MR. KEVIN MULLALLY: Ok, Mr. Chairman, I think everybody is on the line.

CHAIRMAN ROBERT SMITH: We’ve got Kansas City on, too?

SGT. BILL BELL: Yes, we do.

COMMISSIONER JACK GANT: Jack Gant’s here.

CHAIRMAN SMITH: Oh, hi Judge.

COMMISSIONER GANT: Hi.

CHAIRMAN SMITH: Glad to hear it. Welcome to the Commission.

COMMISSIONER GANT: Well, thank you.

CHAIRMAN SMITH: Officially. I’m glad that you now have been confirmed and ready to take over.

COMMISSIONER GANT: Well, getting confirmed was kind of unusual because there were still four people there that I served with in the Senate and I’ve been a judge for 26 years or so.

CHAIRMAN SMITH: Is that right?

COMMISSIONER JUDITH SUTTER-HINRICHS: Oh my goodness.

COMMISSIONER GANT: It was kind of like old home week in a way.

CHAIRMAN SMITH: Well, that’s right. That could be either good or bad.

COMMISSIONER GANT: Well, they voted for me so I guess it was all right.

CHAIRMAN SMITH: It must have been good. Well, we’re sure glad to have you. I guess call the roll then, please.

MS. ANGIE FRANKS: Chairman Smith?

CHAIRMAN SMITH: Present.

MS. FRANKS: Commissioner Bartch?

COMMISSIONER FLOYD BARTCH: Present.

MS. FRANKS: Commissioner Hinrichs?

COMMISSIONER HINRICHS: Present.

MS. FRANKS: Commissioner Gant?

COMMISSIONER GANT: Present.

CHAIRMAN SMITH: Judge, we’ll give you a more detailed greeting at the next meeting.

COMMISSIONER GANT: Ok.

CHAIRMAN SMITH: We’ll do it where there will be some people around. I guess, Kevin, we only have one order of business today, don’t we?

MR. MULLALLY: Yes, sir. Before we do that I should mention there was a report on Channel 9 news in Kansas City last night. We’re involved and have recently been served with a lawsuit regarding a progressive slot machine at Ameristar in Kansas City. An individual, who is also a lawyer, has apparently played that machine quite a bit and isn’t satisfied that it’s paying out the way he thinks it should and so he got a TRO, Temporary Restraining Order, from a judge in Kansas City, I believe it’s Judge Harmon in Kansas City, to shut the machine down pending further proceedings in the litigation. Mike Bushmann and the Attorney General’s office will be working on it. We’re not the only party named in the lawsuit. It’s, I think Ameristar’s the first named party and IGT and others, but we are one of the named parties. We will forward a summary out to you as soon as it’s available. We got served at the casino last night so the paperwork hasn’t actually made it to Jefferson City yet.

CHAIRMAN SMITH: We have a lawsuit over one slot machine or is it a group?

MR. MULLALLY: No, I believe it’s just one machine.

COMMISSIONER GANT: That lawyer, Kevin, I think has lost a lot of money, I think, over there, hasn’t he?

MR. MULLALLY: Yeah, he’s lost a lot of money. He’s mad because it hasn’t paid out.

CHAIRMAN SMITH: Well that should be an interesting lawsuit.

COMMISSIONER HINRICHS: If you would, Kevin, explain what kind of a machine this is that makes it unique in any way.

MR. MULLALLY: You know, I don’t know that . . .

COMMISSIONER HINRICHS: You don’t have to do that now but when you send a report.

MR. MULLALLY: Sure, absolutely. We’ve been in contact with Gaming Laboratories International who is our slot machine, electronic gaming device consultant. They are analyzing the allegations made in his petition so we’ll have a complete response for you and a summary as well.

COMMISSIONER HINRICHS: Thank you.

CHAIRMAN SMITH: What is the allegation against the Commission? That we didn’t supervise it properly?

MR. MULLALLY: I don’t know that there is any allegation against us. They just want us to shut it down. I think they want money from the casino and the slot machine manufacturer. I think they’re also arguing that we have failed to properly regulate this device.

COMMISSIONER GANT: Kevin, is there a hearing set on the TRO yet, because usually those are pretty quick?

MR. MULLALLY: The TRO is in effect for ten days. No, I’m not aware of any hearing set on it yet.

COMMISSIONER GANT: Ok.

CHAIRMAN SMITH: That usually has to be disposed of in a hurry. So, they might give you a preliminary restraining order after that. Any other good news you have for us?

MR. MULLALLY: No, that’s it.

CHAIRMAN SMITH: How did your TV show go in St. Louis?

MR. MULLALLY: I’ve not seen it. I don’t know whether Judy saw it.

COMMISSIONER HINRICHS: I can tell you from being an observer that he did an extremely good job, in fact, excellent.

COMMISSIONER BARTCH: Good.

MR. MULLALLY: Thank you. It was interesting but I’ll try to have a tape made available. I have that on my “To Do” list, to call the TV station to see if they’ll send us a tape, but I have not seen it.

CHAIRMAN SMITH: Did you have a friendly or a hostile host?

MR. MULLALLY: No, he was very good, I thought.

COMMISSIONER HINRICHS: He was friendly.

CHAIRMAN SMITH: Ok, unless there’s anything else that you have for us, why don’t we discuss the purpose of this meeting.

MR. MULLALLY: Mr. Chairman, we continue to work towards a settlement with Sigma. We don’t have things quite worked out yet. There’s still a few terms under negotiation. I think there’s still one individual with the company that we would like to talk to. But, we’re working towards trying to get this ready for your consideration, but in the meantime we need to extend the temporary license. We really don’t see any point in having to go back to court and have the judge do this. We might as well go ahead and do it. It’s a possibility that we could be ready for the May meeting, although we are not guaranteeing that.

CHAIRMAN SMITH: Do you all feel that this is a good faith effort on the part of Sigma, not just a further continuance?

MR. MULLALLY: Yes, we think that there is some basis for a reasonable resolution to this, but we’re not there yet.

CHAIRMAN SMITH: And what we’re doing is extending this just past the 28^th meeting then to the 29^th.

MR. MULLALLY: Yeah, just past the 28^th meeting and we’ll either be ready to deal with it at that time to resolve it or it’s possible we could extend it again if we’re not there yet.

COMMISSIONER GANT: Kevin, let me ask you, this is Jack Gant. What’s our policy on continuances? I noticed the first continuance and the information you sent me was for 60 days. This one would be for 12 days. Is there a length of time that we set for continuances, or how many they can get, or does it just depend on the facts in each particular case? If this is in court, is it still pending in court at the present time?

MR. MULLALLY: It was set for a hearing and then the possibility of settlement arose. The licensee’s, we issue supplier’s licenses for a one-year period. There was discipline pending against the company. That license expired and the Commission refused to issue a new license to the company. The company went to Circuit Court and obtained an order from the Judge ordering the Commission to issue them a temporary license until the proceedings before the Gaming Commission could be held. The Company had challenged the Commission’s denial of its license. Before the hearing could be held the possibility of settlement arose and so this is just extending the temporary license to let those settlement discussions continue. Either it would result in a possible settlement or, I guess, at the end of the day those talks could result in no settlement being reached and we could be back at the hearing stage. I think that both sides are ready to go to a hearing if it gets to that point.

CHAIRMAN SMITH: Judge, to answer the other part of your question, we don’t have any specific number of continuances or periods. In fact, the requests for continuances are pretty limited and we haven’t granted them too much. This particular case is a very complicated one involving some Japanese investors and it’s been continued several times because of the complications of the case, and we’ve been trying to push it through to conclusion, and so this is a little bit different than you’ll find in most of them.

COMMISSIONER GANT: Ok, Kevin, let me ask you one other question. If you don’t work this out what do we do? Do we approve the settlement if you reach it, or does the court approve the settlement? Or do both of us have to approve? Who do you have, Callahan or Brown?

MR. MULLALLY: It’s Callahan and, Mike, is there any provision in the order that the judge would have to approve any settlement? I don’t think so. No, there’s no provision in the order that required us to issue a temporary license that would require the court to approve the settlement. So, only the Commission would have to approve any settlement since it was the Commission that issued the original denial order and the discipline.

COMMISSIONER GANT: Part of the settlement would be that they would dismiss their petition with prejudice, I assume.

MR. MULLALLY: Absolutely.

COMMISSIONER GANT: Ok.

CHAIRMAN SMITH: I think it got into court because we had given several continuances to Sigma and they had finally thought that we should come to the end of the thing and resolve it and refuse to grant a further extension and the court entered the picture and granted the extension. So, that’s where we are now.

COMMISSIONER GANT: Ok.

CHAIRMAN SMITH: I think it’s probably wise. It’s a short extension, but I think in view of the fact that there will be a meeting, I’m hopeful you’re close enough that we could get it resolved at that meeting. Who’s working on it from Sigma, just Mr. Dallmeyer or are you dealing with the Chicago attorneys?

MR. MULLALLY: Both.

CHAIRMAN SMITH: Both, ok. So you’re reasonably hopeful that the matter will be resolved by the 28^th?

MR. MULLALLY: Well, you know, we’re working towards it, and we’ll have something for you on the 28^th.

CHAIRMAN SMITH: Any other questions you’d like to ask?

COMMISSIONER GANT: I guess, Bob, do you need a motion then?

CHAIRMAN SMITH: Yes, I guess we need a motion.

COMMISSIONER GANT: I’ll move that we approve a temporary license extension until May 29^th.

COMMISSIONER HINRICHS: I’ll second.

CHAIRMAN SMITH: Any further discussion? If not, will you call the roll?

MS. FRANKS: Chairman Smith?

CHAIRMAN SMITH: In favor.

MS. FRANKS: Commissioner Bartch?

COMMISSIONER BARTCH: In favor.

MS. FRANKS: Commissioner Hinrichs?

COMMISSIONER HINRICHS: In favor.

MS. FRANKS: Commissioner Gant?

COMMISSIONER GANT: In favor.

MS. FRANKS: By your vote, you’ve adopted Resolution No. 03-044.

MR. MULLALLY: Mr. Chairman, I guess the only other thing I would have is just a quick update on what’s going on in the legislature. The budget has been passed by both the House and the Senate. It’s pending before the Governor right now. There’s a possibility, I guess, that the entire budget, or at least portions of it, could get vetoed and that may affect the Commission. We came through the budget process reasonably well. The only thing that got cut was a deputy director level slot that was formerly held by Patricia Churchill, so it’s a vacancy unlike most other agencies that are facing substantial layoffs of currently employed personnel. We’ve been able to avoid that.

There have been a couple of efforts over the last week or so to try to cap our fund. This is an ongoing issue between the Veterans’ fundings for nursing homes and the National Guard and the Student Loan Program and the Early Childhood Development people, all who benefit from our fund. They are all fighting amongst themselves for limited money and, unfortunately, we got caught up in that a little early in the week. We’ve been able to resolve that. We do not believe that there is going to be any amendments offered to cap our fund at this point, but we’re still closely monitoring it.

CHAIRMAN SMITH: By capping it you mean placing a limit on the money that we receive?

MR. MULLALLY: Placing a limit on the amount of money that we could receive which is a horrible idea, and I think we’ve been able to explain to people why that is a horrible idea. What it would likely end up doing is reducing the total amount of money received by everybody, and we’ve also been able to demonstrate fairly convincingly that we’ve been exceptionally efficient in how we’ve handled the money that we’ve been given. It’s not like we’re wasting a lot of money around here.

COMMISSIONER HINRICHS: Kevin, I’m sorry, I’m not sure I understand. Do you mean capping the amount of money we can receive from the gaming industry altogether or just to maintain the Commission offices?

MR. MULLALLY: Capping the amount of money that the state would appropriate, would be allowed to appropriate for our operations.

COMMISSIONER HINRICHS: Ok.

MR. MULLALLY: In other words, we wouldn’t be able to hire any other people. If benefits went up, we might have to lay people off. I mean, there’s certain fixed costs that we don’t control. If our leasing budget goes up, you know the Highway Patrol benefits went up quite a bit this last time, as those costs go up, if our money is capped that means I’ve got to lay somebody off to pay for benefits for the people that we have.

COMMISSIONER HINRICHS: I understand.

CHAIRMAN SMITH: I’ll be glad to testify that we are very frugal on our meals, boxed lunches only.

MR. MULLALLY: We may take you up on that, Mr. Chairman.

CHAIRMAN SMITH: It’s a very crucial time at the end of the session, as Judge Gant knows. So many weird things can happen.

COMMISSIONER GANT: Oh, yeah.

CHAIRMAN SMITH: So, I hope you all are riding close herd on it.

COMMISSIONER GANT: Kevin, I have one other question. I just got in just before this call. I listened on my machine, and I think Angie was saying that the meeting is now in Jefferson City on the 28^th, is that correct?

MR. MULLALLY: Yes, we ran into a lot of problems on trying to get a location in Kansas City, so I think we’ll push that meeting back to the July meeting. Bob Johnson is very interested in doing something in his district. He’s the new Chairman of the Joint Committee on Gaming and Wagering, and he had tried to get the Lee’s Summit City Hall and that wasn’t available, nor was Blue Springs, but he does seem to be interested in doing something like that. Also, there is the possibility of, Chief Bartch said that we may be able to use the Police Commissioner’s Hearing Room at some point in time and then I think, Judge Gant, you’ve mentioned Independence.

CHAIRMAN SMITH: It looks like we’d find something somewhere up there.

COMMISSIONER BARTCH: I think the problem is doing it on short notice. If we go a couple of months out we ought to be able to work it out someplace.

MR. MULLALLY: So, we were thinking about maybe in June, Mr. Chairman, since it will be your last meeting, going back to the law school in Columbia. I know you said you had a lot of commitments in June that would make it difficult for you to go to Kansas City in June, and then maybe go back to Kansas City in July.

CHAIRMAN SMITH: I’m all right the last part of June. If you schedule it in the last part of June, I’m okay anywhere.

COMMISSIONER HINRICHS: Just promise no more snowstorms.

CHAIRMAN SMITH: That’s right. I think the last time we were there we had this ice storm up there. We’re due to go to the Kansas City area. We’ve been to St. Louis a number of times. I think we should go back up there pretty soon.

MR. MULLALLY: If we have an ice storm in Columbia in June, we’ve got more serious problems than anything pending before the Gaming Commission.

CHAIRMAN SMITH: Well, is there anything else that we need to bring up?

MR. MULLALLY: No, that’s it, Mr. Chairman.

CHAIRMAN SMITH: Ok then . . .

COMMISSIONER GANT: Let me ask you a question. What time are we going to start on the 28^th? At 9 o’clock, is that when it is?

MR. MULLALLY: Well, it’s up to you on whether you want to come in the night before or not. If you can come in the night before we can start at 9, otherwise we could start at 10. It’s really up to the Commission.

CHAIRMAN SMITH: It doesn’t make any difference to me, since I’m only 30 miles away. So, whatever the rest of you think.

COMMISSIONER HINRICHS: I’m already planning on being there the night before, so that’s not an issue.

COMMISSIONER BARTCH: I am, too.

COMMISSIONER GANT: Well, if it starts at 9, I want to be there the night before.

CHAIRMAN SMITH: Well, come down and take a look at the place Judge, get a little tour while you’re there, maybe.

COMMISSIONER GANT: Well, Kevin gave me a quick tour.

CHAIRMAN SMITH: Oh, he’s already given you one.

COMMISSIONER GANT: He’s going to have to give me directions how to get there, again.

CHAIRMAN SMITH: Well, that’s not easy.

COMMISSIONER GANT: Ok, it will be 9 o’clock then?

CHAIRMAN SMITH: If you’re comfortable with that. Anything else? Any other questions? If not then, do we have a motion to adjourn?

COMMISSIONER BARTCH: I make that motion.

CHAIRMAN SMITH: Is there a second?

COMMISSIONER GANT: Second.

CHAIRMAN SMITH: Call the roll.

MS. FRANKS: Chairman Smith?

CHAIRMAN SMITH: In favor.

MS. FRANKS: Commissioner Bartch?

COMMISSIONER BARTCH: In favor.

MS. FRANKS: Commissioner Hinrichs?

COMMISSIONER HINRICHS: In favor.

MS. FRANKS: Commissioner Gant?

COMMISSIONER GANT: In favor.

CHAIRMAN SMITH: Ok, everybody have a good time and we’ll see you next week.

COMMISSIONER BARTCH: We’ll see you on the 28^th.

CHAIRMAN SMITH: 28^th, right.

COMMISSIONER HINRICHS: Bye.