0001

1 BEFORE THE

MISSOURI GAMING COMMISSION

2

3

4

In the Matter of:

5 Commission Meeting

6

7

8 April 24, 2002

Missouri Gaming Commission

9 3417 Knipp Drive

Jefferson City, Missouri

10

11

12 BEFORE: ROBERT SMITH, Chair

LYNN NIKOLAISEN, Member (via telephone)

13 JOE ADORJAN, Member

MURIEL BATTLE, Member

14

15

16

REPORTED BY:

17

Melinda Adolphson

18 ASSOCIATED COURT REPORTERS

714 West High Street

19 Jefferson City, Missouri 65102

20

21

22

23

24

25

0002

1 P R O C E E D I N G S

2 CHAIRMAN SMITH: Welcome to the Gaming

3 Commission meeting. First order of business is the

4 call of roll of who is present.

5 MS. ANGIE FRANKS: Commissioner Smith?

6 CHAIRMAN SMITH: Present.

7 MS. FRANKS: Commissioner Nikolaisen?

8 COMMISSIONER NIKOLAISEN: Present.

9 MS. FRANKS: Commissioner Battle?

10 COMMISSIONER BATTLE: Present.

11 MS. FRANKS: Commissioner Adorjan?

12 COMMISSIONER ADORJAN: Present.

13 CHAIRMAN SMITH: Commissioner Nikolaisen

14 is by telephone, but she seems to be tuned in

15 properly this morning so everything is working all

16 right.

17 First order of business is a consideration

18 of the minutes of January the 30th, 2002. Did

19 everybody have a chance to review those changes?

20 We have a motion then to approve them?

21 COMMISSIONER BATTLE: I move approval.

22 CHAIRMAN SMITH: Motion to approve. Is

23 there a second?

24 COMMISSIONER ADORJAN: Second.

25 CHAIRMAN SMITH: All in favor say aye.

0003

1 (ALL COMMISSIONERS SAID AYE.)

2 CHAIRMAN SMITH: I have not had a chance

3 to read the minutes of February 27th and March

4 15th. I wonder if you all would mind if we just

5 pass that until next time. Is there any urgency

6 until we have a chance to look at that?

7 If not, we'll move on to D, which is the

8 Players, L.P. proposal which involves an

9 administrative item that's been up in front of us

10 before. And the hearing officer has done further

11 study. We'll see what new enlightenment he has for

12 us, if any.

13 MR. THAD McCANSE: I have a lot more

14 enlightenment, but I reached the same conclusion.

15 At this February meeting --

16 CHAIRMAN SMITH: In spite of all my good

17 arguments?

18 MR. McCANSE: When I presented this, the

19 Commission asked that I check to see if the

20 statutes authorizing the Commission to pass

21 rules and regulations would be sufficient to adopt

22 the rule that is under question as to whether or

23 not the Commission can charge interest on admission

24 fee underpayments. The parties, both the

25 Commission's attorney and Players' attorney, had

0004

1 nothing further to add than they had already

2 submitted.

3 However, I did spend some time in the

4 library reading cases and found that most of them

5 supported -- in fact, I think all of them supported

6 what my original recommendation was. That is, that

7 while there is clear authority for the Commission

8 to charge interest on underpayment of the gross

9 receipts tax, there is no such authority as far as

10 the underpayment of admission fee taxes or the

11 admission fees, which is a tax. So that the cases

12 that were cited for the authority that is charging

13 of interest is a substantive matter and must take

14 legislative action rather than the rulemaking

15 action of the state agency. I found nothing to

16 challenge that finding or that recommendation.

17 And as I say, neither of the parties

18 submitted any cases that challenged what I have

19 said originally. The Commission's attorney had

20 thought the one section as far as authorizing the

21 gross receipts tax interest payments should

22 be construed as broad enough to cover the admission

23 fee payments. I could not read the statute that

24 way because the statute by its own language limited

25 its provisions to that particular section, not to

0005

1 another section of the statutes.

2 So I felt and do feel that the Commission

3 is just not authorized to charge interest on

4 underpayment of admission fees.

5 CHAIRMAN SMITH: And my argument in

6 connection to the enabling act, you don't think

7 gives us sufficient power to do this?

8 MR. McCANSE: The enabling act was pretty

9 broad and it gave you power to do certain things,

10 which I think I covered in my proposed report and

11 order, but not interest. Because interest has been

12 held to be a tax of its own or part of a taxing

13 process and only the legislature can do that.

14 CHAIRMAN SMITH: Do either of the

15 attorneys want to add anything to what's been

16 presented previously? I think we both have seen

17 your briefs and your statements.

18 MR. MIKE BRADLEY: I don't care to add

19 anything. I have discussed this with the hearing

20 officer and we've cited every case we could find

21 previously.

22 CHAIRMAN SMITH: That's a dangerous thing

23 to ask lawyers if they want to say anything. And

24 there's been no success in working out any

25 settlements of this matter?

0006

1 MR. BRADLEY: The trouble with that is

2 that this is something that will come up in the

3 future. We need some sort of resolution on it.

4 CHAIRMAN SMITH: Do any of the

5 Commissioners have any questions? Okay.

6 Do we have a motion to either sustaining

7 the Commissioner's position on this, or hearing

8 officer's position, which would in effect mean

9 that we're not able to assess interest on this

10 obligation? I guess my feeling is it's not worth

11 fighting over, and the solution, perhaps, is with

12 the legislature, and I don't know if we've made any

13 attempts to do anything about that or not, Kevin.

14 It's probably the wrong session to do it, but maybe

15 next session. I think we need some additional

16 power there.

17 COMMISSIONER BATTLE: So you're asking for

18 a motion?

19 CHAIRMAN SMITH: Motion either approving

20 the hearing officer's finding, which would mean

21 that we will not be able to collect the interest

22 or --

23 COMMISSIONER BATTLE: I so move.

24 CHAIRMAN SMITH: Is there a second?

25 COMMISSIONER ADORJAN: Second.

0007

1 CHAIRMAN SMITH: Any discussion? If not,

2 please call the roll.

3 MS. FRANKS: Commissioner Smith?

4 CHAIRMAN SMITH: Reluctantly in favor.

5 MS. FRANKS: Commissioner Nikolaisen?

6 COMMISSIONER NIKOLAISEN: Opposed.

7 MS. FRANKS: Commissioner Battle?

8 COMMISSIONER BATTLE: In favor.

9 MS. FRANKS: Commissioner Adorjan?

10 COMMISSIONER ADORJAN: In favor.

11 MS. FRANKS: By your vote you have adopted

12 Resolution No. 02-027.

13 MR. KEVIN MULLALLY: Mr. Chairman, the next item

14 on the agenda -- actually the next four, are

15 hearing officer recommendations referred by Hearing

16 Officer Mike Yost.

17 CHAIRMAN SMITH: First one, I believe, is

18 Jesse McDonald.

19 MR. MIKE YOST: That's correct. And if it

20 would please the Commissioners, we could probably

21 take up tabs E and F at the same time because they

22 involve the same facts and the same issues.

23 CHAIRMAN SMITH: I think we probably have

24 to vote on each one separately.

25 MR. YOST: Right. As far as my

0008

1 presentation, I'll be presenting both of those.

2 Resolution No. 02-018 relates to Petitioner Jesse

3 McDonald and Resolution No. 02-019 relates to

4 Petitioner Casey Garner. They were both employed

5 as Level II licensees at the Harrah's North Kansas

6 City casino in the bar area of the casino.

7 Mr. McDonald was employed as a bartender, and

8 Ms. Garner was employed as a waitress. And the

9 facts presented at the hearing, which neither

10 Petitioner attended, were that they engaged in a

11 scheme where they sold alcoholic beverages to a

12 customer and then rang that up as soft drinks.

13 And the key fact of that is that the soft

14 drinks are not billed to the customer. They were

15 complimentary, and alcoholic drinks are billed to

16 the customer. So the money that was collected from

17 the customer to the waitress and then that was paid

18 to Mr. McDonald was not taken into the cash

19 register of the casino, but instead was diverted to

20 a tip fund which is divided amongst the employees.

21 These actions would constitute an

22 appropriation of funds from the casino, which is

23 considered stealing under the laws of the State of

24 Missouri and would also violate the regulations

25 involving moral character of the licensees. And

0009

1 secondly, since the Petitioner has the burden of

2 proof as to whether the proposed discipline should

3 be carried out against them, their failure to

4 appear meant that they did not meet their burden

5 of proof to show why their license shouldn't be

6 revoked.

7 CHAIRMAN SMITH: What was the nature of

8 the proof of this? How did they find this out?

9 MR. YOST: I believe this was caught on

10 the surveillance video cameras of the casino and

11 then checked the casino -- the cash register tapes

12 after they saw that on videotape.

13 CHAIRMAN SMITH: Any questions by the

14 Commissioners? All right.

15 Then I guess we should take them up in

16 order. Jesse McDonald first. Do we have a motion

17 either approving the finding or disapproving the

18 finding of the hearing officer?

19 COMMISSIONER NIKOLAISEN: I move for

20 approval.

21 COMMISSIONER BATTLE: I second.

22 CHAIRMAN SMITH: Moved and seconded. Do we

23 approve the finding in connection with Jesse

24 McDonald, which was violation of administrative

25 remedy to be revoking his license.

0010

1 Call roll.

2 MS. FRANKS: Commissioner Smith?

3 CHAIRMAN SMITH: In favor.

4 MS. FRANKS: Commissioner Nikolaisen?

5 COMMISSIONER NIKOLAISEN: Favor.

6 MS. FRANKS: Commissioner Battle?

7 COMMISSIONER BATTLE: In favor.

8 MS. FRANKS: Commissioner Adorjan?

9 COMMISSIONER ADORJAN: In favor.

10 MS. FRANKS: By your vote you have adopted

11 Resolution No. 02-018.

12 CHAIRMAN SMITH: The next is Casey Garner

13 and basically those are the same facts on this

14 case, too?

15 MR. YOST: That's correct.

16 COMMISSIONER NIKOLAISEN: I move for

17 approval.

18 COMMISSIONER BATTLE: I will second.

19 CHAIRMAN SMITH: Motion to approve the

20 findings of the hearing officer revoking

21 occupational license. Is there a second?

22 COMMISSIONER BATTLE: I second.

23 CHAIRMAN SMITH: Any discussion?

24 If not, call roll.

25 MS. FRANKS: Commissioner Smith?

0011

1 CHAIRMAN SMITH: In favor.

2 MS. FRANKS: Commissioner Nikolaisen?

3 COMMISSIONER NIKOLAISEN: Favor.

4 MS. FRANKS: Commissioner Battle?

5 COMMISSIONER BATTLE: Favor.

6 MS. FRANKS: Commissioner Adorjan?

7 COMMISSIONER ADORJAN: Favor.

8 MS. FRANKS: By your vote you have adopted

9 Resolution No. 02-019.

10 CHAIRMAN SMITH: I believe the next one is

11 Appolon Eliasin and that's your case, too?

12 MR. YOST: That's correct. Resolution

13 02-020, Petitioner Appolon Eliasin. The proposed

14 discipline was a revocation of his Level II

15 occupational license for failure to follow the

16 internal controls that are set forth by the

17 Ameristar Casino. Specifically what Mr. Eliasin

18 failed to do, the internal controls of the casino

19 require that anyone who enters the – it’s called

20 the hard count room, which is where the coin money

21 is counted and collected, if anyone who enters that

22 room is required to be what's called wanded with a

23 hand held metal detector on their way out to ensure

24 that they are not carrying coins that were supposed

25 to have been left in the room to prevent coin theft

0012

1 and skimming from the casino.

2 The videotape surveillance showed that

3 Mr. Eliasin, who was part of a drop team, entered

4 the hard count room, and then when he exited the

5 hard count room they attempted to wand him, but he

6 refused to be wanded. The security officers asked

7 him -- told him he had to be wanded, and he told

8 them, no, he wasn't going to be and eventually

9 walked away without being wanded.

10 His explanation at the hearing was he

11 admitted that he did refuse to be wanded on that

12 particular day as was shown on the surveillance.

13 He stated that his supervisor had told them that if

14 he was accompanied by security officers at the

15 casino during his round, so to speak, he did not

16 have to be wanded when he came out of the hard

17 count room. That's a little suspect to me, because

18 first of all, everyone who entered the room and

19 left was wanded except for Mr. Eliasin. And

20 security officers told him at the time that he had

21 to be wanded. And it was basically a refusal on

22 his part.

23 So even if he was told that information,

24 which there was no way to verify, the objective

25 evidence should have told him that he should have

0013

1 submitted to be wanded at that time. So the

2 regulations of the Commission are clear that he is

3 subject to the revocation of his license for

4 violation of internal controls. That's my

5 recommendation.

6 CHAIRMAN SMITH: Is there any evidence

7 from the supervisor one way or the other?

8 MR. YOST: No. They were not called as a

9 witness by either party.

10 CHAIRMAN SMITH: Any other questions on

11 the part of the Commission?

12 Do we have a motion then either to approve

13 the findings, which is revocation again as his

14 failure to follow the rules?

15 MR. ADORJAN: I'll move Resolution 02-020.

16 COMMISSIONER NIKOLAISEN: Second.

17 CHAIRMAN SMITH: It's been moved and

18 seconded that the adoption of Resolution No.

19 02-020, which is the hearing officer's findings.

20 Call roll.

21 MS. FRANKS: Commissioner Smith?

22 CHAIRMAN SMITH: In favor.

23 MS. FRANKS: Commissioner Nikolaisen?

24 COMMISSIONER NIKOLAISEN: Favor.

25 MS. FRANKS: Commissioner Battle?

0014

1 CHAIRMAN BATTLE: In favor.

2 MS. FRANKS: Commissioner Adorjan?

3 COMMISSIONER ADORJAN: In favor.

4 MS. FRANKS: By your vote you have adopted

5 Resolution No. 02-020.

6 CHAIRMAN SMITH: Stephanie Lewis, I

7 believe is next.

8 MR. YOST: Yes. 02-021, Petitioner

9 Stephanie Lewis. This is a case which the

10 Commission is familiar with, a felony conviction or

11 plea-type situation. Ms. Lewis plead guilty to a

12 felony back in 1982 and was sentenced in the State

13 of Kansas for a suspended imposition of sentence.

14 Under the statute, that is considered a plea of

15 guilty in the State of Missouri that is required by

16 the casino to deny a license. And under the laws

17 of the State of Kansas, a suspended imposition of

18 sentence is a conviction, which would also require

19 the Commission to deny her an occupational

20 license. In addition, Ms. Lewis failed to appear

21 for her hearing to challenge that.

22 I would point out that there needs to be a

23 correction made in the findings of fact. The date

24 of her plea was September 20th, 1982, and not 1981

25 as it says. So I'd ask the Commission to consider

0015

1 the recommendation based upon that.

2 CHAIRMAN SMITH: Can that be corrected on

3 the record or --

4 MR. MULLALLY: Yes.

5 CHAIRMAN SMITH: Okay. So the final order

6 will show that?

7 MR. MULLALLY: Somebody can move the

8 amendment and then move it adopted as amended.

9 CHAIRMAN SMITH: All right. We have

10 argued this case before --

11 MR. YOST: That's correct.

12 CHAIRMAN SMITH: -- whether a plea --

13 where there's not actually sentencing on it. The

14 question is at play again. So I think you're right

15 on termination.

16 Any questions on the part of the

17 Commissioners?

18 Do we have a motion to approve the action

19 in connection with Stephanie Lewis, 02-021?

20 COMMISSIONER ADORJAN: I'll move

21 Resolution 02-021 as amended.

22 COMMISSIONER NIKOLAISEN: Second.

23 CHAIRMAN SMITH: Call the roll.

24 MS. FRANKS: Commissioner Smith?

25 CHAIRMAN SMITH: In favor.

0016

1 MS. FRANKS: Commissioner Nikolaisen?

2 COMMISSIONER NIKOLAISEN: Favor.

3 MS. FRANKS: Commissioner Battle?

4 COMMISSIONER BATTLE: In favor.

5 MS. FRANKS: Commissioner Adorjan?

6 COMMISSIONER ADORJAN: In favor.

7 MS. FRANKS: By your vote you have adopted

8 Resolution No. 02-021 as amended.

9 CHAIRMAN SMITH: The next item involves

10 Daniel Goff, 02-022.

11 MR. MULLALLY: Judge Wilson will make that

12 presentation.

13 CHAIRMAN SMITH: Good morning, Judge

14 Wilson.

15 JUDGE McCORMICK WILSON: Good morning. I am tempted

16 to just say ditto. This man is really in a bind.

17 He pleaded guilty to a felony in 1978. He was

18 18 years old. He took a CB out of an automobile.

19 It would have been a misdemeanor except that it

20 involved a motor vehicle and turned it into a

21 felony. There's nothing in the record to indicate

22 that he had done anything since illegal or wrong.

23 However, it's my conclusion that the

24 Commission has no leeway at all. He has violated

25 the statute. He has pleaded guilty and is not

0017

1 eligible for licensure.

2 CHAIRMAN SMITH: It's a tough fact

3 situation, but I think you're right, we don't have

4 any discretion on a conviction of felony.

5 JUDGE WILSON: His attorney, Van Adams,

6 made a very forceful argument about the closure of

7 this record under the other statutes. And it may

8 be that if he can find enough people that will help

9 him take it up to Kansas City, Kansas City could

10 say that it didn't mean what it said and what the

11 statute doesn't mean, but I can't and you can't.

12 CHAIRMAN SMITH: Any questions on the part

13 of the Commissioners?

14 COMMISSIONER ADORJAN: No. I'd just like

15 to amplify what you just said. I think it's a very

16 difficult situation reading this case, and I

17 believe he just turned 18 years old and it's a

18 felony for boosting a CB in 1978. It's terrible

19 circumstances, but the rules are the rules.

20 JUDGE WILSON: He could be the poster boy.

21 COMMISSIONER BATTLE: I think you're

22 right.

23 CHAIRMAN SMITH: The only solution, I

24 guess, is changing the statutes. We have no

25 discretion, as you pointed out.

0018

1 JUDGE WILSON: Well, the discretion that

2 you have on licensing him would not help if the

3 casino cannot hire him. It's a two-point argument

4 as Mr. Bradley pointed out.

5 CHAIRMAN SMITH: Any other questions?

6 If not, do we have a motion in connection

7 with 02-022?

8 COMMISSIONER NIKOLAISEN: I move for

9 approval.

10 COMMISSIONER BATTLE: I'll second.

11 CHAIRMAN SMITH: The motion has moved the

12 hearing officer's findings that licensure is

13 denied. Is there a second?

14 COMMISSIONER BATTLE: I do.

15 CHAIRMAN SMITH: Call roll.

16 MS. FRANKS: Commissioner Smith?

17 CHAIRMAN SMITH: Favor.

18 MS. FRANKS: Commissioner Nikolaisen?

19 COMMISSIONER NIKOLAISEN: Favor.

20 MS. FRANKS: Commissioner Battle?

21 COMMISSIONER BATTLE: In favor.

22 MS. FRANKS: Commissioner Adorjan?

23 COMMISSIONER ADORJAN: In favor.

24 MS. FRANKS: By your vote you have adopted

25 Resolution No. 02-022.

0019

1 MR. MULLALLY: Mr. Chairman, I should

2 comment that they probably left at this point, but

3 a couple of years ago we decided to abate, and we

4 previously just had one hearing officer, and we

5 decided to abandon that setup in favor of having

6 three to kind of split the cases up by the type and

7 location in order to be more efficient and to save

8 costs. And it has proven to do both. All three

9 hearing officers have been doing a very good job of

10 moving their docket. The decisions have been very

11 thorough and well written. And I think the setup

12 has served us well, and all three of them are doing

13 a good job.

14 CHAIRMAN SMITH: What's our status on

15 backlog? Are we caught up? I know at one time we

16 were quite a bit behind.

17 MS. FRANKS: We're caught up. We have

18 quite a few hearings ahead of them.

19 COMMISSIONER BATTLE: That sounds good.

20 CHAIRMAN SMITH: At one time we were at

21 least a year behind, I know.

22 MR. MULLALLY: It's done very well.

23 Also, before we move into the staff portion

24 of the presentation, I think it is appropriate to

25 mention today is what used to be known as

0020

1 Secretary's Day. I now understand it's called

2 Dedicated Personal Assistant Day or something like

3 that. And I think I would be incredibly remiss if

4 I didn't mention, not only my assistant, but the

5 number of those that assist the deputy directors

6 and other people throughout the staff.

7 Angie, in all honesty and without

8 overstating this, is the most dedicated and

9 effective assistant that I've ever been around, not just

10 worked with, but been around. And I'm not really

11 sure how I'd get by without her. Everybody helps

12 her out in our section as well. And there's a

13 number of others throughout the Commission staff,

14 but I think they deserve our appreciation.

15 CHAIRMAN SMITH: I think we all appreciate

16 Angie's help. She is responsible about getting

17 agendas to us and informing us on what's going on.

18 We appreciate it, I think as well as the other

19 people. I think that's nice that you're going to

20 take them all out to lunch today. We'll try to get

21 through in time to have plenty of time to save for

22 lunch.

23 COMMISSIONER BATTLE: I think she takes

24 good care of the Commissioners, too, and I

25 appreciate that.

0021

1 MR. MULLALLY: Tab J is a very minor

2 proposed amendment to the Commission records

3 rule. This will make it clear and allow us to

4 store records at our Kansas City and St. Louis

5 offices, but most importantly at each gaming office

6 facility. Right now we keep a copy -- or I guess,

7 do we keep an original?

8 MS. DEBBIE FERGUSON: Copy.

9 MR. MULLALLY: A copy of every Level II

10 file. So every employee at the casino, waitresses,

11 dealers, everything is kept here in addition to all

12 the casino sites. It's an incredible burden, and

13 not only to keep these files, but to make sure they

14 match each other. And what we would like to do is

15 maintain the official copy at the gaming facility,

16 which is the place where it belongs and it's most

17 efficient to keep it, and not maintain a copy

18 here. And this rule would allow us to do that.

19 CHAIRMAN SMITH: I just had one question

20 that occurred to me. Do we have any policy on the

21 destruction of records? Is there any state statute

22 that specifies or --

23 MR. MULLALLY: Yes. There is a state

24 statute and our policy is consistent with that. In

25 fact, we have to submit -- I sign a letter every

0022

1 year that is prepared by our records custodian

2 certifying to the Secretary of State's Office that

3 we were in compliance with their recordkeeping and

4 retention requirements. Now, we are going to --

5 the copy at the boat is not going to be the only

6 copy, right? We're either going to have a digital

7 copy or some other back up. So in case something

8 were to happen to that, fire or other disaster, we

9 wouldn't be wiped out.

10 COMMISSIONER BATTLE: I think I heard you,

11 Kevin, say that they had to match, meaning if one

12 was adjusted, the other one would be adjusted.

13 MR. MULLALLY: Yes.

14 COMMISSIONER BATTLE: I know that's the

15 danger in having more than one copy. How would you

16 propose that if you had it digitally someplace

17 else?

18 MR. MULLALLY: Debbie, do you want to

19 address that?

20 MS. FERGUSON: Well, I'm not sure as far

21 as the digital imaging how we're proposing to go

22 to, we have to work out all the kinks, so I'm not

23 going to sit here and say we have a fool-proof

24 plan. But the general concept is that these Level

25 II records, the original records start at the

0023

1 casino sites and would stay at that site, and that

2 would be where we would go to get the official

3 record. But as the employee turnover occurs,

4 because of storing problems, that when it becomes

5 an inactive file, it would be shipped and then

6 retained at the Jeff City office.

7 At that point we have the ability here

8 today to go ahead and image those documents, and

9 then we don't have to worry as much as far as our

10 file space downstairs. Now, to say we have worked

11 out totally the active part, again, to tell you

12 today, the Level II active records would be at the

13 casino sites.

14 COMMISSIONER BATTLE: So then the official

15 record would be the one at the casino site?

16 MS. FERGUSON: That's correct.

17 CHAIRMAN SMITH: Do we have sufficient

18 storage space at the casinos until they can be sent

19 here?

20 MS. FERGUSON: Yes.

21 MR. MULLALLY: Yes.