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

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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

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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?

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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?

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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

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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.

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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.

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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

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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.

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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.

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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.

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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