1 MISSOURI GAMING COMMISSION

2 MEETING

RIVERSIDE CITY HALL

JANUARY 30, 2002

6 BE IT REMEMBERED, that the Missouri Gaming

7 Commission, held a meeting at the Riverside City

8 Hall, City Council Chambers, 2950 N.W. Vivion Road,

9 in Riverside, State of Missouri, on the 30th day of

10 January, 2002, commencing at 9:00 a.m. in the

11 morning of that day, said meeting having been called

12 by members of the Missouri Gaming Commission,

13 pursuant to the issuance of due notice to all

14 parties in interest, and the following is a

15 transcript of the records of proceedings had during

16 the course of said meeting.

18 A P P E A R A N C E S

19 Robert Smith, Commissioner

20 Lynne R. Nikolaisen, Commissioner

(via telephone)

Dr. Muriel W. Battle, Commissioner

22 (via telephone)

23 J. Joe Adorjan, Commissioner

24 Also Appearing:

25 James A. Leacock, Shorthand Reporter

of Cross Reporting Service

1 COMMISSIONER SMITH: Could we call the

2 meeting to order. Welcome to all the hardy people

3 who came up here today. You must have something

4 really important to show up, other than the staff

5 and they had to be here. We are glad you made it

6 and hope you make it back all right. We are ready

7 to go ahead and start the meeting. Call the meeting

8 to order. Would you call the roll, Angie.

9 MS. ANGIE FRANKS: Commissioner Smith.

10 COMMISSIONER SMITH: Present.

11 MS. FRANKS: Commissioner Nikolaisen.

12 COMMISSIONER NIKOLAISEN: Present.

13 COMMISSIONER SMITH: We have two members

14 that couldn't be here. And they were going to be

15 here by telephone.

16 COMMISSIONER SMITH: Lynne, are you there?

17 COMMISSIONER NIKOLAISEN: I am here. You

18 were clicking out on me now and then. Can you hear

19 me?

20 COMMISSIONER SMITH: I can hear you, yes.

21 Can you hear me? It is just now and then it goes

22 like it clicks dead. Let's go on and see what

23 happens over the next few minutes.

24 I could try to get closer to it to see if

25 that helps.

1 MS. FRANKS: Commissioner Battle.

2 COMMISSIONER BATTLE: Here.

3 MS. FRANKS: Commissioner Adorjan.

4 COMMISSIONER ADORJAN: Present.

5 COMMISSIONER SMITH: We have a quorum for

6 the meeting. The first order of business is

7 consideration of minutes of September 26th, 2001.

8 Does anybody have any comments about the meeting,

9 if not, do we have a motion to approve?

10 COMMISSIONER BATTLE: I will.

11 COMMISSIONER NIKOLAISEN: I will second.

12 I thought you had moved to approve.

13 COMMISSIONER BATTLE: I will second.

14 COMMISSIONER SMITH: Is there any

15 discussion or any changes? If not do you want the

16 roll call on this? Call the roll, please.

17 MS. FRANKS: Commissioner Smith.

18 COMMISSIONER SMITH: In favor.

19 MS. FRANKS: Commissioner Nikolaisen.

20 COMMISSIONER NIKOLAISEN: In favor.

21 MS. FRANKS: Commissioner Battle.

22 COMMISSIONER BATTLE: In favor.

23 MS. FRANKS: Commissioner Adorjan.

24 COMMISSIONER ADORJAN: In favor.

25 MS. FRANKS: By your vote you have adopted

1 the minutes of the September 26, 2001 meeting.

2 COMMISSIONER SMITH: Next order of

3 business is the consideration of the minutes of

4 October 24th, 2001. Do we have a motion in regard

5 to those minutes?

6 COMMISSIONER ADORJAN: I move it.

7 COMMISSIONER SMITH: Motion has been made.

8 COMMISSIONER BATTLE: Second.

9 COMMISSIONER SMITH: Seconded by

10 Commissioner Battle. Any discussion or

11 modifications? If not, call the roll.

12 MS. FRANKS: Commissioner Smith.

13 COMMISSIONER SMITH: In favor.

14 MS. FRANKS: Commissioner Nikolaisen.

15 COMMISSIONER NIKOLAISEN: In favor.

16 MS. FRANKS: Commissioner Battle.

17 COMMISSIONER BATTLE: In favor.

18 MS. FRANKS: Commissioner Adorjan.

19 COMMISSIONER ADORJAN: In favor.

20 MS. FRANKS: By your vote you have adopted

21 the minutes of the October 24th, 2001 meeting.

22 COMMISSIONER SMITH: Just for the

23 information of the crowd, these minutes are pretty

24 long. But, we have waded through them. The

25 next order of business is minutes of Wednesday,

1 November 28th, 2001. Do we have a motion to approve

2 those minutes?

3 COMMISSIONER NIKOLAISEN: So moved.

4 COMMISSIONER BATTLE: And second. Muriel

5 Battle.

6 COMMISSIONER SMITH: Motion and a

7 second. Any discussion or modifications proposed?

8 If not, call the roll.

9 MS. FRANKS: Commissioner Smith.

10 COMMISSIONER SMITH: In favor.

11 MS. FRANKS: Commissioner Nikolaisen.

12 COMMISSIONER NIKOLAISEN: In favor.

13 MS. FRANKS: Commissioner Battle.

14 COMMISSIONER BATTLE: In favor.

15 MS. FRANKS: Commissioner Adorjan.

16 COMMISSIONER ADORJAN: In favor.

17 MS. FRANKS: By your vote you have adopted

18 the minutes of the November 28, 2001 meeting.

19 COMMISSIONER SMITH: The next order of

20 business is consideration of Resolution Number

21 02-010, in regard to the appeal of Elizabeth

22 McDaniel. For the information of the crowd, we have

23 independent administrative hearing officers that

24 hear these appeal cases. Judge McCormick Wilson is

25 in Jefferson City and couldn't make it, but he is

1 here, I hope, by telephone.

2 JUDGE McCORMICK WILSON: I'm here.

3 MR. TOM CAMPBELL: Mr. Chairman, I would like

4 to request the opportunity for Tom Carr, who is the

5 regional vice president for the Isle of Capri, and

6 Jeff King, who is the general manager for the Isle

7 of Capri in Boonville, to make a short statement at

8 the conclusion of the hearing officer's. The

9 statements will be of a non-fact base.

10 COMMISSIONER SMITH: Do they have a

11 feeling they would like to get out of here? Is that

12 what you're telling me?

13 MR. CAMPBELL: No, Mr. Chairman.

14 COMMISSIONER SMITH: Okay. That will be

15 fine.

16 MR. CAMPBELL: Thank you.

17 COMMISSIONER SMITH: Judge, you go ahead

18 and --

19 JUDGE McCORMICK WILSON: I didn't hear

20 that.

21 MR. SMITH: That didn't have anything to

22 do with you.

23 MR. CAMPBELL: I apologize one more

24 time. They would like to make a statement regarding

25 the hearing officer's report in this matter.

1 COMMISSIONER SMITH: I misunderstood

2 then. I understand. You will have a chance to be

3 heard.

4 MR. CAMPBELL: Thank you.

5 COMMISSIONER SMITH: Let's try it again.

6 Go ahead, Judge, and tell us what this is about.

7 JUDGE McCORMICK WILSON: This is the lady

8 who has extensive background in gaming, and who has

9 applied for a Level One license to serve as

10 controller at the Isle of Capri casino in

11 Boonville. The Commission staff recommended that

12 her license not be granted because she was, quote,

13 financially irresponsible. And that is an awkward

14 term. It doesn't seem to be defined in the statute

15 or in the regulations, but it has to do with

16 whether this person is able to show her

17 qualification for this particularly sensitive

18 financial and accounting position with the casino.

19 And the allegations against her by the Commission

20 staff seem to be in two pieces.

21 First of all, that she had failed to

22 properly make her tax returns on time and to pay the

23 taxes as they were due. Now as nearly as I can

24 tell, that has all been taken care of. She has

25 either paid the taxes or is waiting for them to be

1 determined.

2 Now I was provided with a series of cases

3 by the attorney for the Commission of prior

4 applications for Level Two licenses, where the

5 allegation was that they had failed to pay taxes.

6 Am I coming through?

7 COMMISSIONER NIKOLAISEN: You are.

8 JUDGE McCORMICK WILSON: This seems to me

9 that it has to be dealt with differently on a Level

10 One license as controller, for a Level Two license,

11 which would not be nearly so sensitive. In addition

12 to the tax problems, though, the Commission staff

13 referred to her gambling, or her gaming losses at

14 the time that she was having her tax troubles. And

15 when you get into that, it is disturbing, because at

16 a time when she was delaying her tax returns and

17 delaying her tax payments, she was wagering money in

18 Indiana of a greater amount than her total tax

19 liability. I mean, she lost more than her total

20 tax liability was. And according to her figures,

21 had she put her gaming money into her tax bills, she

22 would have been paid up on time.

23 But there is still one more thing that has

24 to do with her financial irresponsibility. She

25 reported only her winnings that were reportable on

1 the W-2(g) form. That's the form that the casino

2 has to file with the Internal Revenue Service where

3 there is a $1,200 or more winning. And she reported

4 only her W-2(g) form winnings, so that if she won

5 $100 or a thousand dollars, she failed to report

6 it. Only the ones where she won $1,200 or more did

7 she make the report.

8 And worse than that, to offset that, she

9 took the total amount of money that went through the

10 machines and offset that against her W-2(g)

11 winnings. And it gets into this kind of an

12 example. If you go in with one dollar and you win a

13 dollar, then you've got $2. And then if you wager

14 both of those dollars and lose them both, how much

15 have you lost? Have you lost $2, or have you lost

16 $1. And you go through her winnings -- I mean, you

17 go through her testimony, and you go through the

18 evidence in this case, and part of the time she says

19 that that would be losing $1, and part of the time

20 she says it would be losing $2. But she offset her

21 W-2(g) winnings with her total losses, which would

22 be the $2 in that example.

23 Those things together, with the kind of

24 job she wants to apply for and the responsibility

25 she will have on that job, her laxness in her tax

1 accountability, her wagering and her business about

2 offsetting one kind of winning with another kind of

3 of loss, led me to believe that she was not -- she

4 had not shown she was suitable for this Level One

5 license. I would be happy to answer questions.

6 COMMISSIONER SMITH: Anybody have any

7 questions first of Judge Wilson?

8 COMMISSIONER ADORJAN: I have two or three

9 questions, Judge.

10 COMMISSIONER SMITH: This is Joe Adorjan.

11 COMMISSIONER ADORJAN: My first question

12 is, and again, I guess I got a little confused in

13 reading all the material, but did she in fact file

14 for the proper tax extensions?

15 JUDGE McCORMICK WILSON: I didn't hear

16 you, sir.

17 COMMISSIONER SMITH: Did she file for the

18 proper tax extensions? Can you hear me, McCormick?

19 JUDGE McCORMICK WILSON: Did she file her

20 proper tax returns?

21 COMMISSIONER ADORJAN: No. The question

22 is, did she file in a timely manner for her tax

23 extensions?

24 JUDGE McCORMICK WILSON: She did not file

25 in a timely manner.

1 COMMISSIONER ADORJAN: My second question

2 is, were the installment payments on the taxes paid

3 on time?

4 JUDGE McCORMICK WILSON: My understanding

5 at the hearing was that yes, they had all been paid

6 on time. There was still an issue in Indiana that

7 had not been determined, but when that was

8 determined, that would be paid.

9 COMMISSIONER ADORJAN: My third question

10 is: Is the State of Indiana or the State of Missouri

11 or the Federal IRS in any form prosecuting the lady?

12 JUDGE McCORMICK WILSON: I'm sorry, I

13 didn't hear the question.

14 COMMISSIONER ADORJAN: Is the State of

15 Indiana, the State of Missouri, or the Federal IRS,

16 are they in any form prosecuting Ms. McDaniel for

17 delinquent taxes?

18 JUDGE McCORMICK WILSON: I'm sorry, I

19 just cannot hear.

20 COMMISSIONER SMITH: Can you hear me,

21 McCormick?