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?

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.

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

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

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

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.

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.

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

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

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