1
1 BEFORE THE MISSOURI GAMING COMMISSION
2 STATE OF MISSOURI
3
4
5 Meeting
February 19, 2004
6 3417 Knipp Drive
Jefferson City, Missouri
7
8
9
COMMISSIONERS PRESENT:
10
Floyd Bartch, Chairman
11 Judy Sutter-Hinrichs, Member
George Hartsfield, Member
12 Jack Gant, Member
13
14
15
16 REPORTED BY:
17 TRACY L. THORPE, CSR, CCR
ASSOCIATED COURT REPORTERS
18 11 North Fifth Street
Columbia, Missouri 65201
19 (573) 442-3600
(573) 636-7551
2
1 I N D E X
2 I. Call to Order
3 II. Consideration of Minutes
A. December 12, 2003
4
III. Consideration of Hearing Officer Recommendations
5 B. Gregory L. Gerdts
1. Resolution No. 04-008
6 C. Duane V. Murff
1. Resolution No. 04-009
7 D. Charlotte Kaim
1. Resolution No. 04-010
8 E. Denise L. Wilson
1. Resolution No. 04-011
9 F. Keith Douglas
1. Resolution No. 04-012
10 G. Fraternal Order of Eagles #4210
1. Resolution No. 04-001-B
11 H. VFW Post 2210
1. Resolution No. 04-002-B
12
IV. Consideration of Licensure of Level I/Key Applicants
13 I. Resolution No. 04-013
14 V. Consideration of Disciplinary Action
J. The Missouri Gaming Company
15 1. DC-04-046
K. President Riverboat Casino-MO, Inc.
16 2. DC-04-047
17 VI. Consideration of Proposed Rules & Regulations
L. Proposed Amendment
18 1. 11 CSR 45-4.260 -
Occupational Licenses
19 2. 11 CSR 45-5.200 -
Progressive Slot Machines
20
VII. Consideration of Temporary Licenses
21 M. Sigma Game, Inc.
1. Resolution No. 04-014
22
IX. Adjournment
23
24
25
3
1 CHAIRMAN BARTCH: We'll call the meeting to
2 order then. Would you call the roll?
3 MS. ANGIE FRANKS: Chairman Bartch?
4 CHAIRMAN BARTCH: Present.
5 MS. FRANKS: Commissioner Hinrichs?
6 COMMISSIONER SUTTER-HINRICHS: Present.
7 MS. FRANKS: Commissioner Gant?
8 COMMISSIONER GANT: Present.
9 MS. FRANKS: Commissioner Hartsfield?
10 COMMISSIONER HARTSFIELD: Present.
11 MR. KEVIN MULLALLY: Mr. Chairman, good
12 morning, Commissioners.
13 First item on the agenda is the consideration
14 of the December 12, 2003 minutes.
15 COMMISSIONER SUTTER-HINRICHS: I will move to
16 approve those minutes.
17 COMMISSIONER GANT: Second.
18 CHAIRMAN BARTCH: Is there any other
19 discussion?
20 If not, would you call the roll?
21 MS. FRANKS: Chairman Bartch?
22 CHAIRMAN BARTCH: Approve.
23 MS. FRANKS: Commissioner Hinrichs?
24 COMMISSIONER SUTTER-HINRICHS: Approve.
25 MS. FRANKS: Commissioner Gant?
4
1 COMMISSIONER GANT: Approve.
2 MS. FRANKS: Commissioner Hartsfield?
3 COMMISSIONER HARTSFIELD: Approve.
4 MS. FRANKS: By your vote, you've adopted the
5 minutes of the December 12, 2003 meeting.
6 MR. MULLALLY: Mr. Chairman, the first item --
7 or the next item on the agenda are seven hearing officer
8 recommendations, and Hearing Officer Thad McCanse is here
9 to make the presentations.
10 MR. THAD MCCANSE: Mr. Chairman, members of
11 the Commission.
12 CHAIRMAN BARTCH: Good morning, sir.
13 MR. MCCANSE: The first case is Gregory
14 Gerdts, which -- and I'm not sure how many of you have seen
15 the video of this, but it is pretty graphic. Mr. Gerdts is
16 a bartender at Harrah's Casino. He went over to Ameristar
17 to gamble, had too much to drink, was asked to leave and
18 refused to do so, saying he wanted to go to the restroom
19 first. And they pointed out you can go outside and go
20 quietly.
21 And a commotion erupted where they finally had
22 to handcuff him, walk him out, then carry him out and then
23 take him to the Commission room. One of the persons that
24 was called to the scene was an agent of the Gaming
25 Commission, Highway Patrolman, and he told him if he didn't
5
1 leave, he was trespassing. They gave him a lot of
2 alternatives, he refused to do so.
3 The interesting thing in this matter is that
4 it's a licensee of one casino being punished for what he did
5 at another casino. At the same time, I think that there is
6 authority which I cited in my findings of fact, conclusions
7 of law and opinion to find that if he refused to obey a
8 lawful order of the Gaming Commission agent or if he broke
9 any local law or state law, he can be punished, including
10 revocation.
11 That was the initial suggestion in the
12 preliminary order for discipline. And I concur with that,
13 that I thought that under the circumstances his behavior was
14 so unseemly that a revocation would be in order.
15 All this took place in the presence of other
16 patrons who were gambling. And looking at the casino, what
17 really kind of fascinated me is almost nobody paid
18 attention. They were too busy at the tables or whatever.
19 And as they were carrying him out, struggling, why, they
20 just went on.
21 But at the same time, it was a public display
22 by a licensee and it should not have happened and he could
23 have prevented it. There wasn't any real dispute about the
24 fact that he was intoxicated and somewhat out of control, so
25 my recommendation is a revocation.
6
1 COMMISSIONER GANT: Mr. Chairman, I move that
2 Commission Resolution No. 04-008 be approved and adopted.
3 COMMISSIONER SUTTER-HINRICHS: Second.
4 COMMISSIONER HARTSFIELD: Second.
5 CHAIRMAN BARTCH: Any other discussion?
6 If not, would you call the roll?
7 MS. FRANKS: Chairman Bartch?
8 CHAIRMAN BARTCH: Approve.
9 MS. FRANKS: Commissioner Hinrichs?
10 COMMISSIONER SUTTER-HINRICHS: Approve.
11 MS. FRANKS: Commissioner Gant?
12 COMMISSIONER GANT: Approve.
13 MS. FRANKS: Commission Hartsfield?
14 COMMISSIONER HARTSFIELD: Approve.
15 MS. FRANKS: By your vote, you've adopted
16 Resolution No. 04-008.
17 MR. MCCANSE: The next case is Duane Murff.
18 Murff was a blackjack dealer and he -- at one shift he
19 started making some mistakes. At first he failed to collect
20 a bet from a player that had a losing hand. Then some time
21 later he paid a player whose cards had been collected and
22 had previously been paid for a blackjack, he paid him again.
23 This time I think on a straight bet.
24 Then within an hour, the same player asked to
25 exchange small denomination chips for larger in the amount,
7
1 I think, of some $50. He gave him the larger denomination,
2 $50 worth of chips, but didn't collect the ones he was
3 supposed to pick up for change. The video shows this pretty
4 clearly.
5 Now, he was an experienced blackjack dealer.
6 He worked at other casinos and he'd been, I think, three or
7 four years at that trade. He had to have known that
8 surveillance cameras are on the tables. And his behavior --
9 he said that he had had some personal problems and his
10 daughter had been taken out of school by her mother and he
11 didn't know where she was when he went by to pick her up and
12 that he was upset.
13 The question is – really, is this something
14 that he did to pay off somebody, give somebody he knew a
15 benefit or was it just a stupid mistake and a lot of
16 indifference or carelessness? The person who got the money
17 was interviewed by the Highway Patrol and he said he didn't
18 remember anything about it except that he was at the table,
19 so he didn't give the money back. There was nothing that
20 they found at the time or that I know of since to connect
21 the two. One of them is Hispanic and Mr. Murff is a black
22 man.
23 So my conclusion was that since there was no
24 showing of an intent, that at the very least it was gross
25 negligence and incompetence. Now, I did put in the
8
1 conclusions of law and then the final order an allegation of
2 misconduct, but in reviewing the law, and I think Grace
3 versus the Gaming Commission, misconduct is an intentional
4 act and it would be inconsistent with the negligence, so I
5 would ask leave to strike the misconduct part. And I think
6 there is plenty of reason to penalize him for the negligence
7 and the incompetence.
8 Instead of a revocation, I had suggested that
9 his occupational license be suspended for 30 days. It was
10 kind of a close call, but his license, I think, is up in April
11 anyhow and he was planning on transferring, he said, to the
12 electric department.
13 I weighed this somewhat before I finally
14 decided to recommend the 30-day suspension rather than the
15 revocation since we had no indication that he was
16 deliberately being dishonest, and the fact that he'd made an
17 earlier mistake to another person indicates that he
18 shouldn't have been working that evening, his mind just
19 wasn't on his job. So my recommendation is the 30-day
20 suspension.
21 Again, the video shows this transaction, I
22 think. And, again, it clearly shows that he paid off
23 somebody and failed to collect the -- when he'd already
24 collected the cards and then failed to collect the chips
25 when he made change.
9
1 COMMISSIONER GANT: Did the player object to
2 being paid twice?
3 MR. MCCANSE: He knew nothing. He said, I can
4 recall being at the table, but I don't know what else.
5 Obviously he wasn't about to give up -- I think it was $75.
6 So --
7 CHAIRMAN BARTCH: Your basic feeling and your
8 decision is based on you just don't feel the gentleman was
9 trying to be dishonest, he just --
10 MR. MCCANSE: No. I didn't feel that he had
11 any deal with this other guy at all. I think he was
12 obviously not with it. And they relieved him that night. I
13 think they fired him that night.
14 COMMISSIONER SUTTER-HINRICHS: In our minutes,
15 that suggests license revocation.
16 CHAIRMAN BARTCH: Yes, it does.
17 COMMISSIONER SUTTER-HINRICHS: Is that -- the
18 Commission staff determines that? Why is the license
19 revocation recommendation in the papers that we have rather
20 than the 30-day suspension?
21 MR. MULLALLY: Well, the original preliminary
22 order of discipline would have been for -- would have been
23 for license revocation. The hearing officer's opinion is
24 recommending a 30-day suspension. The resolution 04-009
25 would adopt the hearing officer's recommendation, which is
10
1 the -- that's what we usually do. But you can depart --
2 obviously depart from that.
3 COMMISSIONER SUTTER-HINRICHS: I guess I'm
4 just confused by -- I've got two copies of this in here and
5 both times it says revocation.
6 MR. MULLALLY: Well, that's the preliminary
7 order for discipline. That's the thing that starts the
8 action. It's like the filing of charges.
9 COMMISSIONER SUTTER-HINRICHS: Okay. Well,
10 usually we have something at the end that has the
11 recommendation and I'm --
12 CHAIRMAN BARTCH: Here's -- on page 4.
13 COMMISSIONER SUTTER-HINRICHS: Okay. That's I
14 guess -- I always look at the end to see what the conclusion
15 is and the conclusion is at the beginning for some reason.
16 MR. MULLALLY: Yeah. With hearing officer
17 opinions, it typically is.
18 COMMISSIONER SUTTER-HINRICHS: Okay. There it
19 is. Yeah. Okay. Thirty days. Well, I read that, but then
20 I go on to the end and --
21 COMMISSIONER HARTSFIELD: Mr. Chairman, I'd
22 move approval of Resolution 04-009.
23 COMMISSIONER GANT: Second.
24 CHAIRMAN BARTCH: Is there any other
25 discussion?
11
1 Call the roll.
2 MS. FRANKS: Chairman Bartch?
3 CHAIRMAN BARTCH: Approve.
4 MS. FRANKS: Commissioner Hinrichs?
5 COMMISSIONER SUTTER-HINRICHS: Approve.
6 MS. FRANKS: Commissioner Gant?
7 COMMISSIONER GANT: Approve.
8 MS. FRANKS: Commissioner Hartsfield?
9 COMMISSIONER HARTSFIELD: Approve.
10 MS. FRANKS: By your vote, you've adopted
11 Resolution No. 04-009.
12 MR. MCCANSE: The next item is Charlotte Kaim
13 or Kaim, I'm not quite sure how to pronounce it. This lady
14 was -- well, she admittedly altered a receipt. Somebody
15 else turned in a jackpot and she got a receipt for $225 and
16 altered it to $325.
17 Initially it looked as if she had taken $100.
18 However, after the investigation of it, it turned out that
19 there was only a 25 cent difference in her wallet where she
20 carried the money to pay off jackpots, which was in the
21 limits allowed by the casino. She admitted that she did
22 something stupid and altered the receipt, but denied that
23 she had taken any money for it.
24 When the case was set for a hearing, there was
25 some discussion between Mr. Bradley, representing the
12
1 Commission, and Ms. Kaim and some of the other -- or even
2 perhaps before that. And it was decided that since the
3 casino had suspended her for five days out of this incident,
4 after being satisfied that no money was missing, that
5 instead of a 90-day suspension, which would cost her her
6 job, that the recommendation -- and I believe it was
7 reviewed by the senior staff of the Commission -- would be a
8 6-day suspension, which would be one additional day.
9 The interesting thing is that her boss was
10 present and he was supportive of the settlement. And he
11 also said that they reduced force, but kept her and shifted
12 her to another department because they felt that she was a
13 valuable employee. She now works in the VIP lounge.
14 After hearing the statements of Mr. Bradley
15 and the agreement made by Ms. Kaim and looking at the file,
16 I approved a settlement and mailed a settlement agreement to
17 Mr. Bradley and I signed one. I think you got that back
18 today; is that correct?
19 MS. FRANKS: Yes.
20 MR. MCCANSE: So that the only thing remaining
21 to be done -- it's been signed by all the parties. The only
22 thing remaining to be done is for the Commission either to
23 approve it or disapprove it.
24 COMMISSIONER GANT: Mr. Chairman, I move
25 Commission Resolution No. 04-010 approving and adopting the
13
1 attached settlement agreement be approved.
2 COMMISSIONER SUTTER-HINRICHS: Second.
3 CHAIRMAN BARTCH: Approved and seconded.
4 Do we have -- call the roll, please.
5 MS. FRANKS: Chairman Bartch?
6 CHAIRMAN BARTCH: Approve.
7 MS. FRANKS: Commissioner Hinrichs?
8 COMMISSIONER SUTTER-HINRICHS: Approve.
9 MS. FRANKS: Commissioner Gant?
10 COMMISSIONER GANT: Approve.
11 MS. FRANKS: Commissioner Hartsfield?
12 COMMISSIONER HARTSFIELD: Approve.
13 MS. FRANKS: By your vote you've adopted
14 Resolution 04-010.
15 MR. MCCANSE: The next item involved an
16 incident that took place at, I think, a casino in Boonville
17 where the security camera, surveillance camera was
18 covered up for a period of time.
19 There were three people who were cited for a
20 proposed penalty. Two of the people were represented by an
21 attorney. And a request for a hearing was filed by
22 Ms. Wilson, not signed by her but purportedly from the
23 attorney.
24 So we mailed him notice that the matters would
25 be set for a hearing and he wrote back saying that, I don't
14
1 represent her, she apparently copied the documents that I
2 had prepared for the other two people and submitted them as
3 if I was representing her. She was a few days over the
4 30-day limit for filing her request for a hearing.
5 The Commission, through Mr. Bradley, filed a
6 Motion to Dismiss the request for a hearing on the grounds
7 that the proper request was not made and that the document
8 she submitted was a forgery. We set that motion for a
9 hearing in Jefferson City and sent the notice of the hearing
10 to two different addresses, one of which was in the
11 Commission file and another of which I think she had put in
12 the request for a hearing that was filed.
13 She did not appear. And after waiting for, I
14 don't know, 20 or 30 minutes, we went ahead and Mr. Bradley
15 presented his evidence, including the documents from the
16 attorney and the other two people who were represented. And
17 as a result, why, I sustained the Motion to Dismiss and am
18 submitting that to the Commission on the grounds, first, that
19 the request for a hearing was not properly made; and,
20 second, that she was out of time for it and under the
21 circumstances, no reason had been shown to grant her an
22 extension of time.
23 COMMISSIONER SUTTER-HINRICHS: I would move to
24 adopt.
25 COMMISSIONER GANT: She was kind of ingenious.
15
1 COMMISSIONER SUTTER-HINRICHS: I move to adopt
2 Missouri Gaming Commission Resolution No. 04-011.
3 COMMISSIONER GANT: Second.
4 COMMISSIONER HARTSFIELD: Second.
5 CHAIRMAN BARTCH: Is there any other
6 discussion?
7 If not, please call the roll.
8 MS. FRANKS: Chairman Bartch?
9 CHAIRMAN BARTCH: Approve.
10 MS. FRANKS: Commissioner Hinrichs?
11 COMMISSIONER SUTTER-HINRICHS: Approve.
12 MS. FRANKS: Commissioner Gant?
13 COMMISSIONER GANT: Approve.
14 MS. FRANKS: Commissioner Hartsfield?
15 COMMISSIONER HARTSFIELD: Approve.
16 MS. FRANKS: By your vote, you've adopted
17 Resolution No. 04-011.
18 MR. MCCANSE: The next one is Keith Douglas.
19 He had a temporary license at the President Casino and had
20 gone through the background investigation. Although he
21 didn't apparently disclose it initially, it turned out that
22 he had been -- had pleaded guilty to a felony of criminal
23 nonsupport of a child.
24 As a result, at the hearing, why, we said that
25 he's not suitable for licensing. I put a little discussion
16
1 about the statute itself, Section 313.812.8, and raised the
2 question as to whether that possibly refers to the riverboat
3 license since under one section of it it says that the
4 licensee shall not employ or contract with a person who has
5 been guilty of a felony. Occupational license is --
6 licensees, I don't think the employer contracts with anybody
7 else. And it also refers to another section that refers to
8 the Class A licensees.
9 But I think interpreting the section and
10 looking at the whole series of statutes under that heading
11 or the subsections, I thought it was broad enough to cover.
12 I know in one prior case, I think it may have been Pen-Yan v.
13 Boyd, they fined the riverboat for hiring a
14 supplier who had been convicted of a felony. And that could
15 have been done here, but I think that's probably the long
16 way around.
17 Obviously, I think the intent of the
18 legislature is not to allow felons to have any connection
19 with the gambling industry in the state of Missouri, so my
20 recommendation is that he be found unsuitable.
21 COMMISSIONER HARTSFIELD: Mr. Chairman, I move
22 approval of Resolution 04-012.
23 COMMISSIONER SUTTER-HINRICHS: Second.
24 CHAIRMAN BARTCH: Is there any other
25 discussion?
17
1 If not, would you call the roll?
2 MS. FRANKS: Chairman Bartch?
3 CHAIRMAN BARTCH: Approve.
4 MS. FRANKS: Commissioner Hinrichs?
5 COMMISSIONER SUTTER-HINRICHS: Approve.
6 MS. FRANKS: Commissioner Gant?
7 COMMISSIONER GANT: Approve.
8 MS. FRANKS: Commissioner Hartsfield?
9 COMMISSIONER HARTSFIELD: Approve.
10 MS. FRANKS: By your vote, you've adopted
11 Resolution No. 04-012.
12 MR. MCCANSE: The next two cases are bingo
13 cases. And I arrived at my conclusion, what should I say,
14 sorrowfully or reluctantly, because they're small town
15 people, they do a lot of good things, but they had been
16 warned time and time again not to have any slot machines on
17 their premises.
18 The Fraternal Order of Eagles 4210, which is
19 the next case in line, is in Bonne Terre, Missouri. Now,
20 they had five illegal gambling devices that were found during
21 an inspection. Afterwards, they removed all of the people
22 that had any connection with the machines being there and
23 had new officers. And they also -- there was evidence that
24 this could be a blow to the Eagles operation there that
25 would end it.
18
1 The problem is that one of the people who
2 testified for the Fraternal Order of Eagles went to a
3 membership meeting and said we shouldn't have those
4 machines there. Sooner or later, you're going to get
5 caught. And nothing was done.
6 The Commission had sent out repeated notices,
7 initially saying that you may have your license revoked if
8 you have illegal gambling devices. And then finally on
9 September 17, 2001, they sent what they call their
10 zero-tolerance letter saying your license will be revoked.
11 And I think they included that in subsequent material that
12 was sent to all the bingo licensees.
13 I know in a prior case in an American Legion
14 Post with somewhat similar circumstances we voted to revoke
15 the license. While they do a lot of good things, and I'm
16 glad they have community support, regretfully, my only
17 conclusion would be that their license should be revoked.
18 I would hope, and I suspect it may happen,
19 that if the other bingo licensees are notified that some of
20 the charitable organizations have had their licenses
21 revoked, that they may get the message, finally, because
22 nothing else seems to be working.
23 But, in any event, there's been a very firm
24 policy by the Commission to try and keep illegal gaming
25 devices out of the area -- the building where bingo is
19
1 played, and that didn't happen here. So my recommendation is
2 that the license be revoked.
3 CHAIRMAN BARTCH: You know, and I certainly
4 agree with your recommendation. The sad part of it, having
5 been involved in some of those organizations, is they do do
6 some very good things.
7 MR. MCCANSE: That's true.
8 CHAIRMAN BARTCH: What's difficult here is why
9 are they not getting the message? Is some of their
10 leadership just burying the letters or -- you know, Steve,
11 why aren't they get the message?
12 MR. STEVE JOHNSON: Frankly, sir, because it's
13 profitable to have the devices. The devices are more
14 profitable in many cases than the bingo game itself. That's
15 the long and short answer.
16 MR. MULLALLY: The good news is the trend
17 appears to be that they are getting the message. The facts
18 are that this is some time ago. Ever since the Commission
19 has come down with its zero-tolerance policy, that if you
20 have slot machines, we don't care if they're unplugged or
21 locked in the closet, it's illegal under the law to possess
22 them.
23 They don't have to catch anybody wagering on
24 them; they don't have to be operational. If you have the
25 device in your possession, it's illegal, just like if you
20
1 have marijuana. And since we've had this case and a number
2 like that -- and the officers have done a good job, there's
3 been some good publicity.
4 I think it was about this time last year we
5 went to a parking lot right up here and the local news
6 filmed us destroying about 30 of these machines. Bringing a
7 trash truck up here, throwing them in the back and crushing
8 them. And that word has gotten out. And we're seeing far
9 fewer of these devices. In fact, I don't think we've had a
10 device case in probably over a year.
11 MR. JOHNSON: These are the last ones.
12 COMMISSIONER GANT: This may have been covered
13 when I was reading my -- if we revoke the license -- and
14 just like the Chairman just mentioned, this is kind of a
15 silly situation the way that they do this because it was
16 paying their mortgage and raising a lot of money. Once we
17 revoke a license, is that for ad infinitum?
18 MR. MULLALLY: No. The facts would be taken
19 into consideration again. They could replace the officers,
20 they could engage in some -- or implement some measures that
21 would help prevent this in the future and then come back and
22 present the, I guess, new and improved organization to the
23 Commission again. And certainly you're not ineligible for
24 forever.
25 COMMISSIONER GANT: It says here that the
21
1 officers have very little authority, so they need to turn --
2 even if they say don't use the things, but -- well, I'm glad
3 at least they can resubmit, but I agree with the
4 no-tolerance rule.
5 MR. MCCANSE: I think, Judge, that in the
6 transcript there was a discussion on what happens if they
7 lose their license. And they can re-apply as a new
8 licensee. And I believe the testimony was that usually if
9 they're approved, it would take about a year or so to get it
10 done.
11 MR. MULLALLY: In fact, Ernie, have we
12 licensed some folks that used to have machines and they've
13 come back with new officers and the people that were
14 involved before were out of the bingo?
15 MR. ERNIE RAUB: Yes. We're in that process with
16 one organization that has reapplied.
17 COMMISSIONER SUTTER-HINRICHS: There are other
18 ways to raise money.
19 MR. MULLALLY: Well, and frankly, there are at
20 least a couple of organizations that we believe surrendered
21 their bingo license because the illegal machines were more
22 profitable than bingo was. And the local law enforcement
23 wasn't doing anything about their illegal machines, so the
24 only problem was the Gaming Commission. So they just turned
25 in their bingo license and said you guys don't have any
22
1 jurisdiction over us anymore, we'll just go on with our
2 illegal machines.
3 COMMISSIONER GANT: Mr. Chairman, I move that
4 Commission Resolution No. 04-001-B be adopted.
5 COMMISSIONER SUTTER-HINRICHS: Approve -- I
6 mean second.
7 CHAIRMAN BARTCH: If there's no other
8 discussion, would you please call the roll?
9 MS. FRANKS: Chairman Bartch?
10 CHAIRMAN BARTCH: Approve.
11 MS. FRANKS: Commissioner Hinrichs?
12 COMMISSIONER HINRICHS: Approve.
13 MS. FRANKS: Commissioner Gant?
14 COMMISSIONER GANT: Approve.
15 MS. FRANKS: Commissioner Hartsfield?
16 COMMISSIONER HARTSFIELD: Approve.
17 MS. FRANKS: By your vote, you've adopted
18 Resolution No. 04-001-B.
19 MR. MCCANSE: The next and last case is VFW
20 Post 2210, another bingo case. And I pointed out during the
21 hearing that I was eligible for VFW, but I've never joined
22 it so I felt that I could go ahead and be impartial.
23 This was a little different switch. Some of
24 the others had the settlement agreement at the
25 Administrative Hearing Commission. This group had a hearing
23
1 and contested it. And the commissioner found that they did
2 possess illegal gambling devices and that they should be
3 subject to discipline.
4 At the hearing, they were represented by an
5 attorney who said that the notices that were sent out, only
6 two of them defined the word "premises" and that some of
7 them didn't define the word "illegal gambling devices," so
8 maybe only two of them were specific.
9 At the same time, premises is defined in one of
10 the Code of State Regulations, and it means any part of the
11 building where bingo is played even though the bingo area
12 may be separated from the other area by a partition.
13 In this case when the -- there was an
14 anonymous complaint, a telephone complaint saying they've
15 got some slot machines here. So they sent an inspection
16 team down to St. Genevieve and they tried to contact people
17 who were listed as representing the organization.
18 They finally got someone who said I can get in
19 the bingo hall, but I can't get in the rest of it. And then
20 somebody else said what happens if we don't let you in?
21 And the response was well, we'll go back to Jefferson City
22 and recommend that your license be revoked.
23 And then finally they showed up with a key to
24 the bingo hall and they found seven table-top machines.
25 They went through the machines one by one to test them out.
24
1 Now, whoever was running this wasn't doing the veterans any
2 favor, because one of the machines had a payout of
3 41 percent. By statute I think the riverboat has to be at
4 least 80 and most of them are over 90. So the best machine
5 they had I think the payout was 60 percent. So while they
6 may have been making some money, they weren't doing the
7 veterans any favors.
8 The activities -- when they went by to pick up
9 machines they say well, come back at six o'clock and the
10 Highway Patrol said that's fine, but we'll stay here in the
11 parking lot and watch the place, because they were a little
12 bit afraid that the machines might disappear in the
13 meantime.
14 I think all of their activities showed what
15 can best be described as guilty knowledge, that they knew
16 that they were there, they knew they were on the premises,
17 and they knew they were illegal.
18 So, again, reluctantly, because the VFW put in
19 evidence that they had done a lot of great things in
20 transporting veterans to hospitals, contributing to various
21 causes, they've raised a considerable amount of money, but
22 at the same time some of the other charitable organizations
23 had also done good things and their licenses had been
24 revoked.
25 So I could not make any exception or
25
1 distinction in this case. And, again, it's with sadness
2 that I think the only recommendation would be a revocation
3 of the bingo license.
4 COMMISSIONER GANT: Mr. Chairman, I hate to do
5 this against the VFW Post, but they ought to comply with the
6 law, so I will move that Commission Resolution No. 04-002-B
7 be adopted.
8 COMMISSIONER HARTSFIELD: Second.
9 CHAIRMAN BARTCH: Is there any discussion?
10 Would you please call the roll?
11 MS. FRANKS: Chairman Bartch?
12 CHAIRMAN BARTCH: Approve.
13 MS. FRANKS: Commissioner Hinrichs?
14 COMMISSIONER SUTTER-HINRICHS: Approve.
15 MS. FRANKS: Commissioner Gant?
16 COMMISSIONER GANT: Approve.
17 MS. FRANKS: Commissioner Hartsfield?
18 COMMISSIONER HARTSFIELD: Approve.
19 MS. FRANKS: By your vote, you've adopted
20 Resolution No. 04-002-B.
21 MR. MULLALLY: Thank you, Mr. McCanse.
22 I should note for the record, Mr. Chairman,
23 that Mr. McCanse has submitted his resignation effective
24 April 1st. He has done a great service for the Gaming
25 Commission and the people of the State of Missouri. He's
26
1 handled, I believe, over 75 cases for us over the last couple
2 of years and we certainly wish him well as he enjoys tennis
3 and the other things that he likes to do in his spare time.
4 MR. MCCANSE: I thought at 85 I ought to quit
5 some time or another.
6 CHAIRMAN BARTCH: And we do wish you well.
7 And if you could bear with us, I have a resolution that we
8 would like to give you. It says, Whereas, on April 1st of
9 2000, Thad McCanse was appointed as a hearing officer by the
10 Missouri Gaming Commission; and whereas, Mr. McCanse will
11 resign as hearing officer position as of April 1st, 2004;
12 and whereas, over the past four years Mr. McCanse has made
13 significant contributions to the Commission's mission
14 ensuring the integrity of the commercial and charitable
15 gaming in Missouri; and whereas, the Commission is very
16 grateful to Mr. McCanse for his kindness, courteous manner
17 and the care and detail for which he has administered and
18 prepared his cases; now therefore, be it resolved that the
19 members of the Missouri Gaming Commission and the staff
20 offer their sincere gratitude and deep appreciation to Thad
21 McCanse for his dedicated service to the people of the State
22 of Missouri and wish him well in his future endeavors.
23 Thank you very much, sir.
24 MR. MCCANSE: Well, thank you all. Thank you
25 all.
27
1 COMMISSIONER GANT: Thad, I've appreciated
2 your legal knowledge in writing these conclusions and your
3 compassion towards people. And good luck in the future.
4 MR. MCCANSE: Well, yes. I may try and figure
5 out something else to get into.
6 COMMISSIONER SUTTER-HINRICHS: We will miss
7 you, but we won't miss your broken W.
8 MR. MCCANSE: You know, that's sort of a
9 trademark now.
10 COMMISSIONER GANT: How old did you say you
11 were?
12 MR. MCCANSE: I'll be 85 in May.
13 COMMISSIONER GANT: Well, I hope I'm in as
14 good shape when I reach that as you are.
15 MR. MCCANSE: Well, thanks. It's nice being
16 here. From day to day I say that.
17 MR. MULLALLY: Thank you.
18 Mr. Chairman, the next item on the agenda is
19 the consideration of the licensure of Level I and key
20 applicants, and Lieutenant Keith Johnson is here to make
21 the presentation.
22 MR. KEITH JOHNSON: Morning, Mr. Chairman --
23 CHAIRMAN BARTCH: Good morning.
24 MR. JOHNSON: -- Commissioners.
25 The background teams conducted investigations
28
1 of the following Level I applicants that included, but were
2 not limited to, criminal, financial and general character
3 inquiries. The following individuals have been investigated
4 and found to be suitable for licensing by the Commission:
5 Gary L. Johnson, general manager The Missouri Gaming
6 Company, doing business as Argosy Riverside Casino; and
7 Fredrick George Stuckel, II, director of regulatory
8 compliance, Harrah's Maryland Heights Casino. Thank you.
9 COMMISSIONER GANT: Do you want a motion to
10 approve them?
11 CHAIRMAN BARTCH: I think -- can we do both at
12 the same time?
13 MR. MULLALLY: Yes.
14 COMMISSIONER GANT: I move that Commission
15 Resolution No. 04-013 be adopted and these people be
16 approved.
17 COMMISSIONER SUTTER-HINRICHS: Second.
18 CHAIRMAN BARTCH: If there's not any other
19 discussion, please call the roll.
20 MS. FRANKS: Chairman Bartch?
21 CHAIRMAN BARTCH: Approve.
22 MS. FRANKS: Commissioner Hinrichs?
23 COMMISSIONER SUTTER-HINRICHS: Approve.
24 MS. FRANKS: Commissioner Gant?
25 COMMISSIONER GANT: Approve.
29
1 MS. FRANKS: Commissioner Hartsfield?
2 COMMISSIONER HARTSFIELD: Approve.
3 MS. FRANKS: By your vote, you've adopted
4 Resolution No. 04-013.
5 MR. MULLALLY: Mr. Chairman, the next item on
6 the agenda is the consideration of preliminary orders of
7 discipline, and General Counsel Mike Bushmann is here to
8 make the presentation.
9 MR. MIKE BUSHMANN: Good morning,
10 Mr. Chairman, Commissioners.
11 First item I have for you is Case
12 No. DC-04-046, which is a preliminary order of discipline
13 against The Missouri Gaming Company, which does business as
14 Argosy Riverside Casino.
15 As you know, Argosy recently opened up their
16 new casino, and in the course of that renovation, they had
17 to move many of their slot machines over to the new casino.
18 Movement of slot machines is strictly controlled and
19 requires testing and inspection by the Commission staff.
20 In the course of those inspections last
21 November and December, Commission slot machine technician
22 Todd Nelson discovered revoked software in slot machines on
23 two separate occasions.
24 The first software he found had been revoked
25 on May 28, 2002, because under some circumstances the
30
1 hopper would lock up during a payout, which requires a RAM
2 clear, clearing all accounting and play history. It was
3 supposed to be removed from slot machines within 60 business
4 days, but it was still in nine machines on November 20,
5 2003, almost 18 months later.
6 The second software he found had been revoked
7 on August 15, 2003, because the paytables were incorrect.
8 It was supposed to be removed by November 15th, but it was
9 still in four machines on December 3rd.
10 Since leaving revoked slot-- revoked software
11 in slot machines makes them in an unsuitable condition, the
12 staff recommends that The Missouri Gaming Company be fined
13 for Count I in the amount of $20,000 and for Count II in the
14 amount of $5,000 for a total of $25,000.
15 CHAIRMAN BARTCH: And these fines are
16 generally what we've done for like instances?
17 MR. BUSHMANN: Yes, sir. The fines for this
18 sort of thing typically range somewhere between 10,000 and
19 25,000 dollars.
20 COMMISSIONER SUTTER-HINRICHS: I would move to
21 approve Missouri Gaming Commission -- I guess that's -- is
22 it a resolution? DC-04-046.
23 MR. BUSHMANN: Order of discipline.
24 COMMISSIONER SUTTER-HINRICHS: Order of
25 discipline.
31
1 COMMISSIONER HARTSFIELD: Second.
2 COMMISSIONER GANT: That includes both counts?
3 MR. BUSHMANN: Yes.
4 COMMISSIONER GANT: Okay.
5 CHAIRMAN BARTCH: If there is no other
6 discussion, would you please call the roll?
7 MS. FRANKS: Chairman Bartch?
8 CHAIRMAN BARTCH: Approve.
9 MS. FRANKS: Commissioner Hinrichs?
10 COMMISSIONER SUTTER-HINRICHS: Approve.
11 MS. FRANKS: Commissioner Gant?
12 COMMISSIONER GANT: Approve.
13 MS. FRANKS: Commissioner Hartsfield?
14 COMMISSIONER HARTSFIELD: Approve.
15 MS. FRANKS: By your vote, you've adopted
16 Disciplinary Complaint DC-04-046.
17 MR. BUSHMANN: Case No. DC-04-047 is against
18 President Riverboat Casino-Missouri, Inc. for several rule
19 violations relating to admissions, ticketing and purchasing
20 chips during a private party at the casino on November 2,
21 2003.
22 Starting back in August, when the staff
23 learned about the plans for this private party, the staff
24 worked closely with the company to try and make sure that
25 the public safety and gaming enforcement would be provided
32
1 for.
2 The company was told several times that all
3 persons who were attending the party, the rules would apply
4 to them and that the company would be held accountable for
5 any violations of gaming laws that might occur.
6 However, during the course of that event some
7 of the company's employees didn't follow proper procedures
8 on a number of occasions. The ticketing supervisor and
9 security director allowed a group of nine persons to enter
10 the casino without presenting a player's card; a marketing
11 employee made a patron a player's card without him being
12 present and without his proper identification card; a craps
13 table employee improperly allowed a patron to buy in for
14 chips using the player's card of another person; an
15 executive host made a player's card for a patron without him
16 being present and then gave him the card without requiring
17 that he sign it. The table games manager then directed that
18 that card be swiped to register a previous improper purchase
19 of chips.
20 The casino is responsible for the actions of
21 its employees, so the staff recommends that for all these
22 violations, President Riverboat Casino be fined in the
23 amount of $50,000.
24 COMMISSIONER HARTSFIELD: Is there any
25 precedent for the amount? Any guideline for the amount?
33
1 MR. BUSHMANN: I went back through the
2 previous cases and I really didn't see anything that applied
3 to this sort of thing. It was the grouping of violations
4 all at one time, I think, that caused the Discipline Committee
5 to recommend a relatively high amount.
6 COMMISSIONER GANT: Mr. Chairman, I recommend
7 that DC-04-047 be adopted.
8 COMMISSIONER HARTSFIELD: Second.
9 CHAIRMAN BARTCH: If there's no other
10 discussion, would you please call the roll?
11 MS. FRANKS: Chairman Bartch?
12 CHAIRMAN BARTCH: Approve.
13 MS. FRANKS: Commissioner Hinrichs?
14 COMMISSIONER SUTTER-HINRICHS: Approve.
15 MS. FRANKS: Commissioner Gant?
16 COMMISSIONER GANT: Approve.
17 MS. FRANKS: Commissioner Hartsfield?
18 COMMISSIONER HARTSFIELD: Approve.
19 MS. FRANKS: By your vote, you've adopted
20 Disciplinary Complaint DC-04-047.
21 MR. MULLALLY: Mr. Chairman, under tab L are
22 some proposed rule amendments, and Mike Bushmann will
23 present the first rule.
24 MR. BUSHMANN: On 11 CSR 45-4.260 the Legal
25 and Enforcement Sections have been working on this proposed
34
1 amendment for over a year. The issue has been what do you do
2 about applicants and licensees who have misdemeanor
3 convictions on their record.
4 In the case of persons who have felony
5 convictions, the law is clear that they can't have a gaming
6 license. In the case of someone who has a misdemeanor
7 conviction, however, the Commission has discretion on
8 whether or not to issue a license to that person. The
9 Commission has never really established any clear guidelines
10 on what to do with these folks, but has kind of handled the
11 issue on a case-by-case basis.
12 What the staff is proposing in this rule
13 amendment is to set out the types of misdemeanors that
14 definitely disqualify a person from having a gaming license,
15 and that's gambling offenses and offenses that involve
16 theft, fraud or dishonesty that occur within the
17 previous five years.
18 The Commission can still discipline or deny
19 someone who has received a different misdemeanor conviction,
20 and we would continue to handle those cases on a
21 case-by-case basis.
22 The benefits of establishing more clear
23 guidelines like this rule for misdemeanors are going to give
24 more information and guidance to the licensees and the
25 applicants and to speed up the processing time for
35
1 applications.
2 In addition to this rule change, the staff has
3 also completely revised and streamlined the entire work flow
4 of the license application process for these folks. This
5 will enable us to give many applicants a quick decision on
6 their application, and it will cut out a lot of the existing
7 paperwork that's built into the process. It will save staff
8 time and resources while also benefiting those persons who
9 have applied for a license. So the staff recommends that
10 this proposed amendment be approved.
11 CHAIRMAN BARTCH: Discussion?
12 COMMISSIONER SUTTER-HINRICHS: I would move
13 that we adopt Rule No. 11 CSR 45-4.260.
14 COMMISSIONER GANT: Let me ask a question.
15 CHAIRMAN BARTCH: Sure.
16 COMMISSIONER GANT: On No. 6 you've got
17 mandatory shall make the applicant or licensee unsuitable.
18 MR. BUSHMANN: Yes, sir.
19 COMMISSIONER GANT: And earlier you'd say may.
20 And there's somewhat of -- do you feel it should be
21 mandatory that if they do, that's it?
22 MR. BUSHMANN: That would be the
23 recommendation of the staff, was that we set out a few of
24 them that the Commission would agree that if you have that
25 conviction on your record, you're definitely going to be
36
1 denied or have your license disciplined.
2 That enables us to allow some of the licensing
3 technicians in the field to make that initial determination.
4 It gives them clarity to say that we can tell you right now
5 as you're sitting across the table from a person that
6 they're going to be denied.
7 Now, other misdemeanor convictions would be
8 sent up to Jefferson City for review by the Discipline
9 Review Board, and ultimately the Commission, but it would
10 save a great deal of staff time and give more guidance to
11 the person right at the time of application if they could
12 know -- if there was something that was on your record that
13 definitely was a disqualifying conviction, then they could
14 be told right then.
15 And this is just an attempt by the staff to
16 recommend some offenses that we thought the Commission would
17 probably think would definitely disqualify somebody.
18 COMMISSIONER GANT: Do you have access to all
19 the disposition of sentence things or -- Mike's shaking his
20 head yes.
21 MR. BRADLEY: We do.
22 COMMISSIONER GANT: You understand what an
23 Alford plea is? They don't admit they're guilty, they just
24 consider the circumstances and feel they're going to be
25 found guilty. So I'll second your motion.
37
1 CHAIRMAN BARTCH: Is there any other
2 discussion?
3 Would you please call the roll?
4 MS. FRANKS: Chairman Bartch?
5 CHAIRMAN BARTCH: Approve.
6 MS. FRANKS: Commissioner Hinrichs?
7 COMMISSIONER SUTTER-HINRICHS: Approve.
8 MS. FRANKS: Commissioner Gant?
9 COMMISSIONER GANT: Approve.
10 MS. FRANKS: Commissioner Hartsfield?
11 COMMISSIONER HARTSFIELD: Approve.
12 MS. FRANKS: By your vote, you've adopted
13 proposed amendment 11 CSR 45-4.260.
14 MR. MULLALLY: I think it's important to
15 recognize the work of those people that came up with this
16 revised work flow process. It's really going to save a
17 substantial amount of paperwork and time and really produce
18 a better process for the public, much more efficient, and
19 really good work.
20 It was Mike who assembled the team and led it.
21 I know Keith Essmyer did a lot of work on that as well as a
22 number of others, so it's really a substantial improvement
23 over what we have been doing.
24 Also under tab L is another proposed rule
25 dealing with progressive slot machines and financial analyst
38
1 Jim Oberkirsch is here to explain.
2 MR. JIM OBERKIRSCH: Good morning, Chairman
3 and Commissioners.
4 This is a relatively minor revision to an
5 existing rule which sets forth financial covenants that
6 govern companies that wish to do wide-area progressive games
7 in Missouri. And it's important that we have these
8 financial covenants because these companies pay jackpots in
9 large amounts in subsequent periods, so financial
10 suitability is a major concern.
11 This particular change was requested by the
12 licensee, which is IGT in this case. That is the only
13 licensee currently licensed to offer wide-area progressive
14 games. And they requested this change to add flexibility as
15 to how they could demonstrate liquidity.
16 Basically, the old rule said you had to have a
17 current ratio of not less than two to one. We've just added
18 another parameter which says you can have working capital of
19 greater than 20 percent of the outstanding jackpot
20 liability. So now they have a choice of two in order to
21 comply with the financial covenants.
22 In addition, we bolstered the long-term
23 financial strength indicators. We added a new one called
24 the debt to EBITDA ratio and we're saying that you cannot
25 have a debt to EBITDA ratio of more than four to one.
39
1 This was added to the existing one which said your interest
2 coverage ratio has to be not less than three to one.
3 So I think overall we've got a stronger rule
4 with regard to financial suitability, but yet we're giving
5 the licensee a little flexibility in how they can
6 demonstrate one aspect of financial suitability. I'd be
7 happy to answer any questions.
8 COMMISSIONER HARTSFIELD: I'll move approval
9 of Rule 11 CSR 45-5.200.
10 CHAIRMAN BARTCH: Do I have a second?
11 COMMISSIONER SUTTER-HINRICHS: Second.
12 CHAIRMAN BARTCH: If there's no other
13 discussion, would you please call the roll?
14 MS. FRANKS: Chairman Bartch?
15 CHAIRMAN BARTCH: Approve.
16 MS. FRANKS: Commissioner Hinrichs?
17 COMMISSIONER SUTTER-HINRICHS: Approve.
18 MS. FRANKS: Commissioner Gant?
19 COMMISSIONER GANT: Approve.
20 MS. FRANKS: Commissioner Hartsfield?
21 COMMISSIONER HARTSFIELD: Approve.
22 MS. FRANKS: By your vote, you've adopted
23 proposed amendment 11 CSR 45-5.200.
24 MR. MULLALLY: Mr. Chairman, we had included
25 on the agenda a consideration of dealing with the issue of
40
1 Sigma Game, Inc.'s temporary license. However, late
2 yesterday we received a letter from Sigma where they
3 would -- they indicated that they would not seek to extend
4 their temporary license as of March 31st.
5 MR. JOHNSON: March 1st.
6 MR. MULLALLY: I'm sorry. As of March 1st
7 they will no longer do business in the state of Missouri.
8 They will continue to seek the establishment of their
9 suitability under their license application, but they will
10 discontinue doing business in the state as of March 1st.
11 CHAIRMAN BARTCH: Which means we don't have to
12 do any action on this?
13 MR. MULLALLY: There's no action necessary on
14 our part. Anything else to add, Mike?
15
16 MR. BUSHMANN: No.
17 MR. MULLALLY: So that concludes the business
18 that staff has. I don't know whether you want to ask the
19 audience whether there's anybody that would like to be
20 recognized.
21 CHAIRMAN BARTCH: Yes. I'd like to ask the
22 audience if there's anyone that would like to speak or be
23 recognized? This is your opportunity.
24 RON UPDEGRAVE: Thank you. Mr. Chairman,
25 members of the Commission, Director Mullally. I'm Ron
41
1 Updegrave. I live in Arnold, Missouri. And I'd just like
2 the Commission to recognize the group from ABC, or Against
3 Barnhart Casino, continuing our objection to a casino in
4 Jefferson County.
5 Do you want to stand up? Thank you.
6 CHAIRMAN BARTCH: Thank you. We've had closed
7 session, so is there any other business? Motion for
8 adjournment?
9 COMMISSIONER GANT: I so move.
10 COMMISSIONER HARTSFIELD: Second.
11 CHAIRMAN BARTCH: Do we need to call the roll?
12 MR. MULLALLY: All in favor.
13 COMMISSIONERS: Aye.
14 CHAIRMAN BARTCH: We're adjourned then.
15 WHEREUPON, the hearing was adjourned.
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1 CERTIFICATE OF REPORTER
2
3 I, Tracy L. Thorpe, a Certified Shorthand Reporter,
4 and Notary Public within and for the State of Missouri, do
5 hereby certify that the witness whose testimony appears in
6 the foregoing deposition was duly sworn by me; that the
7 testimony of said witness was taken by me to the best of my
8 ability and thereafter reduced to typewriting under my
9 direction; that I am neither counsel for, related to, nor
10 employed by any of the parties to the action in which this
11 deposition was taken, and further, that I am not a relative
12 or employee of any attorney or counsel employed by the
13 parties thereto, nor financially or otherwise interested in
14 the outcome of the action.
15
16
17 ____________________________
Tracy L. Thorpe, CSR, CCR
18 Notary Public State of Missouri
(Commissioned in Boone County)
19 My commission expires December 16, 2005.
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