0001
1
2 BEFORE THE MISSOURI GAMING
COMMISSION
STATE OF MISSOURI
3
4
5
6 Meeting
Wednesday, January 24, 2001
7 3417 Knipp Drive
Jefferson City, Missouri
8
9
10
11
COMMISSIONERS
PRESENT:
12
L. G.
Ullery, Chairman
13
Robert Smith, Vice Chairman
Lynne
R. Nikolaisen, Secretary
14 Dr.
Muriel W. Battle
15
16
17
18
19
20
21
REPORTED
BY:
22 Patricia A.
Stewart, CSR, CCR, RPR, RMR
ASSOCIATED COURT
REPORTERS
23 714 West High
Street
P. O. Box 1308
24 Jefferson City,
Missouri 65101
(573) 636-7551
25
0002
1
I N D E X
2
Call to Order
3
Consideration of
Approval of Minutes: 4
4
October 10,
2000
5 October 25, 2000
November 29,
2000
6
7 Consideration of Hearing Officer
Recommendations:
8
Resolution No.
01-001 6
9 Thomas J. Carullo
10
Consideration of
Licensure of
11 Certain Level
I/Key Applicants:
12 Resolution No.
01-002 29
13
Consideration of
Licensure of
14 Certain
Suppliers:
15 Resolution No.
01-003 34
Osborne
Coinage Company
16
Resolution No.
01-004 37
17 United States
Playing Card Company
18
Consideration of
Relicensure of a
19 Certain
Supplier: 32
20 Resolution No.
01-005
Acres Gaming
Incorporated
21
Resolution No.
01-006
22 The Bud Jones
Company
23 Resolution No.
01-007
Mikohn Gaming
Corporation
24
Resolution No.
01-009
25 George C.
Matteson Company, Inc.
d/b/a
GEMACO
0003
1
2 I N D E X (CONT'D)
3 Consideration of Relicensure of a
Certain Supplier
(Cont'd):
4
Resolution of
No. 01-009
5 Sigma Game, Inc.
6 Resolution No. 01-010
Atronic Casino
Technology, L.L.C.
7
8 Consideration of Settlement
Agreements:
9 Resolution No. 01-001-B 42
Sikeston Eagle
Lodge #3319
10
11 Consideration of
Proposed Rulemaking:
12 11 CSR
45-17.015 - Access to Excursion 44
Gambling Boat
for Purposes of
13
Employment
14 11 CSR
45-31.005 - Procedures for 49
Disciplinary
Actions and Hearings
15
Update on Status
of Isle of Capri - 51
16 Boonville/Kansas
City
17 Update on Status
of Mark Twain Casino - 61
LaGrange
18
Problem Gambling
Education Presentation 77
19 Lia Nower,
Ph.D.
20 Presentation by
Ken Peck 111
21 Market
Report 125
22 Closed Session
23 Adjournment
24
25
0004
1 P R O C E E D I N G
S
2 CHAIRMAN ULLERY:
We've come to order just a
3 few minutes ago. We need to get the meeting started.
4 We'll have another commissioner here
shortly, but in the
5 meantime, we'll continue on.
6 Will you call the roll for us,
Angie, please.
7 MS. FRANKS: Chairman Ullery?
8 CHAIRMAN ULLERY: Present.
9 MS. FRANKS: Commissioner Smith?
10
COMMISSIONER SMITH:
Present.
11 MS.
FRANKS: Commissioner Nikolaisen?
12
COMMISSIONER NIKOLAISEN:
Present.
13 MS.
FRANKS: Commissioner Battle?
14 (No
response.)
15 MS.
FRANKS: Commissioner Adorjan?
16 (No
response.)
17
CHAIRMAN ULLERY: Make note when
Commissioner
18 Battle arrives,
that she's present at the time.
19
COMMISSIONER SMITH: Mr. Adorjan
is hooked in
20 from
France?
21
CHAIRMAN ULLERY: Mr. Adorjan is
out of the
22 country. So, no, we're not hooking him in.
23 MR.
MULLALLY: Mr. Chairman, Commissioners,
the
24 first item on
the agenda under Tabs A, B and C are minutes
25 from the October
10th, 25th and November 29th meeting.
0005
1 COMMISSIONER SMITH: Those are the ones that we
2 previously made some corrections to them,
and the
3 corrections were made.
4 MR. MULLALLY: Pardon?
5 COMMISSIONER SMITH: There were -- some
6 corrections, I think, were made in one of
these minutes,
7 and they came back, I guess, for
resubmission.
8 MR. MULLALLY: That's correct.
9 COMMISSIONER SMITH: They look fine to me.
10
COMMISSIONER NIKOLAISEN: I move
for approval.
11
CHAIRMAN ULLERY: We have a
motion for
12 approval.
13
COMMISSIONER SMITH: Is that for
all of the
14 minutes?
15
COMMISSIONER NIKOLAISEN: That's
for A, B and
16 C, all.
17
COMMISSIONER SMITH: I second the
motion.
18
CHAIRMAN ULLERY: We have a
motion to second.
19
Angie, will you call the roll, please.
20 MS.
FRANKS: Chairman Ullery?
21
CHAIRMAN ULLERY: Favor.
22 MS.
FRANKS: Commissioner Smith?
23
COMMISSIONER SMITH: Favor.
24 MS.
FRANKS: Commissioner Nikolaisen?
25
COMMISSIONER NIKOLAISEN: In
favor.
0006
1 MS. FRANKS: By your vote you've adopted the
2 minutes of the October 10, 2000, October
25th, 2000 and
3 November 29th, 2000 meeting.
4 CHAIRMAN ULLERY: Thank you.
5 MR. MULLALLY: Mr. Chairman, under Tab D we
6 have a consideration of a hearing officer
recommendation
7 in the case of Thomas J. Carullo versus
Missouri Gaming
8 Commission.
9 And Hearing Officer Yost will
make the
10
presentation.
11 MR.
YOST: Good morning.
12
CHAIRMAN ULLERY: Good
morning.
13 MR. YOST: I have DC-00-2053.
14
CHAIRMAN ULLERY: Wait a
minute.
15 MR.
YOST: Resolution.
16
COMMISSIONER SMITH: Is that the
one involving
17 Mr.
Carullo?
18 MR.
YOST: Yes, it is. 01-001.
19
CHAIRMAN ULLERY: Okay. Continue.
20 MR.
YOST: The petitioner is Thomas J.
Carullo,
21 and the
respondent is the Missouri Gaming Commission.
22
Specifically, on June 5th, 2000 the Missouri
23 Gaming
Commission notified Thomas J. Carullo that his
24 Level II
occupational license would be disciplined by a
25 56-hour
suspension for violation of the loss limit
0007
1 provisions of the Missouri statutes and
regulation.
2 On June 19th of 2000 he
requested a hearing
3 through counsel, and on November 22nd of
2000 the hearing
4 was conducted, presided over by
myself.
5 The petitioner appeared in
person, represented
6 by counsel, Mr. Robert Shirkey, and the Commission
was
7 represented by Michael Bradley of the
Attorney General's
8 Office.
9 The facts: This was a typical loss limit case.
10 Specifically on
March 24th, 2000 an undercover sting
11 operation was
conducted by officers from the Missouri
12 Gaming
Commission, in which Mr. Carullo allowed the
13 trooper to buy
in for more than the $500 loss limit by
14 providing --
asking for $50 in chips, when, I believe, he
15 had $40
remaining on his loss limit card, and Mr. Carullo
16 did allow him to
do that.
17
Factually, this is a case where he is certainly
18 subject to
discipline under the laws and regulations of
19 the
Commission.
20 I am
recommending that he not be disciplined
21 for the reason
that the Missouri Gaming Company, who was
22 his employer,
terminated him upon finding out of the
23 proposed
discipline in this case, and he has not had a job
24 in gaming since
the termination, which is approaching
25 seven months at
this point in time.
0008
1 So it's my opinion that adding a
56-hour
2 suspension on his license would -- if he
were -- if and
3 when he decides to reapply for a gaming
position would be
4 excessive since he's already, essentially,
served seven
5 months' worth of involuntary unemployment,
so to speak, in
6 the field of gaming.
7 COMMISSIONER NIKOLAISEN: Can I just ask a
8 quick question there?
9 MR. YOST: Certainly.
10 COMMISSIONER NIKOLAISEN: By terminating him,
11 does that
absolve them of penalties?
12 MR.
YOST: Well, I'm glad you asked that,
13 because I was
going to address that.
14 And
if you read my proposed discipline, you'll
15 notice that I
was concerned with that issue.
16 I've
been doing these for about a year, and
17 you've heard me
make presentations for about a year.
And
18 I think you'll
find that I try to take a common-sense
19 approach to these
types of situations.
20 And
some things that came up in this particular
21 hearing
concerned me as to how this case was handled by
22 the company and
how the company perceives it will be
23 handled by the
Missouri Gaming Commission. And those
were
24 concerns I
wanted to address to the Commission about.
25
Before I begin, I want to point out that I
0009
1 understand that the loss limits are
somewhat of a
2 controversial issue at this point in
time. And I don't
3 want anyone to be confused by my comments
that I am
4 commenting on my feelings about the loss
limit provision
5 as a whole.
6 If you're asking personally, I
believe in the
7 loss limit provision. So don't take anything that I say
8 today as a criticism of the loss limit
provisions in
9 general.
10 I
disagree with a company terminating an
11 otherwise
qualified and hard-working employee because of a
12 singular
violation of this type.
13 And I am more troubled by the fact that the
14 company's
reasoning, at least to the employee, for his
15 termination was
they felt like this would minimize the
16 effect of any
proposed discipline that the Commission
17 might give to
the company as a result of their termination
18 of the
employee.
19 The
one thing I've learned in covering and
20 hearing several
loss limit cases over the last year is --
21 is that these
employees are set up for failure by the
22 companies.
23 They
are -- dealers are given the very, very
24 difficult task
of conducting the games in the manner that
25 is prescribed by
the company in the way the companies want
0010
1 them.
2 They are also charged with
watching every
3 customer at their table to make sure that
the customers
4 are not stealing money, or trying to trick
them to
5 successful win the game, or those
natures.
6 And then you compound that with
the problem of
7 the excessive noise and the commotion that
goes on in the
8 casino environment.
9 And then they are also asked to
abide by the
10 loss limit
provisions. And the equipment that they
are
11 given to
accomplish this task in my opinion is not
12 appropriate for
the job that they're asked to do.
13
You've heard several of these cases, and we've
14 talked about --
these machines do not have an audible beep
15 that tells the
dealer that the -- that the customer has
16 gone over the
loss limit. They clear out after a
matter
17 of time so the
dealer can ring in a new transaction.
18 I
feel like it's only a matter of time before
19 even the finest
dealer on the floor is going to violate
20 the loss limit
provisions because of the equipment that
21 they are given
and because of the multiple tasks that they
22 are asked to
do.
23 So I
am troubled. I -- put it this way: It is
24 my hope that it
is not the Commission's policy to minimize
25 the regulatory
effect that the loss limit violations have
0011
1 on the company, because they set forth a
system that does
2 not help the dealer at all in this problem,
and then they
3 fire the dealer as a result of a problem
that's basically,
4 you know, predisposed to happen.
5 So I just wanted to raise those
concerns that I
6 have in this particular case.
7 COMMISSIONER SMITH: Is there any reason that
8 we couldn't penalize the company and not
penalize the
9 individual?
10 If
they discharged him, what you're saying is,
11 in a practical
matter, he's gone.
12 Two
questions: one is, if he reapplies,
then
13 he has no
record. Isn't that something that he
should
14 have some -- is
that something we should think about?
15 MR.
MULLALLY: Normally I wouldn't comment
on
16 these things if
it was going to affect the case, but this
17 is really
outside the parameters of the case.
18
COMMISSIONER SMITH: It's a good
time to bring
19 it up.
20 MR.
MULLALLY: In fact, you did penalize the
21 company. The admission fined the Missouri Gaming
Company
22 $100,000 for the
loss limit violations that emanated out
23 of this
particular sting. So the -- it really
had no
24 impact on the
way the company was treated.
25
CHAIRMAN ULLERY: How many --
excuse me.
0012
1 Go ahead, Lynne.
2 COMMISSIONER NIKOLAISEN: I was just going to
3 say, along those lines -- I know it's come
up before,
4 especially this audible beep thing and
everything else
5 going on -- have companies -- not this
company, but the
6 other boats who are represented, has there
been any
7 discussion with their people maybe of
changing this system
8 to not only avoid penalties of that size
for the company
9 but to keep people from being
terminated?
10 MR.
MULLALLY: We -- Clarence Greeno and
Steve
11 Johnson -- staff
from Steve Johnson's staff has been
12 looking at a
number of the technological solutions that
13 might be
available. And I think we are headed
towards
14 adopting some
kind of standards on that.
15 I
don't know if you want to address that any
16 further,
Steve.
17 MR.
JOHNSON: I can't -- I really can't
address
18 it beyond that,
except that we're looking at the state-of-
19 the-art systems
that are reading systems and tracking
20 systems that
should eliminate these things from happening.
21
COMMISSIONER NIKOLAISEN: But it
might be --
22 and I'm just
asking for a guess. Is it six months
away, a
23 year away, two
-- two years away?
24 MR.
JOHNSON: It's terribly expensive
25 technology. It is being used now in -- in casinos in
0013
1 Las Vegas.
And it's -- I'd hate to put a time parameter
2 on it, but it's actually -- it's being
tested, it's being
3 used.
It's probably closer than not if we choose to go
4 that way aggressively.
5 CHAIRMAN ULLERY: Can somebody tell me what the
6 main problem is with the system we've got
now?
7 And I understand where you're
coming from. But
8 I'm not sure that -- I don't agree with
what you're saying
9 right now as far as discipline is
concerned, but I'm
10 subject to
changing my mind before this is over with
11 today.
12 But I
don't really understand -- I know the
13 commotion and so
on and so forth. But how many of these
14 cases do we have
where this is a valid defense, if you
15 will --
16 MR.
YOST: I don't want to interrupt you,
17 Mr. Chairman,
but I want to make sure that my position is
18 clear. I do feel that the individual dealer should
be
19 subject to
discipline for these violations.
20 In
this particular case, I feel like since the
21 fact that this
employee has gone seven months without
22 employment is
punishment itself.
23 I
placed in my proposed findings -- I don't
24 want my comments
to be confused, that I think that this
25 absolves the
employee of responsibility, because, clearly,
0014
1 it does not, in my opinion. They are still -- it's still
2 their mental mistake that caused this to
happen, and I
3 feel like they have to be disciplined in
order that the
4 loss limit has the proper respect and
attention in their
5 minds.
I do feel that way.
6 My concern simply was, there is
a perception on
7 the part of the company that they feel like
by terminating
8 the employee, that that -- whether that's
founded or
9 unfounded, there is a perception, at least,
that they feel
10 like they can
avoid discipline by terminating an otherwise
11 fine employee
for a system that may be flawed in its
12 inception.
13
CHAIRMAN ULLERY: If the system
is flawed, then
14 I think we need
to address that. I'm just -- maybe I'm
15 confused like
maybe the dealers are. I'm not
sure. I
16 don't -- I'm not
perceiving what I need to here as far as,
17 it is this
dealer's responsibility.
18 MR.
YOST: Correct.
19
CHAIRMAN ULLERY: I guess one of
my questions
20 is, does anybody
know if most of the gaming industry fire
21 these people
when they get this type of a charge and so on
22 and so
forth?
23 I
don't remember any, but then maybe they are.
24 Is
that a routine, or can anybody answer that?
25 Or is
this unique?
0015
1 MR. MULLALLY: Yeah, I don't know that it is
2 routine.
And I can certainly say that it's not anything
3 that's been encouraged by the Gaming
Commission staff,
4 and, frankly, not even anything that we pay
a lot of
5 attention to.
6 Company discipline is a separate
and distinct
7 thing from Commission discipline. And what they choose to
8 do with their employees has really been, to
a large
9 extent, left up to them.
10 Now,
to the extent that you think we need to
11 start looking at
that and see if the casino is acting
12 improperly, I
think we're certainly willing to do that.
13 But we really
have not -- in no way allowed it to affect
14 the disciplinary
process.
15
CHAIRMAN ULLERY: Well, let me
make it clear.
16 I'm not -- I
don't think we should interfere at this point
17 as to what the
gaming companies do with their employees,
18 as long as it's
not an illegal act. So that's not what
19 I'm implying at
all.
20 MR.
MULLALLY: To the -- I'm sorry.
21
CHAIRMAN ULLERY: Go ahead.
22 MR.
MULLALLY: I think to the extent that an
23 employee felt
like they were treated unfairly, there are
24 processes other
than the Gaming Commission to deal with
25 that.
0016
1 CHAIRMAN ULLERY: Do you have --
2 MR. YOST: Just so -- I certainly will not
3 advocate a position that we would get
involved in the
4 personnel policies of the company
either.
5 As much as I may disagree with their decision,
6 it's certainly their decision to make.
7 My concern simply was the
perception that the
8 company had and why they were dismissing
the employee, if
9 you understand the distinction between
those two.
10
CHAIRMAN ULLERY: Oh, sure, I
appreciate that.
11 MR.
YOST: As far as the problem -- if
you're
12 trying to
identify what in my mind the problem is, I just
13 feel like they
are given the ominous task -- a dealer on a
14 Saturday night
in a packed casino is given these loss
15 limit readers,
as far as I -- as best as I'm able to
16 understand, only
shows that the person -- the card is
17 not -- is over
the limit for a brief period of time, and
18 then it just
goes away.
19 And
if you're paying attention to other things,
20 such as whether
or not somebody is trying to steal chips
21 or something
like that, it's very possible and it's --
22 every case I've
had it's been people that, you know,
23 otherwise are
fine and they do everything great and they
24 do a great
job.
25 They
just -- on a bad night they allowed -- and
0017
1 the problem I would point out to you is, I
don't know how
2 many times this happens where it's not
involving a
3 trooper.
I only have the cases where it's involved an
4 undercover trooper.
5 So, you know, with the million
different things
6 that they're charged with doing, the one --
you know, the
7 one thing that can be easily overlooked by
the machinery
8 that is in place is that brief period of
time where the
9 credit-card Verifone says that they're over
the limit.
10 And time after
time they don't catch it.
11
COMMISSIONER SMITH: I have
another question,
12 Mr. Chairman, if
you're finished.
13
CHAIRMAN ULLERY: Go ahead. I'm toying.
14
COMMISSIONER SMITH: I'm just
wondering a
15 little bit about
the form of the order.
16 I guess we're in a situation where the man is
17 guilty of a
violation of the rule but he's not
18
disciplined. And all the final
order says is that he's
19 not
disciplined.
20 I'm
just wondering if it wouldn't be better off
21 to have a
finding that he's been found guilty of the
22 violation, but
because of the penalties already received,
23 there will be no
discipline. So if he comes back up for
24 employment, it
would reflect that.
25 MR.
YOST: And I could certainly reword the
way
0018
1 the final order is written.
2 I do put in my findings of facts
in my last
3 paragraph involving the conclusions of law
that he is
4 subject -- that he did commit the violation
and that he is
5 subject to discipline.
6 COMMISSIONER SMITH: I saw that.
I thought
7 in the final order maybe that would make it
clear to
8 everybody that you were finding him guilty,
but --
9 MR. YOST: That is certainly a change that I
10 can make in this
case and in the future.
11
COMMISSIONER SMITH: Do you have
a problem with
12 that,
Kevin?
13 MR.
MULLALLY: I mean, I'd really like to
leave
14 it up to the
hearing officer, but I think it makes a lot
15 of sense.
16
COMMISSIONER SMITH: I think it
would be easier
17 for everybody to
understand exactly what happened.
18
CHAIRMAN ULLERY: Also, the last
line, if
19 you're going to
modify it, you know, you indicate here