1 BEFORE THE MISSOURI GAMING COMMISSION

STATE OF MISSOURI

3 BE IT REMEMBERED, that the above-entitled

4 matter came on for meeting at the St. Charles City

5 Hall, 200 North Second Street, St. Charles, Missouri,

6 on the 15th day of March 2002, commencing at the hour

7 of 10:00 in the morning of that day, said meeting

8 having been called by members of the Missouri Gaming

9 Commission pursuant to the issuance of due notice to

10 all parties in interest, and the following is a

11 transcript of the records of proceedings had during

12 the course of said meeting.

15 A P P E A R A N C E S

Mr. Robert Smith -- Chairman

Ms. Lynne Nikolaisen -- Commissioner

Dr. Muriel Battle -- Commissioner

Mr. Kevin Mullally -- Executive Director

Ms. Angela Franks – Administrative Assistant

Page 1

1 CHAIRMAN SMITH: We'll bring this session

2 to order. It looks like the mayor left his gavel up

3 here, so we used it. Everybody get seated and, well,

4 we'll get started and try to get this meeting over

5 pretty quick here.

6 The primary reason that we are meeting in

7 St. Charles today is to look over the improvements at

8 the St. Charles facility here and see how they're

9 progressing on that. And we appreciate the invitation

10 to look at it, but we do have some business that we'll

11 conduct. And then we will have a closed session

12 afterwards. Let's call the roll first.

13 MS. ANGIE FRANKS: Commissioner Smith?

14 CHAIRMAN SMITH: Present.

15 MS. FRANKS: Commissioner Nikolaisen?

16 COMMISSIONER NIKOLAISEN: Present.

17 MS. FRANKS: Commissioner Battle?

18 COMMISSIONER BATTLE: Present.

19 MS. FRANKS: Commissioner Adorjan?

20 CHAIRMAN SMITH: I understand he's in the

21 Amazon, so we can't reach him by telephone.

22 MR. KEVIN MULLALLY: Mr. Chairman, the first

23 item on the agenda to begin the Patricia Churchill

24 show this morning is consideration of rules and

25 regulations. We've got a couple of final rules of

Page 2

1 order.

2 MS. PATRICIA CHURCHILL: These are proposed

3 amendments that were first presented to the Commission

4 at the December 6th meeting in Boonville. The public

5 hearing was held on February 20th of this year. They

6 relate to safety standards and the inspections that

7 the floating facilities and continuously moored

8 vessels have to undergo.

9 The first one is number one under Tab A.

10 It's 11 CSR 45-6.020, and the amendment to this rule

11 permits five-day licensees to utilize Commission

12 approved third party examiners to conduct the required

13 safety inspections.

14 It specifies the qualifications for these

15 third party examiners, and it clarifies that if a

16 facility is located in an area that doesn't have a

17 locally adopted building code that they shall be in

18 compliance with Missouri state law and regulation, as

19 well as a nationally recognized building fire code

20 approved by the Commission.

21 We did receive one comment during the

22 period from Aztar relating to vessels like the boat in

23 Caruthersville and also in Riverside.

24 COMMISSIONER SMITH: What would that have

25 to do with the amendments, though?

Page 3

1 MS. CHURCHILL: Well, where this says

2 being in compliance with the building and fire code

3 approved by the Commission.

4 There's also a part of the rule that

5 talks about, if you were a vessel that previously held

6 a certificate of inspection from the Coast Guard,

7 which is a boat like Caruthersville or the Argosy

8 boat in Riverside, they are not held to a building and

9 fire code. And they wanted to put something in there

10 that would state that they were bound by the code of

11 federal regulations. We thought the language was a

12 little too broad.

13 And I think it's covered sufficiently in

14 the current language and the current Commission

15 policies.

16 CHAIRMAN SMITH: Are there any other

17 questions about this particular rule?

18 COMMISSIONER NIKOLAISEN: I move for the

19 adoption of 11 CSR 45-6.020.

20 COMMISSIONER BATTLE: I'll second.

21 CHAIRMAN SMITH: Moved and seconded that

22 we adopt 11 CSR 45-6.020. Let's call the roll.

23 MS. FRANKS: Commissioner Smith?

24 CHAIRMAN SMITH: In favor.

25 MS. FRANKS: Commissioner Nikolaisen?

Page 4

1 COMMISSIONER NIKOLAISEN: Favor.

2 MS. FRANKS: Commissioner Battle?

3 COMMISSIONER BATTLE: In favor.

4 MS. FRANKS: By your vote you have

5 adopted the final order of rulemaking 11 CSR 45-6.020.

6 MS. CHURCHILL: The next item is 11 CSR

7 45-6.025. It's related safety standards, and it

8 specifies the nature of inspections to be conducted by

9 the Commission-approved third party examiner.

10 We did receive one comment from ABS

11 Consulting, and in response to that comment we added

12 paragraph 3-C. And that ensures accountability and

13 continuity if the licensee changes third party

14 examiners during the existence of their license.

15 It ensures that the reports are delivered

16 to us by the licensee, since they're the one that is

17 accountable to us. But those reports have to be

18 certified by the examiner.

19 And it also ensures that if they switch

20 examiners, that all the reports, findings,

21 recommendations, suggestions, etc. would be forwarded

22 to the new third party to make sure that it's not lost

23 in the transition.

24 CHAIRMAN SMITH: Where is that covered?

25 MS. CHURCHILL: If you look in the final

Page 5

1 order of rulemaking just before the Missouri register

2 on that particular rule.

3 CHAIRMAN SMITH: "C"?

4 MS. CHURCHILL: Yes. That's 3-C. So "C"

5 is the new provision.

6 CHAIRMAN SMITH: Okay. If they're not

7 required to have a certificate from the U.S. Coast

8 Guard, they've got to meet the Missouri law

9 requirements; is that right?

10 MS. CHURCHILL: That's right. I mean,

11 essentially, we use all of the standards from the Code

12 of Federal Regulations that are applicable.

13 CHAIRMAN SMITH: Is there any opposition

14 to this?

15 MS. CHURCHILL: No.

16 CHAIRMAN SMITH: No comment at all?

17 MS. CHURCHILL: Well, just the comment

18 that we received from ABS. And I thought it was a

19 good one, that you do want to ensure continuity if

20 there's a transition.

21 CHAIRMAN SMITH: Any further questions?

22 Do we have a motion?

23 COMMISSIONER BATTLE: I'll move for

24 approval.

25 COMMISSIONER NIKOLAISEN: Second.

Page 6

1 CHAIRMAN SMITH: Moved and seconded that

2 11 CSR 45-6.025 on safety inspections be adopted.

3 Call the roll, please.

4 MS. FRANKS: Commissioner Smith?

5 CHAIRMAN SMITH: In favor.

6 MS. FRANKS: Commissioner Nikolaisen?

7 COMMISSIONER NIKOLAISEN: Favor.

8 MS. FRANKS: Commissioner Battle?

9 COMMISSIONER BATTLE: In favor.

10 MS. FRANKS: By your vote you have

11 adopted the final order of rulemaking 11 CSR 45-6.025.

12 MR. MULLALLY: Mr. Chairman, the next

13 item on the agenda is the consideration of a denial of

14 a level I license applicant.

15 MR. MIKE BUSHMANN: Good morning,

16 Commissioners.

17 COMMISSIONER NIKOLAISEN: Good morning.

18 MR. BUSHMANN: David Teague is the

19 corporate vice president for information systems for

20 Isle of Capri Casinos, Inc., which is the parent

21 company of the two Isle of Capri casinos in Missouri.

22 Mr. Teague applied for a level I

23 occupational license in this state, and he was

24 investigated as part of the application process by

25 agents of the Commission.

Page 7

1 During that investigation, it was

2 discovered that Mr. Teague had failed to disclose two

3 previous arrests on his application, both of which

4 occurred in Nevada in 1991.

5 During a subsequent interview by

6 Commission agents, Mr. Teague admitted to one of the

7 arrests, but was evasive and untruthful about the other

8 arrest.

9 Commission regulations provide that a

10 license applicant may be denied a license if that

11 person fails to disclose or states falsely information

12 called for in the application process.

13 It's this failure to disclose the

14 information, not the underlying arrests themselves,

15 that call into question Mr. Teague's credibility and

16 integrity.

17 We realize we're talking about a person's

18 livelihood here, so we do not take the matter lightly,

19 but we believe that being untruthful in the

20 application process is a very serious charge for which

21 we frequently deny applicants for level II licenses.

22 For this reason the Commission staff

23 recommends that Mr. Teague's application for a level

24 I license be denied.

25 Resolution No. 02-016 includes a finding

Page 8

1 that Mr. Teague is unsuitable to hold a level I

2 license and directs the executive director to issue a

3 denial letter to him.

4 Should you approve the resolution,

5 Mr. Teague will have the opportunity to have his case

6 heard by a Commission hearing officer. If you have

7 any questions about this, I'd be happy to answer

8 them.

9 COMMISSIONER SMITH: I noticed there were

10 a number of different violations. Would you explain

11 to us a little bit about what the violations were and

12 how you think it affects his credibility?

13 MR. BUSHMANN: Well, in open meeting I

14 don't think I'd like to list them.

15 CHAIRMAN SMITH: Okay. Just generally.

16 MR. BUSHMANN: The fact is not that he

17 had been arrested. The fact, I think, that's

18 important is that he failed to disclose to us that he

19 had been arrested and was untruthful during the

20 interview when he was being interviewed by the

21 Commission agents.

22 I think that's the key thing to look at

23 here. Because the two arrests in question -- there

24 was never a conviction for those. Those were

25 eventually dismissed.

Page 9

1 So it wasn't that in itself that caused

2 the problems. It's the fact that he was untruthful in

3 the interview about it.

4 CHAIRMAN SMITH: How long has he been

5 here in Missouri in his present position?

6 MR. BUSHMANN: Well, he doesn't work in

7 Missouri. He works for the parent company, so he's

8 located out of state.

9 CHAIRMAN SMITH: Did some of the

10 information come from Louisiana?

11 MR. BUSHMANN: He was also interviewed in

12 Louisiana about this very same thing, and he had also

13 failed to disclose those to Louisiana.

14 That occurred just a few months before he

15 filled out his Missouri application, so he was

16 questioned in deposition about these very same issues

17 only three or four months before he filled out and

18 sent in his Missouri application.

19 CHAIRMAN SMITH: I guess I'm a little

20 surprised this hasn't come up before, since he

21 apparently has worked for them since 1996.

22 MR. BUSHMANN: I have no explanation as

23 to why other states hadn't taken any action.

24 COMMISSIONER NIKOLAISEN: It sounds like

25 our people are pretty thorough.

Page 10

1 MR. BUSHMANN: I believe they were.

2 COMMISSIONER BATTLE: That's the

3 impression I got as I read this.

4 CHAIRMAN SMITH: If we adopt the

5 resolution, then it's a determination that he will be

6 denied a certification, and he will have the right to

7 a hearing before the hearing officer, or what happens

8 next?

9 MR. BUSHMANN: Yes. He would have a

10 right to have his case heard before a hearing officer.

11 And if so, it would come before you again.

12 CHAIRMAN SMITH: What's your pleasure on

13 that?

14 COMMISSIONER NIKOLAISEN: I move for the

15 adoption of Resolution No. 02-016 denying the

16 licensure of this level I applicant.

17 COMMISSIONER BATTLE: I'll second.

18 CHAIRMAN SMITH: Moved and seconded that

19 we adopt Resolution No. 02-016, which will be a denial

20 which will be subject to appeal if he so desires.

21 Call the roll, please.

22 MS. FRANKS: Commissioner Smith?

23 CHAIRMAN SMITH: In favor.

24 MS. FRANKS: Commissioner Nikolaisen?

25 COMMISSIONER NIKOLAISEN: Favor.

Page 11

1 MS. FRANKS: Commissioner Battle?

2 COMMISSIONER BATTLE: In favor.

3 MS. FRANKS: By your vote you have

4 adopted Resolution No. 02-016.

5 MR. MULLALLY: Mr. Chairman, it's been a

6 practice of ours to periodically update the Commission

7 on Missouri's nationally acclaimed problem gambling

8 programs. I think those updates in the past have been

9 well-received. With the agenda relatively sparse this

10 month, we thought it would be a good time to take the

11 opportunity to do that. So with your pleasure I will

12 ask Patricia Churchill to come up and provide that

13 update.

14 CHAIRMAN SMITH: It would be particularly

15 important right now to find out what in the world is

16 going on in Jefferson City.

17 MS. CHURCHILL: Right. I get to try out

18 my problem gambling legs today. Melissa Stephens, the

19 problem gambling's program administrator, is out this

20 week, and so I shamelessly, with her permission,

21 plagiarized some of her recent presentations as far as

22 her -- for some of the information that I worked from

23 and, I'm sure, hopefully, will give it some justice.

24 In any event, just to give you kind of an

25 overview of some of the problem gambling programs that

Page 12

1 we have right now, you know we're a member of the

2 Missouri Alliance to Curb Problem Gambling. There are

3 two other state agencies that are also members.

4 That's the Missouri Department of Mental Health and

5 the Missouri Lottery Commission. There's also the

6 Missouri Riverboat Gaming Association, private entity

7 industry organizations and the Missouri Council on

8 Problem Gambling Concerns, not for profit.

9 In general, the goals of the Alliance are

10 to raise awareness of problem gambling, to raise

11 awareness of the 888-BETS-OFF helpline, to promote

12 availability of the free treatment and promote

13 prevention and education programs for our youth here

14 in Missouri.

15 I mentioned the 888-BETS-OFF helpline.

16 It's a 24-hour toll-free helpline staffed by trained

17 counselors. And I don't think it has always been

18 staffed by trained counselors. It has been a more

19 recent development that the people who answer the

20 phones are actually master's level trained counselors.

21 Is that right, master's level? Master's level trained

22 counselors.

23 That is good for the caller because they

24 get immediate response and some assessment right away,

25 and then they can be referred to free treatment in

Page 13

1 their local area.

2 That leads me to the next one. Free

3 compulsive gambling treatment is available through the

4 Department of Mental Health. And one venue to get

5 that is by calling the 888-BETS-OFF line. That's a

6 way to be referred.

7 The treatment is available to both

8 problem gamblers and their family members, and it is

9 not necessary for the problem gambler to be in

10 treatment in order for their family member to receive

11 free treatment.

12 And these -- I should mention that this

13 is just for Missouri residents. If you're in another

14 state, the Missouri Department of Mental Health won't

15 pay for your treatment.

16 Another program which I know we're all

17 familiar with and is near and dear to Kevin's heart is

18 the Voluntary Exclusion Program. We administer that.

19 It is an avenue for problem gamblers to

20 acknowledge that they have a problem and take

21 responsibility for that problem by banning themselves

22 for life from the Missouri excursion gambling boats.

23 They're also removed from the casinos’

24 direct marketing list and their player privileges are

25 revoked at all Missouri casinos.

Page 14

1 And to give you a snapshot of the program

2 right now, there are 3912 people on the list. And

3 that's -- the number certainly includes, I'm sure, a

4 number of people who may or may not be in Missouri

5 anymore, but that is the entire number right now.

6 The calendar year 2001 saw a 28 percent

7 increase in applications over calendar year 2000.

8 That was 1397 applications in 2001 compared to 1094 in

9 calendar year 2000.

10 Recently, with all this kind of explosive

11 growth that we've experienced over the last two years,

12 we've completed a comprehensive review of all the

13 information in the databases.

14 And we did that with the help of people

15 from Steve Johnson's and Donna Watson's shop. They,

16 in their spare time, helped us review every file in

17 that database to ensure that -- look for missing

18 information and incorrect information. We're really

19 trying to ensure the integrity of that data.

20 Now that we've completed that, the next

21 item on our agenda is to bring in the people from the

22 boats, the companies who are responsible for

23 maintaining that list at their facility, and bring them

24 in for training. And our IT people will talk to them

25 and explain how to download the database on a weekly

Page 15

1 basis.

2 And as part of that training, we're

3 developing a manual that will kind of be a resource,

4 something that you can pass on to the next person, you

5 know, in a job change. It will have all the laws, all

6 the regulations and screen shots, for people like me

7 who are technically challenged, pictures of the

8 computer screen, how it looks and what you do next to

9 download the database.

10 We're also going to do, as we roll this

11 out, for lack of a better word, an audit to make sure

12 that everybody got the right list and they have all

13 the names.

14 And then periodically -- and that's for

15 every facility. And then periodically thereafter, we

16 will do random auditing and check to make sure that

17 the databases have maintained their integrity. So

18 we're excited about that and are looking forward to

19 getting past that.

20 Just to hit some highlights of other

21 responsible problem -- excuse me -- problem gambling

22 programs in Missouri, responsible gambling education

23 week is typically the second full week of August, and

24 that's August 12th through the 16th.

25 My understanding is there are activities

Page 16

1 underway to do a new underage gambling focus and this

2 year maybe make the focus on the friends rather than

3 the problem gamblers themselves, knowing that

4 sometimes it's the friends and family members that are

5 in the objective position to recognize some of those

6 problems.

7 All Bets Off is something that I had the

8 opportunity to see from the very beginning. It's a

9 real interesting program. It's an interactive

10 workshop for youth, typically eighth and ninth

11 graders, that's done in school. It's a one-hour

12 program.

13 It was developed by a not-for-profit

14 foundation in Jefferson City called the Second Chance

15 Foundation. And the two ladies involved have

16 extensive theater backgrounds, as well as community

17 service backgrounds.

18 And they work -- I got to watch a

19 workshop at Fulton High School. And it is -- it

20 educates on addictions including gambling. So that's

21 the first of its kind in Missouri to educate youth on

22 problem gambling issues.

23 Me, I, would be terrified to step in

24 front of a group of eighth and ninth graders and

25 expect that they would be entertained, let alone

Page 17

1 educated, by the things I had to say. And I watched

2 these ladies and they were fabulous. They really

3 engaged the kids. And I was impressed by the kids and

4 the teachers. So it was a nice opportunity to see

5 that in action.

6 It's been in several schools across the

7 state. It's been very well-received by teachers and

8 students alike, so we would like to see that continue.

9 Kind of your more standard bread and

10 butter sort of things -- of course, we do

11 informational exhibits. We've done them at

12 educational conferences for administrators and

13 teachers -- Melissa Stephens is the one who primarily

14 takes those and also Shelly Perez from the Lottery --

15 the Governor's Conference on Aging, and they're also

16 going to be at the Prosecutor's Conference later this

17 month and also the Prosecutor's Conference in August.

18 There is the Speakers Bureau. Kevin has

19 been on a local radio show at least twice, I think,

20 and was very well-received. The lines light up, we're

21 told. And Gary Gonder from the Lottery has also been

22 on the radio program. Our speakers are available to

23 go anywhere in the state and talk about problem

24 gambling issues.

25 The Riverboat Gaming Association, through

Page 18

1 the casinos -- and I will mention a program of theirs,

2 I've mentioned plenty of ours -- has Project 21. And

3 Project 21 educates casino employees about looking for

4 underage gamblers.

5 There's also a scholarship program, and I

6 think they award about six a year. And it's based on

7 an essay or a video or a poster about problem

8 gambling. So that's another program.

9 In general, that's kind of an overview.

10 If you have any questions, I'll be happy to try to

11 answer them, or I'm sure Kevin will pitch in and help

12 me if I can't answer them.

13 COMMISSIONER NIKOLAISEN: I have maybe a

14 two-fold question because I know we've talked about

15 people -- if I called in today and I'm in St. Louis

16 and I want free treatment, say, I've got a problem,

17 what's the accessibility?

18 I mean, can somebody get in fairly soon,

19 or do they say, hey, because it's free, we only have

20 two counselors, and we can't see you until September?

21 Do you have any idea? I'm just curious.

22 MS. CHURCHILL: Kevin.

23 MR. MULLALLY: Sure. In St. Louis the

24 counseling program probably took the biggest hit from

25 the relatively short lapse in funding that we've

Page 19

1 picked up from the supplemental.

2 A guy named Dan Smith was doing a

3 tremendous amount of the counseling. I think Dan has

4 now re-engaged; is that right?

5 MS. CHURCHILL: I believe so.

6 MR. MULLALLY: Yes. Dan is very good. I

7 think it really depends on what day of the week you

8 call. It's like any other business. Some days they

9 are busier than others.

10 COMMISSIONER NIKOLAISEN: Is it a --

11 MR. MULLALLY: I think you can --

12 COMMISSIONER NIKOLAISEN: -- horrible

13 thing, though --

14 MR. MULLALLY: -- talk to someone --

15 COMMISSIONER NIKOLAISEN: -- where it's

16 months or something where you can't get in?

17 MR. MULLALLY: No.

18 COMMISSIONER NIKOLAISEN: Like six

19 months?

20 MR. MULLALLY: No. I do not believe that

21 there is that kind of backlog. I think --

22 COMMISSIONER NIKOLAISEN: I mean, weeks,

23 I understand, you know?

24 MR. MULLALLY: Yeah.

25 COMMISSIONER NIKOLAISEN: Many of us have

Page 20

1 tried to get in to see our own doctor -- but I was

2 just curious.

3 MR. MULLALLY: I am not aware of any

4 complaints from somebody who had to wait an extended

5 period of time --

6 COMMISSIONER NIKOLAISEN: Okay.

7 MR. MULLALLY: -- to get in. In fact, I

8 don't even think it's weeks. I think usually, if you

9 really want to see somebody -- I'm not aware of

10 anybody that hasn't been able to get in.

11 Anyway, plus, as Patricia mentioned, the

12 people that are answering the phone are master's level

13 counselors themselves. So I think any immediate

14 problems, they're able to address right there on the

15 phone.

16 COMMISSIONER NIKOLAISEN: Would that be

17 the same for somebody who calls in, say, in La Grange

18 or Caruthersville?

19 MR. MULLALLY: Well, again, they would

20 get the immediate counseling from the master's level

21 professional.

22 I think it's also important to point out

23 that Life Crisis Services that administers this hot

24 line is also the number one agency for providing

25 suicide counseling, I think, in the Midwest -- is that

Page 21

1 right -- certainly, in the Midwest. And so issues of

2 that high degree of severity are in good hands.

3 COMMISSIONER NIKOLAISEN: But just

4 because somebody lives in a very unusual -- or an out

5 of the way part of the state doesn't mean they don't

6 have access?

7 MR. MULLALLY: I do not believe that

8 there is --

9 COMMISSIONER NIKOLAISEN: We've never

10 heard of any?

11 MR. MULLALLY: -- probably particularly

12 convenient access up in that Hannibal area. I don't

13 know if we've got --

14 MS. CHURCHILL: There is. I know, in

15 fact, that there is at least one or two.

16 MR. MULLALLY: Okay.

17 MS. CHURCHILL: There are at least one or

18 two in Hannibal.

19 COMMISSIONER NIKOLAISEN: I was just

20 curious. I'm glad you mentioned the Life Crisis

21 because I had forgotten that, and they do have a good

22 reputation here in St. Louis, and they are a suicide

23 hot line.

24 MR. MULLALLY: You have identified what I

25 believe -- what we believe, from the Gaming Commission

Page 22

1 staff's perspective, is somewhat of a problem in the

2 delivery model that the Department of Mental Health

3 has chosen.

4 And we have really encouraged -- and

5 here's the problem. Most of the agencies that provide

6 this kind of treatment are not-for-profit agencies

7 operating on an extremely tight budget. They cannot

8 afford to hire a problem gambling counselor on the

9 come. In other words, they can't say I'm going to pay

10 you $50,000 to come in and become a part of our

11 counseling team, and we better hope that you get

12 $50,000 of business. They can't afford to do it.

13 So what they're generally doing is

14 they're using their alcohol and drug counselors,

15 getting them certified as problem gambling counselors,

16 and they're treating the gamblers on top of their

17 already full caseload of alcohol and drug people. So

18 really this is kind of overtime.

19 Most of the gamblers that are being

20 treated, with rare exceptions -- I think Dan Smith --

21 with rare exceptions of people who have established

22 huge clienteles -- Stan Beirs is another one in Kansas

23 City that has been successful in doing that. But most

24 of the other ones are treating the gamblers on top of

25 their alcohol and drug people.

Page 23

1 What we have encouraged the Department of

2 Mental Health to at least experiment with is to hire,

3 as a state employee, someone in -- we have suggested

4 to try one in Kansas City and one in St. Louis and

5 have this person -- all they do full-time is gambling.

6 And when they don't -- if they don't have

7 clients for that day, go out and talk to a school, go

8 out and talk to a Chamber of Commerce, do education,

9 do outreach, go teach a class at one of the casinos to

10 the workers, you know, full-time counseling. And what

11 you don't take up with counseling, do education and

12 outreach.

13 Because I think, if the Alliance

14 statistics have shown anything, it's that outreach

15 works. If you look at the numbers of people accessing

16 the hot line, participating in the voluntary exclusion

17 program and most recently accessing treatment, all

18 those things have spiked because of Alliance outreach

19 and --

20 COMMISSIONER NIKOLAISEN: Knowledge.

21 MR. MULLALLY: -- Alliance efforts.

22 COMMISSIONER NIKOLAISEN: Knowledge of

23 it.

24 MR. MULLALLY: So they haven't bidded

25 that yet, but it's something we have certainly thrown

Page 24

1 out there and encouraged them to do.

2 COMMISSIONER NIKOLAISEN: Okay. Because

3 even though -- I mean, we're the ones -- the gaming

4 industry is funding that? That's the money that's

5 going to the Division of Mental Health; correct?

6 MR. MULLALLY: It's coming out of the

7 dollar admission fee.

8 COMMISSIONER NIKOLAISEN: Right. So the

9 dollars -- what you're saying is the dollars are

10 there. It's a way of trying to get them to tweak the

11 -- to put it into different places?

12 MR. MULLALLY: Yeah.

13 COMMISSIONER NIKOLAISEN: Okay.

14 MR. MULLALLY: They have used a managed

15 care model when at least some allege none is needed at

16 this point.

17 COMMISSIONER NIKOLAISEN: Okay. Thanks.

18 CHAIRMAN SMITH: I was curious. I

19 understand that the appropriations for the Mental

20 Health Division in the state are going to be

21 substantially cut this year, and I wonder whether

22 that's going to affect our program with reference to

23 the number of counselors and that sort of thing they

24 will have available?

25 MS. CHURCHILL: It shouldn't. They're

Page 25

1 getting the full appropriation -- the maximum

2 appropriation allowed under law this year.

3 CHAIRMAN SMITH: And that's not going to

4 be affected then?

5 MS. CHURCHILL: No.

6 MR. MULLALLY: Well, it hasn't to date.

7 MS. CHURCHILL: Well, I shouldn’t say that.

8 Anything is possible this year, but to date it has

9 not.

10 CHAIRMAN SMITH: I know other parts of

11 that program are being cut -- of the mental health

12 program, and I wondered if it affected us.

13 If it does affect us, are there any other

14 resources we could add to it to help solve the

15 problem?

16 MR. MULLALLY: It's unlikely that -- it

17 appears unlikely that it will affect the gambling

18 treatment mainly because it's not general revenue

19 funds. It's the Gaming Commission funds.

20 The reason that the other mental health

21 programs are being cut is because there is just no

22 general revenue out there. These funds don't have

23 that problem.

24 But as far as other resources, unless --

25 no. There's no other public resources available.

Page 26

1 Now, if Mike's people want to, out of the graciousness

2 of their hearts, contribute additional private money,

3 then that's possible. But they already expend

4 significant amounts of money on the programs that they

5 do offer including the -- the association fully funds

6 the hot line at significant expense.

7 CHAIRMAN SMITH: Any other questions of

8 Patricia on this? Thank you. I wonder if anybody

9 else wants to comment on this at this time? We have a

10 little more time available than we usually do in a

11 meeting.

12 MS. CHURCHILL: You're more than welcome.

13 CHAIRMAN SMITH: Is there anything you

14 want to add, or has Patricia covered anything? I

15 assume not. So go ahead to the --

16 MS. CHURCHILL: Legislative --

17 CHAIRMAN SMITH: -- next issue. Yes.

18 MS. CHURCHILL: This is Act 3 of my show.

19 If I get a little weary, I may pull up a chair but so

20 far so good.

21 The Senate is adjourned until Monday.

22 The House is in technical session today. It's the last

23 day to file bills, so they're technically open, but

24 they're not meeting today.

25 This week was a busy week to understate

Page 27

1 it. House Bill 1877 sponsored by Representative Jim

2 Foley regarding funding for schools -- on Tuesday

3 March 12th, it was adopted in the House by a vote of

4 90 to 65. That must have been augmented after the actual

5 board vote. They left it open, but it didn't change

6 the outcome, 90 to 65.

7 On Wednesday the 13th it was third read

8 and passed; however the emergency clause was defeated,

9 which would have allowed that to get a full fiscal

10 year impact from those tax provisions and gambling

11 provisions. Since that was defeated, it won't go into

12 effect until August 28th, if and when it's passed and

13 signed.

14 It was then reported to the Senate and

15 first read. So it has crossed houses, and that's

16 moving along nicely, I guess you could say.

17 The other gaming bill that seems to be

18 getting a lot of attention recently is Senate Bill

19 1248. It was filed and first read on February 28^th,

20 and that's sponsored by Senator Jim Mathewson. And it

21 also relates to the Schools of the Future Fund.

22 Both of these bills have very similar

23 provisions regarding revenue issues -- Department of

24 Revenue tax issues, but their gaming provisions are

25 very different.

Page 28

1 House Bill 1877 increases the admission

2 fee by one dollar to a total of three dollars, and it

3 increases the AGR tax by 2 percent to a total of 22

4 percent. And it leaves in place the $500 loss limit.

5 Now, when it was originally drafted in

6 committee, it removed the loss limit, but that was

7 stripped during committee, and it came out without the

8 removal of the loss limit, leaving it intact.

9 Senate Bill 1248 changes the admission

10 fee from a per excursion two-dollar fee to a flat

11 five-dollar fee. This is, we've estimated, roughly

12 equivalent to a 79-cent increase in the two dollar fee

13 if you're trying to compare apples to apples. And it

14 also removes the $500 loss limit.

15 I checked this morning before I left, even

16 though it was kind of early in Jefferson City. They

17 have not assigned that to committee, but we expect

18 that to happen shortly, and we expect a hearing this

19 coming week. So those are the --

20 CHAIRMAN SMITH: What will be the

21 difference in revenue to the School Foundation Program

22 if the loss limit part is now eliminated?

23 MS. CHURCHILL: We've provided our

24 information to OA on that, and I can let Jim talk

25 really specifically if you want to get specific on

Page 29

1 fiscal information. The fiscal note on 1248 has not

2 come out yet, so we have not released those numbers

3 openly.

4 CHAIRMAN SMITH: I'd like to hear what

5 the differences might be.

6 MS. CHURCHILL: We have that and can give

7 that to you. Other business this week of a less

8 controversial nature, I guess you could say, is Senate

9 Bill 1220 regarding criminal history checks. And that

10 was, at our request, sponsored by Senator Sims.

11 And on Wednesday the 13th it was heard in

12 Pensions and General Laws. And thanks in large part

13 to the persuasive testimony of Steve Johnson, our

14 deputy director for enforcement, it was voted out, duly

15 passed, and has been reported to the floor and placed

16 on the consent calendar.

17 This language that we put in there is for

18 bingo, for excursion gambling, and we also included

19 lottery in there. They needed the same language

20 required by the FBI pursuant to public law 92544.

21 And it simply clarifies our authority and

22 our responsibility with regard to handling fingerprint

23 background checks. It does not expand our authority

24 in any way. It just allows us to continue doing what

25 we're doing.

Page 30

1 So it hopefully will remain consent and

2 move through the process, because we do need it to

3 continue to ensure that felons aren't in gaming as

4 required by the statutes.

5 Non-Gaming Commission, but of interest

6 probably to us, is there are two horse racing bills,

7 House Bill 1679, by Representative Crump, and Senate

8 Bill 1010, by Senator Sims.

9 Representative Crump's bill is the one

10 that's been getting a large part of the attention

11 recently. It was debated for several hours on the

12 floor yesterday and was laid over to the informal

13 calendar.

14 It takes it out, as we would expect and

15 as previous versions have in earlier years, it removes

16 the Horse Racing Commission from under the Gaming

17 Commission, which is where it is just kind of housed

18 right now, and puts it back under Public Safety as a

19 separate Commission.

20 And it has a two dollar admission fee.

21 And the revenues generated after paying the expenses

22 of that Commission would go to the State School Monies

23 Fund.

24 CHAIRMAN SMITH: And that's on the

25 informal calendar now?

Page 31

1 MS. CHURCHILL: It is, but it was laid

2 over early in the week right after they passed 1877

3 for about a day, and then they took it up on Thursday.

4 We would expect it to come up again. It's not gone.

5 CHAIRMAN SMITH: You do expect it to come

6 up again?

7 MS. CHURCHILL: I would, yes. And then

8 next week there is a bill where we're just looking at

9 keeping an eye on things that are related to gaming.

10 And this really relates to lotteries.

11 Senate Bill 1222 by Senator Jacob creates

12 a video gaming machine network. It would be lottery

13 machines at various locations. And it's got a hearing

14 next week on the 20th.

15 And then, finally, and certainly not

16 least, House Bill 8 is the appropriations bill, and

17 there has been a fair amount of activity on

18 appropriations, as you noted, Commissioner Smith.

19 And, if you have any specific questions

20 on House Bill 8 and our budget, Debbie Ferguson can

21 certainly answer those more ably than I could.

22 CHAIRMAN SMITH: I guess I'd like to kind

23 of hear what it might do.

24 MS. CHURCHILL: All right.

25 CHAIRMAN SMITH: We might have to live

Page 32

1 with it if passed.

2 MS. DEBBIE FERGUSON: Thank you. I thought I

3 was going to get out without having to say anything.

4 CHAIRMAN SMITH: It's about time you said

5 something.

6 MS. FERGUSON: House Bill 8 so far has

7 been received with the Governor's recommendation and

8 has not formally been changed; however, in the House -- it

9 came out of the House subcommittee as recommended by

10 the Governor, but right now we're before the House

11 Budget Committee, Representative Tim Green.

12 And there's some anticipation that our

13 budget could be modified this coming week; however,

14 his amendments have not been officially put out for us

15 to be more specific for you.

16 There's a couple of decision items that

17 we've talked to him about. Kevin is committed to

18 trying to utilize our core money wherever possible.

19 And so the tentative recommendations that have been

20 talked about, we believe we could live with, if they

21 do make those modifications.

22 And so far -- again, as far as official

23 action, nothing has happened. But probably by the

24 next meeting I could better tell you of what, finally,

25 the House has done to us. And it will probably be

Page 33

1 before the Senate at that point.

2 CHAIRMAN SMITH: At this point you don't

3 anticipate any major problems then with our budget?

4 MS. FERGUSON: So far with the beauty of

5 us and the dedicated funding, obviously, we have not

6 received the same level of scrutiny as those general

7 revenue agencies and the severe cuts that they are

8 having to consider. But, again, we're still not out

9 of the woods yet with our budget.

10 MR. MULLALLY: Mr. Chairman, we have been

11 doing a great deal of self-examination. As you may

12 recall from the February newsletter, I called upon all

13 our staff to examine their particular areas of

14 responsibility to see how we could cut costs or

15 increase efficiencies or other measures.

16 We've gotten back some feedback there,

17 and we've done some further examination at the

18 managerial level.

19 And, you know, I spent about ten years

20 over there as a staffer for the legislature beating up

21 bureaucrats because I thought they could be more

22 efficient, and I'm not about to become a hypocrite

23 now.

24 So in the areas where we've been able to

25 identify things that we can cut, and there have been a

Page 34

1 couple, we've taken them to the subcommittee chairman.

2 And hopefully that frankness and openness will serve

3 us well, and the amendments will be in accordance with

4 the things that we've identified.

5 CHAIRMAN SMITH: I think we probably have

6 an obligation to do what you're doing. If everybody

7 else has got a tight budget, I don't think we should

8 -- we should take a serious look as to where we might

9 cut some corners, too.

10 MR. MULLALLY: I wholeheartedly concur.

11 I think it's part of our responsibility as public

12 servants to try to operate as efficiently as we can.

13 And I called on the staff to do that.

14 And I think we've got a pretty good track

15 record of that in the past. I've told the committee

16 that I don't think they can identify any expenditures

17 of the Gaming Commission over the years that have been

18 frivolous. I think we've used our money efficiently.

19 And whatever money is left over has gone

20 where it's supposed to go, to the early childhood and

21 veterans and the other programs that the legislature

22 has identified. So we're hopeful that we'll get a

23 fair, good result out of the Budget Committee.

24 MS. FERGUSON: I might go ahead and just

25 mention, as well, the overall big picture of the

Page 35

1 Gaming Commission Fund in its entirety -- as you know,

2 we are currently obligated by statute to disburse

3 those monies a certain way.

4 That's being heavily reviewed between the

5 veterans and the early childhood community, and

6 they're trying to find a balance, I think, that works

7 for both of those entities.

8 But I think they've decided that

9 legislation needs to occur versus being able to do it

10 through the budget process.

11 But initially, I think a lot of folks

12 were looking if budgetarily we could make those

13 changes to satisfy those two entities.

14 CHAIRMAN SMITH: Is that a legislative

15 decision that has to be made, or is that something we

16 have input on?

17 MS. FERGUSON: Yes. We're pointing out

18 to them that by statute we are required to disburse

19 the monies a certain way. And any balance in the

20 Gaming Commission Fund, once the obligations are met

21 for us and other state entities, we must disburse

22 pursuant to the statute. And I don't have the ability

23 to change that even though they desire for it to go in

24 different ways.

25 CHAIRMAN SMITH: Any other questions on

Page 36

1 our budget? If not, Jim, I would like -- could you

2 kind of tell us what your projections are as to what

3 the different bills will do to funding?

4 MS. CHURCHILL: Yes. The fiscal note

5 hasn't been filed on 1248, so we can provide that to

6 you offline, if that's all right.

7 CHAIRMAN SMITH: Okay. Fine. We need

8 to know at some point.

9 MS. CHURCHILL: Right.

10 CHAIRMAN SMITH: I think we had some

11 other minor corrections we wanted to make. Was any

12 bill that was included in any of those that we

13 discussed earlier for show like the issue of this

14 subpoena by ordinance sort of thing?

15 MS. CHURCHILL: No, there's not. We've

16 been hesitant to open that up so broadly. Right now

17 we are looking -- we are keeping our eyes open. If

18 there's a broad-based gaming bill that's moving, we'll

19 look, and we're prepared to offer an amendment.

20 CHAIRMAN SMITH: Okay. Any other

21 questions on the legislative update issue? If not,

22 thank you for your presentations.

23 Are there any groups that anybody wants

24 to be heard at this time? We usually ask people, if

25 they have any statement they want to make, this is

Page 37

1 your chance to do so.

2 If not, then I guess our procedure is

3 going to be that we'll have a closed session after the

4 adoption of the resolution. And when we come back in,

5 we will just adjourn, so there will be no further

6 business.

7 But we are planning, after this meeting

8 is over, to go in and examine the progress that has

9 been made in St. Charles on their expansion. Now,

10 what is the arrangement on that, Kevin? How do we do

11 that, or where do we meet?

12 MR. MULLALLY: I believe, the

13 representatives from Ameristar are here, so I think we

14 can just -- our closed session will be fairly brief.

15 We only have a couple of things for you. So if they

16 can hang around, we can just leave right from here.

17 CHAIRMAN SMITH: Okay. Fine.

18 COMMISSIONER NIKOLAISEN: I have a

19 question that I'm not sure if this is opened or

20 closed, but I'm just curious. I know we have talked

21 about it in previous meetings here about evaluating

22 our process for applications, and I know you all have

23 been going through that. Can you give us an update on

24 where that stands and --

25 MR. MULLALLY: Sure.

Page 38

1 COMMISSIONER NIKOLAISEN: -- when that

2 might be presented.

3 MR. MULLALLY: What we're doing at the

4 staff level right now is

5 evaluating our process. I think we've identified a

6 couple of areas where our process -- our selection

7 process can be augmented.

8 Particularly, I think we will recommend

9 to you that we hire some type of a real estate

10 consultant that can advise us on site-related issues,

11 permits issues, environmental issues and those types

12 of things to make sure that we know everything there

13 is to know about the sites that we're dealing with.

14 I think that it's also important that the

15 Commission articulate ahead of time, rather than on

16 the back end, some type of general idea as to what we

17 think is in the best interest of the state.

18 So we're trying to come to some kind of

19 consensus at the staff level in conjunction with

20 looking at the St. Louis area market of what types of

21 projects would make sense in general terms.

22 I think we will be prepared to present

23 that kind of two-pronged plan to you sometime late

24 spring or early summer or sometime in the May/June

25 time frame.

Page 39

1 Then it will be our recommendation to

2 give the industry some time to react to that through

3 the summer and then begin a selection process in late

4 summer or early fall to conclude by the end of the

5 year.

6 CHAIRMAN SMITH: And we have really made

7 no determination as to whether there is or not, from

8 an economic point of view, a possibility of an

9 additional location in St. Louis at this time?

10 MR. MULLALLY: No. Jim is taking an

11 updated look at the St. Louis market, and he will be

12 prepared to provide a report to you on that.

13 He has taken Commissioner Nikolaisen's

14 suggestion and is working with the Department of

15 Revenue to look at some sales tax figures to see what

16 affect the economy has had on some of the other

17 entertainment venues and the entertainment businesses.

18 So it will be similar to last time, and

19 we will present a very thorough market report to you

20 in conjunction with the other information that I have

21 just outlined.

22 CHAIRMAN SMITH: I concur. I think it's

23 a good idea to have some sort of real estate

24 consultant information available before we even start

25 going into this process because that's something we

Page 40

1 missed before.

2 And as I understand it, at this point

3 really the only area that we are considering any

4 possibility of expansion at this time would be

5 somewhere in the St. Louis area?

6 MR. MULLALLY: Well, in the loosely

7 defined St. Louis area. I think the St. Genevieve

8 folks are still interested. So I think the review

9 would extend down that far. And so -- yes -- I think

10 the St. Louis area and eastern and mid eastern region.

11 CHAIRMAN SMITH: Any other questions on

12 this issue? I think it's good to bring this out, that

13 at least we're planning on that for later on this

14 year. Any other business that I've overlooked?

15 MR. MULLALLY: That's all we have for you

16 today, Mr. Chairman.

17 CHAIRMAN SMITH: Do we have a motion to

18 go into executive session?

19 COMMISSIONER BATTLE: I have the motion.

20 We move to close this meeting to receive, discuss and

21 consider the following matters: Confidential or

22 privileged communications with attorneys under Section

23 610.021(1) RSMo; Personnel matters under 610.021(3)

24 and (4) RSMo; and investigatory, proprietary and

25 application records, information and summaries under

Page 41

1 610.021(14) and 313.847.1 RSMo.

2 COMMISSIONER NIKOLAISEN: Second.

3 CHAIRMAN SMITH: Moved and seconded for

4 the adoption of Resolution to go into secret -- not

5 secret, that's the wrong word to use -- closed

6 session. Call the roll, please.

7 MS. FRANKS: Commissioner Smith?

8 CHAIRMAN SMITH: In favor.

9 MS. FRANKS: Commissioner Nikolaisen?

10 COMMISSIONER NIKOLAISEN: Favor.

11 MS. FRANKS: Commissioner Battle?

12 COMMISSIONER BATTLE: In favor.

13 CHAIRMAN SMITH: We'll go into session

14 and be back here shortly.

15 (Thereupon, this meeting was adjourned.)

Page 42

1 STATE OF MISSOURI )

)

2 COUNTY OF ST. LOUIS )

3 I, Angela Kozuszek, a Notary Public within and

4 for the State of Missouri, do certify that I acted as

5 Official Reporter at the time these proceedings

6 transpired, that these proceedings were reduced to

7 shorthand by me on the day, between the hours, at the

8 place and in that behalf first aforesaid, and later

9 transcribed by computer, and that this and the

10 foregoing pages are a true and accurate transcript to

11 the best of my ability of the record of proceedings of

12 the Missouri Gaming Commission held at St. Charles

13 City Hall, 200 North Second Street, St. Charles,

14 Missouri on the 15th day of March, A.D., 2002.

15 IN WITNESS WHEREOF, I have hereunto set my hand

16 and Seal this 27th day of March, A. D., 2002.

17 MY COMMISSION EXPIRES January 26, 2006.

19 __________________________

Angela Kozuszek

20 Notary Public, within and

for the State of Missouri

Page 43

Concannon & Jaeger St. Louis, Missouri (314)421-1000