and answers briefly address some commonly asked questions about the Annual Meeting and the merger. They do not, and are not intended to, address all the information that may be important to you. You should read the summary and the remainder of this Proxy Statement, including all appendices, carefully.

The Merger

Q:		What is the proposed merger?
A:		Pursuant to the merger agreement, Merger Sub will be merged with and into the Company with the Company emerging as the surviving corporation and a wholly owned subsidiary of GCA. The merger agreement is attached to this Proxy Statement as Appendix A. We encourage you to read it carefully and in its entirety.
Q:		What will I receive in the merger?
A:		Upon completion of the merger, you will be entitled to receive $0.50 in cash, without interest, for each share of our common stock that you own. We sometimes refer in this Proxy Statement to the consideration that holders of our common stock will receive in connection with the merger as the merger consideration.
Q:		What vote is required to complete the merger?
A:		Under the Delaware General Corporation Law (the “DGCL”) and the terms of the merger agreement, the affirmative vote of the holders of at least a majority of the outstanding shares of our common stock on the record date for the Annual Meeting is required to adopt the merger agreement and complete the proposed merger. Each share of our common stock is entitled to one vote.
Q:		How does our Board of Directors recommend that I vote?
A:		After considering a number of factors, our Board of Directors unanimously determined that the terms of the merger agreement are fair to, and in the best interests of, the Company and our stockholders, and that the merger agreement is advisable and approved the merger agreement and the transactions contemplated thereby. Our Board of Directors unanimously recommends that you vote FOR the adoption and approval of the merger agreement and the merger contemplated thereby.
Q:		Do our directors and executive officers have any special interests in the merger?
A:		Yes. When considering the recommendation of our Board of Directors, you should be aware that some of our directors and officers have interests that are different from, or in addition to, yours. These interests include, among others, the vesting of any unvested restricted stock awards of executive officers due to the

merger (for which such officers will receive the same $0.50 per share merger consideration received by all other stockholders) as well as the continued indemnification of, and provision of directors’ and officers’ insurance coverage to, current directors and officers of the Company after the merger. Please see the section of this Proxy Statement entitled “Interests of Certain Persons in the Merger” on page 72 for a further description of the special interests of our directors and executive officers in the merger.

Q:		When do you expect to complete the merger?
A:		We are working to complete the merger as quickly as possible and have agreed with GCA that the merger will be completed no later than the second business day after all closing conditions have been satisfied or waived. However, we cannot predict the exact timing of the merger because it is subject to several conditions. Assuming that all the conditions to the merger are satisfied or waived in a timely fashion, we currently expect to complete the merger in the third quarter of 2008.
Q:		What are the U.S. federal income tax consequences of the merger to me?
A:		The receipt of cash for shares of our common stock in the merger will be a taxable transaction for U.S. federal income tax purposes. In general, as a result, you will recognize gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash you receive in the merger and your adjusted tax basis in the shares of our common stock you exchange for cash pursuant to the merger. However, because the tax consequences of the merger are complex and may vary depending on your particular circumstances, we recommend that you consult your tax advisor concerning the federal (and any state, local or foreign) tax consequences to you as a result of the merger.
Q:		Am I entitled to appraisal or dissenters’ rights in connection with the merger?
A:		Yes. Record holders of our common stock who follow the procedures set forth in Section 262 of the DGCL will be entitled to receive payment of the fair value of such shares together with a fair rate of interest, if any, as determined by the Court of Chancery of the State of Delaware. The fair value as determined by the Delaware court is exclusive of any element of value arising from the accomplishment or expectation of the merger. If you wish to exercise your appraisal or dissenters’ rights, you must vote against approval of the merger agreement. It is not sufficient to abstain from voting.

The Annual Meeting and Other Information

Q:		What is the date, time and place of the Annual Meeting?
A:		The Annual Meeting of stockholders will be held at the Hampton Inn, 4975 Dean Martin Drive, Las Vegas, Nevada 89118, on Thursday, August 7, 2008, at 10:00 a.m. (Pacific Daylight Time).
Q:		What am I being asked to vote on?
A:		You are being asked to vote to:

1. Elect four directors of the Company;

2. Ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008;

3. Adopt and approve the merger agreement and the merger contemplated thereby; and

4. Grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies if there appear to be insufficient votes at the time of the Annual Meeting to adopt and approve the merger agreement and the merger contemplated thereby.

Q:

Who is entitled to vote at the Annual Meeting?

A:		All holders of our common stock of record as of the close of business on June 30, 2008, which we refer to as the record date, will be entitled to notice of, and to vote at, the Annual Meeting.
Q:		How do I vote my shares?
A:		If you hold a stock certificate in your name for our common stock, you are the owner of record of the shares evidenced by that certificate. If you are a stockholder of record, you may attend the Annual Meeting and vote in person. Alternatively, if you wish to vote by proxy, you may use one of the following methods:

1. By Mail. Complete, sign, date and return the enclosed proxy card in the prepaid envelope provided;

2. By Telephone. Call the toll-free telephone number listed in the voting instructions attached to the proxy card and follow the recorded instructions; or

3. By Internet. Access our secure website registration page through the Internet at http://www.investorvote.com/CKNN, and follow the instructions outlined on that website.

Q:		If my broker holds my shares in “street name,” will my broker vote my shares for me on the proposal to adopt and approve the merger agreement and the merger contemplated thereby?
A:		Without instruction from you, your broker will not be able to vote your shares on the proposal to adopt and approve the merger agreement and the merger contemplated thereby. You should instruct your broker to vote your shares, following the procedures provided by your broker. If you wish to attend and vote at the Annual Meeting in person, you must bring an executed power of attorney or proxy in your name that has been signed by the record holder of your shares. Please contact your broker or financial institution for this information.
Q:		What if I fail to instruct my broker?
A:		If you fail to instruct your broker to vote shares held in street name, it will be considered a vote AGAINST the proposal to adopt and approve the merger agreement and the merger contemplated thereby. However, it will not have any effect on the vote for directors, since the nominees are elected by a plurality of the votes cast, and will not have any effect on the proposal to ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008 or the proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies, because these matters require the majority of the votes cast to be approved.
Q:		What should I do if I receive more than one set of voting materials?
A:		You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares of our common stock. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive.
Q:		Can I change my vote after I have voted?
A:		You may revoke your proxy or change your vote at any time before the final vote at the Annual Meeting or any adjournment or postponement of the Annual Meeting. If you are the owner of record, you may do this by:

1. Giving written notice of revocation to the Corporate Secretary, Cash Systems, Inc., 7350 Dean Martin Drive, Suite 309, Las Vegas, NV 89139;

2. Signing and submitting another valid proxy dated a later date;

3. Voting at a later date by telephone or internet; or

4. Voting in person at the Annual Meeting.

		If you hold stock in street name, you must contact your broker or financial institution for information on how to revoke your proxy or change your vote.
Q:		What happens if I do not send in my proxy or if I abstain from voting?
A:		The failure to vote, either by proxy or in person, will have the effect of a vote AGAINST the proposal to adopt and approve the merger agreement and the merger contemplated thereby. The failure to vote will have no effect on the proposal to elect directors, the proposal to ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008, or the proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies. Abstentions will have the effect of a vote AGAINST the proposal to adopt and approve the merger agreement and the merger contemplated thereby, AGAINST the proposal to ratify the appointment of Virchow, Krause & Company, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2008, and AGAINST the proposal to grant discretionary authority to adjourn the Annual Meeting, if necessary, to solicit additional proxies, but will have no effect on the proposal to elect directors.
Q:		Should I send in my stock certificates now?
A:		No. After the merger is completed, you will receive written instructions for exchanging your shares of our common stock for the merger consideration of $0.50 in cash, without interest, for each share of our common stock.
		PLEASE DO NOT SEND YOUR STOCK CERTIFICATES NOW.
Q:		Where can I find more information?
A:		We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information on the public reference room. You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Our public filings are also available to the public from document retrieval services and the Internet Web site maintained by the SEC at www.sec.gov .
Q:		Whom should I call with questions?
A:		If you have any questions about the proposed merger or the process for voting or, if you would like additional copies of this Proxy Statement or a replacement proxy card, please contact us at Cash Systems, Inc., 7350 Dean Martin Drive, Suite 309, Las Vegas, NV 89139, (702) 987-7169, Attention: General Counsel.

SUMMARY

          The following summary highlights selected information discussed in greater detail elsewhere in this Proxy Statement and may not contain all of the information that is important to you. To more fully understand the merger, and for a detailed description of the terms and conditions of the merger and certain other matters being considered at the annual meeting, you should read carefully this entire Proxy Statement and all of its appendices, including the merger agreement. We have included parenthetical references to pages in other portions of this Proxy Statement containing a more detailed description of the topics presented in this summary.

Parties to the Merger Agreement (Page 43)

Cash Systems, Inc.
7350 Dean Martin Drive, Suite 309
Las Vegas, Nevada 89139
(702) 987-7169

          We are a provider of cash access products and related services to the gaming industry. Our products and services provide gaming patrons access to cash through automated teller machine (“ATM”) cash withdrawals, credit and debit card cash advances, and check cashing. Through a joint venture with Bally Gaming, Inc. (“Bally”) and Scotch Twist, Inc. (“Scotch Twist”), we have also developed the Powercash product, which allows customers to fund player accounts using credit and debit cards tied to a players club card, such that the player’s club card can be used in place of a credit or debit card to effectuate transactions within a casino for gaming, dining, retail purchases, and lodging under a license to a portfolio of patents from Scotch Twist.

Global Cash Access, Inc.
3525 East Post Road, Suite 120,
Las Vegas, Nevada 89120
(800) 833-7110

          GCA is a provider of cash access products and related services to the gaming industry. GCA’s products and services provide gaming establishment patrons access to cash through a variety of methods, including ATM cash withdrawals, credit card cash advances, point-of-sale, debit card transactions and check verification and warranty services. In addition, GCA also provides products and services that are designed to improve credit decision-making, automate cashier operations and enhance patron marketing activities for gaming establishments.

Card Acquisition Subsidiary, Inc.
3525 East Post Road, Suite 120,
Las Vegas, Nevada 89120
(800) 833-7110

          Merger Sub is a wholly owned subsidiary of GCA, formed solely for the purpose of facilitating the merger.

The Merger Agreement

           The Merger (Page 60)

          Pursuant to a merger agreement we have entered into with GCA and Merger Sub, a wholly owned subsidiary of GCA, Merger Sub will be merged with and into us, with the Company emerging as the surviving corporation. If the merger is completed, we will become a wholly owned subsidiary of GCA.

          If the merger is completed, our stockholders will receive $0.50 in cash, without interest, in exchange for each share of our common stock that they hold, other than dissenting shares subject to appraisal rights under Delaware law, which will be treated as described below.

          The merger agreement provides that each option to purchase shares of our common stock will be cancelled in exchange for the right to receive a cash payment equal to the excess, if any, of the per share merger consideration over the exercise price of the stock option multiplied by the number of shares of our common stock subject to the option, subject to tax withholding. No payment will be made with respect to options that have per share exercise prices equal to or greater than $0.50.

          We expect to close the merger promptly after the approval and adoption of the merger agreement by our stockholders and after all other conditions to the merger have been satisfied or waived. At present, we anticipate that the closing will occur in the third quarter of 2008.

           Reasons for the Merger (Page 50)

          In the course of its deliberations, our Board of Directors considered, among other things, the following material factors:

	•		its conclusion that the Company would not have sufficient cash on hand to satisfy its obligation under the Second Amended and Restated Senior Secured Convertible Notes (the “Senior Secured Notes”) to redeem up to $12.1 million on October 10, 2008 if the note holders exercised their optional right of redemption;
	•		the substantial likelihood that the Company would not have sufficient cash on hand to meet obligations that could arise prior to October 10, 2008 either due to a default under the Senior Secured Notes as a result of the delisting of the common stock on The NASDAQ Global Market (“NASDAQ”) or due to the acceleration of certain accrued expenses;
	•		based on the liquidation analysis prepared by our senior management and presented to our Board of Directors, the holders of our common stock likely would receive between $0.00 and $0.18 per share in the event of a bankruptcy of the Company (assuming the Company would incur $2.5 million in administrative and other costs and expenses associated with a bankruptcy proceeding), substantially less than the merger consideration of $0.50 per share;
	•		the contacts and discussions from November 18, 2007 to May 27, 2008, the commencement of the exclusivity period, between our senior management and our financial advisors and numerous other parties, including competitors other than GCA, strategic buyers, private equity firms and private investors, all of which either declined to participate in the process or were unable to submit a viable proposal for acquiring or investing sufficient cash in the Company within the timeframe required, as well as the fact that the Company publicly announced on March 18, 2008 that it was exploring strategic alternatives and received no bona fide offers in response to that announcement;
	•		Deutsche Bank Securities Inc.’s (“Deutsche Bank”) opinion to our Board of Directors on June 12, 2008 to the effect that, as of that date and based upon and subject to the assumptions made, matters considered and limits of review set forth therein, the merger consideration pursuant to the merger agreement of $0.50 per share of common stock was fair, from a financial point of view, to the holders of our common stock;
	•		the indication by the holders of the Senior Secured Notes that they would be willing to execute redemption agreements under which they would accept $21 million plus accrued but unpaid interest in complete settlement of the greater amount due to them, and they would agree (1) to forebear from exercising any rights or remedies they may possess under the Senior Secured Notes and Second Amended and Restated Warrants to Purchase Common Stock (the “Warrants”), (2) to waive any rights they may possess as a result of the merger, and (3) to refrain from converting, exercising, selling, transferring or otherwise conveying all or any portion of the Senior Secured Notes and Warrants prior to the redemption contemplated by the redemption agreements; and
	•		the efforts made by our senior management and advisors to obtain greater value than $0.50 per share in cash and/or to receive a portion of the merger consideration in GCA common stock, GCA’s indication that it was unwilling to pay more than $0.50 per share in cash, and the recognition that the $0.50 per share in value for stockholders and the prospect that our creditors were going to receive no less than $21 million was a better outcome than that expected in the only other alternative available, a bankruptcy filing.

           Recommendation of Our Board of Directors (Page 51)

          After careful consideration, the Board of Directors has unanimously:

	•		determined that the principal terms of the merger agreement and the merger are advisable and fair to, and in the best interests of, the Company and its stockholders;
	•		approved the merger agreement and the transactions contemplated thereby, including the merger; and
	•		recommended that our stockholders vote FOR the adoption and approval of the merger agreement and the merger contemplated thereby.

           Opinion of Deutsche Bank Securities Inc. (Page 51)

          Deutsche Bank delivered its opinion to our Board of Directors to the effect that, as of June 12, 2008 and based upon and subject to the factors and assumptions set forth in the written opinion, the $0.50 per share in cash to be received by holders of our common stock pursuant to the merger agreement was fair to such holders from a financial point of view.

          The full text of the written opinion of Deutsche Bank, dated June 12, 2008, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix B to this Proxy Statement. Our stockholders should read the opinion in its entirety. Deutsche Bank provided its opinion for the information and assistance of our Board of Directors in connection with its consideration of the transaction contemplated by the merger agreement. The Deutsche Bank opinion is not a recommendation to any holder of our common stock as to any matter relating to the transaction.

           Conditions to the Merger (Page 70)

          The completion of the merger is conditioned on the satisfaction or waiver, if permissible, of a number of conditions, including, but not limited to, the following:

	•		our receipt of the requisite vote of our stockholders approving the proposal to adopt and approve the merger agreement and approve the merger;
	•		the absence of any statute, rule, order or injunction prohibiting the merger or otherwise making the merger illegal;
	•		the absence of any pending claim, suit, action or proceeding brought or filed by any third party that has a reasonable likelihood of success or by any governmental entity relating to certain matters, including challenging or seeking to restrain or prohibit the consummation of the merger or the other transactions contemplated by the merger agreement or placing materially adverse conditions or limitations on GCA’s ownership or operation of the surviving company in the merger;
	•		the representations and warranties of each party contained in the merger agreement being true and correct in all material respects, except for where the failure to be true and correct would not have a material adverse effect on the representing party;
	•		the performance or compliance in all material respects of each party with all covenants, obligations and conditions required to be performed or complied with by each party under the merger agreement;
	•		the absence of any material adverse effect on our business;
	•		our joint venture with Bally and Scotch Twist shall be continuing in full force and effect and we shall not have received any notice of their intent to terminate; and
	•		no customers from whom we generated gross revenues during the year ended December 31, 2007 representing at least 10% of our gross revenues during such period shall have terminated their relationships with us, materially diminished their use of our products or services or indicated their intent to do either of the foregoing.

           Acquisition Proposals (Page 65)

          We have agreed that neither we nor any of our subsidiaries will (and we will not authorize or permit any of our officers, directors, employees or agents to) directly or indirectly take any action to solicit, initiate, or encourage anyone to make, submit or announce any takeover proposal. Additionally, we have agreed not to disclose any nonpublic information relating to the Company or to engage in or continue any other negotiations or discussions regarding any inquiry or proposal that is, or would reasonably be expected to lead to, a “takeover proposal” or otherwise facilitate any effort or attempt to make a takeover proposal.

          However, the prohibitions with respect to takeover proposals are subject to an exception where, prior to the stockholders meeting considering the merger agreement, we receive a takeover proposal without violating these

provisions of the merger agreement and our Board of Directors determines that such takeover proposal constitutes or is reasonably likely to constitute a “superior proposal” and determines that the failure to take action with respect to the superior proposal would be a breach of its fiduciary duties to the stockholders, then we, and our officers, directors, employees and other representatives may take action otherwise prohibited by the merger agreement; provided that we must first comply with a number of notice, informational and other requirements under the merger agreement. The merger agreement also contains additional agreements by us and limitations on how we may respond to a takeover proposal (see “The Merger Agreement — Acquisition Proposals”).

           Termination of the Merger Agreement (Page 68)

          The merger agreement may be terminated:

	•		by mutual written consent duly authorized by the boards of directors of each of GCA and us;
	•		by GCA or us if:

	•		the closing of the merger has not occurred by December 31, 2008, subject to certain limitations;
	•		the required approval of the proposal to adopt and approve the merger agreement and approve the merger by our stockholders is not obtained at the Annual Meeting or any postponement or adjournment;
	•		a governmental entity has issued a permanent injunction or other order preventing the merger and that order or injunction has become final and nonappealable or, by GCA only in certain additional situations, including where a permanent injunction has created materially adverse conditions on GCA’s ownership or operation of us following the effectiveness of the merger;
	•		any statute, rule, regulation or order has been enacted, entered, enforced or deemed applicable to the merger which makes the consummation of the merger illegal or, by GCA only if a governmental entity or entities in states or tribal jurisdictions where we derived at least 5% of our revenues withholds, denies or materially qualifies a license, approval or waiver from or to GCA; or
	•		the other party breaches any of its representations, warranties, covenants or agreements in the merger agreement, which breach is incurable or is not cured within 10 days of written notice of the breach;

•

by GCA if:

	•		we (or any of our subsidiaries, or any of our officers, directors, employees or representatives) breach or violate our obligations under the merger agreement with respect to takeover proposals; or
	•		our Board of Directors changes, withdraws or fails to reaffirm its recommendation of the merger, or recommends, endorses, accepts or agrees to a takeover proposal or fails to recommend against acceptance of any tender offer or exchange offer; or
	•		GCA is notified by a governmental entity that the merger will jeopardize any governmental authorization we hold or GCA holds as of the date of the merger agreement.

•

by us if:

•

our Board of Directors authorizes us to enter into a definitive agreement in respect of a superior proposal, provided we have not breached the provisions described above in the section of this

Proxy Statement entitled “— Acquisition Proposals” and we have paid to GCA the termination fee of $990,000.

           Fees and Expenses (Page 69)

          Costs and expenses related to the merger will generally be paid by the party incurring those costs and expenses. We and GCA have agreed in certain circumstances upon termination of the merger agreement to pay the actual, reasonable and documented out-of-pocket costs and expenses incurred by the other party up to a maximum of $300,000 in connection with the merger agreement, including the fees and expenses of its outside advisors, outside accountants and outside legal counsel. Specifically, we are required to reimburse GCA if GCA terminates the merger agreement because our stockholders fail to approve the merger at a duly convened meeting of the stockholders or because the closing of the merger has not occurred by December 31, 2008 (when all other conditions in GCA’s favor other than the limits on our transaction fees and our net working capital have been satisfied). GCA is required to reimburse our costs and expenses if we terminate the merger agreement due to a breach by GCA of any representation, warranty, obligation, or agreement in the merger agreement.

          We also agreed that the maximum amount of all expenses, costs or other fees (consisting of all accountant, attorney, financial advisor and investment banker fees, but excluding liabilities arising from the obligation to pay premiums under our officers’ and directors’ liability insurance policy) incurred or that may be incurred by us in connection with the merger agreement and the transactions contemplated thereby will not exceed the sum of $2,500,000 plus up to $250,000 of any excess working capital (as such term is defined in the merger agreement).

          In addition, we have agreed to pay to GCA a termination fee of $990,000 (less any reimbursement of GCA’s fees and expenses we are otherwise required to pay) if the merger agreement is terminated:

	•		by either us or GCA because our stockholders fail to approve the merger at a duly convened meeting of the stockholders or the closing of the merger has not occurred by December 31, 2008, but only if within 12 months following such termination we either consummate another acquisition proposal or enter into a letter of intent or binding agreement regarding a takeover proposal; or
	•		by GCA if we breach any representation, warranty, obligation, or agreement in the merger agreement, violate the terms of the merger agreement with respect to a takeover proposal, or our Board of Directors changes, qualifies or withdraws its recommendation or fails to recommend against acceptance of any tender offer or exchange offer; or
	•		by us in connection with our Board of Directors authorizing us to enter into a definitive agreement with respect to a superior proposal.

Appraisal Rights (Page 56)

          If the merger is consummated, holders of record of our common stock who do not vote in favor of adopting the merger agreement and the transactions contemplated by the merger agreement, including the merger, and who otherwise comply with the applicable provisions of Section 262 of the Delaware General Corporation Law (the “DGCL”), will be entitled to exercise appraisal rights under Section 262 of the DGCL. Failure to take any of the steps required under Section 262 of the DGCL on a timely basis may result in a loss of those appraisal rights. These procedures are described in this Proxy Statement and the provisions of the DGCL that grant appraisal rights and govern such procedures are attached as Appendix C.

Material United States Federal Income Tax Consequences of the Merger (Page 54)

          The exchange of shares of our common stock for the merger consideration will be a taxable transaction to our stockholders for U.S. federal income tax purposes. See “The Merger—Material United States Federal Income Tax Consequences of the Merger.”

           Tax matters can be complicated, and the tax consequences of the merger to you will depend on the facts of your own situation. You should consult your own tax advisor to fully understand the tax consequences of the merger to you.

Litigation Related to the Merger (Page 59)

          On June 18, 2008, an alleged stockholder of the Company filed a stockholder class action complaint in the Nevada District Court in Clark County, Nevada, titled Staehr v. Cash Systems, Inc., et al., Case No. A565593,

naming the Company and all of our directors as defendants. The complaint purports to be brought on behalf of all stockholders of the Company (excluding the defendants and their affiliates). Among other things, the complaint alleges that the individual defendant directors, in approving the proposed merger with GCA, breached various fiduciary duties owed to the Company’s stockholders by failing to take steps to maximize stockholder value and by agreeing to accept inadequate consideration. The complaint also alleges that the directors engaged in unspecified self-dealing. The complaint alleges that the Company aided and abetted the directors’ breaches of fiduciary duties. The complaint seeks, among other things, class certification as well as certain forms of injunctive relief, including enjoining the consummation of the merger. We believe that the allegations of this complaint are without merit, and intend to vigorously contest the action. There can be no assurance, however, that we will be successful in our defense of this action or that we will be able to satisfy the conditions to the closing of the merger as a result of the pendency of this action. See “The Merger Agreement — Conditions to the Merger.”

FORWARD-LOOKING STATEMENTS

          This Proxy Statement contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, or the Act. Statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “hopes,” “assumes,” “may,” and similar expressions constitute forward-looking statements. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company actions, which may be provided by management are also forward-looking statements as defined in the Act. Forward-looking statements are based upon expectations and projections about future events and are subject to assumptions, risks and uncertainties about, among other things, the Company and economic and market factors.

          Actual events and results may differ materially from those expressed or forecasted in the forward-looking statements due to a number of factors. The principal factors that could cause the Company’s actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, our failure to continue as a going concern; our failure to explore strategic alternatives that result in a definitive transaction; our failure to develop products or services that achieve market acceptance or regulatory approval; our failure to accurately evaluate the assumptions underlying our estimates of the useful lives for depreciable and amortizable assets, our estimates of cash flows in assessing the recoverability of long-lived assets, and estimated liabilities for chargebacks, litigation, claims and assessments; competitive forces or unexpectedly high increases in interchange and processing costs that preclude us from passing such costs on to our customers through increased surcharges or reduced commissions; unanticipated changes to applicable tax rates or laws or changes in our tax position; regulatory forces, competitive forces or market contraction that affect our cash advance business; our inability to satisfy conditions to borrow additional funds, if required or unanticipated operating capital needs that cause our cash flows from operations and possible borrowing facilities to be insufficient to provide sufficient capital to continue our operations; our failure to accurately estimate our operating cash flows and our failure to accurately predict our working capital and capital expenditure needs; our inability to obtain additional financing through bank borrowings or debt or equity financings at all or on terms that are favorable to us; competitive pressures that prevent us from commanding higher prices for our Cash Access Services than other providers; actions taken by our technology partners or the failure of our technology partners to service our needs; our failure to renew our contracts with our top customers; changes in the rules and regulations of credit card associations that require the discontinuation of or material changes to our products or services; and our inability to identify or form joint ventures with partners that result in products that are commercially successful; and other factors or conditions described or referenced in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and our subsequent Quarterly Reports on Form 10-Q. The Company’s past performance or past or present economic conditions are not indicative of future performance or conditions. Undue reliance should not be placed on forward-looking statements. In addition, the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to projections over time unless required by federal securities law.

          The forward-looking statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and our subsequent Quarterly Reports on Form 10-Q. See “Where You Can Find More Information” on page 75.

RISK FACTORS

          You should carefully consider the following factors and the other information in this Proxy Statement before voting on the proposal to adopt and approve the merger agreement and the merger contemplated thereby.

If the merger agreement is terminated, we do not expect to have sufficient liquidity to continue to operate the Company in the ordinary course of business.

          If the merger agreement is terminated, we may not have sufficient working capital to continue our operations past October 2008 when the holders of our Senior Secured Notes may require us to redeem a portion of the Senior Secured Notes in an amount not to exceed $12.1 million in the aggregate, or earlier if our common stock is delisted from The NASDAQ Global Market, which is an event of default under our Senior Secured Notes, or if payments of certain other accrued expenses are accelerated or unforeseen events or circumstances arise that negatively affect our liquidity. In connection with the merger agreement, our note holders have agreed to forebear from exercising any rights or remedies they may possess under the Senior Secured Notes until the earlier of the redemption contemplated in the merger or the termination of the merger agreement. If the merger agreement is terminated and we subsequently default on the Senior Secured Notes, whether as a result of our failure to satisfy the note holders’ optional right of redemption or as a result of the delisting of our common stock from NASDAQ, our note holders would be entitled to, among other things, accelerate the maturity of the outstanding balance of the Senior Secured Notes and foreclose on substantially all of the Company’s assets, which secure the Senior Secured Notes.

          Further, the costs incurred by us in connection with the merger will further exacerbate our deteriorating liquidity and working capital position. We currently expect to incur significant out-of-pocket expenses for services in connection with the merger, consisting of financial advisor, legal and accounting fees and financial printing and other related charges, many of which may be incurred even if the merger is not completed. Moreover, if the merger agreement is terminated under specified circumstances, we may be required to reimburse GCA for its costs and expenses incurred in connection with the merger up to a maximum of $300,000 and to pay GCA a termination fee of $990,000.

          Also, to the extent that there is uncertainty about the closing of the merger, or if the merger does not close, our business may be harmed if customers, strategic partners or others believe that we cannot effectively compete in the marketplace without the merger or if there is customer and employee uncertainty surrounding the future direction of the Company on a stand-alone basis.

           The “no solicitation” restrictions and the termination fee provisions in the merger agreement may discourage other companies from trying to acquire the Company.

          While the merger agreement is in effect, subject to specified exceptions, we are prohibited from entering into or soliciting, initiating or encouraging any inquiries or proposals that may lead to a proposal or offer for a merger or other business combination transaction with any person other than GCA. In addition, in the merger agreement, we agreed to pay a termination fee to GCA in specified circumstances, including if the merger agreement is terminated:

	•		by either us or GCA because our stockholders fail to approve the merger at a duly convened meeting of the stockholders or the closing of the merger has not occurred by December 31, 2008, but only if within 12 months following such termination we either consummate another acquisition proposal or enter into a letter of intent or binding agreement regarding a takeover proposal; or
	•		by GCA if we breach any representation, warranty, obligation, or agreement in the merger agreement, violate the terms of the merger agreement with respect to a takeover proposal, or our Board of Directors changes, qualifies or withdraws its recommendation or fails to recommend against acceptance of any tender offer or exchange offer; or
	•		by us in connection with our Board of Directors authorizing us to enter into a definitive agreement with respect to a superior proposal.

          These provisions could discourage other parties from trying to acquire the Company even though those other parties might be willing to offer greater value to our stockholders than GCA has agreed to pay under the terms of the merger agreement.

PROPOSAL #1 — ELECTION OF DIRECTORS

          The Bylaws of the Company provide that the number of directors shall be determined by resolution of the Board of Directors at a regular or special meeting or by the stockholders at each annual meeting. The Board of Directors, by resolution, has fixed the number of directors at four for the ensuing year. Accordingly, at the Annual Meeting, you will be asked to vote on the election of four directors who will constitute the Company’s Board of Directors.

          However, if the proposed merger is consummated, pursuant to the terms of the merger agreement, the directors of Merger Sub immediately prior to the effective time of the merger will be the directors of the surviving corporation until their respective successors are duly elected and qualified.

          In the election of directors, each proxy will be voted for each of the nominees listed below unless the proxy withholds a vote for one or more of the nominees. Each of the nominees listed below is currently a director of the Company. Each person elected as a director shall serve for a term of one year or until his or her successor is duly elected and qualified. If any of the nominees should be unable to serve as a director by reason of death, incapacity or other unexpected occurrence, the proxies solicited by the Board of Directors shall be voted by the persons appointed as proxies for such substitute nominee as is selected by the Board or, in the absence of such selection, for such fewer number of directors as results from such death, incapacity or other unexpected occurrence. The election of each nominee requires the affirmative vote of a plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors.

          The following table provides certain information with respect to our nominees for director as of June 23, 2008.

Name
Michael D. Rumbolz			54			Chief Executive Officer, President, and Chairman of the Board
Patrick R. Cruzen(1)(2)(3)			61			Director
Donald D. Snyder(1)(3)			60			Director
Patricia W. Becker(1)(3)			56			Director

           Michael D. Rumbolz has been the Company’s Chief Executive Officer and Chairman of the Board since January 1, 2005 and also President since April 2005. Prior to January 2005, he was Vice Chairman and a director of Casino Data Systems from April 2000 to September 2001, and President and Chief Executive Officer of Anchor Gaming from 1995 to 2000. Prior to joining Anchor Gaming, Mr. Rumbolz was Director of Corporate Development for Circus Circus Enterprises Inc., including serving as the first president of and managing director of Windsor Casino Limited, a consortium company owned by Hilton Hotel Corp., Circus Circus Enterprises Inc. and Caesars World. Mr. Rumbolz also held various executive positions with Trump Hotels & Casino Resorts. Mr. Rumbolz is also a director of Employers Holdings Inc. and the Seminole Hard Rock Entertainment, Inc. and a Manager of Seminole Hard Rock International, LLC.

           Patrick R. Cruzen joined the Company as a director in March 2004. Since 1997, Mr. Cruzen has served as Chief Executive Officer of Cruzen & Associates, which offers executive recruiting and consulting services for the gaming industry. From 1994 to 1996, he was President and Chief Operating Officer of Grand Casinos, Inc. From 1990 to 1994, Mr. Cruzen served as Senior Vice President of Finance and Administration of MGM Grand, Inc. Mr.

Cruzen is also a director of two other public companies, Canterbury Park Holding Company and Majestic Star Casino, LLC.

           Donald D. Snyder has been a director since April 2005. Prior to that time, Mr. Snyder served as President and as a member of the Board of Directors of Boyd Gaming since 1997. Prior to Boyd Gaming, he was the President and Chief Executive Officer of the Fremont Street Experience, where he continued to hold the Chairman’s post on its governing board until 2006. Mr. Snyder served from 1987 through 1991 as Chairman of the Board and Chief Executive Officer of First Interstate Bank of Nevada, the state’s largest full service bank at the time. During his 22 years with First Interstate Bank, he served his first 18 years in California in various management positions in retail and corporate banking, international banking and real estate banking. He has served on the boards of several gaming and non-gaming companies, including current service on the boards of two other public companies, Western Alliance Bancorporation and Sierra Pacific Resources. Additionally, Mr. Snyder has served on numerous non-profit boards, which presently include the Nevada Development Authority, UNLV Foundation, and the Las Vegas Performing Arts Center Foundation.

           Patricia. W. Becker has been a director since April 2005. Ms. Becker is currently the Executive Director of the International Gaming Institute at the University of Nevada, Las Vegas. Ms. Becker most recently served as Senior Vice President of Corporate Affairs for Aladdin Gaming, LLC, which owned the Aladdin Resort & Casino. Before joining the Aladdin in 1998, she owned her own gaming consulting business focused exclusively on assisting senior management and corporate boards with various gaming business issues. Earlier in her career, Ms. Becker served as Chief of Staff to former Governor Bob Miller of the State of Nevada, was a Senior Vice President and General Counsel of Harrah’s Hotel and Casino Corporation, and served as a board member on the Nevada State Gaming Control Board. Ms. Becker formerly served on the boards of Fitzgeralds Gaming Corporation and Powerhouse Technologies, Inc.

          The Board of Directors recommends that you vote FOR the election of each of the nominees listed herein.

CORPORATE GOVERNANCE

Overview

          The Board of Directors is committed to good business practices, transparency in financial reporting and the highest level of corporate governance. To that end, the Board has engaged in a regular process of reviewing our corporate governance policies and practices in light of proposed and adopted laws and regulations, including the Sarbanes-Oxley Act of 2002, the rules of the Securities and Exchange Commission (“SEC”), and the rules and regulations of The NASDAQ Global Market (“NASDAQ”) over which the shares of our common stock are traded. The Board of Directors oversees our business and monitors the performance of management. In accordance with corporate governance principles, the Board does not involve itself in day-to-day operations. The directors keep themselves informed through, among other things, discussions with the Chief Executive Officer, other key executives and our principal external advisers (legal counsel, outside auditors, investment bankers and other consultants), by reading reports and other materials that we send them and by participating in Board and committee meetings.

Director Independence

          The Board of Directors and its various committees must have participation by members who are “independent” as defined by the applicable rules and regulations of NASDAQ, including Rule 4200(a)(15) of the Marketplace Rules of The NASDAQ Stock Market LLC. The Board has determined that each of Messrs. Cruzen and Snyder and Ms. Becker is independent under such rules and regulations.

Board Qualification and Selection Process

          The Board of Directors will consider candidates for nomination as a director recommended by stockholders, directors, third party search firms and other sources. In evaluating director nominees, the Board considers the following factors and qualifications, among others:

	•		the appropriate size and the diversity of the Company’s Board of Directors;
	•		the needs of the Board with respect to the particular talents and experience of its directors;
	•		the knowledge, skills and experience of nominees, including experience in technology, business, finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;
	•		familiarity with domestic and international business matters;
	•		age and legal and regulatory requirements;
	•		experience with accounting rules and practices;
	•		appreciation of the relationship of the Company’s business to the changing needs of society; and
	•		the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members.

          The Board will consider the attributes of the candidates and the needs of the Board, and will review all candidates in the same manner. The Board believes that candidates for directors should have certain minimum qualifications, including being able to read and understand basic financial statements, being over 18 years of age, having familiarity with the Company’s business and industry, having high moral character and mature judgment, being able to work collegially with others, and not currently serving on more than three boards of public companies. The Board may modify these minimum qualifications as deemed necessary.

Stockholder Nominations for Director Candidates

          A stockholder who wishes to recommend one or more directors must provide a written recommendation to the Chairman of the Board at the following address:

Cash Systems, Inc.
Attn: Chairman of the Board
7350 Dean Martin Drive, Suite 309
Las Vegas, NV 89139

          Notice of a recommendation must include the name, address and telephone number of the stockholder and the class and number of shares such stockholder owns. With respect to the nominee, the stockholder must include the nominee’s name, age, business address, residence address, current principal occupation, five year employment history with employer names and a description of the employer’s business, the number of shares beneficially owned by the nominee, whether such nominee can read and understand basic financial statements, and board membership, if any.

          The recommendation must be accompanied by a written consent of the nominee to stand for election if nominated by the Board of Directors and to serve if elected by the stockholders. The Company may require any nominee to furnish additional information that may be needed to determine the eligibility of the nominee.

Communications with the Board

          Stockholders may communicate directly with the Board of Directors. All communications regarding general matters should be directed to our Secretary at the address below and should prominently indicate on the outside of the envelope that it is intended for the complete Board of Directors or for independent directors only. If no such designation is made, the communication will be forwarded to the entire Board. Stockholder communications to the Board should be sent to:

Secretary				Secretary
Attention: Board of Directors				Attention: Independent Directors
Cash Systems, Inc.		OR		Cash Systems, Inc.
7350 Dean Martin Drive, Suite 309				7350 Dean Martin Drive, Suite 309
Las Vegas, NV 89139				Las Vegas, NV 89139

Code of Conduct

          The Board of Directors has approved a Code of Conduct that applies to the Chief Executive Officer, the Chief Financial Officer, and all other persons performing similar functions. The Code of Conduct addresses such topics as ethical conduct, proper use of our assets, compliance with applicable laws and regulations, and accuracy and preservation of public disclosures. Copies of the Code of Conduct are available upon written request to:

Cash Systems, Inc.
Attn: Secretary
7350 Dean Martin Drive, Suite 309
Las Vegas, NV 89139

          Any amendments or waivers to our Code of Conduct will be promptly disclosed by posting on our website at www.cashsystemsinc.com.

Committees of the Board

          The Board of Directors has two standing committees, the Audit Committee and the Compensation Committee. We have established written guidelines governing the nomination of directors, in a manner consistent with the requirements of NASDAQ. The Board of Directors has also designated a special committee to, among other things, review, evaluate, investigate, pursue and negotiate the terms and conditions of the merger, and to recommend to the full Board of Directors whether the merger agreement should be adopted and approved.

           Audit Committee. The Audit Committee operates under a written charter adopted by the Board of Directors. Among other things, the purpose of the Audit Committee is to oversee and monitor the integrity of the Company’s financial statements and internal accounting and financial controls, the Company’s independent auditor’s qualifications, independence and compensation, the performance of the Company’s internal auditors and independent auditors, and the Company’s compliance with legal and regulatory requirements. The Audit Committee consists of Messrs. Cruzen (Chairman) and Snyder and Ms. Becker. The Board has determined that Mr. Cruzen is an “audit committee financial expert” as defined by the rules of the SEC. The Board has also determined that each of Ms. Becker, Mr. Cruzen, and Mr. Snyder is an independent director and meets each of the other requirements for Audit Committee members under the applicable rules and regulations of NASDAQ. The Audit Committee held seven formal meetings in 2007. A copy of the current charter for the Audit Committee is available on our website at www.cashsystemsinc.com. The charter is reviewed annually. The report of the Audit Committee for the 2007 fiscal year is found on page 39 of this Proxy Statement.

           Compensation Committee. The Compensation Committee operates under a written charter adopted by the Board of Directors. Among other things, the purpose of the Compensation Committee is to oversee the Company’s compensation and employee benefit plans and practices, including its executive compensation plans and its incentive-compensation and equity-based plans, review and recommend to the Board of Directors the salaries, bonuses and perquisites of the Company’s executive officers, determine the individuals to whom, and the terms upon which, awards under the Company’s incentive plans are granted, make periodic reports to the Board of Directors as to the status of such plans, and review and recommend to the Board of Directors additional compensation plans. The Compensation Committee consists of Ms. Becker (Chairman) and Messrs. Cruzen and Snyder. The Board has determined that each of Ms. Becker, Mr. Cruzen and Mr. Snyder is an independent director under the applicable rules and regulations of NASDAQ. The Compensation Committee held four formal meetings in 2007. A copy of the current charter for the Compensation Committee is available on our website at www.cashsystemsinc.com. The charter is reviewed annually. The report of the Compensation Committee for the 2007 fiscal year is found on page 25 of this Proxy Statement.

           Nominating Committee. The Company does not have a nominating committee. Nominations to the Board of Directors are either selected or recommended for the Board’s selection by a majority of the Board’s independent directors. The Company has determined not to establish a nominating committee based on the small size of the existing Board of Directors.

Meeting Attendance

           Board and Committee Meetings. The Board held nine formal meetings during 2007. Each director attended at least 75% of the aggregate of (i) the total number of meetings of the Board of Directors held during the period for which he or she served as a director, and (ii) the total number of meetings of the committees on which he or she served.

           Annual Meeting of Stockholders. Directors are encouraged to attend our annual meetings of stockholders; however, there is no formal policy regarding attendance at annual meetings. Each of our directors serving at the time of the Company’s 2007 annual meeting of stockholders attended the annual meeting.

Compensation Committee Interlocks and Insider Participation

          During the year ended December 31, 2007, the following directors and former directors have at one time been members of the Company’s Compensation Committee: Patrick R. Cruzen, Donald Snyder, Patricia Becker, and Don R. Kornstein. None of the Compensation Committee’s current or former members has at any time been an officer or employee of the Company. None of the Company’s executive officers serves or in the past fiscal year has served as a member of the Board of Directors or compensation committee of any entity that has one or more of its executive officers serving on the Company’s Board of Directors or Compensation Committee.

EXECUTIVE OFFICERS OF THE COMPANY

          The following table lists the executive officers of the Company and provides their respective ages and current positions with the Company as of June 23, 2008. Biographical information for each such person, other than Michael D. Rumbolz whose biography is provided under the heading “Proposal #1 — Election of Directors,” is provided below.

Name		Position		Age
Michael D. Rumbolz		Chief Executive Officer, President and Chairman of the Board			54
Andrew Cashin		Executive Vice President, Chief Financial Officer and Treasurer			43
John F. Glaser		Executive Vice President of Sales and Marketing			52
Katherine W. Bloomfield		Chief Information Officer			55
Zev Kaplan		General Counsel and Assistant Secretary			55

           Andrew Cashin has been the Company’s Executive Vice President, Chief Financial Officer and Treasurer since March 23, 2006. Prior to joining the Company, Mr. Cashin was employed as a Senior Vice President of Bally Gaming, a principal business unit of Bally Technologies, Inc. (formerly known as Alliance Gaming Corporation), which is a worldwide leader in designing, manufacturing and distributing traditional and nontraditional gaming machines. As Senior Vice President of Bally Gaming, Mr. Cashin was responsible for oversight of Bally Gaming’s various business lines, including game sales and game operations. Prior to serving in that capacity, Mr. Cashin was employed as Vice President of Finance and Information Technology of Bally Gaming, where he was responsible for the daily oversight of Bally Gaming’s finance department. Prior to that, Mr. Cashin was the Western Regional Brand Operations Manager at Harrah’s Entertainment, Inc. Mr. Cashin began his professional career as an accountant with Arthur Andersen & Co.

           John F. Glaser has been the Company’s Executive Vice President of Sales and Marketing since June 6, 2005. Mr. Glaser has over 20 years of sales and marketing experience, including 13 years of experience in the gaming sector. He is the former Vice President of Sales for Bally Gaming, where he oversaw the sale and leasing of gaming machines for the United States and Canadian markets. Prior to joining Bally Gaming in 1997, Mr. Glaser was the Director of Sales for International Game Technology, where he was responsible for hiring, training and developing the sales and sales support staff as well as for the sale and leasing of over 79,000 gaming machines. Mr. Glaser joined International Game Technology in 1992 from The Circle K Corporation, where he spent eight years as Manager and Regional Marketing Director.

           Katherine W. Bloomfield has been the Company’s Chief Information Officer since August 1, 2005. Ms. Bloomfield has over 20 years of experience in the software development and delivery industry, specializing in enterprise data management and distribution solutions. Most recently, Ms. Bloomfield was Vice President of Operations for VisionShare Inc. with responsibility for the delivery of VisionShare’s integration services, managed services, product development, quality assurance and customer support. Prior to VisionShare, Mr. Bloomfield’s management roles include Vice President of Technical Operations for Stellent, Inc. and Director of Professional Services for Apertus Technologies, where she was responsible for guiding the expansion of consulting services, product training and product support organizations resulting in increased accountability and revenue growth. Earlier in her career, Ms. Bloomfield held technical positions at PricewaterhouseCoopers and Control Data where she was instrumental in the development and delivery of custom software applications for the financial service and electrical utility industries, respectively.

           Zev E. Kaplan has been the Company’s General Counsel since March 2005. Mr. Kaplan has been a member of the Board of Directors of Homeland Security Capital Corporation, a publicly-traded company, since January 2006. From April 1995 to the present he has been General Counsel to the Regional Transportation Commission of Southern Nevada, where he has played a key policy role in the start-up of the local transit systems and their facilities. Mr. Kaplan spent fifteen years in government services during which time he served as Senior Deputy D.A. with the Clark County District Attorney’s Office-Civil Division; General Counsel to the Nevada Public Service Commission; and Staff Attorney to the U.S. Senate Committee on Commerce, Science and Transportation. Mr. Kaplan received his J.D. from Southwestern University School of Law; MBA from the University of Nevada, Las Vegas; and B.S. from the Smith School of Business at the University of Maryland.

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

          We have adopted a practice of offering competitive compensation intended to attract, retain and motivate a qualified executive management team at market rates. With respect to our chief executive officer (“CEO”), chief financial officer, and the other three most highly-compensated executive officers (collectively referred to as the “Named Executive Officers”), this Compensation Discussion and Analysis describes our compensation philosophy and objectives, methodologies to establish their compensation, and the practices to administer such programs.

          The Company’s Compensation Committee (the “Committee”) is authorized to review and approve the compensation of the CEO and recommend for approval of the full Board of Directors, the annual compensation for each of the other Named Executive Officers. The Committee operates under a written charter adopted by our Board and is comprised solely of independent directors as determined in accordance with various rules and regulations of NASDAQ, the SEC and the Internal Revenue Service.

Compensation Objectives and Philosophy

          In determining the appropriate pay levels for base salary, target bonuses, and long-term incentives, the Committee relied primarily on its review and analysis of the following factors, where relevant for each Named Executive Officer:

	•		the responsibilities of the position, the performance of the individual and his or her general experience and qualifications
	•		our overall financial performance (including budget variances) for the previous year and the contributions to such performance measures by the individual or his or her department
	•		the individual’s total compensation during the previous year or at his or her prior employment where relevant to the position filled at the Company
	•		compensation levels paid by comparable companies in similar industries
	•		the individual’s length of service with us
	•		any knowledge or set of skills not easily replaceable that are critical to the success of the Company
	•		the individual’s effectiveness in dealing with external and internal audiences

          The primary objective of our fiscal year 2007 executive compensation program was to motivate executives and key talent to achieve critical financial and non-financial corporate goals. Our 2007 executive compensation program took into account the Company’s dependence on the long-term development and implementation of new technologies and innovative processes. As with many companies who have long development cycles of key products, it was critical for us to recognize annual individual contributions that would positively impact Company value in future years. This was also necessary to retain key executive talent during the development cycle of our products.

          The Committee believes that a culture of Company ownership is critical to align executive and stockholder interests. To attract, reward, and retain highly talented executives, key objectives of our executive compensation program are to pay executives competitively, both in value and the mix of pay between each component of total compensation. The Committee believes we accomplish these objectives by providing total compensation packages to our executive team that are comparable to executives of similarly sized companies and with similar roles and responsibilities within the industries in which we compete for executive talent. The Committee believes that the compensation of our Named Executive Officers is competitive with companies of similar size and with comparable operating results in similar industries.

Methodologies for Establishing Compensation Program

          At the end of fiscal year 2006, the Committee engaged an independent compensation consultant to advise the Committee on the principal aspects of executive compensation, including base salaries and short- and long-term incentives, as well as all aspects of Board of Directors’ compensation. The Committee selected Presidio Pay Advisors, Inc. (“Presidio Pay”), an independent compensation consultant, to provide the Committee with a competitive analysis of current executive and Board of Directors’ compensation for fiscal year 2007 and to assist the Committee in complying with new executive compensation disclosure requirements for fiscal year 2006. The analysis and recommendations of Presidio Pay for executive management and the Board of Directors is reflected in the new employment agreement for our CEO and have been incorporated into the fiscal year 2007 compensation program.

          Presidio Pay reported to the Committee rather than to management, although it met with management from time to time for purposes of gathering information on proposals that management made to the Committee. The Committee is free to replace Presidio Pay or hire additional consultants at any time. Presidio Pay has not provided any other services, outside those listed above, to the Company and received compensation only with respect to the services provided to the Committee.

          The Committee acts independently of the CEO when determining the compensation program and levels for the CEO. The Committee will solicit recommendations from the CEO and other members of senior management for the compensation program for the other Named Executive Officers. However, implementation of any recommendations made by the CEO or other members of senior management is at the sole discretion of the Committee.

          When share based compensation is included as part of an executive’s compensation, the share based grants (i.e. options or restricted stock) are approved by the Committee and priced based on the closing price of the Company’s stock on the date the grant is approved by the Committee.

Components of our Compensation Program

          The Committee uses the above objectives as a guide for assessing how to allocate each of the following components of our compensation program:

	•		Annual base salaries
	•		Short-term cash bonuses
	•		Long-term equity-based compensation (stock options, restricted shares, etc.)
	•		Retirement benefits provided under a 401(k) plan
	•		Executive perquisites
	•		Benefits provided under an all-employee benefit program

           Base Salary

          Base salaries are the fixed, recurring portion of the employee’s cash compensation paid over a 12 month period and are intended to reward the day-to-day aspects of their roles and responsibilities and to maintain pay levels and pay mix that are competitive with those companies with whom we compete for executive talent. The Committee believes that the fiscal year 2007 base compensation of our Named Executive Officers was competitive with companies of similar size and with comparable operating results in similar industries.

           Annual Incentives

          Historically, annual bonuses have been distributed by the CEO using a bonus pool approved by the Board of Directors, the final distribution of which was reported back to the Board of Directors. The Committee has established a formal executive bonus plan to reward executives based on performance in their positions as well as the overall performance of the Company. The plan is effective for fiscal year 2008. For fiscal year 2007 performance, no annual bonuses were paid out to the Company’s executives.

          Annual bonuses are intended to reward overall financial performance, including budget variances for the previous year, and the contributions to such performance measures by an executive or his or her business unit. In addition, the Committee considers subjective performance metrics of the executive and the individual’s effectiveness in dealing with external and internal constituencies. When performance is achieved, bonuses can be a significant portion of an executive’s annual compensation package.

          In fiscal year 2007, the CEO was awarded a contractual cash bonus of $50,000, based on the terms of his employment agreement signed in fiscal year 2004 for fiscal year 2006 performance. None of the other Named Executive Officers were awarded a cash bonus for fiscal year 2007 performance. In addition, the Executive Vice President of Sales and Marketing was awarded 20% of the commissions earned by the sales department pursuant to his employment agreement in which he is entitled to participate in the Company’s sales commission program as determined by senior management. Sales commissions are paid based on such factors as gross profit percentage and length of contract term.

           Long-Term Incentives

          The Committee believes that equity ownership of the Named Executive Officers aligns the interests of the executives with those of our stockholders and enhances our ability to attract and retain highly qualified personnel on a basis competitive with industry practices. Equity-based incentives granted by the Company pursuant to our equity incentive plans help achieve this objective and provide additional compensation to the executives. We have granted both stock options and restricted stock as a long-term, equity-based compensation that vests based on continued employment over multiple years. The number of options and/or restricted stock granted and the vesting schedule for each executive’s grant in 2007 was determined based on a variety of factors, including market pay practices, the availability of shares under the current equity incentive plan, and concerns over stockholder dilution.

          In fiscal year 2007, the Committee chose to issue restricted shares to Michael D. Rumbolz (Chief Executive Officer), Andrew Cashin (Chief Financial Officer), John Glaser (Executive VP of Sales and Marketing), Kate Bloomfield (Chief Information Officer), and Zev Kaplan (General Counsel). The Committee’s decision was based on concern over stockholder dilution, the limited number of shares reserved for future issuance under the current equity incentive plan, and the need to make a competitive long-term incentive grant to retain Mr. Rumbolz, Mr. Cashin, Mr. Glaser, Ms. Bloomfield, and Mr. Kaplan. The use of restricted stock allowed the Committee to use fewer underlying shares than would be required using stock options, while conserving the additional shares remaining in the pool to attract or retain other key executives.

           Benefits & Perquisites

          In fiscal year 2007, the Named Executive Officers were eligible to receive health care coverage, dental and vision insurance, long-term and short-term disability insurance, life and accidental death and dismemberment insurance, health and dependent care flexible spending accounts, and certain other benefits that are generally available to other Company employees.

          Other perquisites given to the Named Executive Officers can include vacation time in addition to the vacation time typically provided to other Company employees and an automobile allowance.

           The Company maintains a tax-qualified 401(k) Plan. The 401(k) Plan permits participants to make 401(k) contributions on a pretax basis. All employees of the Company who are at least age 21 are eligible to participate in the 401(k) Plan. In general, participants can contribute up to $15,500 of their pretax compensation to the 401(k) Plan (subject to changes by the IRS on an annual basis). The 401(k) Plan also provides that the Company will make a

matching contribution on behalf of each eligible participant equal to 100% of the 401(k) contributions made by such participants, up to 4% of their individual compensation.

          We believe our perquisites and generally available benefits, such as 401(k) plans and health care coverage, are standard components of any competitive pay package. We feel that without offering these additional elements of compensation, we would not be able to attract and retain key executive talent. In addition to competitive practices, our benefits programs give our employees access to quality healthcare, financial protection from unforeseen events, assistance in achieving retirement financial goals, enhanced health, and productivity in full compliance with applicable legal requirements. These generally available benefits typically do not specifically factor into decisions regarding an individual executive’s total compensation or equity award package.

Chief Executive Officer Compensation

          The base salary of our CEO, Michael D. Rumbolz, was paid under the terms of his current employment agreement, which was executed in 2007. The agreement set Mr. Rumbolz’s base salary at $350,000, with the potential to earn more than the base amount upon the satisfaction of specified performance goals, as established by the Committee. No bonus was awarded for fiscal year 2007 performance. Mr. Rumbolz’s original employment agreement, which was executed in 2004, provided for an annual cash bonus of a minimum amount of $50,000 payable on February 15, 2007 for fiscal year 2006 performance. The CEO’s job performance was evaluated by reference to the performance of the Company with respect to revenue and earnings, return on stockholders’ equity, improving capital structure and financial condition, as well as the CEO’s leadership and team-building skills.

Change of Control and Post-Employment Payments

          From time to time, the Company may enter into certain arrangements that provide for payment upon the termination of a Named Executive Officer. Currently, the Named Executive Officers have provisions in their employment agreements that would provide for some form of post-employment severance benefits. The Company believes that post-employment severance benefits are in line with market pay practices. There are a number of different types of arrangements the Company currently has with its Named Executive Officers. The potential payments for each Named Executive Officer are identified in the “Potential Post-Employment Payment Calculations” section of this filing. The following summarizes the potential payments the Company is obligated to make in the event of an involuntary termination without cause and involuntary termination upon a change-in-control.

           Involuntary Termination Without Cause — In the event of a termination of the Named Executive Officer’s employment without cause by the Company, the executive will be entitled to full vesting of any unvested restricted stock awards. In addition, certain Named Executive Officers are eligible to continue to receive the base salary and certain benefits agreed upon under their employment agreements for the remaining term of the agreement if they are terminated without cause.

           Involuntary Termination Following a “Change of Control” — If a change of control of the Company occurs, each Named Executive Officer will be entitled to full vesting of any unvested restricted stock awards. In addition, the Board, pursuant to the 2005 Equity Incentive Plan, has the discretion to accelerate the vesting of any stock options or restricted shares granted. In addition, certain Named Executive Officers may be eligible to continue to receive the base salary and certain benefits agreed upon under their employment agreement for the remaining term of the agreement if they are terminated without cause following a change of control.

Tax Deductibility and Executive Compensation

          We have structured our compensation program to comply with Internal Revenue Code Sections 162(m). Under Section 162(m) of the Internal Revenue Code, a limitation was placed on tax deductions of any publicly-held corporation for individual compensation to certain executives of such corporation exceeding $1,000,000 in any taxable year, unless the compensation is performance-based. The Company has no individuals with non-performance based compensation paid in excess of the Internal Revenue Code Section 162(m) tax deduction limit.

COMPENSATION COMMITTEE REPORT

          The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

The COMPENSATION COMMITTEE
Patricia Becker, Chair
Patrick R. Cruzen
Donald Snyder

           The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act.

EXECUTIVE COMPENSATION

     The following table illustrates the compensation paid during fiscal year 2007 to our Chief Executive Officer, Chief Financial Officer, and each of our three other most highly compensated executive officers who were serving as executive officers at the end of fiscal year 2007. We collectively refer to these persons as the “Named Executive Officers.”

Summary Compensation Table

																										Change in
																										Pension
																										Value and
																						Non-Equity				Non-Qualified
																						Incentive				Deferred				All
														Stock				Option				Plan				Compensation				Other
Name and						Salary				Bonus				Awards				Awards				Compensation				Earnings				Compensation				Total
Principal Position		Year				($)				($)(1)				($)(2)				($)				($)(3)				($)				($)(4)				($)
Michael D. Rumbolz			2007			$	350,000			$	50,000			$	66,796			$	—			$	—			$	—			$	29,323			$	496,119
Chief Executive Officer,			2006			$	350,000			$	50,000			$	—			$	—			$	—			$	—			$	29,123			$	429,123
President & Chairman of the Board
Andrew Cashin			2007			$	250,000			$	—			$	143,087			$	—			$	—			$	—			$	5,319			$	398,406
Executive Vice President,			2006			$	184,616			$	—			$	87,434			$	—			$	—			$	—			$	33,504			$	305,554
Chief Financial Officer & Treasurer
John F. Glaser			2007			$	170,000			$	—			$	23,798			$	—			$	33,884			$	—			$	13,474			$	241,156
Executive Vice President			2006			$	160,769			$	16,000			$	—			$	—			$	58,469			$	—			$	13,794			$	249,032
of Sales & Marketing
Katherine W. Bloomfield			2007			$	150,000			$	—			$	23,798			$	—			$	—			$	—			$	10,856			$	184,654
Chief Information Officer			2006			$	146,615			$	12,000			$	—			$	—			$	—			$	—			$	11,279			$	169,894
Zev E. Kaplan			2007			$	125,000			$	—			$	11,902			$	—			$	—			$	—			$	33,550			$	170,452
General Counsel			2006			$	125,000			$	18,500			$	—			$	—			$	—			$	—			$	34,482			$	177,982

	•		Mr. Rumbolz: $9,000 in automobile allowance, $11,323 in Company paid medical, accidental death & disability, life, long-term disability, and dental premiums, and $9,000 in 401(k) contributions made on his behalf;
	•		Mr. Cashin: $5,319 in Company paid medical, accidental death & disability, life, long-term disability, and dental premiums;
	•		Mr. Glaser: $5,319 in Company paid medical, accidental death & disability, life, long-term disability, and dental premiums, and $8,155 in 401(k) contributions made on his behalf;

	•		Ms. Bloomfield: $5,319 in Company paid medical, accidental death & disability, life, long-term disability, and dental premiums, and $5,960 in 401(k) contributions made on her behalf; and
	•		Mr. Kaplan: $24,000 in administrative reimbursement to Zev E. Kaplan Ltd, Mr. Kaplan’s professional law corporation, $5,319 in Company paid medical, accidental death & disability, life, long-term disability, and dental premiums, and $4,231 in 401(k) contributions made on his behalf.

Employment Agreements

          Subsequent to an amendment to extend the expiration of Mr. Rumbolz’s original contract from December 31, 2006 to March 31, 2007, the Company entered into a new employment agreement with Michael D. Rumbolz, effective March 6, 2007, pursuant to which Mr. Rumbolz serves as the Company’s Chief Executive Officer, Chairman of the Board, and President. Under the terms of the new agreement, Mr. Rumbolz receives an annual base salary of $350,000, has been granted 65,000 shares of restricted stock at the “fair market value” of such stock on the date of grant, vesting in four equal annual installments, and is entitled to no less than two weeks paid annual vacation, reimbursement for any and all ordinary and necessary business expenses that he reasonably incurs in connection with the business of the Company, and other usual benefits. This new agreement expires on March 5, 2009, unless sooner terminated or extended.

          On June 13, 2008, Mr. Rumbolz entered into an employment offer letter with GCA as a condition to entering into the merger agreement. Mr. Rumbolz’s employment with GCA will become effective immediately upon consummation of the merger, under which he will serve as a Corporate Strategy Advisor of GCA on a part-time basis. Although the agreement is at-will, the terms of the agreement will run for two years from the effective date of the merger. Under the agreement, Mr. Rumbolz will be entitled to receive a base salary of $150,000 during the term of the agreement, and management of GCA will recommend that the board of directors of GCA grant to Mr. Rumbolz an option to purchase 100,000 shares of GCA common stock. He will be eligible for an incentive bonus but not eligible to participate in GCA’s standard benefit plans due to his part-time status.

          On March 23, 2006, the Company entered into an employment agreement with Andrew Cashin, pursuant to which Mr. Cashin serves as the Company’s Executive Vice President and Chief Financial Officer. Pursuant to this agreement, Mr. Cashin receives an annual base salary of $250,000, bonus compensation as determined by the Company’s Board of Directors, no less than four weeks paid annual vacation, reimbursement for any and all ordinary and necessary business expenses that he reasonably incurs in connection with the business of the Company, and other usual benefits. Mr. Cashin also received 50,000 shares of restricted stock as well as an additional grant in 2007 of 25,000 at the “fair market value” of such stock on the date of grant, vesting in three equal annual installments. The employment agreement expires on March 22, 2009, unless sooner terminated or extended.

          On June 12, 2008, the Company entered into an amendment to the employment agreement with Mr. Cashin as a condition to the closing of the merger. Pursuant to the amendment, upon the effectiveness of the merger, Mr. Cashin shall be deemed to have resigned as the Company’s Executive Vice President and Chief Financial Officer and shall automatically become a director (but not a member of the Board of Directors) of the Company.

          On June 6, 2005, the Company entered into an employment agreement with John F. Glaser, pursuant to which Mr. Glaser serves as the Company’s Executive Vice President of Sales & Marketing. Pursuant to this agreement, Mr. Glaser receives an annual base salary of $150,000 through June 5, 2006 and $170,000 from June 6, 2006 through June 5, 2007. Mr. Glaser is also eligible for bonus compensation as determined by the Company’s Board of Directors, no less than four weeks paid annual vacation, reimbursement for any and all ordinary and necessary business expenses that he reasonably incurs in connection with the business of the Company, and other usual benefits. In addition, Mr. Glaser participated in the FY 2007 Sales Compensation Plan. Mr. Glaser’s FY 2007 commission earnings can be found in the Summary Compensation Table. Mr. Glaser also received the option to purchase 100,000 shares of the Company’s common stock at the “fair market value” of such stock on the date of grant. This agreement expired on June 5, 2007. The Company currently employs Mr. Glaser as an at-will employee.

          On July 5, 2005, the Company entered into an employment agreement with Katherine W. Bloomfield, pursuant to which Ms. Bloomfield serves as the Company’s Chief Information Officer. Pursuant to this agreement,

Ms. Bloomfield receives an annual base salary of $150,000, bonus compensation as determined by the Company’s Board of Directors, no less than four weeks paid annual vacation, reimbursement for any and all ordinary and necessary business expenses that she reasonably incurs in connection with the business of the Company, and other usual benefits. Ms. Bloomfield also received the option to purchase 70,000 shares of the Company’s common stock at the “fair market value” of such stock on the date of grant. This agreement expired on August 1, 2007. The Company currently employs Ms. Bloomfield as an at-will employee.

          On March 14, 2005, the Company entered into an employment agreement with Zev E. Kaplan, pursuant to which Mr. Kaplan serves as the Company’s General Counsel. Pursuant to this agreement, Mr. Kaplan receives an annual base salary of $125,000, bonus compensation as determined by the Company’s Board of Directors, no less than two weeks paid annual vacation, reimbursement for any and all ordinary and necessary business expenses that he reasonably incurs in connection with the business of the Company, $24,000 in administrative reimbursement to Mr. Kaplan’s professional law corporation, and other usual benefits. This agreement expired on March 13, 2007. The Company currently employs Mr. Kaplan as an at-will employee.

Grants of Plan-based Awards

																														All Other				All Other
																														Stock				Option				Exercise
																														Awards:				Awards:				or Base				Grant Date
						Estimated Future Payouts												Estimated Future Payouts												Number of				Number of				Price of				Fair Value
						Under Non-Equity												Under Equity Incentive												Shares				Securities				Option				of Stock
						Incentive Plan Awards												Plan Awards												of Stock				Underlying				Awards				and
		Grant				Threshold				Target				Maximum				Threshold				Target				Maximum				or Units				Options				($/Share)				Option
Name		Date				($)				($)				($)				(#)				(#)				(#)				(#)				(#)				(2)				Awards
Michael D. Rumbolz			3/6/2007			$	—			$	—			$	—				—				—				—				65,000	(1)			—			$	5.03			$	326,950
Andrew Cashin			6/6/2007			$	—			$	—			$	—				—				—				—				25,000				—			$	6.30			$	157,500
John F. Glaser			6/6/2007			$	—			$	—			$	—				—				—				—				20,000				—			$	6.30			$	126,000
Katherine W. Bloomfield			6/6/2007			$	—			$	—			$	—				—				—				—				20,000				—			$	6.30			$	126,000
Zev E. Kaplan			6/6/2007			$	—			$	—			$	—				—				—				—				10,000				—			$	6.30			$	63,000

Outstanding Equity Awards at Fiscal Year-End

          The following table shows information as of December 31, 2007 for our Named Executive Officers concerning unexercised options, stock that has not vested and equity incentive plan awards.

Outstanding Equity Awards at Fiscal Year-end

		Option Awards																				Stock Awards
																														Equity				Equity
										Equity																				Incentive				Incentive
										Incentive																				Plan Awards:				Plan Awards:
										Plan																				Number of				Market or
										Awards:																Market				Unearned				Payout Value
		Number of				Number of				Number of												Number of				Value of				Shares,				of Unearned
		Securities				Securities				Securities												Shares or				Shares or				Units or				Shares, Units
		Underlying				Underlying				Underlying												Units of				Units of				Other				or Other
		Unexercised				Unexercised				Unexercised				Option								Stock That				Stock That				Rights That				Rights That
		Options				Options				Unearned				Exercise				Option				Have Not				Have Not				Have Not				Have Not
		(#)				(#)				Options				Price				Expiration				Vested				Vested				Vested				Vested
Name		Exercisable(1)				Unexercisable				(#)				($)				Date				(#)				($)(2)				(#)				($)
Michael D. Rumbolz			300,000				—				—			$	7.45				12/22/2014				65,000	(3)		$	287,300				—			$	—
Andrew Cashin			—				—				—			$	—				—				33,334	(4)		$	147,336				—			$	—
			—				—				—			$	—				—				25,000	(5)		$	110,500				—			$	—
John F. Glaser			100,000				—				—			$	7.69				6/6/2015				20,000	(6)		$	88,400				—			$	—
Katherine W. Bloomfield			70,000				—				—			$	8.05				8/1/2015				20,000	(6)		$	88,400				—			$	—
Zev E. Kaplan			120,000				—				—			$	7.70				3/15/2015				10,000	(7)		$	44,200				—			$	—

Option Exercises and Stock Vested

     16,667 shares of restricted stock vested for one of our Named Executive Officers during 2007. None of our Named Executive Officers exercised any options in 2007.

Nonqualified Deferred Compensation

     The Company does not maintain any deferred compensation programs. Accordingly, none of our Named Executive Officers deferred compensation during 2007.

Potential Post-Employment Payment Calculations

          The Company has entered into certain agreements and maintains certain plans that will require the Company to provide compensation to certain Named Executive Officers in the event of termination of employment, resignation, death or disability, or change in control of the Company. The amount of compensation payable to each

Named Executive Officer in each situation is listed in the tables below assuming termination as of December 31, 2007. The Company does not provide for any payments upon retirement or upon termination for cause.

          Regardless of the manner in which a Named Executive Officer’s employment terminates, he is entitled to receive amounts earned during his term of employment, including amounts accrued and vested through the 401(k) Plan and, except as provided in the tables below, each Named Executive Officers is eligible to receive vested equity awards upon a termination of employment for any reason. If a change of control of the Company occurs, certain Named Executive Officers may be entitled to the same severance benefits as in the case of an involuntary termination without cause regardless of whether a termination of employment occurs. The following tables describe the potential payments upon termination or a change in control of the Company for the Named Executive Officers. The actual amounts paid to any Named Executive Officer can only be determined at the time of the executive’s separation from the Company.

Mr. Michael Rumbolz

     Subsequent to an amendment to extend the expiration of Mr. Rumbolz’s original contract from December 31, 2006 to March 31, 2007, the Company entered into a new employment agreement with Michael D. Rumbolz, effective March 6, 2007, pursuant to which Mr. Rumbolz serves as the Company’s Chief Executive Officer, Chairman of the Board, and President.

						Involuntary
Executive Benefits and						Not for Cause				For Cause				Death or
Payments Upon Termination(1)		Resignation(2)				Termination(3)				Termination				Disability
Compensation:
Base Salary		$	57,534			$	412,329			$	—			$	—
Short-Term Incentive(4)			—				—				—				—
Long-Term Incentives:			—
Unvested Restricted Stock			—	(5)			287,300	(6)			—				287,300	(6)
Benefits and Perquisites:
Automobile(7)			1,500				10,603				—				—
Health Care			1,861				13,339				—				—
Accrued Vacation Pay(8)			13,462				26,924				—				—
Total		$	74,357			$	750,495	(9)		$	—			$	287,300

Mr. Andrew Cashin

						Involuntary
Executive Benefits and						Not for Cause				For Cause				Death or
Payments Upon Termination(1)		Resignation(2)				Termination(3)				Termination				Disability
Compensation:
Base Salary		$	41,096			$	306,164			$	—			$	—
Short-Term Incentive(4)			—				—				—				—
Long-Term Incentives:
Unvested Restricted Stock			—	(5)			257,836	(6)			—				257,836	(6)
Benefits and Perquisites:
Health Care			874				6,514				—				—
Accrued Vacation Pay(7)			19,231				38,462				—				—
Total		$	61,201			$	608,976	(8)		$	—			$	257,836

Mr. John F. Glaser

						Involuntary
Executive Benefits and		Voluntary				Not for Cause				For Cause				Death or
Payments Upon Termination(1)		Termination(2)				Termination(2)				Termination				Disability
Compensation:
Base Salary		$	13,973			$	13,973			$	—			$	—
Short-Term Incentive(3)			—				—				—				—
Long-Term Incentives:
Unvested Restricted Stock:			—	(4)			88,400	(5)			—				88,400	(5)
Benefits and Perquisites:
Health Care			437				437				—				—
Accrued Vacation Pay(6)			13,077				13,077				—				—
Total		$	27,487			$	115,887	(7)		$	—			$	88,400

Ms. Katherine W. Bloomfield

						Involuntary
Executive Benefits and		Voluntary				Not for Cause				For Cause				Death or
Payments Upon Termination(1)		Termination(2)				Termination(2)				Termination				Disability
Compensation:
Base Salary		$	12,329			$	12,329			$	—			$	—
Short-Term Incentive(3)			—				—				—				—
Long-Term Incentives:
Unvested Restricted Stock:			—	(4)			88,400	(5)			—				88,400	(5)
Benefits and Perquisites:
Health Care			437				437				—				—
Accrued Vacation Pay(6)			11,538				11,538				—				—
Total		$	24,304			$	112,704	(7)		$	—			$	88,400

Mr. Zev E. Kaplan

						Involuntary
Executive Benefits and		Voluntary				Not for Cause				For Cause				Death or
Payments Upon Termination(1)		Termination(2)				Termination(2)				Termination				Disability
Compensation:
Base Salary		$	10,274			$	10,274			$	—			$	—
Short-Term Incentive(3)			—				—				—				—
Long-Term Incentives:
Unvested Restricted Stock:			—	(4)			44,200	(5)			—				44,200	(5)
Benefits and Perquisites:
Administration(6)			2,000				2,000				—				—
Health Care			437				437				—				—
Accrued Vacation Pay(7)			9,615				9,615				—				—
Total		$	22,326			$	66,526	(8)		$	—			$	44,200

Director Compensation

          Each director who is not an employee of the Company was paid a quarterly retainer fee of $7,500 during the year ended December 31, 2007. The directors are not paid any additional cash retainer or meeting fees for committee or Board service. Directors are eligible to receive stock option grants and restricted stock awards under our equity incentive plan. Stock options are granted at fair market value on the date of grant.

Director Compensation

		Fees
		Earned												Non-Equity
		or Paid				Stock				Option				Incentive Plan				All Other
		in Cash				Awards				Awards				Compensation				Compensation				Total
Name		($)				($)				($)(1)				($)				($)				($)
Patricia Becker		$	27,500			$	—			$	90,950			$				$				$	118,450
Patrick Cruzen		$	27,500			$	—			$	90,950			$				$				$	118,450
Don Kornstein(2)		$	27,500			$	—			$	90,950			$				$				$	118,450
Donald Snyder		$	27,500			$	—			$	90,950			$				$				$	118,450

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The SEC has defined “beneficial ownership” to mean more than ownership in the usual sense. For example, a person has beneficial ownership of a share not only if he owns it in the usual sense, but also if he has the power to vote, sell or otherwise dispose of the share. Beneficial ownership also includes the number of shares that a person has the right to acquire within 60 days of June 30, 2008. Two or more persons might count as beneficial owners of the same share.

     The following table shows, as of June 30, 2008, beneficial ownership of the Company’s common stock by (i) the persons or groups known by the Company to own more than 5% of the Company’s outstanding common stock, (ii) each director of the Company, (iii) the named executive officers in the Summary Compensation Table of this Annual Report and (iv) all current executive officers and directors as a group.

		Common Stock
		Beneficially Owned
		Number of				Percent of
Name and Address of Beneficial Owner		Shares(1)				Class(2)
Michael D. Rumbolz(3)			445,000				2.4	%
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
Andrew Cashin			100,000				*
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
John Glaser(4)			120,000				*
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
Zev Kaplan(5)			130,000				*
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
Katherine Bloomfield(6)			90,000				*
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
Patrick R. Cruzen(7)			171,000				*
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
Donald D. Snyder(8)			95,000				*
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
Patricia W. Becker(9)			85,000				*
7350 Dean Martin Drive, Suite 309 Las Vegas, NV 89139
David B. Williams(10)			984,597				5.3	%
860 Canal Street, 3rd Floor Stamford, CT 06902

		Common Stock
		Beneficially Owned
		Number of				Percent of
Name and Address of Beneficial Owner		Shares(1)				Class(2)
Bridger Management, LLC(11)			1,078,100				5.8	%
101 Park Avenue — 48th Floor New York, NY 10178
Baron Capital Group, Inc.(12)			1,000,000				5.4	%
767 Fifth Avenue New York, NY 10153
NorthPointe Capital, LLC(13)			946,840				5.2	%
3201 West County Road 42 #106 Burnsville, MN 55306
Gilder, Gagnon, Howe & Co. LLC(14)			1,096,474				5.9	%
1775 Broadway, 26th Floor New York, NY 10019
Morgan Stanley(15)			1,458,263				7.9	%
1585 Broadway New York, NY 10036
CCM Master Qualified Fund, Ltd.(16)			1,070,272				5.8	%
One North Wacker Drive, Suite 4350 Chicago, IL 60606
William Blair & Company, LLC(17)			1,295,961				7.0	%
222 W. Adams Chicago, IL 60606
All current directors and executive officers as a group (8 people)(18)			1,236,000				*

If the proposed merger is completed, however, each vested option to purchase shares of our common stock will be cancelled in exchange for the right to receive a cash payment equal to the excess of the per share merger consideration over the exercise price of the stock option multiplied by the number of shares of our common stock subject to the option, subject to withholding for applicable taxes.

AUDIT COMMITTEE REPORT

           The following Report of the Audit Committee of the Board of Directors shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or under the Exchange Act, except to the extent that we specifically incorporate the information contained in the report by reference, and shall not otherwise be deemed filed under such acts.

          The Audit Committee of the Board of Directors acts under a written charter adopted and approved by the Board of Directors. The directors signing this report comprised the Audit Committee with respect to reviewing and discussing the Company’s financial statements for the year ended December 31, 2007. The Audit Committee will review the Audit Committee charter annually in light of new developments and may make additional recommendations to the Board of Directors for further revision of the Audit Committee charter to reflect evolving best practices and changes in applicable laws and regulations.

          Management has the primary responsibility for the preparation, presentation and integrity of the Company’s consolidated financial statements, accounting and financial reporting processes, and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm, Virchow, Krause & Company, LLP, is responsible for performing an independent audit of our Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue its report thereon. The independent registered public accounting firm is responsible to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. The Audit Committee’s responsibility is to monitor and oversee these processes on behalf of the Board of Directors. In fulfilling its oversight responsibilities, the Audit Committee:

	•		reviewed and discussed with management the audited consolidated financial statements for the year ended December 31, 2007;
	•		reviewed with the independent auditor, who is responsible for expressing an opinion on the conformity of the Company’s audited consolidated financial statements with generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters that are required to be discussed with the Audit Committee under generally accepted auditing standards and by Statement on Auditing Standards No. 61 (Communications with Audit Committees), as amended; and
	•		received from the independent auditor the written disclosures and letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and discussed with the independent auditor the auditor’s independence from management and the Company, including a consideration of the compatibility of non-audit services with their independence.

          In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, as filed with the SEC.

		AUDIT COMMITTEE
		Patrick R. Cruzen
		Donald Snyder
		Patricia Becker

PROPOSAL #2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

General

     The Audit Committee has appointed Virchow, Krause & Company, LLP as our independent registered public accounting firm for the year ending December 31, 2008, and stockholders are being asked to ratify that appointment. Virchow, Krause & Company, LLP has served as our independent registered public accounting firm since 2001. Virchow, Krause & Company, LLP provided services in 2007 which included the audit of our consolidated financial statements and internal controls, assistance with our periodic reports filed with the SEC, and consultation on matters relating to accounting and financial reporting. All professional services rendered by Virchow, Krause & Company, LLP were furnished at customary rates and terms. Representatives of Virchow, Krause & Company, LLP are expected to be present at the Annual Meeting, either in person or telephonically, and will be given an opportunity to make a statement if so desired and to respond to appropriate questions. If stockholders do not ratify the appointment, the Audit Committee will reconsider the appointment.

          If the proposed merger is completed, however, Virchow, Krause & Company, LLP’s engagement with the Company will be terminated pursuant to the terms of its existing engagement letter.

Fees and Services

          The following table presents the aggregate fees billed for professional services rendered by Virchow, Krause & Company, LLP for the fiscal years ended December 31, 2007 and 2006.

Type of Fees		2007				2006
Audit Fees		$	544,496			$	465,529
Audit-Related Fees			4,125				3,850
Tax Fees			25,140				33,800
All Other Fees			—				—
Total		$	573,761			$	502,909