BEFORE THE GAMING COMMISSION

OF THE STATE OF MISSOURI

MONTHLY MEETING

MAY 23, 2002

ST. LOUIS, MISSOURI

Reported by Sherrie L. Merz, RDR, CSR

3 BEFORE THE GAMING COMMISSION

4 FOR THE STATE OF MISSOURI

11 THE MONTHLY MEETING of th Missouri Gaming

12 Commission commenced at the St. Louis University School

13 of Allied Health, Multipurpose Room, 3rd Floor, 3437

14 Caroline Mall, in the City of St. Louis, State of

15 Missouri, on the 23rd day of May, 2002, commencing at

16 10:00 a.m. in the morning of that day, said meeting

17 having been called to order by the Chairman, pursuant to

18 the issuance of due notice to all parties in interest,

19 recorded by Sherrie L. Merz, Registered Diplomate

20 Reporter, Certified Shorthand Reporter and Notary

21 Public, and the following is the transcript of the

22 record made of all proceedings had during the course of

23 said meeting.

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 A P P E A R A N C E S

3 COMMISSIONERS:

4 ROBERT SMITH, VICE-CHAIRMAN

5 LYNN R. NIKOLAISEN

6 DR. MURIEL W. BATTLE

7 J. JOE ADORJAN

9 ALSO PRESENT:

10 KEVIN MULLALLY, EXECUTIVE DIRECTOR

11 ANGELA FRANKS, ADMINISTRATIVE ASSISTANT

13 * * *

A G E N D A

Page

16 Call to Order 4

Consideration of Minutes 4

17 Consideration of Relicensure

President Riverboat Casino-Missouri 7

18 Presentation by Mayor Slay 53

The Missouri Gaming Company 63

19 Presentation by Mayor Birch 74

St. Joseph Riverboat Partners 80

20 Presentation by Commissioner Mann 91

IOC-Kansas City, Inc. 101

21 Presentation by Director Sterrick 109

Consideration of Relicensure-Suppliers 118

22 Consideration of Licensure-Level I 122

Consideration of Disciplinary Action

23 Michael Barbato 123

Missouri Gaming Company 125

24 Consideration of Rules and Regulations 130

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 (MAY 23, 2002, 10:00 A.M.)

2 CHAIRMAN SMITH: Call the meeting to order

3 please. Angie, will you call the roll?

4 MS. ANGIE FRANKS: Commissioner Smith.

5 CHAIRMAN SMITH: Present.

6 MS. FRANKS: Commissioner Nikolaisen.

7 COMMISSIONER NIKOLAISEN: Present.

8 MS. FRANKS: Commissioner Battle.

9 COMMISSIONER BATTLE: Present.

10 MS. FRANKS: Commissioner Adorjan.

11 COMMISSIONER ADORJAN: Present.

12 CHAIRMAN SMITH: I want to welcome the big

13 crowd today. Every time we come to St. Louis, we draw a

14 big crowd. I don't know what goes on up here. We seem

15 to get a lot of business up here. I guess the first

16 order of business is the consideration of the minutes of

17 the February 27, 2002 meeting. Any corrections?

18 COMMISSIONER BATTLE: I'll move to adopt.

19 CHAIRMAN SMITH: Motion to approve the

20 minutes --

21 COMMISSIONER NIKOLAISEN: Second.

22 CHAIRMAN SMITH: -- Moved and seconded to

23 adopt the minutes of February 27, 2002. Call the

24 roll.

25 MS. FRANKS: Commissioner Smith.

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 CHAIRMAN SMITH: In favor.

2 MS. FRANKS: Commissioner Nikolaisen.

3 COMMISSIONER NIKOLAISEN: In favor.

4 MS. FRANKS: Commissioner Battle.

5 COMMISSIONER BATTLE: In favor.

6 MS. FRANKS: Commissioner Adorjan.

7 COMMISSIONER ADORJAN: In favor.

8 MS. FRANKS: By your vote, you've adopted the

9 minutes of the February 27, 2002 meeting.

10 CHAIRMAN SMITH: Minutes of the March 15,

11 2002 meeting. Do we have any corrections or motion for

12 approval?

13 COMMISSIONER NIKOLAISEN: I move for approval.

14 COMMISSIONER BATTLE: Second.

15 CHAIRMAN SMITH: Moved and seconded to

16 approve the minutes of March 15, 2002. Call the roll.

17 MS. FRANKS: Commissioner Smith.

18 CHAIRMAN 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've adopted the

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 minutes of the March 15, 2002 meeting.

2 CHAIRMAN SMITH: Before we proceed further, we

3 have some matters involving litigation we need to talk

4 about in a closed session with our attorney, and we'll

5 probably be about 20, 10 or 15 minutes. And then we'll

6 come back and reopen the meeting and go ahead with the

7 agenda. Do we have a motion to go into executive

8 session?

9 COMMISSIONER ADORJAN: I move to close the

10 meeting to receive and discuss and consider the

11 following matters: Proprietary records, information and

12 summaries under 610.021(14) and 313.847.1 RSMo, and

13 closed minutes or other closed records under 610.021(14)

14 and 313.847.1 RSMo, and investigatory, proprietary and

15 application records, information and summaries under

16 610.021(14) and 313.847.1 RSMo.

17 CHAIRMAN SMITH: Do we have a second to that

18 motion?

19 COMMISSIONER NIKOLAISEN: Second.

20 CHAIRMAN SMITH: Call the roll.

21 MS. FRANKS: Commissioner Smith.

22 CHAIRMAN SMITH: In favor.

23 MS. FRANKS: Commissioner Nikolaisen.

24 COMMISSIONER NIKOLAISEN: In favor.

25 MS. FRANKS: Commissioner Battle.

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 COMMISSIONER BATTLE: In favor.

2 MS. FRANKS: Commissioner Adorjan.

3 COMMISSIONER ADORJAN: In favor.

4 CHAIRMAN SMITH: And where do we go for

5 executive session now, downstairs -- we'll be back

6 hopefully in 15 minutes. Of course, you've got a

7 lawyer's estimate of time. It may not be quite right.

8 (Closed executive session held off the

9 record.)

10 CHAIRMAN SMITH: Call the meeting back to

11 order. Before we go further, I apologize again for the

12 delay. It's something we did have to take up quickly.

13 Can you all hear us all right in the background, back of

14 the room? Anybody that can't hear us? We weren't sure

15 about the mike. Then I gather you can.

16 I guess the next order of business is taking

17 up the Resolution 02-038 involving renewal of a license

18 from The Missouri Gaming Company.

19 MR. KEVIN MULLALLY: The first one will be the

20 President Riverboat Casino-Missouri under tab C in the

21 book, and the procedure for the relicensing hearings has

22 been that we will first hear from the applicant. Then

23 we will either hear verbally or by written documentation

24 from the home dock city. Then there will be an

25 opportunity for public comment, followed by an

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 investigative summary from our background investigators

2 and finally staff recommendation prior to your

3 consideration of the resolution. So I believe Jim

4 Zweifel is here with the President Casino.

5 CHAIRMAN SMITH: I'm sorry, we did want to put

6 you first.

7 MR. JIM ZWEIFEL: Good morning, Commissioners,

8 good morning, Kevin, and good morning gaming staff. My

9 name is Jim Zweifel. I'm the Vice President and General

10 Manager of the President Casino, Laclede's Landing. I

11 will be doing the presentation today, covering those

12 points that the Commission staff has asked us to cover

13 during this licensing process.

14 Before I start, I'd like to introduce a few

15 people that are with me, actually quite a few people.

16 From our corporate office, we have John Aylesworth.

17 John is our President and Chief Operating Officer. We

18 also have from the corporate office Terry Wirginis.

19 Terry is our Vice Chairman of the Board and Vice

20 President of Marine and Development. We have Ralph

21 Vaclavik with us who is our Senior Vice President and

22 Chief Financial Officer. I also have quite a few people

23 here from the casino. All my directors I think are

24 here. I have nine directors that report directly to me,

25 and would you all stand. That's why there's so many

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 people here today.

2 I'd like to first take you to the presentation

3 outline and just show you what we're going to talk about

4 today. We will spend some time with capital

5 investments. I think that's the most important thing

6 that's happened in the last couple of years; revenue

7 admission results, agreements with the City of St. Louis

8 and our compliance with the various covenants in there.

9 We'll talk about the revenue we generated for the City

10 of St. Louis, and we'll talk about the other topics

11 we're requested to cover, employment, our involvement in

12 the community, responsible gaming, and the crime

13 statistics in the St. Louis area.

14 Before I get started specifically on the

15 capital investment, I'd like to just make a couple of

16 comments. We today are very proud of our casino,

17 Laclede's Landing, President Casino Laclede's Landing.

18 We've done a lot in the last couple of years. We've

19 made significant investments. We are a real competitive

20 force in the St. Louis market.

21 Two years ago about this time, we had a market

22 share percentage of 8 percent. Today we're hovering

23 right around the 11 percent area. We've made

24 significant improvements, not only to the casino

25 product, and I'm talking about the new site, our slot

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 machines, our table games, our food and beverage

2 product, but we've also made significant improvements in

3 the operation. We provide better service today. We're

4 friendlier, we're cleaner, our food and beverage is very

5 competitive, and we're seeing it in the financial

6 results, and we're seeing it in the feedback from our

7 guests. Today I'll show you those financial results,

8 and I think that those bear out what I'm talking about.

9 But the move up the river which happened in

10 December 2000 -- and thank you to the Commission and the

11 City of St. Louis and other authorities that approved

12 the move -- the move up the river was a tremendous win,

13 tremendous win for everyone, for President, for

14 President's employees, for the City of St. Louis, for

15 the State of Missouri and even more important for our

16 casino guests. So I wanted to let you know how we feel

17 about where we are today.

18 Page 1 -- I wanted to kind of set the stage

19 for these pictures here. Page 1 shows the old casino

20 site. The old site, you can see the parking. The

21 closest parking to the front door was right on the

22 levee. As you got out of the car, you tripped on the

23 cobblestones that slant down to the Mississippi River.

24 That was the closest parking. The next closest parking

25 was about three or four blocks away. The levee also was

CONCANNON & JAEGER St. Louis, Missouri (314) 421-1000

1 a spot where the valet parking was, so when you valet

2 parked, you dropped your car off on the levee, again a

3 slant down. There were many, many negatives related to

4 the old site. To sum it up, access to the front door

5 was very poor.

6 Moving on to page 2, this is the new location.

7 We're right in the middle of Laclede's Landing. We've

8 spent, invested $9 million in this new site. The

9 proximity of parking is much better than the old

10 location. Right across the street from our casino is

11 surface parking. We have a four-lane covered

12 porte-cochere which you see in the picture there. We

13 actually really became very competitive with this new

14 site, and we've gotten a lot of positive feedback from

15 it.

16 Page 3 shows the porte-cochere. The four-lane

17 entranceway, you drop your car off in there for valet.

18 In that porte-cocher