BEFORE THE
MISSOURI GAMING COMMISSION
STATE OF
MISSOURI
Meeting
December 12, 2002
St.
Charles City Hall
St. Charles, Missouri
BE IT
REMEMBERED that the above-entitled
matter came on for public
meeting in the Council Chambers
of the City of St. Charles,
St. Charles City Hall, 200
North Second Street, St.
Charles, Missouri, on the 12th
day of December, A.D., 2002,
commencing at the hour of
9:30 in the morning of that day, said meeting having
been
called to order by the
Chairman of the Missouri Gaming
Commission, pursuant to the
issuance of due notice to all
parties in interest, and the
following is the transcript
of the record made of all
proceedings had during the
course of said meeting.
A P P E A
R A N C E S
Robert Smith - Chairman
Dr. Muriel W. Battle -
Commission Member
Lynne R. Nikolaisen -
Commission Member
I N
D E X
Page
Call to Order - Chairman
Smith 3
Roll Call - Ms. Franks 3
Consideration of Minutes -
Chairman Smith 4
Consideration of Hearing Office Recommendations
Resolution No. 02-092 - Thad
McCanse 5
Resolution No. 02-093 - Thad
McCanse 10
Resolution No. 02-094 - Thad
McCanse 17
Resolution No. 02-095 - Thad
McCanse 22
Resolution No. 02-096 - Thad
McCanse 37
Consideration of Relicensure
of Certain Class A Licensees
Resolution Nos. 02-097 and
02-098 - Troy Stremming 46
Tony Raymon 81
Dave Albrecht 83
Remarks by Mayor Patti York
- 87
Investigative Report of the
Missouri Gaming Commission
re Resolution Nos. 02-097
and 02-098 by Corporal Tan
Davenport - 94
Consideration of Level I/Key
Applicants
Resolution No. 02-099 - Rick Wilhoit 97
Resolution No. 02-100 -
Kevin Mullally 100
1 P R O C E E D I N G S
2 CHAIRMAN
SMITH: I guess we're ready to
3 proceed. I'd like to
call the meeting to order.
4 I welcome everybody here.
5 The first order of business is consideration
6 of minutes of
the meeting of September 27, 2002.
7 Anybody find any corrections to the minutes?
8 MR. KEVIN MULLALLY: Mr. Chairman,we might want
9 to take the roll before we get started.
10 CHAIRMAN SMITH: That's probably a good idea.
11 You want it before the minutes. All right. Awful picky.
12 ADMINISTRATIVE ASSISTANT ANGIE FRANKS: Chairman
13 Smith.
14 CHAIRMAN SMITH: Present.
15 MS. FRANKS:
Commissioner Battle.
16 COMMISSIONER BATTLE: Present.
17 MS. FRANKS:
Commissioner Nikolaisen.
18 COMMISSIONER NIKOLAISEN: Present.
19 MS. FRANKS:
Commissioner Bartch.
20 (No response.)
21 CHAIRMAN SMITH: I might state for the record
22 that Mr. Bartch is not here because of a serious illness
23 in the family.
Otherwise he would be here, too.
24 How about the minutes. Any corrections to
25 the minutes?
3
1 (No response.)
2 CHAIRMAN SMITH: If not, do we have a motion
3
to approve them?
4 COMMISSIONER BATTLE: Move.
5 COMMISSIONER NIKOLAISEN: Second.
6 CHAIRMAN SMITH: Moved and seconded the
7 minutes be approved.
8 Call the roll.
9 MS. FRANKS:
Chairman Smith.
10 CHAIRMAN SMITH: In favor.
11 MS. FRANKS:
Commissioner Nickolaisen.
12
COMMISSIONER
NICKOLAISEN: Favor.
13 MS. FRANKS:
Commissioner Battle.
14 COMMISSIONER BATTLE: Favor.
15 MS. FRANKS:
By your vote, you've approved
16 the minutes
of the September 27, 2002 meeting.
17 CHAIRMAN SMITH: The next order of business,
18 I believe, is consideration of the Hearing Officer
19 reports, or do we have a change on that?
20 MR. MULLALLY:
No, that's correct. Hearing
21 Officer McCanse is here to make a presentation.
22 CONSIDERATION OF HEARING OFFICER RECOMMENDATIONS
23 (Resolution No. 02-092)
24 MR. THAD McCANSE: Mr. Chairman, members of the
25 Commission.
4
1 CHAIRMAN
SMITH: Good morning, Judge McCanse.
2 MR. McCANSE:
Thank you, sir.
3 I hate to start off with a negative, but I
4 noticed in rereading the order on the first matter,
5 Harrah's Maryland Heights, that on Paragraph 33 in Line 1
6 I omitted the numeral 5 from the citation. It should be
7 11 CSR 45-5.220 (3), and the same mistake was made in the
8 final order.
9 I'd like leave to amend the proposed final
10 order and findings of fact in that respect.
11 CHAIRMAN SMITH: What paragraph is that in?
12 MR.
McCANSE: Paragraph 33, Line 1. The rule
13 is cited other places correctly, but in those two
14 instances I omitted the numeral 5.
15 CHAIRMAN SMITH: Is there any objection to
16 amending the order at this time?
17 (No response.)
18 CHAIRMAN SMITH: Any question from legal
19 staff?
20 (No response.)
21 CHAIRMAN
SMITH: If not, why, you're
22 authorized to make those additions.
23 MR. McCANSE:
Thank you, Your Honor.
24 This involves a case of the duty of the
25 casino to preserve material in machine readable form for a
5
1 period of one year in regard to electronic gaming devices.
2 It came up because there had been a suspicion that an
3 employee and another person had been getting access to the
4 machines and removing some of the funds of the
5 coin-operated or the electronic gaming devices.
6 They requested the data from Harrah's, which
7 was able to furnish only part of it, and I think the month
8 of November, and then, or one month, there were about
9 three or four months where they could not do it, November
10 of 2000, February through April of 2001.
11 As a result, while the Highway Patrol did
12 obtain a warrant to charge one person with theft, the
13 county prosecutor decided there was not enough evidence,
14 and a certain second person was never charged.
15 The backup -- what happens is they have a
16 hard drive, and then they transcribe the material from the
17 hard drive to a magnetic backup tape.
18 There was a new system installed by the home
19 office people from Las Vegas and they left some tapes.
20 The tapes that they left were correct. However, the tapes
21 that were purchased locally, although they physically
22 looked similar, were incorrect, so that the data,
23 apparently it looked like it was being transcribed when,
24 in fact, it was not, you couldn't retrieve it.
25 And so, as a result, why, the investigation
6
1 was terminated and there was no finding or showing whether
2 or not a crime had been committed and, if so, who did it.
3 Harrah's had said that they are not
4 really required to keep backup tapes and that, in any
5 event, they may have been negligent, but they didn't do it
6 on purpose.
7 The Commission's position, which I agreed
8 with, is that they had an absolute duty under the rule to
9 provide for one year in machine readable form backup
10 material about who got into a slot machine, how much money
11 was there, and other information that is contained in the
12 computer.
13 Apparently, a slot machine is just a computer
14 of its own and there's an awful lot of data in it.
15 The Commission proposed a fine of $75,000.
16 The information supervisor locally was
17 college-trained and, while there was no intent to hide the
18 material, a mistake was made. Their own vice-president of
19 finance,
incidentally, agreed that they had a duty to
20 maintain the information, and was unable to or did not do
21 so.
22 I felt, therefore, that the staff's
23 recommendation of a $75,000 fine was warranted under the
24 circumstances.
25 CHAIRMAN SMITH: Does anyone have any
7
1 questions on this particular case?
2 (No response.)
3 CHAIRMAN SMITH: I was curious about the size
4 of the fine, whether this is consistent with what we're
5 doing in other similar cases, or whether this particular
6 one is unique?
7 MR. McCANSE:
The only other case I recall
8 where there was a fine, it was a $25,000 fine, and I
9 thought it should be reduced to ten. I don't know what
10 ever happened to that matter. I think that also involved
11 Harrah's in connection with their sensitive key recording.
12 I don't know of any other case, I haven't had any, where
13 there was a fine of this magnitude.
14 The rule provides a formula for a maximum
15 amount of fine which is up to $49,000,000. I said since
16 this was a small fraction of it, why, it seemed to be
17 allowable. The
$75,000 was the staff's recommendation.
18 I didn't see any reason to alter that. I don’t know how
19 Mr. Mullally feels about that.
20 MR.
MULLALLY: The staff's recommendation
21 would have been based on an assessment of prior similar
22 acts by other casinos.
23 I'm aware of at least a couple of records
24 violations at Harrah's North Kansas City, and Mike Bushmann
25 may have some additional information that's more specific.
8
1 CHAIRMAN SMITH: Is there anything you could
2 add to this? This is
a pretty important tape to keep
3 because it, apparently, resulted in, I mean that's the way
4 you can catch the people that are violating the law or
5 stealing, and I think it would certainly be important.
6 MR. McCANSE:
Well, there is that. And also
7 to show that he was innocent of anything. I mean rule it
8 in, rule it out. It
just thwarted the investigation when
9 it came down to it, so I thought it was pretty important
10 material to have available, and it wasn't there.
11 CHAIRMAN
SMITH: Any questions?
12 (No response.)
13 CHAIRMAN SMITH: If not, do we have a motion
14 to either approve or disapprove the recommendation?
15 COMMISSIONER NIKOLAISEN:
I move for approval
16 of resolution No. 02-092.
17 COMMISSIONER BATTLE: I second.
18 CHAIRMAN SMITH: Moved and seconded.
19 Further
discussion?
20 (No response.)
21 CHAIRMAN SMITH: If not, call the roll.
22 MS. FRANKS:
Chairman Smith.
23 CHAIRMAN SMITH: In favor.
24 MS. FRANKS:
Commissioner Nikolaisen.
25 COMMISSIONER NIKOLAISEN: Favor.
9
1 MS.
FRANKS: Commissioner Battle.
2 COMMISSIONER BATTLE: Favor.
3 MS. FRANKS:
By your vote, you've adopted
4 Resolution No. 02-092.
5 (Resolution No. 02-093)
6 MR. McCANSE:
The next matter is Harry Plitt,
7 who was a dealer in a Caribbean Stud game with which I'm
8 not familiar, but apparently it requires 52 cards, 13
9 in each suit.
10 CHAIRMAN SMITH: Most games do.
11 MR. McCANSE:
Well, yes, I'll concede that
12 point.
13 This is a companion to the case that the
14 Commission acted on, I think, a couple or three months
15 ago.
16 What happened is that a deck was put in use,
17 it's spread out so the back is showing, and then so the
18 face is showing, so that the opening supervisor and dealer
19 can view the cards to see that everything is in order,
20 there are no irregularities.
21 Mr. Plitt was the fourth of five dealers on
22 this particular occasion, apparently, the same cards being
23 used the whole time.
24 On the fifth dealer, one of the patrons
25 complained that there were two twos of spades and two
10
1 threes of spades, and there were 54 cards being
2 used instead of 52.
3 The tapes were reviewed by the Commission's
4 investigator, and it showed that a light on the shuffling
5 machine, which indicates a miscount, had been blinking
6 ever since the deck was first shuffled, and all through
7 five dealers, apparently.
8 The Commission's investigator did concede
9 that those machines malfunction quite often.
10 The first supervisor or dealer was given a
11 40-hour suspension, and that was handled by another
12 hearing officer, and I'm not quite sure of all the facts
13 in that matter.
14 The next three were never charged, nor was
15 the fifth dealer.
Why they picked Mr. Plitt and
16 recommended a 40-hour suspension was not known to me.
17 There wasn't any evidence made except that nobody else had
18 been charged besides the initial person, who was
19 suspended.
20 Plitt said that the patron might have
21 substituted the cards himself or herself, but there was no
22 evidence to show that, and I suppose when there's a
23 possible miscount of the cards, they are supposed to
24 notify the floor supervisor, and they cannot take the deck
25 out themselves, they have to get permission from somebody
11
1 else to do that.
This was not done.
2 I thought the 40 hours, under the
3 circumstances, was a bit much for the number four, where
4 three or four prior people had already been through this
5 whole thing and, apparently, nobody had told him that
6 something was wrong, but that there should be some
7 suspension.
8 So I recommended eight hours, which was kind
9 of arbitrary on my part, but I thought there should be
10 something, but not as much as the person who made the
11 initial error
who was, I think, more responsible.
12 CHAIRMAN SMITH: One thing that concerned me
13 in this preliminary order was I think you found that they
14 charged the man with the wrong regulation; isn't that
15 correct?
16 MR. McCANSE:
Yes, that's true.
17 CHAIRMAN SMITH: Paragraph 25, I think.
18 MR. McCANSE:
Right. And that is true.
19 There's no question about the facts, but the charge was
20 under the wrong regulation.
21 CHAIRMAN SMITH: What was he actually charged
22 with under this? Was
it because --
23 MR. McCANSE:
That referred to a Class A
24 licensee having some problem with the number of cards
25 involved. I've got
the rules here, but I don't remember
12
1 the details of it.
2 But that doesn't apply, really, to the person
3 who was the dealer, and I don't know what happened in the
4 first case either.
5 CHAIRMAN SMITH: Well, the thing that
6 concerns me, that I think we have an obligation as a
7 Commission to see that the charges are properly listed in
8 the preliminary order because the case is tried on that
9 basis, and it looks to me like if we're charging somebody
10 under the wrong rule, and even if we convict them, if they
11 were to appeal to the circuit court, I'm sure the circuit
12 court would throw that out, and it concerns me that we're
13 proceeding under that.
That bothers me.
14 And also it bothers me that only one out
15 of -- the original dealer, I can understand why he would
16 be charged, because he's the first man responsible. But
17 why you'd pick one of the other three out is difficult for
18 me to understand.
19 I really feel like that this is something
20 that should be dismissed if we can't -- if it's not filed
21 under the right rule, I don't see that we have any right
22 to proceed against
the person.
23 MR. McCANSE:
I don't have any -- I've taken
24 that position in some other matters, I think one that's
25 coming up later. In
fact, there's two others that are
13
1 coming up where the charge was, I think, somewhat faulty.
2 The thing that bothered me, though, that
3 there was, under
the facts that there was a warning that
4 had he said something to the supervisor, he would have
5 been entirely clear.
6 But I concede your point. If you were trying
7 this in a criminal context, why, you'd be thrown out. I
8 suppose it could be refiled. I don't know.
9 CHAIRMAN SMITH: I would think it possibly
10 could be.
11 MR. McCANSE:
So but I don't have any strong
12 feelings about that, Mr. Chairman. I do, and I think I've
13 pointed out on occasion, have some problems with the
14 charge not being quite in line with what the rule says.
15 CHAIRMAN SMITH: I understood we're taking
16 some steps to correct that in the future so this sort of
17 thing doesn't happen.
18 MR.
McCANSE: Right.
19 CHAIRMAN SMITH: So I think that we're
20 putting some controls in, but it looks to me like on this
21 particular one that we're not justified going ahead on it
22 when it's the
wrong charge.
23 I just move that the matter be dismissed, the
24 charges be dismissed for failure to file under the right
25 rule.
14
1 Is there a second to the motion?
2 COMMISSIONER BATTLE: Second.
3 CHAIRMAN SMITH: I have a second.
4
Discussion?
5 (No response.)
6 CHAIRMAN SMITH: If not, would you call the
7 roll?
8 MS. FRANKS:
Chairman Smith.
9 CHAIRMAN
SMITH: In favor.
10 MS. FRANKS:
Commissioner Nikolaisen.
11 COMMISSIONER NIKOLAISEN: Favor.
12 MS. FRANKS:
Commissioner Battle.
13
COMMISSIONER
BATTLE: Favor.
14 MR. MULLALLY:
Mr. Chairman, just for the
15 record, first of all, I think the criticism is quite
16 justified. We do
have an obligation to make sure we cite
17 the correct rule, and we have instituted some redundancies
18 in the process so that more than two or three people
19 review this prior to it coming before you, and I'm
20 confident that this will not happen again.
21 CHAIRMAN SMITH: Well, I'm glad to hear that,
22 and I understood you are taking steps to see that this
23 doesn't occur.
24 MR.
MULLALLY: And we're also implementing
25 some procedures to make sure that things don't get quite
15
1 this stale either.
2 CHAIRMAN SMITH: That was another -- we've
3 certainly improved over where we started out, but we can
4 still do better.
5 COMMISSIONER BATTLE: I also have a concern.
6 With the
blinking light on the shuffling machine, has
7 anything been done to correct that?
8 MR. McCANSE:
I think they may be using a
9 different machine now.
I have some recollection, I
10 believe there's a reference in the transcript that they've
11 taken a step to cure that problem. But, apparently, the
12 dealers don't pay much attention to it.
13 COMMISSIONER BATTLE:
That's my point. Why
14 have it if no one is going to pay attention to it.
15 MR. McCANSE:
My recollection is that there
16 were steps taken to correct that problem.
17
MR. MULLALLY: It's not only the
obligation
18 of the dealer, but also the pit supervisors. The dealers'
19 supervisors have an obligation to check that, as well. I
20 think it's just simply a training issue. I'm not aware --
21 Steve may have some additional information on this. I'm
22 not aware of any, you know, industry-wide equipment
23 changes.
24 CHAIRMAN
SMITH: I think that's kind of a
25 basic thing. Even an
amateur poker player usually counts
16
1 the cards in the deck.
2 MR.
MULLALLY: It's kind of like driving
your
3 car with the oil light on for another 10,000 miles.
4 MR. McCANSE:
One thing that did bother me
5 here is that the investigator said when the cards were
6 spread face up on the table, he could have seen that there
7 was a duplication, had he looked for it, but he didn't
8 look. The tape is
long gone, so he was just going from
9 his recollection.
But that was another problem at
10 Harrah's that has since been resolved, but you're
11 dismissing the case anyhow.
12 CHAIRMAN SMITH: Let's proceed to the next
13 case, then.
14 (Resolution No. 02-094)
15 MR. McCANSE:
The next case is Ana Atok.
16 This is a fiery little lady who is from the Philippines, I
17 think, a CPA,
and she was, I believe she's 69
18 years old.
19 She was a Gold Card Representative on the
20 turnstile where you're supposed to check people as they
21 come through. A 19-year old came through. She
22 didn't verify his identity or demand proof of his age.
23 There was a security officer that was
24 supposed to also be checking the turnstile, but he had
25 gone over to talk with somebody else and had his back to
17
1 the turnstile at the time the kid entered.
2 The boy
went ahead and got on the gaming
3 floor, but somebody spotted him, another security officer,
4 and asked for identification, showed that he was 19,
5 and they had him leave.
He did not actually gamble, but
6 he was on the floor.
7 I think it was some six months before they
8 told Mrs. Atok that she had done something wrong, and she
9 said "Why didn't you tell me in the first place so I
could
10 take a look and be sure it was me?" Again, it was the
11 surveillance tape that they reviewed to show that, indeed,
12 it was her on duty.
13 This,
again, is a case where they charged
14 with the wrong rule and the wrong statute.
15 But there is a statute that applies that
16 forbids minors to have access to the gaming floor.
17
CHAIRMAN SMITH: Was that
included in the
18 preliminary order, that statute?
19 MR. McCANSE:
Yes.
20 CHAIRMAN SMITH: Okay.
21 MR.
McCANSE: Oh, in the preliminary order,
22 no. No, not the one
specific to minors.
23 CHAIRMAN SMITH: Do we have the same problem,
24 then, as in the previous case?
25 MR.
McCANSE: Well, she may have solved it.
18
1 She got fired, or terminated, for some other reason,
2 apparently, before this ever came up, so that I thought
3 there should be some suspension or some punishment in case
4 she ever goes back.
She still, apparently, could have a
5 license.
6 But the thing that bothered me is that there
7 is a statute that prohibits minors from getting access to
8 the casino, and I think they were charged under a rule
9 which, again, referred to Class A licensees, and then
10 under an internal standard which didn't apply at all.
11 So the two references that they charged her
12 with doing something wrong were erroneous in themselves.
13 COMMISSIONER NIKOLAISEN:
Is this similar to
14 the previous case, in that if this were to go to an
15 appeals court it would probably be thrown out, dismissed
16 or --
17 MR. McCANSE:
There is a similarity. As a
18 matter of fact, they were charged with the wrong thing.
19 But having a minor in there, and having a
20 statute prohibiting minors from being in there is, I
21 thought, a separate matter.
I felt that I could
22 distinguish it. And
also I had recommended about the same
23 suspension as the previous case.
24 There was a violation of the statute.
25 CHAIRMAN SMITH: Yes, but the violation of
19
1 the statute wasn't listed in the preliminary order, was
2 it?
3 MR. McCANSE:
No.
4 MR. MULLALLY:
There was one correct citation
5 and one incorrect.
The minimum internal control was
6 correct.
7 MR. McCANSE:
No. The minimum internal
8 control, they conceded in the transcript, did not apply.
9 The one that they cited was MICS N-3(g). The correct
10 citation should have been MICS N-4(g).
11 MR. MULLALLY:
Okay.
12 MR. McCANSE:
So there was, apparently, a
13 mistake in the internal control standard citation.
14 CHAIRMAN SMITH: I guess the basic question,
15 your Paragraph 7, Section 313.812 seems to say that you
16 have to comply with all of the federal, state, or local
17 law or regulations.
18 Is that a sufficient charge to make the person
19 aware of what they are being charged with?
20 MR. McCANSE:
That I thought was more of a
21 recitation. The
charge itself is down in the penalty
22 proposed or,
rather, in Section 11, or Section 10.
23 Section 10 is where they have the charge, the specific
24 charge. The others
are recitations of things that --
25 CHAIRMAN SMITH: But the statute isn't cited
20
1 in either of those sections, is it?
2 MR. McCANSE:
No, not the minors statute.
3 That's 313.817.4,
which prohibits a minor from getting
4 access to the casino.
5 CHAIRMAN SMITH: I think in Paragraph 7 it
6 says failure to comply with Sections 313.800 to 313.850.
7 MR. McCANSE:
Yes, the whole thing.
8 CHAIRMAN SMITH: Would that get us by?
9 MR. McCANSE:
I'd hate to rely on that. It's
10 possible. There may
be discipline for that, and that
11 could be broad enough to cover this situation. But the
12 specific charge is set forth in Section 10.
13 CHAIRMAN SMITH: And this woman, is she still
14 working
there?
15 MR. McCANSE:
No. She was terminated.
16 CHAIRMAN SMITH: Terminated.
17 MR. McCANSE:
It wasn't clear why, and it may
18
not have had anything to do
with this incident.
19 So what I've recommended is that if she ever
20 comes back, then she'd have to have an eight-hour
21 suspension somewhere during her new tenure. I'm not sure
22 that she would ever come back.
23 CHAIRMAN SMITH: It looks to me like to be
24 consistent, we should take the same action as we did in
25 the prior case.
21
1 MR. McCANSE:
Well, I can't argue with that.
2 CHAIRMAN SMITH: Do we have a motion?
3 COMMISSIONER NIKOLAISEN:
I move for
4 dismissal of Resolution No. 02-094.
5 COMMISSIONER BATTLE: I second.
6 CHAIRMAN SMITH: Moved and seconded that we
7 dismiss Case No. 02-094 for the reasons of a defect in the
8 original complaint.
9 Let's call the roll.
10 MS. FRANKS:
Chairman Smith.
11 CHAIRMAN SMITH: In favor.
12 MS. FRANKS:
Commissioner Nikolaisen.
13 COMMISSIONER NIKOLAISEN: Favor.
14 MS. FRANKS:
Commissioner Battle.
15 COMMISSIONER BATTLE: In favor.
16 MS. FRANKS:
By your vote, you've dismissed
17 Resolution No. 02-094.
18 CHAIRMAN SMITH: Next case.
19 (Resolution No. 02-095)
20 MR. McCANSE:
Next case is Joseph Phan, who
21 in 1990, the record showed, he'd been arrested for
22 unlawful use of a weapon, and that showed up in his
23 application in 2001.
24 At the time of the incident, he was 19
25 years old. It
appeared that -- well, Mr. Phan is
22
1 Vietnamese, and it appeared that his brother, who spoke no
2 English, had gotten into some kind of a problem involving
3 traffic, or road rage or something, and a group followed
4 him to Phan's house where the brother was living, and Phan
5 told them to go away, and I don't know exactly what he
6 said, but they went away and came back with some
7 policeman, and the policeman took him down to the station.
8 He at least went
in the car with him.
9 He was fingerprinted. He was not handcuffed.
10 He was never charged with anything. They interrogated him
11 and said you can go home.
12
The record was closed under Section 610 of
13 the statutes.
14 Now, the Commission does have an exception
15 where they can get access to those records, and that's
16 what showed
up on the fingerprint check that was made
17 during his application for employment.
18 However, Section 610 in one of the sections
19 said that an arrest has occurred when there's been a
20 charge or a summons issued.
It means actual restraint of
21 a person where he submits to the custody of the officer
22 under authority of warrant, or otherwise, for a criminal
23 violation which
results in the issuance of a summons and
24 the person being booked.
25 He was not charged. He was not booked. He
23
1 was not restrained, at least in the sense of handcuffs.
2 Instead of that, he was questioned and let go.
3 There's another statute also dealing with
4 arrests which may be broad enough to cover this situation.
5 The problem is whether he -- I think that the
6 610 definition would apply, and there was no arrest.
7 But, in any event, he didn't believe he'd
8 been arrested, and so that he didn't feel that he had made
9 any intentional misstatement on his application, because
10 he doesn't have quite as clear a picture of crimial law in
11 Missouri and
in the law of this country.
12 He said I never had a chance to prove I was
13 innocent, and he was a little bit upset by the fact that
14 he wasn't allowed to go to court.
15 So that even if you feel that he had been
16 arrested, under the rules, the Commission has discretion
17 not to revoke a license of an individual where the
18 individual honestly believed that he had not made any
19 misstatement.
20 I think that was the case here, that if he
21 was wrong about being arrested, it was not intentional.
22 It was due to his ignorance of what the law is, and he
23 could make a pretty good case that he actually was not
24 arrested, so I recommended that the license should not be
25 revoked.
24
1 CHAIRMAN SMITH: You cited the case of State
2 versus Murdock in Paragraph 21, saying if you go for a
3 limited purpose of an investigative interview at the
4 police station, you're not under arrest.
5 Looks to me like this is probably what
6 happened here, isn't it?
7 COMMISSIONER NIKOLAISEN: Yes.
8 MR. McCANSE:
It sounds like it. The problem
9 comes with the burden of proof to show by clear and
10 convincing evidence that you're not guilty of something,
11 and if the burden of proof is on the Commission, it would
12 be clear that Phan would have no problem winning.
13 Since the burden of proof is on him, the
14 record is not clear as to exactly what transpired. But
15 you could make -- I mean it appears to be an investigation
16 rather than an arrest and they decided, obviously, there
17 was nothing to it, said go home and keep out of our hair.
18 Apparently, he has
ever since.
19 MR. MULLALLY:
Mr. Chairman, one of the
20 questions I had about this is that we seem to be focusing
21 almost entirely on the word arrest, and the application
22 asks whether you have ever been arrested, detained,
23 charged, indicted, convicted, pleaded guilty, or nolo
24 contendere, and I think whether he was detained is a more
25 appropriate focus for this particular case.
25
1 CHAIRMAN SMITH: Isn't it discretionary with
2 us on this type of case as to whether we find him guilty
3 or innocent? It's
not --
4 MR. MULLALLY:
Sure. I was just pointing out
5 we're focusing on arrest, and I'm not sure that that is
6 the appropriate word to focus on in that particular
7 question, given these particular facts.
8 MR. McCANSE:
We did talk a little bit about
9 detained at the hearing.
I had thought detention was
10 something more than an interrogation at the police
11 station.
12 COMMISSIONER NIKOLAISEN: I think I'd
13 mentioned in previous conversation I'm confused by both
14 these words, in a way, because I'm looking at a criminal
15 history record that says there was an arrest number, and I
16 don't know the police procedure.
17 When you are arrested, I guess you are
18
fingerprinted? Is there a form that this individual has
19 to sign or acknowledge the arrest? I'm just --
20 MR. MULLALLY:
Captain Bloomberg, I believe,
21 is here, and would probably be more able to answer.
22 CAPT. BOB BLOOMBERG: Yes. When you're arrested -
23 CHAIRMAN SMITH: Why don't you come up here
24 so we can hear you.
25 CAPT. BLOOMBERG: During the course of a
26
1 typical arrest, a person would be taken to a police
2 station.
3 In an instance where they are fingerprinted,
4 they do have to sign a fingerprint card, and that's where
5 the arrest number is generated from.
6 Having interviewed a lot of people in my
7 career, I've never fingerprinted anyone I brought in for
8 an interview.
9 I've arrested a number of people that I've
10 not necessarily handcuffed.
11 COMMISSIONER NIKOLAISEN: I was going to ask
12 that, too. Is that a
requirement?
13 CAPT. BLOOMBERG: No. And that certainly
14 doesn't have any real bearing on the definition of an
15
arrest or not, simply
handcuffing somebody.
16 CHAIRMAN SMITH: It's really kind of a gray
17 area, isn't it.
18 COMMISSIONER BATTLE: It's really gray. In
19 one part we read where he wanted to go with the foster
20 mother, the stepmother, and the police said no, you'll go
21 with us.
22 And then in talking about arrest is when you
23 don't have control of yourself.
24 CAPT. BLOOMBERG: I think, depending on which
25 way you want to argue it, if he was under the impression
27
1 he had been falsely arrested, he would certainly make the
2 claim that this was an arrest.
3 Being to his benefit not to have been
4 arrested, now is the time to claim that no, I wasn't
5 arrested, but I was taken to the police station. I was
6 fingerprinted, and this paperwork was generated which
7 indicates I was arrested.
I just didn't think I was
8 arrested. I think that's the case he's trying to make.
9 COMMISSIONER NIKOLAISEN: Is the only thing
10 that he signs, then, is the fingerprint record? Does that
11 indicate this is being used for an arrest or --
12 CAPT. BLOOMBERG: That line says "Signature of
13 Person Arrested" on the fingerprint card.
14 COMMISSIONER NIKOLAISEN: It does say
15
"Signature of Person
Arrested."
16 CAPT. BLOOMBERG: Yes.
17 MR. McCANSE:
But that was never in evidence.
18 I don't know what they did in this case.
19 I am
assuming that that's correct, but at
20 least that's outside the record. I may say that the
21 definition of arrest in Section 610 clearly does apply to
22 this situation, since there's no summons, no charge.
23 CHAIRMAN SMITH: It always bothers me anyway
24 that we're charging people with being arrested, because if
25 there's no charge involved, why, really, to me an arrest
28
1 can be right or wrong.
It's a conviction is what concerns
2 me in somebody's record.
3 MR. MULLALLY:
In this case, he's not being,
4 it's not the arrest that's the problem. It's the fact
5 that he didn't disclose it.
6 COMMISSIONER NIKOLAISEN: He didn't disclose
7 it.
8 MR.
MULLALLY: So we can't conduct any
9 additional -- what the real concern is, and the purpose of
10 having this in the statute, is that there's a lot of
11 people that, and I think the most, the easiest to
12 understand, I think, would be organized crime figures,
13 that are often arrested and sometimes never convicted, and
14 unless they disclose those arrests, we can't do any
15 further investigation and find out what associations there
16 were in conjunction with that arrest to determine whether
17 they have some connections that would deem, that we would
18 deem them unsuitable.
19
CHAIRMAN SMITH: There are a lot
people who
20 are arrested, too, that are not guilty of something. Many
21 times people are brought in under arrest, and then
22 they sort them out once they get them to the police
23 station.
24 MR. MULLALLY:
All we're asking is that you
25 disclose that, so during the course of our background
29
1 investigation we can sort through those issues. That's
2 all we're asking.
3 CAPT. BLOOMBERG: And a number of people are
4 arrested, held for the 20 hours while that
5 investigation is being conducted, and released with never
6 being charged. They
were still arrested, but never
7 charged.
8 MR. McCANSE:
There is a case that I cited
9 generally, but not specifically. It's Collander versus
10 Director of Revenue.
It's a 2001 case in the Western
11 District, 44 S.W. 3rd 866, and it says that "An
12 arrest is not
effectuated merely by the officer telling
13 the suspect that she was under arrest one or more times.
14 She was not under arrest when she refused to take a blood
15 alcohol test, although the officer told her she was under
16 arrest, and they said the officer did not handcuff her or
17 otherwise restrict her liberties."
18 Again, I think it's a matter here of
19
intention, whether he
intentionally failed to disclose.
20 Where the Commission does have the discretion, if he did
21 intentionally fail to disclose something, he's forever
22 banned from working for a casino.
23 CHAIRMAN SMITH: I guess we also need to
24 realize that what we have before us is a determination
25 that you made on a record, and we have to base our
30
1 decision on what record there is in front of us, and the
2 officer providing the administrative explanation, I think
3 was proper, but when we get down to it, we have to decide,
4 based upon the record, whether your judgment is correct or
5 not on that.
6 COMMISSIONER NIKOLAISEN: Let me ask one
7 other procedural question because, again, I'm looking at
8 the criminal history record.
9 If somebody is arrested, like you have
10 described, and they are fingerprinted and they sign that,
11 are they given copies of forms, or something, or is there
12 nothing that they take home with them?
13 CAPT. BLOOMBERG: No, there would not
14 necessarily be any paperwork given to that person.
15 COMMISSIONER BATTLE: I have a question I'd
16 like to ask. You
mentioned that the brother didn't speak
17 English.
18 MR. McCANSE:
That's right.
19 COMMISSIONER BATTLE:
Was English a second
20 language for this young man?
21 MR. McCANSE:
It's been ten years since this
22 happened. He seemed,
I thought, pretty articulate. He
23 spoke very
well. They are Vietnamese, and he has a
high
24 school education. I think he's married and has a child
25 now, so if English is his second language, he does a good
31
1 job with it.
2 CHAIRMAN SMITH: I guess to me it's more a
3 question of intention.
I can understand why we want to
4 know information about arrests, but I think in a
5 determination also, since it's not, if you're arrested, it
6 doesn't mean that you're automatically out. It's a
7 discretionary thing, and it seemed to me that the hearing
8 officer has determined that he did not think it's
9 intentional, and it seems to me that I don't want to
10 overrule your judgment on that.
11 MR. McCANSE:
I didn't think so, but
12 partially because he is from another country and is not
13 familiar with the American legal traditions. He may be
14 wrong. Maybe he was
arrested, but he didn't think so.
15 CHAIRMAN SMITH:
Any other questions?
16 (No response.)
17 CHAIRMAN SMITH: What's your pleasure?
18 COMMISSIONER BATTLE: I move approval of
19 Resolution No.
02-095.
20 CHAIRMAN SMITH: Is there a second?
21 I'll second the motion.
22 Call the roll.
23 MS. FRANKS:
Chairman Smith.
24 CHAIRMAN SMITH: In favor.
25 MS. FRANKS:
Commissioner Nikolaisen.
32
1 COMMISSIONER NIKOLAISEN: Opposed.
2 MS. FRANKS:
Commissioner Battle.
3 COMMISSIONER BATTLE: In favor.
4 MS. FRANKS:
The motion fails.
5 COMMISSIONER NIKOLAISEN: Can I just make a
6 recommendation at this point.
7 CHAIRMAN SMITH: This is your chance.
8 COMMISSIONER NIKOLAISEN: It seems like we've
9 had similar types of issues, and especially I use the one
10 suspended imposition of sentence, and especially when
11 people are much younger, and a lot of attorneys have told
12 people oh, this won't be part of record, this is closed.
13 To inadvertently keep people from not telling
14 us the correct information, even though they might think
15 they are, is there a way to work with the casinos in their
16 application to maybe expand that a little, or talk about
17 what you may think of them as closed records or suspended
18 imposition of sentence, you must declare, because I will
19 admit it's very confusing to me, and I've known people
20 from when I was much younger who probably had similar
21 little incidents at age 19 and 20 that were told
22 well, it's a closed record, suspended imposition of
23 sentence, so it's not out there, but it is.
24 And I just don't think most people, the vast
25 majority would have any idea if that's what they've been
33
1 told. So maybe
there's a way to trigger that more by
2 working with the casinos to help them understand exactly
3 what it means, that we do have access to closed records.
4 MR. MULLALLY:
Sure. Yeah, I think that's a
5 good suggestion.
6 CHAIRMAN SMITH: I think it is, too.
7 COMMISSIONER BATTLE: Yes.
8 MR. MULLALLY:
And we are looking at revising
9 the Level II application.
Part of it is to come up with a
10 standard application that goes from state to state. It
11 was an initiative that started with the International
12 Association of Gaming Regulators, and I think Rick Wilhoit
13 has been working on that.
We'll take a look at that
14 question to make sure that maybe in an asterisk below it
15 we clearly explain that.
16 I know that during the application process
17 there is an interview, and many times when this
18 information is discovered an officer will almost force
19 feed them, you know, you're sure there was never, because
20 when we become aware of this, you're sure there never was
21 an incident where you were detained or questioned by the
22 police. And, of
course, once they say no to that, it
23 becomes pretty clear that either they've had some --
24 CHAIRMAN SMITH: But you'd have a surer
25 record if it was very clear on the application.
34
1 MR. MULLALLY:
Sure. And I think that's a
2 good suggestion.
3 CHAIRMAN
SMITH: It's worth looking at.
4 MR. MULLALLY:
Now, a procedural matter.
5 Since the motion failed, this matter is still pending
6 before you. Now, I
don't know whether you want to table
7 it until the next meeting when you have a full complement
8 of commissioners, but it hasn't been disposed of.
9 CHAIRMAN SMITH: We approved the findings.
10 MS.
FRANKS: I don't think we did.
11 MR. MULLALLY:
It was two to one, so the
12 motion failed.
13 CHAIRMAN SMITH: In other words, we don't
14 have three.
15
MR. MULLALLY: Yes. You have to have three
16 votes.
17 CHAIRMAN SMITH: Okay.
18 MR. MULLALLY:
You can table it until the
19 next meeting when you have more commissioners, or you
20 could propose an alternate motion.
21 CHAIRMAN SMITH: Just to maybe make the
22 record straight, I move a substitute motion that instead
23 of sustaining the hearing officer's finding, in view of
24 the status of our quorum, that the matter be tabled and
25 taken up at the next meeting, or at the meeting when we
35
1 will have a quorum.
I guess at the next meeting we can
2 always continue it, table it until the next meeting.
3 Is there a second?
4
COMMISSIONER
BATTLE: I'll second that.
5 CHAIRMAN SMITH: Call the roll.
6 MS. FRANKS:
Chairman Smith.
7 CHAIRMAN SMITH: Favor.
8 MS.
FRANKS: Commissioner Nikolaisen.
9 COMMISSIONER NIKOLAISEN: Favor.
10 MS. FRANKS:
Commissioner Battle.
11 COMMISSIONER BATTLE: In favor.
12 MS.
FRANKS: By your vote, you've tabled the
13 resolution until the next meeting.
14 MR. McCANSE:
Ms. Nikolaisen, I think for
15 your information, the suspended imposition of sentence,
16 once you serve your probation, it is not a conviction,
17 because in order to be convicted you have to be sentenced.
18 However, if there is a plea of guilty, then that can be
19 taken into account.
20 The records, as far as closed records are
21 concerned, there has been, I think, at least eight
22 statutory exceptions, some applying to the enhanced
23
penalties for repeat
offenders, maybe voting, drivers
24 licensing. There's
about seven or eight different things
25 where the records that are closed aren't really closed, so
36
1 there are a lot more open than people might realize, and I
2 think that the idea of making it very clear at the
3 application process is excellent. It would save a lot of
4 problems for me.
5 CHAIRMAN SMITH: I don't think very many
6 lawyers explain that to their clients either.
7 MR. McCANSE:
I would doubt that. Some are
8 the case where they want to get rid of it in a hurry.
9 CHAIRMAN SMITH: Let's proceed, then, to the
10 next case, Bowers.
11 (Resolution No. 02-096)
12
MR. McCANSE: This is Bowers and,
again, I'm
13 sorry to say that it involves a charge that he was, had
14 pleaded guilty or been convicted of a crime of driving
15 under the influence and possession of drug paraphernalia,
16 or a small amount of marijuana.
17 Actually, he was tried in city court and
18 charged under city ordinances, and a violation of a city
19 ordinance is not a crime.
It's neither a misdemeanor nor
20 a felony. That is a
determination that prosecutors often
21 make, as to whether this case is of enough of a
22 seriousness to warrant a county or a state proceeding, or
23 whether to handle it through the city.
24 In this case, he was arrested for DWI, and
25 during the arrest they found a small amount of marijuana
37
1 which he said he was taking back to a friend. In any
2 event, he was tried in city court.
3 He was charged with violating 11 CSR 45-4.260
4 (4)(A), which allows the Commission to revoke an
5 occupational license of an individual who has been
6 convicted of a crime.
But this, as I say, is not a crime.
7 They did
not charge him with a violation of the
8 general statute which applies to any federal, state or
9 local law. It was
cited merely to show that he was
10 subject to discipline if he pleaded guilty to the crime.
11 There is nothing in the record to show that
12 he is injurious to the public health, safety, good order,
13 morals and general welfare of the people of Missouri, or
14 that his past
would be a stain on the credibility of the
15 Missouri gaming industry.
16 He was not charged with failing to notify the
17 Commission that he had violated a local law, which he
18 could have been.
There was evidence to do that and there
19 could have been some punishment awarded had they done
20 that, and the record shows that there was some discussion
21 of that, but that's
not what the preliminary order ended
22 up with, and I felt that since the only charge was that he
23 had pleaded guilty to the crime, and there was no crime,
then
24 there was no basis to impose a discipline.
25 CHAIRMAN SMITH: Do we have a rule which
38
1 provides if a person is guilty of a violation of a city
2 ordinance that it is grounds for discipline?
3 MR. McCANSE:
I'm not sure about the rule,
4 but the statute says any violation of a federal, state or
5 local law is grounds for discipline. That's 313.814(1).
6 CHAIRMAN SMITH: Isn't that what we came up
7 with in connection with the President? Isn't that how we
8 determined, decided that they had violated the ordinance
9 in connection with making gifts to public officials,
10 wasn't it based on that statute?
11 MR. MULLALLY:
That's correct.
12 Recently, last month, we amended a rule that
13 would allow city ordinances to apply.
14 MR. McCANSE:
That was last month?
15 MR. MULLALLY:
Last month, yes.
16 COMMISSIONER NIKOLAISEN: So this wouldn't
17 have applied previous to that because it was a city
18 ordinance?
19 MR. MULLALLY:
Well, the preliminary order
20 cites the statute that says you can be disciplined for any
21 federal, state or local law, and it also says that you can
22 revoke a license for any just cause, in addition to the
23 other citation.
24 But the recent rule amendment, which is not
25 final yet, would add a municipal ordinance because, you
39
1 know, often in the cities, in particular, Kansas City and
2 St. Louis, you can have fairly significant criminal acts
3 that are charged as municipal ordinances, such as weapons
4 charges.
5 CHAIRMAN SMITH: We've got the problem solved
6 in the future --
7 MR. MULLALLY:
That's correct.
8 CHAIRMAN SMITH: -- once we get that passed.
9 MR. MULLALLY:
That's correct.
10
MR. McCANSE: Specifically, in
this one it
11 was charged that "revoke a license of an individual who
12 has been convicted of a crime or been found guilty or pled
13 guilty to the crime, including such finding or pleas and a
14 suspended imposition of sentence." But it specifically
15 refers to crime.
16 COMMISSIONER NIKOLAISEN: Two things, I guess
17 I'm thinking of.
18 I know in Mike Bradley's opening statement he
19 talked about because he pleaded guilty to two acts which
20 could be considered crimes, and for that reason we ask
21 that the 24 month suspension be upheld. I'm a
22 little bit confused about that.
23 I'm also confused because you said there
24 wasn't anything here that would justify that he had
25 potentially been
dangerous to the public.
40
1 MR. McCANSE:
Yes.
2 COMMISSIONER NIKOLAISEN: Wouldn't driving
3 under the influence or DWI be considered dangerous to the
4 public?
5 MR. McCANSE:
That statute, I think,
6 injurious to public health, safety, morals, good order is
7 what it refers to, or general welfare, you could say yes,
8 that public health and general welfare might be involved
9 in a DWI, but that's not what he was charged with. He was
10 specifically charged with only one thing, and that's
11 committing a crime, or pleading guilty to a crime.
12 COMMISSIONER NIKOLAISEN: Okay.
Let me take
13 this a step further.
Maybe I'm asking Bob, too.
14 If this were to go to an appeals court,
15 because it was a local ordinance under the laws at the
16 time, what do we think would happen?
17 CHAIRMAN SMITH: I think it would go to the
18 circuit court on appeal from here, and I guess my opinion
19 is they would kick it out for the same reason, that they
20 didn't -- unfortunately, our rules didn't provide for a
21 violation of a city ordinance at that time when this case
22 was filed, and this change isn't retroactive, so we have
23 to proceed under the old law.
24 MR. McCANSE:
I think it would go from here
25 to the Western District.
Is that correct, Kevin?
41
1 MR. MULLALLY:
That's correct.
2
CHAIRMAN
SMITH: I'm sorry.
3 MR. McCANSE:
And I never predict what a
4 Western District judge would do, but I share the
5 Chairman's opinion that they would throw this out.
6 MR. MULLALLY:
We're batting a thousand with
7 the Western District, so we like them.
8 CHAIRMAN SMITH: Okay. Better stay that
way.
9 We don't want to bring something up that will spoil that
10 record.
11 What is your pleasure on this particular
12 finding?
13 COMMISSIONER BATTLE: Judge McCanse, you
14 propose discipline be suspended?
15 MR. McCANSE:
No. I said that the, I
16 proposed that there be no discipline.
17 Oh, for two years.
18 COMMISSIONER BATTLE: For two years, yes.
19 MR. McCANSE:
Which, in effect, would be the
20 end of his job. I
thought that there was no basis for
21 doing that, and while there could have been a suspension
22 had he been charged with
the right thing, that's not what
23 this case is about.
24 Again, I suppose that this is a matter if
25 they wanted to bring it up again they might be able to. I
42
1 have not looked at that question, if they wanted to later
2 charge him with failing to notify, that would be a
3
different matter.
4 CHAIRMAN SMITH: Do we have a motion, then,
5 either to approve the findings, which would be a finding
6 of not guilty, or to take some other action?
7 COMMISSIONER BATTLE: Well, I think I move, I
8 move approval of Resolution No. 02-096.
9 CHAIRMAN SMITH: Is there a second?
10 I'll second the motion, then.
11
Let's call the roll.
12 MS. FRANKS:
Chairman Smith
13 CHAIRMAN SMITH: In favor.
14 MS. FRANKS:
Commissioner Nikolaisen.
15 COMMISSIONER NIKOLAISEN: Opposed.
16 MS. FRANKS:
Commissioner Battle.
17 COMMISSIONER BATTLE: In favor.
18 CHAIRMAN SMITH: Be careful, or you may have
19 to come back for another
meeting.
20 I'll make a substitute motion again that we
21 table the determination on findings in the Bowers case
22 until the next meeting.
23 Is there a second to the motion?
24 COMMISSIONER BATTLE: Second.
25 CHAIRMAN SMITH: Call the roll.
43
1 MS. FRANKS:
Chairman Smith.
2 CHAIRMAN SMITH: In favor.
3 MS. FRANKS:
Commissioner Nikolaisen.
4 COMMISSIONER NIKOLAISEN: Favor.
5 MS. FRANKS:
Commissioner Battle.
6 COMMISSIONER BATTLE: In favor.
7 MS. FRANKS:
By your vote, you've tabled
8 Resolution No. 02-096.
9
COMMISSIONER NIKOLAISEN: They
are going to
10 take my cake away.
11 MR. MULLALLY:
Well, good to leave something
12 behind. A legacy.
13 CHAIRMAN
SMITH: Mr. McCanse won't be
14 pleased, because he'll have to come back again to the next
15 meeting.
16 MR. McCANSE:
I look forward to it, and thank
17 you, I guess.
18 CHAIRMAN SMITH: Thank you for your
19 presentation.
20 COMMISSIONER NIKOLAISEN: I don't think these
21 were easy.
22 CHAIRMAN SMITH: No. These were difficult.
23 COMMISSIONER NIKOLAISEN: No.
I kept
24 thinking and thinking about them myself.
25 CHAIRMAN SMITH: The next procedure, I guess,
44
1 deals with the renewal of a license for Ameristar Casino
2 of Kansas City.
3 MR. MULLALLY:
Yes. Mr. Chairman, we'll
4 first have a
presentation by the company, and then we will
5 hear from the City, then it's been our tradition to allow
6 an opportunity for the public to offer any comments they
7 might have, and it will conclude with a presentation by
8 Corporal Tan Davenport regarding the renewal
9 investigation.
10 (Resolution Nos. 02-097 and 02-098)
11 MR. MULLALLY:
I believe Troy Stremming is
12 here to represent the company, with others.
13 MR. TROY STREMMING: Good morning, Commissioners,
14 Executive Director Mullally.
15 My name is Troy Stremming. I'm Vice
16 President of Legal and Governmental Affairs for Ameristar
17 Casinos.
18 I have with me this morning Dave Albrecht who
19 is sitting closest to me, who is our new Senior Vice
20 President and General Manager of the Kansas City property,
21 and Tony Raymon, our Senior Vice President and General
22 Manager of the St. Charles property.
23
I've provided
you, prior to the meeting --
24 CHAIRMAN SMITH: Which is which here?
25 MR. STREMMING:
Dave Albrecht is the one closest
45
1 to me, and Tony Raymon is the one furthest away.
2 Our presentation this morning will begin by
3 providing you with the requested information pursuant to
4 your memorandum that we received.
5 Then I'll turn the presentation over to the
6 two general managers to talk to you a little bit about
7 some of the things that we have going on at the properties
8 and, lastly, we'll entertain any questions that you might
9 have.
10 The first thing we were asked to do was
11 summarize our development agreement with the home dock
12 jurisdiction and report on our compliance with it.
13 Ameristar Casino St. Charles enjoys a
14 wonderful relationship with the City of St. Charles,
15 through its mayor, Patti York, who is here with us today,
16 as well as its city council.
17 St. Charles does not have a development
18 agreement with the city. However, Ameristar Casino St.
19 Charles intends to
continue to work very closely with the
20 city leaders to further the economic impact that we have
21 in the community, and the big step that we've taken there
22 is the completion, as you all know, of our new facility
23 here in St. Charles.
This is in addition to the
24 substantial capital investment that we've already made
25 here in the City of St. Charles.
46
1 Regarding Kansas City, if it's okay with you,
2 what I'll try to do on the requested information is to
3 deal with both properties at the same time so we can try
4 to cut this down as much as we can in time.
5 Similar to Ameristar Casino St. Charles,
6 Ameristar Casino Kansas City has a great relationship with
7 the city
government of Kansas City. However,
unlike
8 Ameristar Casino St. Charles, Ameristar Casino Kansas City
9 is party to a development agreement with the Port
10 Authority of the City of Kansas City.
11 Ameristar Casino Kansas City assumed Station
12 Casino Kansas City's obligations pursuant to the
13 development agreement with the Port Authority as a result
14 of the purchase of the Station properties in 2000.
15 Ameristar Casino Kansas City is currently in full
16 compliance with all obligations pursuant to that
17 agreement.
18 In addition to other obligations, Ameristar
19 Casino Kansas City makes the following annual payments to
20 the City, to the Port Authority of Kansas City.
21 First, we make a $100,000 annual contribution
22 for problem gaming awareness and a scholarship fund, and
23 we also make a quarter of a million dollar annual
24 contribution to the Riverfront Project Fund, which was
25 developed for marketing and development of the Kansas City
47
1 riverfront.
2 In addition to that -- well, first of all,
3 this agreement originated in January of 1997, and
4 Ameristar Casino Kansas City will continue to make these
5 annual payments for an additional ten years.
6 ACKC has also agreed to make an annual
7 $200,000 payment for the next five years into a foundation
8 that was set up by the Port Authority of Kansas City.
9 CHAIRMAN SMITH: Excuse me. What is this
10 redevelopment? What
actually is going to happen?
11 MR. STREMMING:
Well, there's a lot of things
12 that have happened since its inception in 1997. Number
13 one, like I said, a $100,000 payment is made annually for
14 problem gaming awareness, and the focus there really has
15 been not so much on treatment, but as much as just that,
16 awareness and getting people into treatment. That seems
17 to be the focus of the Port Authority.
18 And then the $200,000 annual payment or
19 $250,000 annual payment is redeveloping the riverfront,
20 which is in the downtown area, and they use that for
21 everything from marketing to outside sources, trying to
22 bring new businesses into the riverfront area, as well as
23 a beautification process on the riverfront.
24 The $1,000,000 foundation that's being
25 established, and we will actually make that first payment
48
1 next Monday at the Kansas City Port Authority meeting,
2 will be for the benefit of minority and women business
3 enterprises in the Kansas City area. ACKC is currently
4 working with the Port Authority to finalize the formal
5
structure of that and, again,
that first payment will be
6 made next week.
7 As part of the development agreement with
8 Ameristar Casino Kansas City, the property is also
9
obligated to use its best
efforts to meet certain minority
10 and women goals in purchasing and employment. Currently,
11 sixty-seven MBEs and WBEs are among the vendors and
12 suppliers at the Kansas City property.
13 Pursuant to the development agreement and
14 consistent with our corporate policy, we provide equal
15 opportunity to prospective vendors and suppliers
16 irrespective of their race, color, religion, sex, age or
17 national origin. It
is also our policy to take
18 affirmative action to identify and engage the services of
19 qualified MBEs and WBEs.
20 During
the current period of licensure,
21 Ameristar Casino Kansas City has purchased approximately,
22 well, almost $4,000,000 worth of goods and services from
23 qualified MBEs and WBEs in the Kansas City area. This
24 accounts for over 15 percent of Ameristar Casino
25 Kansas City’s total purchases of goods and services for the
49
1 year.
2 Although this falls short of our goals
3 pursuant to the development agreement, the property has
4 shown consistent and steady growth each of the last two
5 years regarding MBE and WBE purchases. This is the result
6 of the establishment and implementation of a strategic
7 plan that we put in place which was instituted when
8 Ameristar took over the property in 2000.
9 ACKC is also proud to announce that more than
10 60 percent of the construction costs associated with
11 the completion of our $23,000,000 parking garage, which was
12 just recently completed, was paid for services and
13 products provided by MBEs and WBEs.
14 ACKC also substantially exceeds its goals in
15 the employment of minorities and women pursuant to the
16 development agreement and, lastly, ACKC recently hosted an
17 MBE/WBE summit at the property which gave MBEs and WBEs
18 the opportunity to collaborate and explore new business
19 opportunities with
purchasing executives from all of the
20 gaming operators in the Kansas City area, and I think all
21 of the operators in the Kansas City area should be
22 applauded for that, because not all of them have the same
23 requirements that we have pursuant to the development
24 agreement, but all the properties in Kansas City were a
25 part of that summit.
50
1 We're hopeful that we're going to take that
2 summit forward and continue to do it every year, and we're
3 working with Harrah's right now in taking over that role
4 next year to host it.
5 The next information that was requested is
6 AGR projections versus actual performance, and you have
7 that information in front of you. The numbers are up in
8 Kansas City. They
are substantially up in St. Charles
9 with the development of the new property here in St.
10 Charles.
11 Regarding projected admissions, we're a
12 little under budget where we thought we would be but,
13 again, in Kansas City we are up, but not up consistent
14 with revenues. I
know, Commissioner Nikolaisen, you've
15
always asked about the
maturity of the casino market, and
16 how the win per passenger continues to climb, but our
17 growth regarding admissions doesn't stay steady with that,
18 and we're continuing to see that trend. In a more mature
19 market, your win per passenger goes up but your number of
20 admissions doesn't rise at the same percentage
21 accordingly.
22 It's not quite the same here in St. Charles
23 because the actual win per passenger has come down a
24 little bit, because now the facility that we have, we have
25 a lot of people that are walking through and seeing it for
51
1 the first time, and not the same mature gamblers that
2 we've had in that market in past experience.
3 CHAIRMAN SMITH: Could I ask a question back
4 on the AGR. It looks
like you didn't quite make your
5 budget on the actual AGR for the year 2002. What do you
6 attribute that to, delay in opening the facility or --
7 MR. STREMMING:
Well, actually, more than
8 anything, I think I attribute it to us setting our goals
9 very high. I think
that those numbers are, we're proud of
10 where those numbers
are at. I think that we just set our
11 goals pretty high, and when you're dealing with that many
12 millions of dollars, you know, we were fairly close.
13 CHAIRMAN SMITH: I'm astonished how much your
14 revenues increased when you opened it, and it surprised me
15 that you didn't quite make your budget.
16 MR. STREMMING:
Well, the other thing to keep
17 in mind, too, these numbers are through September only.
18 We were previously on the agenda for last month, so you
19 really only have two month's worth of revenues at the new
20 property.
21 CHAIRMAN SMITH: I see.
22 MR. STREMMING:
On pages 13 and 14 we were
23 asked to provide a summary of the total capital investment
24 of the projects that we had, and I won't bore you with all
25 the additional individual numbers of what we've put into
52
1 those properties.
You can see that for yourselves.
2
But our total investment as of September 30,
3 2002 at the St. Charles facility is approximately
4 $365,000,000, and in Kansas City it's $362,000,000. So we
5 have a substantial amount of capital invested in the State
6 of Missouri.
7 The next thing we were asked to do --
8 CHAIRMAN SMITH: Are you pleased with your
9 results?
10 MR.
STREMMING: Yes, very much so. Very much
11 so. And I think the
fact that we've continued to invest
12 in this state is evidence of that.
13 I think, as everyone knows, with the
14 discussion of increased tax potential in this state, and
15 those types of things that Kevin has alluded to and,
16 Chairman, you, as well in the annual report, I think what
17 we've seen in other jurisdictions, like Illinois is the
18 obvious example, that if those tax increases continue to
19 go up, particularly at substantial intervals, that you're
20 not going to see the capital investment to be made in any
21 states, including this state.
22 Next we were asked to compare the projected
23 employment with actual performance.
24 At the St. Charles property, in September
25 2001, Ameristar Casino St. Charles employed approximately
53
1 1,037 individuals in 12 various departments.
2 Currently, Ameristar
Casino St. Charles employs 1,906 at
3 the time we put this presentation together. That number
4 now is actually down probably about 200 to about
5 1,700 employees, which is pretty consistent with opening a
6 new facility.
7 Some of those employees that thought it was a
8 great idea to work in the casino industry didn't realize
9 how much work it was, particularly during an opening and
10 also, Tony, as he continues to tighten the screws at that
11 property, try to make it as productive as you can, you
12 will find that some of the positions that were there
13 aren't needed, so that number has come down to about 1,700
14 employees.
15 Our average hourly wage for all of those
16 employees is $8.24.
In addition to that, toked employees
17 receive, on the average, $2.43 in the slot department,
18 $7.94 in the valet department, and 36 cents per hour in
19 the cage, $10.44 per hour in the table games department.
20
So that's in addition to that
$8.24.
21 CHAIRMAN SMITH: What kind of fringe benefits
22 do you have for your employees?
23 MR. STREMMING:
We have great benefits at the
24 property. They have 401(k), they have vision and
health
25 insurance, and I think they are at a very affordable rate,
54
1 comparable or better than other industries here in the
2 state.
3 COMMISSIONER NIKOLAISEN: Why would, and I'm
4 just curious because we've seen it with others, it's not a
5 criticism, it's a comment, being in this economy where
6 things are tough, the unemployment rate's going up, yet
7 turnover stays so high.
What's your guess?
8 MR. STREMMING:
We touch on that later in the
9 presentation.
10 Our turnover rate, and without looking at the
11 number, I don't know where I've got it in there, but I
12 think it's --
13 COMMISSIONER NIKOLAISEN:
About 40.
14 MR. STREMMING:
It's about 40 percent, and
15 I think industry-wide you will find that if you're at
16 50 percent in this industry, you're doing okay.
17
We try to keep that as low as we can, but I
18 think to answer your question more directly, I think you
19 see -- number one, you have a lot of people that think
20 that the casino industry sounds like a very exciting and
21 great industry to be into, and they think it's just going
22 to be a party, and then when they get there they realize
23 it is a lot of hard work.
24
And in the
casino industry, you know, our
25 busiest hours are when most other people are having time
55
1 off for vacation or holidays, and that type of thing, and
2 when people start to realize that they are working
3 holidays, they are working weekends, it doesn't seem like
4 quite as much fun as it was previously.
5 And I
think another thing that you can
6 attribute to that is the casino industry amongst the
7 operators here in this state, like any other state where
8 you have casino gambling, are very competitive, and I
9 think that you find people, more than any other industry,
10 that are probably not as loyal as we would like them to
11 be, and are willing to go to work for our neighbor across the
12 river if they get a 15, 10, 25 cent raise,
13 and then they might end up coming back to us a short time
14 later if they get another 20 cent raise. So I don't
15 think that loyalty factor is as high as what we would like
16 to see it.
17 Regarding Kansas City's projected employment
18 with actual performance, we have approximately 1,700
19 individuals in twelve various departments in Kansas City,
20 as well. Their
average hourly wage is $8.58, and then you
21 have the numbers there in front of you, on the average, in
22 addition to that $8.58 the slot department receives $2.58
23 in toke, $7.85 in the valet department, and 29 cents in
24 the cage, and $11.51 in the table games department.
25 So they are all, when you're combining our
56
1 front line employees, their wages with their tokes, they
2 are all doing pretty well.
3 CHAIRMAN SMITH: What's your lowest minimum
4 wage employee?
5 MR. STREMMING:
You know, I would have to
6 defer to these gentlemen.
7 MR. TONY RAYMON: We have the minimum wage jobs,
8
and then we have --
9 CHAIRMAN SMITH: That's what I was thinking
10 about.
11 MR. RAYMON:
What is minimum wage?
12 MR. DAVE ALBRECHT: They are $4.55 jobs in your
13 food and beverage and your tip positions.
14 MR. STREMMING:
And, as you would imagine,
15 the majority of their take-home is coming from tips.
16 MR. RAYMON:
One other thing to add on
17 Lynne's question, part of the turnover statistics are a
18 bit deceiving, because some of the departments have a high
19 turnover which affects the entire number. Housekeeping
20 department, sanitation, some of the back of the house
21 positions are a high turnover rate which skews the
22 numbers.
23 COMMISSIONER NIKOLAISEN: And it makes sense.
24 I just would assume, just thinking out loud, that with
25 unemployment where it is, that maybe for your industry
57
1 that figure may have gone to 35 or, you know,
2 something that says I'd rather have this job than no job.
3 MR. ALBRECHT:
And another thing that skews
4 those figures, too, is when you transfer within the
5 company from one department to the other, that's
6 considered a turnover.
7 COMMISSIONER NIKOLAISEN: Oh.
8 MR. ALBRECHT:
So that when you go from
9 housekeeping to a casino position, you've lost a position
10 and filled a position, so that skews your numbers also.
11 COMMISSIONER NIKOLAISEN: Okay.
That's
12 interesting. Any
guess as to what percentage that might
13 be?
14 MR. ALBRECHT:
Oh, I wouldn't do that off
15 the top of my head.
16 COMMISSIONER NIKOLAISEN: So it could be for
17 positive reasons, there's a good job and they are going to
18 a different department at a higher wage.
19 MR. ALBRECHT:
Absolutely. We hope they are
20 moving on because they are being promoted or going to a
21 position that they can make more money in.
22 CHAIRMAN SMITH: It would be more meaningful
23 for us to have the figure of the people that left the
24 employment,
rather than including them.
25 COMMISSIONER NIKOLAISEN: Maybe just for
58
1 future reference, and even for ourselves, Kevin, maybe
2 that's something we could do.
3 MR. MULLALLY:
It's news to me.
4 COMMISSIONER NIKOLAISEN: Split out those
5 that truly left and those that transferred.
6 MR. STREMMING: Great. We'll do that.
7 Next, we were asked to explain our
8 affirmative action plan and minority hiring practices, and
9 I will address both
St. Charles and Kansas City at the
10 same time.
11 Ameristar Casino St. Charles and Ameristar
12 Casino Kansas City's affirmative action plans specifically
13
outline the commitment we make
in providing equal
14 employment opportunities to all employees and applicants
15 in full copmpliance with all applicable laws.
16 ACSC and ACKC recognize each employee and
17 applicant as an individual without regard to race, age,
18 gender, color, religion, national origin or disability.
19 These plans extend to all persons in all aspects of the
20 employment relationship including, but not limited to,
21 recruiting, advertising, hiring, promoting, upgrading, et
22 cetera.
23 In St. Charles, currently over 30 percent
24 of our employee force are minorities. This number exceeds
25 the actual local demographic composite of minorities, as
59
1 compiled in the 2000 census, by 10 percent.
2 Ameristar Casino St. Charles routinely
3 advertises employment opportunities in publications
4 targeted to minorities, and regularly solicits new
5 recruitment sources that provide qualified minority
6 applicants.
7 In addition, Ameristar Casino St. Charles
8 strives to promote qualified minorities and women from
9 within its work force into supervisory and management
10 positions within the company.
11 Like Ameristar Casino St. Charles, Ameristar
12 Casino Kansas City strives to provide equal employment
13 opportunities to all employees, as well. Ameristar Casino
14 Kansas City also uses its best efforts to meet or exceed
15 its minority and women employment goals pursuant to the
16 development agreement that I discussed previously.
17 Currently, Kansas City -- actually, I should
18 tell you what our goals are first. Our goals in Kansas
19 City, pursuant to the development agreement, are
20 25 percent
employment for minorities and ten
21 percent for women.
22 During the current period of licensure,
23 Ameristar Casino Kansas City has exceeded these goals.
24 Currently, 33 percent of Ameristar Casino Kansas
25 City's employment force are minorities, and 47
60
1 percent of its work force are women.
2 Like Ameristar Casino St. Charles, Ameristar
3 Casino Kansas City also routinely advertises employment
4 opportunities in publications targeted at minorities, and
5 regularly solicits new recruitment sources that provide
6 qualified minority applicants.
7 In addition, the property in Kansas City has
8 established and implemented a mentorship program to
9 recognize, mentor and
promote qualified minorities and
10 women into supervisory and management positions within the
11 company.
12 Next, we were asked to provide a demographic
13 breakdown of the employees, including state of residence,
14 percentage of minority employees, percentage of women
15 employees, and average compensation by position.
16 I've already addressed most of that in the
17 previous question, but I can tell you that approximately
18 92 percent of our employees in St. Charles are
19 Missouri residents and eight percent are residents of the
20 State of Illinois, and in Kansas City 88 percent
21 of our employees are Missouri residents and 12 percent
22 are residents of the State of Kansas.
23 CHAIRMAN SMITH: Glad to see that when both
24 of those casinos are on the edges of the State.
25 MR. STREMMING:
Um-hum.
61
1 Next, we
were asked to submit a report
2 regarding employee turnover rate, which we've already
3 discussed.
4 Our turnover rate in Kansas City is 40.28
5 percent for the period of licensure, and in St. Charles
6 or, I'm sorry, St. Charles is 40.99 and Kansas City is
7 40.28, so they are both right at around 40 percent.
8 Next, we were asked to provide unemployment
9 rates for the locales in which we operate. Year-to-date
10 average in St. Charles is 3.9 percent, and year-to-date
11 average and, again, these are through September, in Kansas
12 City is 3.7 percent.
So it's almost up an additional
13 point over our last period of licensure.
14 We would like to think, as you've already
15 alluded to, Commissioner Nikolaisen, that we would have a
16 better opportunity to get more qualified and better
17 employees now that that number is a little higher.
18 Next, we were asked to describe our policy
19 regarding utilization of minority contractors and provide
20 data indicating the percentage of minority contracts issued
21 during the current licensure term.
22 At Ameristar Casino St. Charles we've
23 implemented an affirmative action policy for vendors and
24 suppliers. It is our
policy to provide equal opportunity
25 to prospective vendors and suppliers consistent with
62
1 Ameristar's purchase requirements, and the ability of
2 prospective vendors and suppliers to supply the equipment,
3 furnishings, materials, supplies, and services which it
4 may require from time to time, irrespective of their race.
5 It's our policy to take affirmative action to
6 identify and engage the services of qualified minority and
7 female vendors and suppliers, subject to their availablity
8 to meet our needs in St. Charles.
9 CHAIRMAN SMITH: What investigation do you do
10 to be sure that these contractors don't use the minority
11 issue just as a front for another organization?
12 MR. STREMMING:
Well, it's easier to address
13 that in Kansas City.
There's really not a statute or a
14 policy that's in place, or anything that's in place that
15 sets goals or directives utilizing or monitoring that
16 effect until here recently in some of these new
17 requirements, the utilization of minority contractors.
18 We really have a pretty good system set up in
19 Kansas City because, pursuant to the development
20 agreement, we are obligated to do that, and what we've
21 used in Kansas City, and we're going to try to implement
22 this plan in St. Charles, as well, in the St. Louis
23 market, is any entity that is certified by the City of
24 Kansas City as a minority-owned business or female-owned
25 business, then we utilize, we include them in our data.
63
1 And then, in addition to that, we also do
2 our, you know, good faith
background investigations on any
3 of these companies, as well. So that includes, you know,
4 the assurance that their licensure is accurate, and we are
5 relying in Kansas City on the City of Kansas City to make
6 certain that at least 51 percent of that business
7 is either minority or women-owned.
8 In St. Charles we've utilized and, again,
9 these numbers,
we haven't implemented a plan, we have now,
10 but for the last period of licensure we had not
11 implemented a plan to monitor, specifically, all of those
12 vendors that were being used.
13 We are aware of at least 17 minority
14 owned women, or minority or women-owned businesses that
15 we've utilized throughout the last period of licensure in
16 St. Charles, and they've purchased products or services
17 from those vendors totaling $335,000.
18 I've got to tell you I think that the number
19 is probably much higher than that, and I don't think that
20 we've done a good job of monitoring that and that is
21 something, like I said, we've implemented a plan similar
22 to Kansas City to make sure that for the next period of
23 licensure we can more accurately give you a more
24 definitive number on what we've utilized.
25 When you look at that in comparison to Kansas
64
1 City, obviously, Kansas City's numbers are much higher.
2 June White, our Director of Compliance in Kansas City,
3 with the assistance of the Urban League of Greater Kansas
4 City, who is our independent third party consultant and
5 advisor, has been given full authority for the
6 administration, implementation and monitoring of our
7 policy in Kansas City.
All potential providers of goods
8 and service are encouraged to communicate freely with her
9 or her designee concerning ambitions to provide goods or
10 service, or concerns that they might have with purchasing
11 policies and
procedures at the property.
12 Again, like St. Charles, if a vendor is an
13 MBE or WBE, they are particularly encouraged to identify
14 themselves to the property and, particularly, to our
15 Director of Compliance, in order that such information
16 will be available to us for recordkeeping and utilization
17 purposes.
18 Again, the numbers I gave you previously,
19 Ameristar Casino Kansas City has utilized the services of
20 67 minority or women-owned businesses throughout the
21 current period of licensure, and the purchase of these
22 goods and services totaled, again, almost $4,000,000, or
23 approximately 15 percent of our total purchases, and
24 that's in addition to the $13,000,000 that was spent with
25 minority and women-owned businesses during the
65
1 construction of the parking garage.
2 Next, we were asked to report the per capita
3 crime rate before and after the current period of
4 licensure and how that crime rate compares with other high
5 visitation areas near the home dock site. That's somewhat
6 difficult to do.
7 I'll
address St. Charles first. It's
8 somewhat difficult to do in this market because in the St.
9 Charles market, other than us, another casino, I don't
10 think there is a lot of high visitation areas to compare
11 it to with the amount of bodies that we move through a
12 property that size here in St. Charles.
13 So what I've done is attached for you the FBI
14 Uniform Crime Report for calendar years 1999 through 2002.
15 You'll see that the current crime statistics for the year
16 2002, as indicated in the chart, reveals a slight increase
17 in the number of index crimes for the City of St. Charles.
18 However, when compared to the population
19 growth in the City of St. Charles, the increase in the
20 crime statistics is proportionately lower. We'd like to
21 think that
this is a result of our contribution to very
22 visible security in the riverfront area, the
23 revitalization of the riverfront in St. Charles, and the
24 city's use of tax dollars that are generated by the casino
25 for these purposes.
66
1 In Kansas City, unlike St. Charles, the
2 property there is located within a county that has other
3 high visitation areas.
Granted, the other high visitation
4 attractions do not have near the volume of foot traffic
5 that we generate at the casino. However, it gives some
6 evidence to the fact that the crime rate at the Ameristar
7 Casino Kansas City is consistent with, if not lower than,
8 other local attractions.
9 The table that you have, which is on page 39,
10 reflects the crime comparison between our casino, the
11 Metro North Mall, and Worlds of Fun, which is an
12 entertainment park just about two miles from our facility.
13 It should be noted that several factors bear on this
14 comparison.
15 For example, Worlds of Fun is only open from
16 spring through fall, and it does not offer alcohol to its
17 guests and, further, the Metro North Mall, obviously, does
18 not offer alcohol to its customers, and operates a reduced
19 number of hours in comparison to the property. But I
20 think if you look at those numbers in comparison to our
21 casino, you will recognize that, in most cases, those
22 numbers are lower at the casino or proportionately lower
23 for the amount.
24 CHAIRMAN
SMITH: Interesting to note that the
25 biggest crime is purse snatching in that area.
67
1 MR. STREMMING: Yeah, it is.
2 You know, in previous years there's been a
3 focus on cars being broken into and actual car thefts, but
4 I think we have that under control in Kansas City. But,
5 as you can imagine, with any wide open parking space like
6 that, you have those problems, and we work very closely
7 with the City of Kansas City Police Department in running
8 stings where they actually place themselves in vehicles
9 out in the parking lot and then monitor from the roof of
10 the casino, and they've actually broken up one car theft
11 ring by running a sting like that. I think the parking
12 garage will also help improve those numbers.
13 On page 40 we go into what our properties do
14 regarding problem gambling.
You'll see a picture there,
15 it's not very easy to see what it says, but this is the
16 new BETSOFF poster that you're going to start seeing in a
17 lot of the properties here.
18 That poster, I believe, is the result of a
19
joint effort in the Missouri
Alliance to Curb Problem
20 Gambling in coming up with a new poster and, basically, I
21 don't remember the specifics exactly of what it says, but
22 it says something to the effect that if you were there
23 when he caught the big one, you were there when he had his
24 surgery, will you be there to tell him that he has a
25 gambling problem, and I think the focus, there again, is
68
1 on awareness, and I think the Alliance should be
2 congratulated for that in taking a very proactive approach
3 in a little more aggressive manner than they have in the
4 past with just numbers on a posterboard, and those are all
5 displayed throughout our casino, around the ATMs, cages,
6 et cetera.
7 Again,
I'll address what we do at the
8 properties at the same time.
9 CHAIRMAN SMITH: Do you have any figures on
10 disassociated persons, whether those figures are going up
11 or not?
12 MR. STREMMING:
You know, actually, that
13 program is, as you know, instituted and monitored by the
14 Missouri Gaming Commission, and I don't know. I know that
15 we consistently
get numbers that we pull off from their
16 computer system monthly to make sure they are on the DAP
17 list. I know that
there are people that continue to go on
18 there each month, but as far as percentage growth, I don't
19 have an answer to that.
20 MR. MULLALLY:
It's leveled off at about
21 90 a month statewide.
22 CHAIRMAN SMITH: I see.
23 MR. MULLALLY:
There was substantial growth
24 as we increased our education and awareness programs, but
25 we've seen it level off and, you know, again, if you look
69
1 at the prevalence rates from the research community, we
2 think that the number that we're getting is a good thing.
3 In fact, growth in that program is a good
4 thing because we know that about one percent of the
5 population is going to have a problem with this product,
6 not being able to use it responsibly, so the fact that
7 they are
getting in and getting some help and entering
8 into a program that will assist them in refraining from
9 gambling is a good thing.
10 CHAIRMAN SMITH: Thank you.
11 MR.
STREMMING: Some of the things we do,
12 obviously, I've already spoken about, the laminated
13 posters that we put by the ATM machines. We put the
14 888-BETSOFF message at various locations throughout the
15 property, as well, for those that might be seeking that.
16 The 888-BETSOFF brochures are placed at each of the guest
17 services desks, which are prominently displayed for the
18 guests' use.
19 The STEP program, which is a fairly new
20 program, brochures are located at each of the cages on the
21 property, which are prominently displayed for the guests'
22 use, and my understanding of that is that's also a
23 voluntary program, where if you would like to submit your
24 name to credit card companies, that they can then make
25 sure that your credit card does not work in casinos, which
70
1 is a new program.
2 All guest services desk team members have
3
been trained to notify the
Missouri Gaming Commission
4 immediately should a guest request information about the
5 DAP program.
6 All print advertisements and television
7 advertisements, and
I'm sure you've heard some of them,
8 along with various off property advertising collateral
9 contain the "Gambling Problem? Call 888-BETSOFF in
10 Missouri" message.
11
All ticketing
stations prominently display a
12 message for guests that inform the guest that they may
13 request not to receive casino mail.
14 Both properties participate in the Problem
15 Gaming Awareness Week, and encourage our team members to
16 do the same.
17 Ameristar Casino Kansas City has produced and
18 runs a problem gambling awareness advertisement on the video
19 wall at the property.
We don't do that in St. Charles
20 because we don't have a video wall.
21 And in conjuntion with the Alliance to Curb
22 Problem Gambling, both properties are soliciting
23 celebrities that are appearing at the properties, asking
24 them to do public service announcements for problem
25 gambling awareness, and I believe that Wynona Judd, we had
71
1 her over in Kansas City to perform, and we asked her if
2 she would be willing to do that. It's my understanding
3
she's going to be willing to
do a radio advertisement for
4 the Alliance.
5 As I mentioned earlier, the property in
6 Kansas City also contributes $100,000 annually to the Port
7 Authority of Kansas City for the awareness and treatment
8 of problem gambling.
9 And then, in addition, I serve
10 on both the Kansas City Port Authority's Problem Gambling
11 Awareness Committee, and I am also on the Advisory Board
12 of the National Center for Responsible Gaming's Problem
13 Gaming Quarterly.
14 Next, we were asked to discuss our compliance
15 with the Disassociated Persons Program and explain our
16 method of identifying those disassociated persons that
17 attempt to cash checks, use or obtain VIP cards, or cash
18 in large jackpots, et cetera. This is on page 40 through 48
19 of your chart and, again, I'll address both properties at
20 the same time.
21 Each time an updated version of the
22 disasociated persons list, and I'll just say DAP list, is
23 released by the Missouri Gaming Commission, our database
24 teams check every name on the list to insure that all the
25 DAPs are properly flagged and are in the respective
72
1 systems.
2 If the DAP is not currently in our database,
3 we enter their name into the systems and flag it as
4 disassociated.
5 In addition, the address is changed to the
6 respective Ameristar Casino St. Charles or Ameristar
7 Casino Kansas City property address to guarantee that no
8 mail is sent to the person.
So if something accidentally
9 slips through at the mail house, it just gets returned to
10 our property and then we recognize that we have a problem.
11
The state code is also changed to XX as an
12 additional parameter check.
13 Most important, the flagging that is attached
14 to the account restricts turnstile activation. When
15 activation is attempted, a message flashes on the screen
16 prompting the guest services representative to inform the
17 guest that there is a problem with the magnetic strip on
18
the card. The guest services representative then
informs
19 security that there has been a DAP that has attempted to
20 gain entry into the casino and security, in turn, notifies
21 the Missouri Gaming Commission.
22 Other precautions that are taken include data
23 entry guidelines to insure that duplicate accounts are not
24 entered, and that guests are all looked up and entered
25
into the system in the same fashion for easy
detection.
73
1 Team members are trained on data entry guidelines during
2 their orientation program and are retrained quarterly.
3 To protect against DAPs cashing checks or
4 claiming large jackpots, binders containing the printout
5 of the most recent DAP lists are kept at the cage and
6 jackpot service stations, and before cashing a check or
7 paying a reportable jackpot, team members are trained to
8 make certain that the guest is not listed on the DAP list.
9 Each DAP
is also flagged in the jackpot/fill
10 system for further assurance that all DAPs are
11 identified.
12 CHAIRMAN SMITH: What is the jackpot/fill
13 system?
14 MR. STREMMING:
Do you guys want to explain
15 that a little better?
16 MR. RAYMON:
As far as?
17 MR. STREMMING:
He's asking what the
18
jackpot/fill system is.
19 MR. RAYMON:
You mean as far as --
20 CHAIRMAN SMITH: How does it work?
21 MR. STREMMING:
How does it work?
22 MR.
RAYMON: If someone wins a jackpot,
their
23 name is entered into the system, and if they are a DAP, at
24 that point in time they are flagged, as well.
25 CHAIRMAN SMITH: Is that before it's paid
74
1 off?
2 MR. RAYMON:
Yes. And that usually is what's
3 triggered as W2-G income, $1,199.
4
MR. STREMMING: And, obviously,
in any of
5 those cases if we identify anybody that's on the DAP list,
6 whether they are in the property or outside the property,
7 we immediately notify the Gaming Commission.
8 CHAIRMAN SMITH: What happens to the jackpot
9 if he is listed?
10 MR. STREMMING:
If he's listed, if I remember
11 correctly -- well, obviously, we don't pay it, and I can't
12 remember. There was
some dispute about whether that money
13 should be, if it's returned to the casino.
14 Kevin, do you remember?
15
MR.
MULLALLY: Currently, it's
16 returned to the casino.
I think there is a great deal of
17 interest in having that money go to a fund for problem
18 gambling, but currently it's returned to the casino.
19 MR. STREMMING:
Next, we were asked to
20 describe our program to deter underage gambling.
21 Like problem gambling, Ameristar Casino St.
22 Charles and Ameristar Casino Kansas City take the matter
23 of underage gambling very seriously. To that end, both
24 properties have taken various steps to detect and deter
25 underage gamblers, and I'll walk through those briefly that
75
1 are in your list.
2 All marketing team members are certified in
3 TIPS training, which involves extensive training regarding
4 alcohol awareness and underage detection techniques.
5 Underage detection training is done during orientation,
6 and it's also conducted during quarterly retraining.
7 The Missouri Gaming Commission staff has also
8 conducted training at the properties for the marketing,
9 security, and beverage employees, and it's been quite
10 helpful.
11 A proper state or government-issued photo ID
12 is required to obtain a new account, as well as a
13 reprinted card on an existing account at the guest
14 services desk. The
ID presented is checked carefully by
15 the staff for validity.
16 If there are any questions regarding the ID,
17 a security officer is called to verify the validity of the
18 identification. If the security officer is still not
19 comfortable with the validity of the ID, then the Missouri
20 Gaming Commission will be called for assistance.
21 Signage indicating the acceptable forms of
22 identification is located at any location where guests
23 obtain their players card.
24 At the turnstiles all guests who appear to be
25 under the age of 30 at either of our properties are
76
1 required to prevent a valid photo ID before gaining entry
2 into the casino.
3 At
Ameristar Casino Kansas City, videos are
4 played at the turnstiles on televisions outside the
5 turnstiles, and on the video wall, deterring underage
6 guests from attempting to gain access to the casino.
7 And "Must be 21 or older" is printed
on
8 almost all advertising collateral, direct mail and
9 players' cards.
10 In addition, in Kansas City an incentive
11 bonus is awarded to any team member that identifies an
12 underage guest attempting to gain entry or having gained
13 entry into the casino.
14 In addition, any team member who detects five
15 underage guests is awarded an additional bonus of $500.
16 A similar incentive program is in place at
17 Ameristar Casino St. Charles. However, team members are
18 awarded $50.00 for each underage patron that they
19 identify. That's
because Tony is cheaper than Dave.
20 Next, we were asked to provide a report on
21 the number of business closings during the current period
22 of licensure, as well as the number of business start-ups.
23 That's on page 55 and 56 of your flip chart.
24 During the current period of licensure there
25 have been 81 business start-ups in the City of St. Charles
77
1 Unfortunately, neither the City of St. Charles nor
2 the local Chamber of Commerce monitors or has a list
3 that they feel confident in on the number of business
4 closures in the City, but I'm sure if you have any
5 questions regarding the economic development in the City,
6 Mayor York could answer those questions for you.
7 During the current period of licensure in
8 Kansas City there have been 2,317 business start-ups in
9 the metropolitan service area according to the economic
10 development marketplace.
During that same period of time,
11 the Kansas City Development Council reports 27
12 major business have closed, resulting in the loss of 7,269
13 jobs.
14 In addition, 34 major businesses in
15 the Kansas City metropolitan area have suffered downsizing
16 in operations that resulted in the reduction of 6,936
17 jobs.
18 Unfortunately, the City has informed us that
19 it is impossible to gather the same information for all
20 the small business start-ups and failures, and I think the
21 focus there is on
the economy. I don't think that those
22 large scale numbers are major businesses, or are in any
23 way associated with casino gambling being conducted in the
24 City of Kansas City, particularly when you take into
25 consideration that the majority of those jobs that are
78
1 downsizing come from Sprint International Headquarters
2 that are located in Kansas City.
3 We're nearing the end here.
4 We were asked to provide information on
5 charitable contributions in the home dock community and
6 the State of Missouri.
7 In St. Charles during the current period of
8 licensure, the property has made approximately 374
9 separate contributions to various local and state
10 charities, schools, community clubs, fraternal
11 organizations, churches, food pantries, hospitals, and
12 foundations, totaling over $94,000.
13 In addition, in conjunction with the grand
14 opening of the St. Charles facility, Ameristar Casinos,
15 Inc. announced the grant of $100,000 to the new Lewis and
16 Clark boat house and museum which is being built right
17 here on the St. Charles riverfront.
18 During the current period of licensure, in
19 Kansas City that property has made approximately 212
20 separate contributions to various local and state
21 charities, schools, community clubs, et cetera, totaling
22 over $130,000, and that number does not include annual
23 payments that are made to the Port Authority of Kansas
24
City, or a $200,000 voluntary
payment which is made to
25 Clay County on an annual basis.
79
1 CHAIRMAN SMITH: Is that for charitable
2 purposes, or just for county government expenses?
3 MR. STREMMING:
There are really no
4 restrictions on what they can spend that on. We just make
5 that voluntary payment.
I think the majority of that
6 money, though, goes for county expenses.
7 In addition, we were asked to list some of
8 the various organizations that we have contributed to or
9 we're actively involved
with, as well as volunteer time
10 that is given by our employees, and I won't bore you with
11 that list of groups, but you can see there that we have a
12 pretty wide range both in St. Charles and in Kansas City
13 of various groups that we either have our directors at the
14 property, or managers are involved with and we can make
15 significant contributions to.
16 At
both properties they also run a pretty
17 significant United Way campaign drive. In St. Charles,
18 Tony, who is here today, also continues to serve as a
19 director of the St. Charles Chamber of Commerce Board, a
20 director on that Board.
So we encourage our employees to
21 be involved in the local communities, and they are.
22 At this point, that concludes my portion of
23 the presentation. If
you have additional questions, we
24 can save them until the end, and at this time I'll turn it
25 over to Tony and Dave, and I think they have some projects
80
1 and efficiencies that we recognize at the properties that
2 they can tell you about, and then answer any questions you
3 might have about the operations.
4 CHAIRMAN SMITH: Who is going first here?
5 MR. RAYMON:
I'll go first.
6 Tony Raymon, Ameristar St. Charles. I'm the
7 general manager.
8 I just wanted to talk a little bit about our
9 new facility which includes the following amenities.
10 We have a 133,200 square foot casino now,
11 over 3,265 slot machines, and this number is a little
12 outdated. We
actually have about 3,300 now, since this
13 was a September number.
14 We have 95 table games.
15 Our elite players lounge actually opened
16 December 9th. We had
a slight delay on the opening, a
17 very beautiful club for the elite players.
18 CHAIRMAN SMITH: How do you become an elite
19 player?
20 MR. RAYMON:
It’s based on the level of play,
21 number of visits.
22 CHAIRMAN SMITH: I see.
23 MR. RAYMON:
Landmark Buffet, state of the
24 art buffet with multiple serving stations, seats 495
25 guests.
81
1 Amerisports Bar & Grill has a 40-foot video
2 wall and seats approximately 262 guests. It's becoming
3 one of our most popular venues until the Rams fell
4 through.
5 47 Port Street, a high end steakhouse seats
6 154 guests, has a 20-seat private dining room. It also
7 has four booths which we call chef's tables which the
8 guests very much enjoy.
It sits right in the kitchen
9 area.
10
King Cat Club, a martini lounge adjacent to
11 the 47 Port Street Grill, and it seats 46 guests.
12 The Falcon Diner is a casual dining
13 restaurant, seats 185 guests.
14 Pearl's Oyster Bar seats 106 guests, and this
15 is used mostly for the evening dining.
16 Bottleneck Blues Bar, a jazz and blues bar,
17 seats 360 guests with live entertainment. We actually do
18 national acts once a month, and regional acts every
19 weekend, which gives the guests a good variety of
20 entertainment if they want to come in and hear music.
21
Hi-Vi Arcade, a video game arcade
22 accommodates 50 guests.
23 And Merk & Tyler Company, which is a 1,430
24 square foot gift shop.
25 And, in conclusion, we've now been open about
82
1 four months and, as Troy has said about the labor, we were
2 able to reduce labor by about two hundred and there were
3 no layoffs. It was
all done through attrition, people
4 resigning, people moving along, so the stabilization over
5 the last four months has gone very, very well.
6
That concludes my
presentation.
7 CHAIRMAN SMITH: Any particular start-up
8 problems, or has everything gone smoothly?
9 MR. RAYMON:
Well, as all start-ups, this is
10 my seventh start-up in the casino world, and they all have
11 lots of problems associated with them. The cages, getting
12 everybody used to their new jobs. We opened up with
13 about 1,500 restaurant seats, so there was a huge
14 adjustment there for our entire staff, being in the
15 restaurant business.
16 So, overall, though, it's stabilizing very
17 nicely.
18 CHAIRMAN SMITH: Any other questions?
19 (No response.)
20 CHAIRMAN SMITH: Let's hear about Kansas
21 City, then.
22 MR. ALBRECHT:
I'm Dave Albrecht. I'm the
23 new general manager at the Ameristar property in Kansas
24 City.
25 We have a few exciting things going on in
83
1 Kansas City. In
continuing our investment in the State of
2 Missouri and our commitment to the City of Kansas City,
3 plus also not wanting to be one-upped by Tony and his
4 group down here, we've started our own $30,000,000
5 renovation project of our own.
6 This will include enhancement and new
7 restaurants, and also a renovation of our casino.
8 Some of the things that you will see happen
9 at the property, we have already opened a new restaurant
10 called The Freedom Roadhouse. It is an American roadhouse
11 themed
restaurant. It seats 156 people and was
opened in
12 July of this year.
13 Coming on board and opening right after the
14 first of the year we have a new Falcon Diner themed
15 exactly like the venue here in St. Charles, seats 238
16 people, and will be a 24-hour operation.
17 We have added a new steakhouse called The
18 Great Plains Cattle Company. It will be a 140-seat venue
19 with a 72-seat lounge, and this is a new restaurant to the
20 property.
21 The other two restaurants were renovated in
22 spaces where we already had restaurants and just changed
23 the venues and changed the names.
24 We will also be making upgrades to our
25 buffet.
84
1 Next week we have a new venue opening. It's
2 a 78-seat entertainment casual bar venue called Depot #9
3 and it is, as it states, a depot-styled venue which sits
4
next to the railroad car on
the property, and is exciting
5 and going to be very good for the guests coming in, add
6 some excitement to the venue.
7 We also have opened a new food court. We
8 have three outside vendors coming in. One of the vendors,
9 Burger King, opened last week, and right after the first
10 of the year we will also have Sabarro's Pizza, and
11 Coldstone Creameries will open up shortly after the first
12 of the year.
13 Enhancements and renovation to the casino
14 floor, the second deck of our queen boat, has been closed,
15 I believe for a couple years.
16 MR. STREMMING:
Yes.
17 MR. ALBRECHT:
That is reopening mid-January.
18 When that opens up we will add roughly 350 new gaming
19 devices to our casino.
20 We will also be introducing to the Kansas
21 City market ticket in/ticket out. At the end of our
22 renovation, we will have roughly 1,400 machines that will
23 be converted into
ticket in/ticket out.
24 We will also be relocating and building a new
25 poker room, and we will be building and relocating a new
85
1 high limit area.
2 These projects, this project should be done
3 the end of March, and I think will be great enhancements
4 to the property and great new venues for our guests and
5 new conveniences for them on the casino floor.
6 CHAIRMAN SMITH: What is the purpose of the
7 high limit area?
8 MR. ALBRECHT:
Well, the high limit area,
9 your typical gamer who plays a little bit more money than
10 the average customer, likes the convenience of a private
11 area where they don't have people looking over their
12 shoulder
watching them, and we add a few more
13 enhancements, a little bit more personalized service in
14 that area.
15 CHAIRMAN SMITH: Are there any other
16 questions of the two managers?
17 (No response.)
18 CHAIRMAN SMITH: Thank you.
19 Do you have anything else to add to your
20 presentation?
21 MR. STREMMING:
I guess, just in closing, I
22 would just like to say that the projects that Dave and
23 Tony have presented just further establishes Ameristar's
24 commitment to our home dock cities and to the State of
25 Missouri, and we think that all of those projects will
86
1 just continue to further grow the markets, the gaming
2 markets in both of those areas.
3 CHAIRMAN SMITH: I've been on the Commission
4 long enough to see the empty building out there for so
5 many years, and it's really a pleasure to me to see what
6 you all have done to improve that facility.
7 Can we take about a five-minute break before
8 we get the report from the Gaming Commission on their
9
investigation, and we'll be
back here in five minutes, if
10 possible.
11 MR. STREMMING:
Mr. Chairman, before we
12 leave, I would also just ask that there have been letters
13
that have been sent from both
the mayor's office in Kansas
14 City, as well as the mayor's office in St. Charles.
15 Can those just be made a part of the record?
16 CHAIRMAN SMITH: Are either of the mayors
17 here that want to say anything?
18 MR. STREMMING:
Mayor Patti York is here.
19 CHAIRMAN SMITH: Do you want to add anything?
20 I don't want a mayor to be here and not have a chance to
21 speak.
22 MAYOR PATTI YORK: I was over there signing
23 papers.
24 I very much appreciate it and, Commission
25 members, I again welcome you here to St. Charles, and I
87
1 hope the facilities have been all that you've needed and,
2 of course, any time you need us, we'll be here for you.
3 I'm sorry to see Commissioner Nikolaisen
4 leaving, but I certainly wish you well. I know you've put
5 in a lot of hard work for a long time on this Commission.
6 As Mr. Stremming said, I asked that my letter
7 dated October 29th be put back in, or put into the record,
8 and talk a little bit, just very briefly, about our
9 casino, and the pleasure
we have of taking it from a
10 rusting hulk sitting out on the side of the riverfront, to
11 one that we feel is one of the premier facilities in the
12 state.
13
And I really want to thank the Commission and
14 all the staff members for their diligence in working with
15 us and bringing Ameristar to Missouri.
16 Your support was absolutely vital in making
17 sure a first class operator took over these properties and
18 rebuilt the St. Charles facility to its full potential,
19 and I personally want to thank each and every one of you
20 for your involvement in that.
21 I should point out that there are several
22 items which are normally requested from the City in the
23 license renewal process that do not apply to our
24 particular situation, primarily, because the casino does
25 entirely own its own property, rather than property that
88
1 is leased at all
from the city.
2 You will see in my letter that there was a
3 comment, a statement from our City Chief of Police, Paul
4 Corbin, showing that calls for service are statistically
5 insignificant, especially for an entity this size, and
6 particularly for an entity like this in our City.
7 I do want to point out, though, that
8 Ameristar has been an outstanding corporate citizen. I
9 know they have said that about themselves, but it's very
10 important to me, and I meet with all new businesses who
11 come to town, whatever size, and I really emphasize that
12 they need to get involved in the community, not just in
13 city government, or anything like that, but they really
14 need to get out and be involved in our city in some way
15
and in the community.
16 Ameristar's management has made a pointed
17 effort to have not only itself, but it's staff become
18 involved in the community service organizations, and the
19 casino has also
contributed substantial sums of money to
20 organizations in an effort to help them in their services.
21 As Mr. Stremming pointed out, the Lewis and
22 Clark boathouse is especially important to us in our
23 community. We have
been chosen as one of twelve signature
24 events across the United States for the 2004 Bicentennial
25 Celebration of Lewis and Clark leaving to explore the
89
1 West.
2 I had to arm wrestle a lot of mayors across the
3 United States as to where they actually left, and as I
4 point out, it's kind of like when you go on vacation, you
5 get your suitcases from the basement, your kids come home
6 from school, and your husband comes home from work, and
7 when you're in the
car and leaving, you're on vacation.
8 Well, that's what happened with Lewis and
9 Clark. Lewis came
from St. Louis, Clark came from Wood
10 River. They repacked
their boats, actually, hired two
11 people from the City of St. Charles who were born here,
12 baptized here, and left and explored the West, and came
13 back, and both of them got married here.
14 So brought them back safely. I digressed.
15 But Lewis and Clark is very important to us.
16 So for the Ameristar to come forward and make
17 this happen, it is not just a big building. It is an
18 educational venue for children to come and see how the
19 explorers had to live, and what Lewis and Clark needed to
20 do to learn about the West.
21 One of the other things that they were
22 involved in, they were involved in the nitty-gritty dirt
23 of helping us clean up our riverfront.
24 We had a young man who is nationally known,
25 he's been on David Letterman, Good Morning America, a
90
1 young man who came in, and his job is to clean up the
2 riverfront. He does
this.
3 And it took a concerted effort. We had about
4 7,000 people show up, and picked up over 90 tons of trash
5 out of the river.
6 But one of the people who stood forward from
7 the very beginning was Tony, and the casino, who came up
8 and said we're on the river, this is important to us.
9 So it's those kind of things that they didn't
10 just give
money. They gave people. They were part of the
11 people that were out there actually cleaning up the river,
12 and I think that really makes, it makes a big difference
13 to me as a community leader, to make sure that they are
14 not just saying these things, that they are actually doing
15 it.
16 And, of course, from an economic standpoint,
17 it is now our largest employer, Ameristar is, with over
18 1,700 employees and a payroll of over $15,000,000.
19 In my letter it tells you a little more about
20 that, but with the opening of their new restaurants, there
21 is sales tax generated, as well as a tourisim tax that
22 goes back into our community, too.
23 So I, again, just want to emphasize that we
24 believe that Ameristar has been an excellent corporate
25 citizen, and it continues to be a true asset to the City,
91
1 and from the City's standpoint it is deserving of a
2 renewal of its license.
3 So I thank you for your consideration on
4 this, and if you have any questions for me, I'd be happy
5 to answer them.
6 CHAIRMAN
SMITH: I have one question.
7 I just wondered what effect the casino has
8 had on the downtown businesses as far as being vacant or
9 full, or what effect has occurred?
10 MAYOR YORK:
We have seen, and I used to own
11 a bed and breakfast on Main Street.
12 I think, from the very beginning, we have not
13 seen a huge increase in numbers, but we have not seen a
14 decrease in numbers.
They are really totally different
15 kinds of venues, and they bring a different kind of
16 market.
17 People, though, will leave the casino and
18 cruise around our city to see what we have, and we're
19 hoping that those people are coming back. Our numbers are
20 up on Main Street.
21 Of course, after September 11th, every
22 retailer took a big hit.
We've spent a lot in marketing
23 and advertising.
That's where our tourisim dollars go, to
24 bring people back in there, but we haven't really ever had
25 any complaints about the casino versus the smaller
92
1 retailer down on Main Street.
2 CHAIRMAN SMITH: Any questions of the Mayor?
3 (No response.)
4 CHAIRMAN SMITH: If not, thank you for
5 providing this facility for us. It's one of the best ones
6 we've met in.
7 MAYOR
YORK: Well, great. Any time, you're
8 welcome. Thanks.
9 CHAIRMAN SMITH: Anything else?
10 (No response.)
11 CHAIRMAN SMITH: If not, we'll take a
12 five-minute recess and we'll see what the Commission has
13 to say.
14 (Whereupon,short recess was taken.)
15 CHAIRMAN SMITH: Would you come to order,
16 please. I think
we're ready to resume the meeting.
17
18 Before we hear from the Gaming Commission on
19 the investigation of Ameristar, are there any
20 delegations or individuals here who want to make any
21 comments for or against the relicensure of Ameristar?
22
23 (No response.)
24 CHAIRMAN SMITH: If not, Kevin, will you go
25 ahead with the presentation.
93
1 MR. MULLALLY:
Corporal Tan Davenport will
2 make the presentation for the staff.
3 CORPORAL TAN DAVENPORT: Commissioners.
4 Investigators of the Missouri Gaming Commission conducted
5 a relicensing background investigation of Ameristar Casino
6 Kansas City and Ameristar Casino St. Charles.
7 Ameristar Casino Kansas City and Ameristar
8 Casino St. Charles are currently wholly owned subsidiaries
9 of Ameristar Casinos, Inc., a publicly-traded Nevada
10 corporation.
11 Ameristar Kansas City and Ameristar St.
12 Charles were incorporated in the State of Missouri on
13 October 10, 2000, for the purpose of acquiring, owning
14 and operating riverboat gambling operations in Kansas City
15 and St. Charles, Missouri.
16 Ameristar Casino Inc. is an established
17 multi-jurisdictional
gaming enterprise that currently owns
18 and operates six properties in four gaming jurisdictions -
19 Iowa, Mississipi, Missouri, and Nevada.
20 A check with state gaming authorities in
21 those jurisdictions revealed no significant issues or
22 concerns.
23 Credit and criminal background checks were
24 conducted on Ameristar St. Charles and Ameristar Kansas
25 City Key and Level I personnel. No discrepancies or
94
1 concerns were noted.
The criminal background checks
2
included, but were not limited
to, checks with federal,
3 state, county, and municipal law enforcement agencies
4 where the individuals have lived, worked and frequented.
5 The city administrator and city prosecutor,
6 as well as the police and fire departments of Kansas City
7 and St. Charles, were contacted reference any concerns
8 regarding the operations of Ameristar St. Charles and
9 Ameristar
Kansas City. All indicated they had no
negative
10 information to provide.
11 Ameristar Kansas City and Ameristar St.
12 Charles have been issued docking permits by the Department
13 of the Army Corps of Engineers with no negative comments
14 received.
15 The Missouri Department of Natural Resources
16 was contacted regarding wastewater handling facilities of
17 Ameristar Kansas City and Ameristar St. Charles and found
18 them to be adequate.
19 The investigation conducted did not produce
20 any information that would preclude Ameristar Casino
21 Kansas City and Ameristar Casino St. Charles from
22 relicensing by the Missouri Gaming Commission.
23 CHAIRMAN SMITH: Anyone have any questions?
24 MR.
MULLALLY: Mr. Chairman, based on the
25 investigative report, the staff recommends under
95
1 Resolutions 02-097 and 02-098 that Ameristar Casino St.
2 Charles and Ameristar Casino Kansas City be relicensed.
3 CHAIRMAN SMITH: As far as you're concerned,
4 they have a clean slate as far as your investigation
5 indicated?
6 CORPORAL DAVENPORT: Yes.
7 CHAIRMAN SMITH: Any other questions?
8 (No response.)
9 CHAIRMAN SMITH: If not, do we have a motion
10 first as to Ameristar Casino Kansas City?
11 COMMISSIONER NIKOLAISEN: I move the adoption
12 of Resolution 02-097.
13 CHAIRMAN SMITH: Is there a second?
14 COMMISSIONER BATTLE: I'll second.
15 CHAIRMAN SMITH: Call the roll.
16 MS. FRANKS:
Chairman Smith.
17 CHAIRMAN SMITH: In favor.
18 MS. FRANKS:
Commissioner Nikolaisen.
19 COMMISSIONER NIKOLAISEN: Favor.
20 MS. FRANKS:
Commissioner Battle.
21 COMMISSIONER BATTLE: Favor.
22 MS. FRANKS:
By your vote, you've adopted
23 Resolution No. 02-097.
24 CHAIRMAN SMITH: The next item would be a
25 resolution concerning the relicensure of Ameristar Casino
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1 St. Charles, Inc.
2 Do we have a motion on that?
3 COMMISSIONER BATTLE: I move that we adopt
4 Resolution No. 02-098.
5 CHAIRMAN SMITH: Is there a second?
6 COMMISSIONER NIKOLAISEN: Second.
7 CHAIRMAN SMITH: Call the roll.
8 MS. FRANKS:
Chairman Smith.
9 CHAIRMAN SMITH: In favor.
10 MS. FRANKS:
Commissioner Nikolaisen.
11 COMMISSIONER NIKOLAISEN: Favor.
12 MS. FRANKS:
Commissioner Battle.
13 COMMISSIONER BATTLE: Favor.
14 MS. FRANKS:
By your vote, you've adopted
15 Resolution No. 02-098.
16
MR. MULLALLY: Mr. Chairman,
Under Tab I is a
17 Consideration of Level I and Key Applicants, and
18 Lieutenant Rick Wilhoit is here to make a presentation.
19 (Resolution No. 02-099)
20 CHAIRMAN SMITH: Good morning.
21 LT. RICK WILHOIT: Good morning Mr. Chairman,
22 Commissioners.
23 Background teams conducted investigations of
24 four Level I's that included, but were not limited to
25 criminal, financial and general character inquiries. The
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1 following
individuals have been investigated and found to
2 be suitable for licensing by the Commission:
3 James R. Franke, Vice President of Slot
4 Operations at Ameristar Casino St. Charles, Inc.;
5 Jeffrey Carlos Barton, Chief of Security at
6 Mark Twain Casino, LLC;
7 Wendy Kae Dawn Malotte, Internal Auditor at
8 St. Joseph Riverboat Partners, and;
9 Nancy E. Wheatley, Financial Analyst at St.
10 Joseph Riverboat Partners.
11 COMMISSIONER NIKOLAISEN: I have one quick
12 question. On one
individual there was a bit of concern
13 and will be reviewed on a quarterly basis. When you say
14 review, just checking on the status financially?
15 LT. WILHOIT:
Yes.
16 COMMISSIONER NIKOLAISEN:
Okay.
17 LT. WILHOIT:
To probably include credit
18 reports, things of that nature.
19 COMMISSIONER NIKOLAISEN: Thank you.
20 CHAIRMAN
SMITH: You don't think that affects
21 the credibility of the person that's being relicensed
22 involving his wife?
23 LT. WILHOIT:
No sir, not to this point. It
24 is an issue that was, as you could tell, was recently
25 brought to their attention, so we're not only going to
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1 monitor the way by which they deal with the situation, but
2 we will also monitor the way their finances go in the
3 future.
4 CHAIRMAN SMITH: She hasn't joined the
5 Disassociated Program?
6 LT.
WILHOIT: Not to our knowledge.
7 CHAIRMAN SMITH: Any other questions
8 concerning the -- other than that one item, I don't see
9 anything detrimental on any of the others.
10 LT. WILHOIT:
No.
11 CHAIRMAN SMITH: Do we have an action, or
12 motion to approve the relicensure of the Level I license
13 applications referred to?
14 COMMISSIONER BATTLE: I so move.
15 COMMISSIONER NIKOLAISEN: Second.
16 CHAIRMAN SMITH: Moved that Resolution No.
17 02-099 be approved to authorize relicensure and seconded.
18 Will you call the roll?
19 MS. FRANKS:
Chairman Smith.
20 CHAIRMAN SMITH: Favor.
21 MS. FRANKS:
Commissioner Nikolaisen.
22 COMMISSIONER NIKOLAISEN: Favor.
23 MS. FRANKS:
Commissioner Battle.
24 COMMISSIONER BATTLE: Favor.
25 MS. FRANKS:
By your vote, you've adopted
99
1 Resolution No. 02-099.
2 (Resolution No. 02-100.)
3 MR. MULLALLY:
Mr. Chairman, under Tab J is
4 an amendment to a previously adopted Level I licensee.
5 There's a typographical error on the expiration date. It
6 should have been 11/30/03 instead of 10/31/02.
7
COMMISSIONER NIKOLAISEN: I move
for
8 approval.
9 COMMISSIONER BATTLE: Second.
10 CHAIRMAN SMITH: Moved and seconded.
11 Call the roll, please.
12 MS. FRANKS:
Chairman Smith.
13 CHAIRMAN SMITH: Favor.
14 MS. FRANKS:
Commissioner Nikolaisen.
15 COMMISSIONER NIKOLAISEN: Favor.
16 MS. FRANKS:
Commissioner Battle.
17 COMMISSIONER BATTLE: In favor.
18 MS. FRANKS:
By your vote, you've adopted
19 Resolution 02-100.
20 MR. MULLALLY:
Mr. Chairman, that concludes
21 the open session of business that the staff has.
22 I think there are some additional matters.
23 CHAIRMAN SMITH: Yes. First, are there any
24 delegations here to be heard? This is the opportunity if
25 you have something to say.
We always ask for that at the
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1 end of the meeting.
We are shortly going to go into
2 closed session.
3 (No response.)
4 CHAIRMAN SMITH: If there's nobody here, we'll
5 assume that there are no delegations here to be heard
6 today.
7 This is kind of a sad occasion in some ways.
8 We're losing one of our Commission members. She is
9 retiring
voluntarily. She hasn't been kicked off
the
10 Commission. In fact,
I wish she could stay on longer, but
11 she has other interests that are going to take her time,
12 and she advised the Governor some time ago that she would
13 have to leave at the end of the year.
14 Lynne, Ms. Nikolaisen, will be retiring.
15 This is her last meeting.
She's been a real asset to this
16 Commission. Her expertise in finance has been very
17 important, particularly in the time that we have been
18 licensing some new companies in Missouri, and also the
19 reorganization, and she has always been very helpful in
20 helping us through those very difficult periods of
21 analyzing the financial situations of those companies.
22 Also, one of the jobs of this Commission is
23 to try to set
policy and to ask tough questions to be sure
24 that the administration is following the roles that the
25 statute calls for, and the constitution, and Lynne knows
101
1 how to ask those tough questions. She doesn't mind
2 speaking up, and as she showed today, she doesn't mind
3 voting no on issues where she disagrees. That's the kind
4 of commissioner you want.
5 Besides that, she has a great sense of humor
6 and she provides me with one joke a month, a new joke that
7 I haven't heard. I'm
still waiting for the one for today,
8 however.
9 COMMISSIONER NIKOLAISEN: Closed session.
10 (Laughter)
11 CHAIRMAN SMITH: We really have appreciated
12 your assistance, and we hate to lose you, but we hope
13 you'll keep in touch with us, and if you think gaming is
14 not doing the right thing you'll give Kevin or I or
15 somebody else here a call about it.
16 In addition to being able to vote no on some
17 issues today, this is also your opportunity to say a few
18 good words, or bad words, for the good of the order, so
19 we'd like to
hear from you at this time.
20 COMMISSIONER NIKOLAISEN: I will be very
21 brief, just to say thank you for this opportunity. It has
22 been most interesting, and the Commissioners I have served
23 with across the board have been very good, very helpful,
24 and I think we have learned from each other, and we have
25 gone through a lot, and as I mentioned in a letter to the
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1 Governor when I said I couldn't go further than after the
2 end of this year, that I thought this was a phenomenal
3 staff. When they do
things, they are not afraid to admit
4 when they are wrong, or a mistake has been made, and we
5 are constantly changing, which I think is a sign of a good
6 organization. We
aren't afraid of change.
7 So I wish the remaining Commission members
8 good luck, and I hope that --
9 CHAIRMAN SMITH: Group's getting small, isn't
10 it.
11
COMMISSIONER
NIKOLAISEN: Yes. And the new
12 members that come on will find this an equally rewarding
13 experience, and at the same time feel like they have
14 contributed.
15
And I thank you
one and I thank you all.
16 (Applause)
17 CHAIRMAN SMITH: Muriel, you might have some
18 comments, too.
19 COMMISSIONER BATTLE: Yes. I am pleased that
20 Lynne was given an opportunity to take care of things that
21 she has to take care of, but I'm saddened because she
22 won't be here to welcome any of our new members. She
23 certainly made me feel very comfortable from the very
24 first moment that I sat on the Commission.
25 But I echo her comments about our staff. We
103
1 are very impressed with the way that no one seems to point
2 the finger at the other guy, and I think that the people
3 of Missouri are well served by the Gaming Commission, by
4 Kevin and others.
5 So we will miss you, and I don't have any
6 hesitation in thinking that you will call us if we are not
7 doing right. So good
luck, Lynne.
8 COMMISSIONER NIKOLAISEN: Thank you.
9 CHAIRMAN SMITH: Stand up, Lynne. In
10 addition to the high salary which you receive of a hundred
11 dollars a meeting for this job, you also get as you retire
12 a plaque that says "From the Missouri Gaming
Commission.
13 Lynne R. Nikolaisen as a Commissioner and friend,"
which
14 is very appropriate, "from April 1999 to December
2002,"
15 and it has the Missouri seal on it. So this is all you
16 get, other than the friendship we've all had with you.
17 COMMISSIONER NIKOLAISEN: Thank you.
I
18 appreciate it.
19 CHAIRMAN SMITH: I think Kevin would like to
20 make a few comments also.
21 MR. MULLALLY:
Mr. Chairman, on behalf of the
22 staff, and I know that they all join me in this, in public
23 service you get the wonderful opportunity to meet a lot of
24 exciting, smart, talented people, and you also, by the
25 very nature of things, have to say goodbye to many very
104
1 smart, talented people.
2 Sometimes those goodbyes are a little more
3 heartfelt and personal than others, and this is one of
4 those, because Lynne is truly a very, very special person
5 in my view, and I think the staff shares that. She's
6 bright, she's articulate, she's tenacious, she's
7 determined and,
most of all, she has a level of integrity
8 that I think we can all strive to emulate. It is with a
9 great deal of dismay that we have to see her go, and we
10 know she's going on to do other things.
11 You know, many years ago Benjamin Franklin
12 observed that the rulers are the servants and the people
13 are their superiors and their sovereigns and, therefore,
14 for the former to
return to the latter was not to demote
15 them, but is to promote them.
16 So as Lynne returns to being a full time
17 private citizen, I want to be among the first to
18 congratulate her on her promotion, and I am confident that
19 she will use that to notify us whenever she has observed
20 that we have stepped outside of our bounds or strayed from
21 our mission, and I hope that you will stay in
22 communication with us.
We love you dearly, and thank you
23 very much for your service.
24 COMMISSIONER NIKOLAISEN: My sincere thanks,
25 and my mutual feelings as well.
105
1 CHAIRMAN SMITH: Now, Lynne, you have one
2 last official act as a Commissioner. There's a resolution
3 that you get to read which will close this session and
4 open a closed session meeting.
5 COMMISSIONER NIKOLAISEN: I move to close
6 this meeting to receive, discuss and consider the
7 following matters:
8 Legal actions --
9 CHAIRMAN SMITH: Read with feeling now.
10 COMMISSIONER NIKOLAISEN: I don't have your
11 sense of storytelling with this.
12 Legal Actions, Cause of Action and Litigation
13 under 610.021(1) RSMo.;
14 Personnel matters under 610.021(3) and (4)
15 RSMo;
16 Closed minutes or other closed records under
17 610.021(14) and 313.847.1 RSMo.
18 CHAIRMAN SMITH: Very good job.
19 Do we have a second to that resolution?
20 COMMISSIONER BATTLE: I'll second.
21 CHAIRMAN SMITH: Call the roll.
22 MS. FRANKS:
Chairman Smith.
23 CHAIRMAN
SMITH: In favor.
24 MS. FRANKS:
Commissioner Nikolaisen.
25 COMMISSIONER NIKOLAISEN: Favor.
106
1
MS. FRANKS: Commissioner Battle.
2 COMMISSIONER BATTLE: Favor.
3 CHAIRMAN SMITH: The motion carries, and I
4 advise the people here that we will have a brief closed
5 session, but when we come back it will be just to close
6 the meeting. There
will be no further business.
7 (Whereupon, at 11:30 o'clock a.m., December
8 12, 2002, the public session of the Missouri Gaming
9 Commission was closed.)
10
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14
15
16
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21
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107
STATE OF MISSOURI )
) SS.
COUNTY OF ST. CHARLES )
I, Dennis J.
Jaeger, a Registered Merit
Reporter and Notary Public
for the State of Missouri, do
hereby certify that I was
present at the public meeting of
the Missouri Gaming
Commission on December 12, 2002, that
all proceedings which then
transpired were
contemporaneously reduced to
shorthand by me, and later
transcribed into typewriting, and the foregoing 107 pages
are a true and accurate
transcript of the record of
proceedings made by me at
that time.
IN WITNESS
WHEREOF, I have hereunto set my
hand and seal this 26th day
of December, A.D. 2002.
MY COMMISSION
EXPIRES MARCH 17th, 2205.
________________________
Dennis J. Jaeger, RMR
108