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1 BEFORE THE MISSOURI GAMING COMMISSION

STATE OF MISSOURI

5 BEFORE: Robert Smith, Chairman

Dr. Muriel W. Battle, Commissioner

6 Floyd Bartch, Commissioner

7 BY TELEPHONE:

8 Lynne R. Nikolaisen, Commissioner

10 HELD AT:

3417 Knipp Drive

11 Jefferson City, Missouri

12 August 28, 2002

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1 CHAIRMAN SMITH: Call the meeting to

2 order. Will you call roll, please?

3 MS. ANGIE FRANKS: Chairman Smith.

4 CHAIRMAN SMITH: Present.

5 MS. FRANKS: Commissioner Nikolaisen.

6 COMMISSIONER NIKOLAISEN: Present.

7 MS. FRANKS: Commissioner Battle.

8 COMMISSIONER BATTLE: Present.

9 MS. FRANKS: Commissioner Adorjan.

10 Commissioner Bartch.

11 COMMISSIONER BARTCH: Present.

12 CHAIRMAN SMITH: Good morning, Lynne.

13 COMMISSIONER NIKOLAISEN: Good morning.

14 CHAIRMAN SMITH: Everything under

15 control in St. Louis?

16 COMMISSIONER NIKOLAISEN: So far so

17 good.

18 CHAIRMAN SMITH: Okay. The first order

19 of business is the consideration of minutes of June

20 24, 2002. Any objections or changes in the

21 minutes?

22 COMMISSIONER BATTLE: I move approval.

23 CHAIRMAN SMITH: Move that the minutes

24 be approved as published. Is there a second?

25 COMMISSIONER NIKOLAISEN: Second.

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1 CHAIRMAN SMITH: Any discussion? If

2 not, call the roll.

3 MS. FRANKS: Chairman Smith.

4 CHAIRMAN SMITH: In favor.

5 MS. FRANKS: Commissioner Nikolaisen.

6 COMMISSIONER NIKOLAISEN: Favor.

7 MS. FRANKS: Commissioner Battle.

8 COMMISSIONER BATTLE: In favor.

9 MS. FRANKS: Commissioner Bartch.

10 COMMISSIONER BARTCH: Favor.

11 MS. FRANKS: By your vote, you've

12 adopted the minutes of the June 24, 2002, meeting.

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

14 item on the agenda is the consideration of a series

15 of Hearing Officer recommendations, the first three

16 being handled by Hearing Officer Thad McCanse, who

17 will make the presentation.

18 CHAIRMAN SMITH: Good morning, Judge

19 McCanse.

20 MR. THAD MCCANSE: Good morning, your Honor,

21 I mean, Mr. Chairman. I understand you're officially

22 Mr. Chairman.

23 COMMISSIONER BATTLE: It's official

24 now.

25 CHAIRMAN SMITH: You may proceed.

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1 MR. MCCANSE: I've been advised in the

2 interest of time to try to be brief, which is

3 difficult for me, as you may know. However, the

4 first case, Sharon Nelson, is one where a Trooper,

5 with the first day on-the-job, was faced with a

6 problem involving an employee with her first day in

7 that particular area, and the first day of the second

8 week.

9 Sharon was told to cover a Security

10 Officer during a 30-minute lunch break and went down

11 -- she had not been told what she was supposed to do.

12 She was just told go down there and cover for him.

13 She went down and saw two people with a cart and said

14 what am I supposed to do? They said you escort us to

15 the bank, so she said okay.

16 She noticed that the door had been

17 propped open with a little plastic tray, but she

18 thought nothing of it at that time because no one

19 told her what she was supposed to do or that the door

20 should be kept closed. In the meantime, the Trooper

21 came down, found the situation, and as he should, he

22 started an investigation, and as a result, a charge

23 was brought.

24 What he didn't do, and which is

25 unfortunate, is talk to her, because he might have

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1 found out that she was new there, that she had

2 received no training, that although there was over a

3 million dollars worth of merchandise or tokens in the

4 coin room, there was apparently no loss or no problem

5 and that she was gone 20 to 25 minutes, and then she

6 came back, why, she went back to her regular duties,

7 and then later was found to -- that she had been

8 charged with a 24-hour suspension as a result.

9 A collateral matter is the question of

10 service, which I mentioned on the second page of the

11 report, where I suggested to make two rules

12 consistent with each other, there should be some rule

13 changes.

14 We've had problems with service in some

15 of my cases, and I think some others from time to

16 time, but I thought under the circumstances, that the

17 one who should have been disciplined was the man who

18 propped the door open, and the casino really didn't

19 cover itself by glory by sending an untrained and

20 unknowledgeable person down to that particular duty.

21 So contrary to the recommendation, I thought that

22 there should be no penalty in this case.

23 CHAIRMAN SMITH: Anyone have any

24 questions of the Hearing Officer?

25 COMMISSIONER BATTLE: No, I think it

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1 was well-written because that was the first thing

2 that occurred to me, who really was at fault if she

3 had received no training.

4 CHAIRMAN SMITH: Wonder on these why

5 the casino isn't the one who should be before us

6 instead of the individual.

7 MR. MULLALLY: We should note that

8 because we bifurcate these hearings, we decided that

9 individually that Mr. McCanse didn't have the benefit

10 of knowing that there were other disciplines

11 associated with these incidents, and there were other

12 parties, her supervisor, and I believe maybe also the

13 casino, but three others were disciplined in

14 association with this particular incident.

15 CHAIRMAN SMITH: Mr. Bradley, do you

16 have anything you want to say about this case?

17 MR. MIKE BRADLEY: No, I think we presented

18 all the information that was there and I don't want

19 to re-argue it without her having the benefit of

20 arguing it as well.

21 CHAIRMAN SMITH: It's your pleasure

22 then. Any other questions? If not, do we have a

23 motion to either approve or disapprove the

24 recommendation of the Hearing Officer?

25 COMMISSIONER BATTLE: Well, I move that

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1 we support the recommendation of the Hearing Officer.

2 COMMISSIONER NIKOLAISEN: Second.

3 CHAIRMAN SMITH: Any further

4 discussion? If not, call the roll.

5 MS. FRANKS: Chairman Smith.

6 CHAIRMAN SMITH: Favor.

7 MS. FRANKS: Commissioner Nikolaisen.

8 COMMISSIONER NIKOLAISEN: Favor.

9 MS. FRANKS: Commissioner Battle.

10 COMMISSIONER BATTLE: In favor.

11 MS. FRANKS: Commissioner Bartch

12 COMMISSIONER BARTCH: Favor.

13 MS. FRANKS: By your vote, you've

14 adopted Resolution Number 02-059.

15 MR. MCCANSE: The second case is Keith

16 Ganaway versus Commission, and in there, there was a

17 60-hour suspension proposed for the incident. He was

18 a member of a team that went around picking up bill

19 validator boxes, which have cash in them, and then

20 replacing them with an empty box.

21 This particular team had four people.

22 One opened the machine, the Petitioner was the one that

23 took out the cash -- the box with the cash. Someone

24 else was supposed to do a third thing, and the fourth

25 man was to put the empty box back in so that money

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1 could be re-inserted in the machine. The Petitioner

2 is the only one still with the casino.

3 My problem with this is that the

4 preliminary order did not charge him with the

5 internal control standard that they finally relied on

6 during the hearing, but instead, with a section of

7 the state regulations, which I don't think is

8 applicable at all.

9 Even more of a problem is that the

10 statement of facts of the preliminary order decided

11 that it was not his job to replace the empty box,

12 that that belonged to a fourth employee, one of those

13 who was no longer employed.

14 The box being empty was no problem as

15 far as the loss of potential money is concerned. It

16 was out of the machine for about an hour, and the

17 only problem was that people who use that machine

18 couldn't get change by putting a bill in.

19 I thought that the preliminary order

20 was, in fact, flawed, because it didn't charge him

21 with the precise violation that they later tried to

22 prove at the time of the hearing, and further, the

23 preliminary order, on its face, said that a fourth

24 man was the one responsible for not putting the box

25 in.

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1 The Trooper said that in his opinion,

2 every man on the team had that duty to make sure that

3 everything was done right, but that was his opinion,

4 and I didn't find any evidence to support that, and

5 therefore, again, I recommended that there be no

6 discipline imposed under the circumstances.

7 CHAIRMAN SMITH: Any questions of the

8 Commissioner on this one? All right.

9 So what you're saying is that we don't

10 have a rule that wasn't correctly -- the rule wasn't

11 cited to have been sufficient grounds to impose the

12 penalty on him?

13 MR. MCCANSE: Right, I don't think he

14 was given due notice of what he was really charged

15 with, which to me is a necessary element to have a

16 fair hearing.

17 CHAIRMAN SMITH: It really wasn't his

18 duty to do this anyway.

19 MR. MCCANSE: No, under the

20 circumstances, no, and sometimes when they have three

21 men instead of four, why, they do help out on these

22 other jobs, and in this case, there were four people,

23 and he was one watching pulling the cash out, not

24 putting the box back in.

25 CHAIRMAN SMITH: Are there any other

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1 questions? If not, do we have a motion?

2 COMMISSIONER NIKOLAISEN: I move for

3 approval.

4 CHAIRMAN SMITH: Is there a second?

5 COMMISSIONER BATTLE: Second.

6 CHAIRMAN SMITH: Call roll.

7 MS. FRANKS: Chairman Smith.

8 CHAIRMAN SMITH: Favor.

9 MS. FRANKS: Commissioner Nikolaisen.

10 COMMISSIONER NIKOLAISEN: Favor.

11 MS. FRANKS: Commissioner Battle.

12 COMMISSIONER BATTLE: In favor.

13 MS. FRANKS: Commissioner Bartch.

14 COMMISSIONER BARTCH: Favor.

15 MS. FRANKS: By your vote, you've

16 adopted Resolution Number 02-060.

17 MR. MCCANSE: The next case is Harrah's

18 Maryland Heights versus the Commission, and in

19 reading this over before coming over today, I

20 discovered that I'd gotten pretty verbose.

21 CHAIRMAN SMITH: We already discovered

22 that.

23 MR. MCCANSE: One of my problems was

24 that the preliminary order was signed by the

25 Chairman, so I want to be sure that I've covered all

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1 bases, at least adequately.

2 The key, if I may use it in this case,

3 to this case, is the casual way that they handled

4 keys. The -- they have what they call sensitive

5 keys. One of which is a key that opens -- or one of

6 two keys that opens a vault. It takes two to do it,

7 but each key is sensitive.

8 The Commission's minimum control

9 standards provide that there should be strict

10 control over the custody and issuance of sensitive

11 keys. Here, the keys were given to the man who

12 signed them out, who gave them to a dispatcher, who

13 gave them finally to a chain of three other people, the

14 last one of which left it on somebody's desk when no

15 one was around and went home.

16 The casino investigated this

17 vigorously saying that there wasn't anything against

18 what they call the secondary dissemination of it, but

19 there is some language in there. For example, the

20 key should be returned to the custody, which I

21 discussed in the Findings of Fact and Final order,

22 and that is that return to custody doesn't mean

23 return to the custody to the individual who got it,

24 but it means return the custody of the casino's bank

25 or the one where it came from in the first place.

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1 This was not done.

2 Also, there was a key log that was

3 supposed to be maintained to show who had possession

4 of the key. There is a key log, and what it shows

5 is that somebody had possession of it, but the entry

6 was false, and he said he returned it when he hadn't.

7 There was also a key list, but that in itself is not

8 a log, and is not part of what the rule requires to

9 be kept.

10 I think that there is some question

11 here, too, of the responsibility for the employees

12 who had gone through this procedure. There's no

13 showing that the employees were doing anything other

14 than what the casino was allowing. In other words, this

15 seemed to be a procedure that the casino had, in

16 effect, adopted by allowing the key list and the keys

17 to be distributed away from the one who originally

18 got it.

19 There's no evidence, by the way, as to

20 why it was necessary for others to have the key.

21 That matter just was plain not touched on. There was

22 a question of the, I think, the -- Harrah's raised

23 the issue of constitutionality of the requirement of

24 the burden of proof being on the Petitioner to show

25 by clear and convincing evidence why it should not be

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1 penalized.

2 CHAIRMAN SMITH: That's a

3 constitutional issue on this.

4 MR. MCCANSE: Yes, there is. They

5 raised that constitutional issue, but I don't think

6 --

7 CHAIRMAN SMITH: What is the issue? I

8 don't understand.

9 MR. MCCANSE: The issue is that it's a

10 denial of due process that unfairly shifts the burden

11 of proof to prove yourself innocent instead of making

12 the other side prove that you've done something

13 wrong, and not only that, by a standard of clear and

14 convincing evidence rather than by a preponderance of

15 the evidence.

16 I didn't give much of a credence to

17 that claim or defense. In the first place, the

18 Commission can't make the statute or even a rule

19 unconstitutional. In the second place, I don't think

20 that in a restricted, regulated business, like the

21 gambling industry, that a higher requirement, such as

22 clear and convincing evidence, is unfair or uncalled

23 for, and in the third place, in this case I thought

24 that there was even a preponderance of the evidence

25 to show that the rules had been violated and that

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1 there should be some penalty.

2 The penalty that was recommended was

3 $25,000. Part of the charge was that there was an

4 ongoing practice by the casino of allowing

5 unauthorized people to have access to keys. There's

6 just simply no evidence of that. There was evidence

7 of one prior incident where the door had not been

8 locked, which was a breach of security.

9 Also, the casino did take immediate

10 action to prevent loss by notifying surveillance,

11 changing the locks, and taking other steps to be sure

12 that no damage had been done. There was no loss as a

13 matter of fact. However, I think that because of the

14 casual way, again, that they allowed keys to be

15 handled, that some fine was warranted.

16 I'll admit that I chose the $10,000

17 figure somewhat arbitrarily, but one that I thought

18 would be reasonable under the circumstances.

19 CHAIRMAN SMITH: Any questions

20 concerning this case? Did Maryland Heights indicate

21 that in the future they're going to change their policy

22 on this?

23 MR. MCCANSE: There was nothing in the

24 records that show that, no. In fact, they defended

25 their policy.

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1 CHAIRMAN SMITH: Is there any reason

2 why the key couldn't go back to the bank? I mean,

3 why it was, in other words, isn't that the way it was

4 supposed to happen?

5 MR. MCCANSE: The key just plain

6 disappeared. I don't know what happened, and there's

7 no reason that I can think of why at least it

8 couldn't have gone back to the guy that took it out

9 and put it in the bank, or one of the others could

10 have taken responsibility to be sure that the key got

11 someplace secure rather than on a dispatcher's desk.

12 COMMISSIONER BATTLE: Even though you

13 labeled it as a casual way that they handled the key,

14 did they respond to that?

15 MR. MCCANSE: Their response was that

16 they were allowed to do this. They did say at one

17 point, however, that even if there should be a

18 penalty, it shouldn't be that much, so I did go along

19 with them for that.

20 CHAIRMAN SMITH: Any other questions?

21 What's your pleasure? Motion one way or the other

22 either to approve or disapprove.

23 COMMISSIONER BATTLE: Well, I'll move to

24 approve the Hearing Officer's recommendation to

25 Resolution 02-061.

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1 CHAIRMAN SMITH: Motion to adopt the

2 Hearing Officer's recommendations on 02-061. Is

3 there a second?

4 COMMISSIONER BARTCH: Second.

5 CHAIRMAN SMITH: There's a second. Any

6 further discussion? Will you call roll, please?

7 MS. FRANKS: Chairman 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 MS. FRANKS: Commissioner Bartch.

14 COMMISSIONER BARTCH: Favor.

15 MS. FRANKS: By your vote, you've

16 adopted Resolution Number 02-061.

17 MR. MULLALLY: Thank you, Mr. McCanse.

18 Before we go on to the items under Tab F, I should

19 mention that our Public Information Officer, Harold

20 Bailey, is in the back and he has materials

21 associated with the meeting, should anybody from the

22 media or anyone else wish to have some of the

23 paperwork that we have.

24 In addition, I should congratulate you,

25 Mr. Smith, on being appointed Chairman. That was

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1 done recently by the Governor and Harold also has

2 copies of a release with the appropriate information

3 regarding that appointment, and you've been pulling

4 your load as Acting Chairman, but didn't get paid for

5 it.

6 CHAIRMAN SMITH: Someone was needed to

7 sign the annual report, I guess. I don't know if

8 congratulations or condolences are in order, but

9 thank you, Kevin.

10 MR. MULLALLY: The remaining Hearing

11 Officer recommendations will be presented by Judge

12 McCormick Wilson.

13 CHAIRMAN SMITH: Good morning, Judge

14 Wilson.

15 JUDGE MCCORMICK WILSON: Good morning.

16 CHAIRMAN SMITH: I apologize for being

17 so early this morning.

18 JUDGE WILSON: Well, I had a long way

19 to travel. I think it's nice that you've gotten out

20 of the Vice business, though.

21 CHAIRMAN SMITH: Yes, I'm glad to hear

22 that, too.

23 JUDGE WILSON: I have a series here

24 this morning. The first, Sandy Speiser, 02-063. She

25 was a 19-year-old slot attendant, and video showed

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1 that she picked up tokens from a patron's chair, put

2 them in the slot machine, pushed the button, walked

3 away. She's charged with being under age.

4 She was not old enough to gamble. She

5 was charged with taking money that she shouldn't

6 have, she was charged with gambling on her own boat.

7 I found her explanation that she was testing the

8 machine not to be credible.

9 In the first place, to test the

10 machine, you have to have a patron that's complaining

11 about the drop, or you have to have some indication

12 that the machine was not working properly. She

13 didn't have a patron, she didn't test the machine

14 that the patron was using. I just didn't believe her

15 story. I recommend that her license be revoked.

16 CHAIRMAN SMITH: I just have a question

17 about the age. Do we have a minimum age for

18 employees?

19 JUDGE WILSON: Not that I'm aware of.

20 MR. MULLALLY: The statute allows for

21 persons age 18 to engage in certain activities on the

22 riverboat.

23 COMMISSIONER BATTLE: And the gambling

24 age is?

25 MR. MULLALLY: Gambling age is 21.

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1 CHAIRMAN SMITH: That's kind of an

2 indication if you hire people that young to maybe do

3 it. Have you given any thought to making a rule to

4 make it 21?

5 MR. MULLALLY: Well, it's a legislative

6 issue. It was heavily debated in the legislature in

7 1994 and revisited, I believe, in 1998 or '99, and

8 the consensus of the legislature was to allow for 18-

9 year-olds to engage in certain activities on the

10 riverboat. They couldn't be dealers or things of

11 that nature, but there are certain positions in which

12 they are eligible to work and hold a license.

13 CHAIRMAN SMITH: Why did you decide on

14 revocation rather than some other form of punishment?

15 JUDGE WILSON: I didn't think you

16 wanted her working in a casino. She should not have

17 taken the money. There's a perfectly good process to

18 turn in money that's been left. She should not have

19 put it in the machine, and then particularly, she

20 should not have made up the story about testing the

21 machine.

22 CHAIRMAN SMITH: Any other questions?

23 Do we have any motions?

24 COMMISSIONER NIKOLAISEN: I move for

25 approval.

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1 CHAIRMAN SMITH: Second?

2 COMMISSIONER BATTLE: I'll second.

3 CHAIRMAN SMITH: Moved and seconded that

4 we approve the recommendation. Call the roll.

5 MS. FRANKS: Chairman Smith.

6 CHAIRMAN SMITH: I guess I'm going to

7 vote no on the question of penalty, not on the question

8 of the guilt.

9 MS. FRANKS: Commissioner Nikolaisen.

10 COMMISSIONER NIKOLAISEN: Favor.

11 MS. FRANKS: Commissioner Battle.

12 COMMISSIONER BATTLE: In favor.

13 MS. FRANKS: Commissioner Bartch.

14 COMMISSIONER BARTCH: Favor.

15 MS. FRANKS: By your vote, you've

16 adopted Resolution Number 02-063.

17 CHAIRMAN SMITH: Next one.

18 JUDGE WILSON: May I go back just one

19 moment to the Speiser case. She was taken off of the

20 floor, and she works in a different capacity for the

21 boat at this time.

22 CHAIRMAN SMITH: I assumed she lost her

23 job totally, but it was just in this particular

24 capacity.

25 JUDGE WILSON: The next, Gary Callison

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1 II, 02-064.