1
1 BEFORE THE MISSOURI GAMING COMMISSION
2
3
4
5 MEETING
6 TRANSCRIPT OF PROCEEDINGS
7
8 November 29, 2004
9 9:00 a.m.
10 Missouri Gaming Commission
11 3417 Knipp Drive
12 Jefferson City, MO
13
14
COMMISSION MEMBERS PRESENT: Commissioner
Bartch, Chairman
15
Commissioner Judy Hinrichs,Vice-Chairman
Commissioner George
Hartsfield
16
Commissioner Jack Gant
Commissioner Ralph
Biele
17
18
19
REPORTED BY: Monnie S.
VanZant, CCR, CSR, RPR
Midwest
Litigation Services
20 714 W. High Street
Jefferson
City, MO 65102
21
(573) 636-7551
22
23
24
25
2
1 TRANSCRIPT OF PROCEEDINGS
2
COMMISSIONER BARTCH: Call the
3 meeting to order.
Angie, call the roll.
4 MS. ANGIE FRANKS: Chairman Bartch?
5 COMMISSIONER BARTCH: Here.
6 MS. FRANKS:
Commissioner Hinrichs?
7 COMMISSIONER HINRICHS: Here.
8 MS. FRANKS:
Commissioner Gant?
9 COMMISSIONER GANT: Here.
10 MS. FRANKS:
Commissioner Hartsfield?
11 COMMISSIONER HARTSFIELD: Here.
12 MS. FRANKS:
Commissioner Biele?
13 COMMISSIONER BIELE: Here.
14 MR. KEVIN MULLALLY: Mr. Chairman, in Vol.
15 I of your two volume materials, Under Tab A are
16 the minutes of the October 13, 2004 meeting.
17 COMMISSIONER HINRICHS: Move to
18 approve.
19 COMMISSIONER HARTSFIELD: Second.
20 COMMISSIONER BIELE: Second.
21 COMMISSIONER GANT: Tie.
22 COMMISSIONER BARTCH: It's been moved
23 for approval of the minutes. Call the roll.
24 MS. FRANKS:
Chairman Bartch?
25 COMMISSIONER BARTCH:
Approve.
3
1 MS. FRANKS:
Commissioner Hinrichs?
2 COMMISSIONER HINRICHS: Approve.
3 MS. FRANKS:
Commissioner Gant?
4 COMMISSIONER GANT: Approve.
5 MS. FRANKS:
Commissioner Hartsfield?
6 COMMISSIONER HARTSFIELD: Approve.
7 MS. FRANKS:
Commissioner Biele?
8 COMMISSIONER BIELE: Approve.
9 MS. FRANKS:
By your vote, you've
10 adopted the minutes of the October 13, 2004
11 meeting.
12 MR. MULLALLY: Chairman, the next
13 item on the agenda is the consideration of a
14 number of hearing officer recommendations. And
15 Hearing Officer Stephen Stark is here to make
16 his first presentations to the Commission.
17 MR. STEPHEN STARK: Good morning,
18 Commissioners.
19 COMMISSIONER BARTCH: Good morning.
20 COMMISSIONER HINRICHS: Good morning.
21 COMMISSIONER GANT: Good morning.
22 COMMISSIONER HARTSFIELD: Good
23 morning.
24 COMMISSIONER BIELE: Good morning.
25 MR. STARK:
Appropriate for me to sit
4
1 here or --
2 COMMISSIONER BARTCH: Absolutely.
3 Whatever is good for you. Glad to have you.
4 MR.
STARK: Thank you. Thank you.
5 COMMISSIONER GANT: Try to talk --
6 because somebody in the audience may want to
7 hear you, and at times if you're not talking
8 into that,
they don't hear you behind you. So
9 -- okay? You
can just talk right at -- it will
10 carry if you talk into the microphone.
11 MR. STARK:
Okay. Keep it close
12 then. The
first case on your agenda is Tania
13 Burnett. This
is a case where Ms. Burnett was
14 -- has an occupational license in which she
15 filed an application in June of 2002. Your
16 application always asked the question, Have you
17 had any arrests or convictions? And then it
18 goes on further to say that if there's any
19 changes to
this later on, those changes have to
20 be reported.
21 Well, in January of 2003, Ms.
22 Burnett was charged and arrested for stealing.
23 She did not
tell the Commission about this
24 arrest. Later
on, when she pleaded to a one
25 year probation, she did report it. The
5
1 Commission in its preliminary order for
2 discipline alleged two bases for discipline;
3 the first being the failure to report the
4 arrest, and then the conviction of the crime
5 itself.
6 Ms. Burnett’s only defense was really
7 that her friend had called on her behalf the
8 Commission immediately after her arrest. And
9 someone at the gambling boat on behalf of the
10 Commission said there was no need to report it
11 until you know exactly what the final
12 resolution of that arrest or that criminal
13 action might be.
14 So my recommendation, based upon the law,
15 is that she did not provide the necessary
16 reporting of her arrest and the crime itself
17 would be grounds for discipline. As such, I do
18 recommend that the preliminary order be
19 affirmed for revocation of this petitioner's
20 license.
21 COMMISSIONER BARTCH: As is our
22 policy now, is there anyone from the audience
23 who wishes to speak to this representing Ms.
24 Burnett?
25
COMMISSIONER GANT: I move that
the
6
1 decision of the hearing officer be approved and
2 adopted. I'd
like to see -- this is a -- you
3 know, this is a classic situation that -- I
4 think what -- what did she shoplift, a two or
5 $20 deal or something like that?
6 MR.
STARK: She testified it was a $3
7 item.
8 COMMISSIONER GANT: $3 item. Why
9 anybody would want to steal something for $3
10 and lose their job over it is just non-sensical
11 and mind boggling.
But that's not for us to
12 decide. Then
-- I didn't like it when she
13 didn't call directly, and she had somebody else
14 call. And I
feel sorry for the lady. But, you
15 know, I don't feel sorry because she stole
16 something.
That's her problem. I feel sorry
17 we're going to have to approve this. But that
18 is also her problem.
And it just shows how
19 foolish people can be, I guess.
20 COMMISSIONER HINRICHS: I'll second
21 the Commission Resolution No. 04-056.
22 COMMISSIONER BARTCH: Is there any
23 further discussion?
Please call the roll.
24 MS. FRANKS:
Chairman Bartch?
25 COMMISSIONER BARTCH:
Approve.
7
1 MS. FRANKS:
Commissioner Hinrichs?
2 COMMISSIONER HINRICHS: Approve.
3 MS. FRANKS:
Commissioner Gant?
4 COMMISSIONER GANT: Approve.
5 MS. FRANKS:
Commissioner Hartsfield?
6 COMMISSIONER HARTSFIELD: Approve.
7 MS. FRANKS:
Commissioner Biele?
8 COMMISSIONER BIELE: Approve.
9 MS. FRANKS:
By your vote, you've
10 adopted Resolution No. 04-056.
11 MR. STARK:
Commissioners, next on
12 the docket is the case of Robert Mueller.
13 Mr. Mueller is a holder of an Occupational
14 Level II license.
His job title was slot
15 operations manager for the Ameristar Casino in
16 St. Charles.
17 This case dealt with some missing keys.
18 Apparently, an employee that was under the
19 supervision of Mr. Mueller had misplaced a
20 number of keys, some of them being designated
21 as sensitive keys.
The end result was that the
22 keys were
actually locked up in a safe place.
23 However, Mr. Mueller failed to report the
24 missing keys up the chain of command with
25 regard to his supervisors and with regard to
8
1 reporting this incident to the Commission's
2 gaming agents at the casino.
3 The internal control procedures of the
4 casino as well as the minimum standards that
5 the Commission requires does require accounting
6 for keys. Now,
I must amend my proposal with
7 regard to some
Findings of Fact that there are
8 some typos. If
you have -- at page 2 of my
9 Findings of Fact, No. 13 identifies the date of
10 August 7, 2004.
That should have been August
11 8, 2003. So
there's two typos in that
12 particular paragraph.
August 8, 2003 is the
13 correct date there.
Then in paragraph 15, I
14 put the year 2004.
It should have been 2003.
15 So I would respectfully ask that those three
16 typos be corrected.
17 Again, based upon the minimum internal
18 control standards and Mr. Mueller's failure to
19 report, the Commission in its preliminary order
20 proposed a discipline of 16 hours suspension.
21 The defense that Mr. Mueller presented was that
22
he himself wanted to
conduct an investigation
23 rather than immediately report the incident.
24 He tried to make the argument that immediately
25 did not necessarily mean right away, but rather
9
1 after he was able to ascertain the facts based
2 upon his own investigation. I did not accept
3 that. My reading of immediately is that it
4 should have been done right away rather than
5 wait for his own individual investigation. In
6 fact, I made use of the dictionary in my
7 proposed order with regard to defining some
8 terms that Mr. Mueller wanted to define in his
9 own words.
10 Therefore, based upon, again, my reading
11 of the
law and Findings of Fact, I recommend
12 that the Commission affirm its preliminary
13 order that suspension of 16 hours is the
14 appropriate discipline in this case.
15 COMMISSIONER BARTCH: Anybody wish to
16 speak on behalf of Mr. Mueller?
17 COMMISSIONER HINRICHS: I'll move
18 that we approve Commission Resolution No.
19 04-058.
20 COMMISSIONER GANT: I'll second it.
21 COMMISSIONER HARTSFIELD: Question.
22 What did you base the 16 hours on? Is it
23 precedent or some guideline?
24 MR. STARK:
Actually, no. I just
25 accepted what the -- the preliminary order had
10
1 suggested. I
didn't see any need to change it.
2 The petitioner has the burden to carry forth on
3 a clear and convincing standard any other
4 alternative or
his proof of no need for
5 discipline.
And I -- yeah. I don't have any
6 particular guidelines that I used in
7 deciding what was the appropriate discipline
8 other than to
recommend an affirmation of what
9 the Commission has already said.
10 COMMISSIONER HARTSFIELD: Okay.
11 COMMISSIONER BARTCH: I think our
12 staff could answer the reason for the 16 hours.
13 No one wants to.
14 MR. MIKE BUSHMANN: In sensitive key
15 cases, the Commission Discipline Review Board
16 staff usually recommends 8 to 16 hour suspensions
17 in this type of case.
18 COMMISSIONER HARTSFIELD: So it's
19 pretty much precedent?
20
MR.
BUSHMANN: It's consistent with
21 what we've recommended in the past.
22 COMMISSIONER HARTSFIELD: Okay.
23 COMMISSIONER BARTCH: Any other
24
discussion? Do we have a motion
and a second?
25 So call the -- do we have a second?
11
1 MS. FRANKS:
Yes.
2 COMMISSIONER BARTCH: Okay.
Call the
3 roll.
4 MS. FRANKS:
Chairman Bartch?
5 COMMISSIONER BARTCH: Approve.
6
MS.
FRANKS: Commissioner Hinrichs?
7 COMMISSIONER HINRICHS: Approve.
8 MS. FRANKS:
Commissioner Gant?
9 COMMISSIONER GANT: Approve.
10 MS.
FRANKS: Commissioner Hartsfield?
11 COMMISSIONER HARTSFIELD: Approve.
12 MS. FRANKS:
Commissioner Biele?
13 COMMISSIONER BIELE: Approve.
14 MS. FRANKS:
By your vote, you've
15 adopted Resolution No. 04-058.
16 COMMISSIONER GANT: I checked the
17 dictionary myself.
18 MR. STARK:
I'm sorry?
19 COMMISSIONER GANT: I checked the
20 dictionary also since that's what he wanted us
21 to do on that one.
22 COMMISSIONER HINRICHS: Did you look
23 up the definition of "it"?
24 COMMISSIONER GANT: I don't think I
25 did.
12
1 MR. STARK:
I think I looked up three
2 words, didn't I?
3 COMMISSIONER HINRICHS: Yes, in
4 another case.
5 MR. STARK:
Immediately, missing and
6 misplaced. I
think those were the terms that
7 were being debated.
The third case on our
8 agenda is the case of Mr. Gene Weggenmann.
9 This is another case of failure to report.
10 Mr. Weggenmann was licensed. Again, the
11 application asked about arrests, charges,
12 convictions, any changes to your application
13 have to be updated.
Mr. Weggenmann was
14 arrested and plead guilty to a misdemeanor of
15 sexual misconduct, and he failed to report his
16 arrest.
17 Based upon, again, the regulations and the
18 -- and the statutes that provide that failure
19 to report changes in one's application can be
20 grounds for
discipline as well as a conviction
21 of a crime can be the basis for discipline.
22 Finding that there was a failure to report,
23 finding that there was indeed a conviction for
24 a crime, I recommend that the preliminary order
25 for a revocation of this gentleman's license is
13
1 proper and
appropriate. And that would be my
2 recommendation.
3 COMMISSIONER BARTCH: Anybody to
4 speak on behalf of Mr. Weggenmann?
5 COMMISSIONER GANT: Chairman, I move
6 that the Commission approve and adopt the final
7 order in the matter of 04-042 and that that be
8 considered a final decision in the case.
9
COMMISSIONER HARTSFIELD: Second.
10 COMMISSIONER BARTCH: Any other
11 discussion?
Please call the roll.
12 MS. FRANKS:
Chairman Bartch?
13
COMMISSIONER BARTCH: Approve.
14 MS. FRANKS:
Commissioner Hinrichs?
15 COMMISSIONER HINRICHS: Approve.
16 MS. FRANKS:
Commissioner Gant?
17 COMMISSIONER GANT: Approve.
18 MS. FRANKS:
Commissioner Hartsfield?
19 COMMISSIONER HARTSFIELD: Approve.
20 MS. FRANKS:
Commissioner Biele?
21 COMMISSIONER BIELE: Approve.
22 MS. FRANKS:
By your vote, you've
23 adopted Resolution No. 04-060.
24 MR. STARK:
The next case on our
25 agenda is the case of Ms. Connie Bolton. This
14
1 is a case that actually, at the time of the
2
hearing -- actually, before the hearing was
3 conducted, the Attorney General's office and
4 the Petitioner, Ms. Bolton, came to an
5 agreement, a settlement agreement, which is
6 attached as part of my recommendations. Ms.
7 Bolton was arrested by the Municipal Police in
8 St. Charles for a misdemeanor driving while
9 intoxicated.
She did not report that arrest to
10 the Commission within the ten days required.
11 Again, this is a case where any changes in the
12 application have to be reported.
13
The parties
entered into a settlement
14 agreement in which discipline was agreed to in
15 the amount of 16 hours of suspension. Given
16 that the parties came to an agreement, that is
17 my recommendation that this agreement be
18 accepted and that the suspension be imposed
19 upon this particular licensee.
20 COMMISSIONER BARTCH: Anybody to
21 speak on behalf of Ms. Bolton?
22 COMMISSIONER GANT: Mr. Chairman, I
23 move that we -- in Resolution 04-061 that we
24 approve and adopt the final order and it be
25 considered the final decision of our
15
1 Commission.
2 COMMISSIONER BIELE: Second.
3 COMMISSIONER BARTCH: Any other
4 discussion?
Please call the roll.
5 MS. FRANKS:
Chairman Bartch?
6 COMMISSIONER BARTCH: Approve.
7 MS. FRANKS:
Commissioner Hinrichs?
8 COMMISSIONER HINRICHS: Approve.
9 MS. FRANKS:
Commissioner Gant?
10 COMMISSIONER GANT: Approve.
11 MS. FRANKS:
Commissioner Hartsfield?
12 COMMISSIONER HARTSFIELD: Approve.
13 MS. FRANKS:
Commissioner Biele?
14 COMMISSIONER BIELE: Approve.
15 MS. FRANKS:
By your vote, you've
16 adopted Resolution No. 04-061.
17 COMMISSIONER HINRICHS: May I ask a
18 procedural question?
Because there are
19 different numbers --
20 COMMISSIONER GANT: Yeah, there is.
21 COMMISSIONER HINRICHS: The number at
22
the beginning of
everything is DC 04-061, and
23 yet the one that's on the -- the actual
24 preliminary order for disciplinary action is
25 04-064. Which
are we supposed -- what number
16
1 is the appropriate number? I presume it's the
2 one that's on the first page.
3 MS. FRANKS:
The resolution number is
4 what we're adopting.
5 COMMISSIONER HINRICHS: The one on
6 the first page.
So when we're making a motion,
7 we should use that first page?
8 MS. FRANKS:
Yeah.
9 COMMISSIONER HINRICHS: Okay.
10 MR. STARK:
The next case is the case
11 of Mr. William Hall.
Mr. Hall, in July of 2003,
12 was employed by International Game
13 Technology. He
was working at the Isle of
14 Capri Boonville Casino on behalf of
15 International Game Technology. He was
16 present in the information technology room, the
17 computer room of the casino, and there were
18 other workers there as well, employees of the
19
Isle of Capri and
another employee, I believe,
20 of International Game Technology.
21 A couple workers decided to cover the
22 surveillance camera that was in place in the
23
computer room. The camera was
just a
24 stationary camera focused in on the entrance to
25 monitor the individuals coming in and out of
17
1 that particular computer room. Apparently,
2 some of the workers wanted to play what they
3 called a prank to cover this camera in order to
4 test whether
other employees in the
5 surveillance room would be able to learn of the
6 obstruction of the camera and how quickly they
7 would be able to do that.
8
In the preliminary
order for disciplinary
9 action, the suggestion was revocation of
10 Mr. Hall's license.
What adds to the story in
11 this particular case is the fact that the
12 Highway Patrol officer on duty conducted an
13 investigation, and Mr. Hall was not truthful in
14 answering questions about the events
15 surrounding the covering of this surveillance
16 camera. And
the law clearly shows that the
17 Gaming Commission has authority to discipline
18 for several grounds, namely, whether or not a
19 particular act
is injurious to the public
20 health, safety, morals, good order, general
21 welfare to the people of the state, whether
22 there's incompetence, misconduct, gross
23
negligence, fraud, misrepresentation or
24 dishonesty.
And Mr. Hall did admit that he was
25 not truthful with the investigators, that he
18
1 was trying to protect a fellow employee of
2 possible discipline and that -- and, in fact,
3 he lied to the Commission's agent.
4 Furthermore, the regulations provide
5 that any employee should report any misconduct
6 or any suspicious activity to the Commission.
7 So Mr. Hall participated in an activity that --
8 in
covering the camera, which would lead one to
9 believe that there was something to hide.
10 Secondly, he failed to report the conduct. And
11 thirdly, he was not honest in his answers to
12 the investigators.
Based upon those findings,
13 I recommend that the preliminary order for
14 disciplinary action be affirmed and that Mr.
15 Hall's license
be revoked.
16 COMMISSIONER BARTCH: Anyone wish to
17 speak on behalf of Mr. Hall?
18 MR. WILLIAM HALL: Yes.
19 COMMISSIONER BARTCH: Come forward.
20 MR. HALL:
My name is William Hall.
21 And I'd just like to say that there was no
22 maliciousness, premeditation or anything. It
23 was strictly a
dumb mistake in bad judgment on
24 my part. I've
been in this business almost 15
25 years. And I'd
like some consideration, maybe
19
1 suspension, probation, fine or all three. I'd
2 like to keep continued employed in this
3 industry. And
I regret that it ever
4 happened. If I
could turn back the clock, I
5 would, but I can't.
And I understand my
6 mistake, and I take responsibility for that.
7 COMMISSIONER BARTCH: Any other
8 discussion?
9 COMMISSIONER BIELE: No.
I guess I
10 understand what you're saying. But what you
11 did, to me, is inexcusable. You do not cover
12 up a
surveillance camera. To me, there's
just
13 -- there is just no excuse for that.
14 MR. HALL:
I understand that.
15 COMMISSIONER BIELE: There's a lot of
16 reading
between the lines here, I think also.
17 And like I said, it's just something that
18 cannot be in a casino setting.
19 MR. HALL:
I'd like to add, I didn't
20 cover the camera.
I should have stopped the
21 gentleman that did.
And that is my mistake.
22 And like I say, I apologize for that.
23 COMMISSIONER GANT: Mr. Hall,
24 you're probably the least guilty of
25 all of them.
But, you know, code of honor can
20
1 only go so far.
Those people aren't going to
2 help you get a job if we don't renew your
3 license or if we revoke it. This is another
4 instance of how people do silly things that
5 affect
their lives, you know.
6 MR. HALL:
Yes, sir.
7 COMMISSIONER GANT: The lady that
8 shoplifts for $3, and, you know, we had others
9 of these coming up.
And another said that a
10 lady was changing her clothes. That's not the
11 place to change your clothes anyway in a
12 surveillance room.
And I don't know which case
13 -- which was true.
But, you know, I feel sorry
14 for everybody.
But there's a time to joke and
15 a time not to joke and a place to joke and a
16 place not to joke.
And you can see what it
17 does, the work it causes the staff and
18 everybody. And
I feel sorry for everybody
19 involved in this, but I really don't feel very
20 sorry because it's not the place to joke. I
21 guess that's all.
22 COMMISSIONER HARTSFIELD: I'd make
23 one comment. I
guess I could bend a little bit
24 on the initial infraction, although it's
25 serious. But
to be untruthful to an
21
1 investigator just adds fuel to the fire.
2 Mr. Chairman, I move adoption of Resolution No.
3 04-063.
4 COMMISSIONER HINRICHS: Second.
5 COMMISSIONER BARTCH: Any other
6
discussion? Please call the
roll.
7 MS. FRANKS:
Chairman Bartch?
8 COMMISSIONER BARTCH: Approve.
9 MS. FRANKS:
Commissioner Hinrichs?
10
COMMISSIONER HINRICHS: Approve.
11 MS. FRANKS:
Commissioner Gant?
12 COMMISSIONER GANT: Approve.
13 MS. FRANKS:
Commissioner Hartsfield?
14 COMMISSIONER HARTSFIELD: Approve.
15 MS. FRANKS:
Commissioner Biele?
16 COMMISSIONER BIELE: Approve.
17 MS. FRANKS:
By your vote, you've
18 adopted Resolution NO. 04-063.
19 MR. STARK:
The next case is the case
20 of Mr. Steven Baker.
Mr. Baker is a holder of
21 a Level II occupational license. Or excuse me.
22 I apologize.
He made application for the
23 license. He
did identify convictions for
24 invasion of privacy and for sexual misconduct
25 and
for child molestation. The investigator
22
1 that reviewed the application with him made the
2 recommendation that Mr. Baker not be licensed
3 to work in the gaming industry based upon these
4 past criminal convictions.
5 Mr. Baker presented evidence that he was
6 informed by the Ameristar Casino that it was
7 felony criminal convictions, not misdemeanor
8 criminal convictions that would prevent him
9 from obtaining a license to be employed.
10 So he
went through the training program in
11 anticipation of receiving a license.
12 The preliminary -- well, the
13 application for Mr. Baker to obtain a license
14 was, indeed,
rejected by the Commission and the
15 hearing was based upon whether or not that was
16 appropriate.
Mr. Baker does have the burden of
17 proof to prove his suitability for
18 employment.
Based upon the law that allows the
19 Commission to not license someone with criminal
20 convictions, I found that the facts support the
21 action of the
Commission not to issue a license
22 to Mr. Baker.
And that would be my
23 recommendation that the license not be issued.
24 COMMISSIONER BARTCH: Anybody to
25 speak on behalf of Mr. Baker?
23
1 COMMISSIONER BARTCH: And a motion?
2 COMMISSIONER HINRICHS: I --
3 COMMISSIONER GANT: Mr. Chairman --
4 ladies first.
5 COMMISSIONER HINRICHS: Move to
6 approve Resolution No. 04-064.
7
COMMISSIONER GANT: I'll second.
8 COMMISSIONER BARTCH: Any other
9 discussion?
Please call the roll.
10 MS. FRANKS:
Chairman Bartch?
11
COMMISSIONER BARTCH: Approve.
12 MS. FRANKS:
Commissioner Hinrichs?
13 COMMISSIONER HINRICHS: Approve.
14 MS. FRANKS:
Commissioner Gant?
15 COMMISSIONER GANT: Approve.
16 MS. FRANKS:
Commissioner Hartsfield?
17 COMMISSIONER HARTSFIELD: Approve.
18 MS. FRANKS:
Commissioner Biele?
19 COMMISSIONER BIELE: Approve.
20 MS. FRANKS:
By your vote, you've
21 adopted Resolution No. 04-064.
22 MR. STARK:
Our next case is the case
23 of Ms. Pamela Hunter.
Ms. Hunter is licensed
24 as a Level II occupational licensee. This
25 case, again, is with regard to subsequent
24
1 criminal activity that was not reported to the
2 Commission. In
the -- at the time of her
3 application, she had no criminal history. But
4 subsequently, she had two cases -- two criminal
5 cases in two different counties for passing bad
6 checks. She --
I believe she reported the
7 conviction of
one of them, but she did not
8 report the arrest of either one of them
9 and did not report the second bad check
10 conviction. So
in effect, she had four
11 opportunities -- or actually four requirements
12 to report the arrest and the conviction. So
13 she failed in three regards in reporting as
14 required by the regulations.
15
Another matter in this case is a question
16 on the application with regard to prior
17 litigation.
The question asked, Have you been
18 sued or named as a defendant in any lawsuit?
19 And at the time of the application she
20 correctly answered no. But subsequent to the
21 application, she was sued by a creditor and a
22 judgment was entered against her. She failed
23 to report that as well.
24 These criminal convictions of passing a
25 bad check, the civil lawsuit of unpaid debt
25
1 lead to another grounds for discipline with
2 regard to financial responsibility. So based
3 upon the criminal convictions, the failure to
4 report and the lack of financial
5 responsibility, it would be my recommendation
6 that the discipline proposed in the preliminary
7 order of a license revocation for Ms. Hunter
8 would be approved.
9 COMMISSIONER BARTCH: Anybody to
10 speak on behalf of Ms. Hunter?
11 COMMISSIONER BIELE: Chairman, I --
12 COMMISSIONER HINRICHS: I'm
13 sorry. Go
ahead.
14 COMMISSIONER BIELE: I move for
15 resolution of 04-066.
16 COMMISSIONER HARTSFIELD:
Second.
17 COMMISSIONER HINRICHS: You got my
18 attention on passing bad checks.
19 COMMISSIONER BARTCH: Any other
20 discussion? If not,
please call the roll.
21 MS. FRANKS:
Chairman Bartch?
22 COMMISSIONER BARTCH: Approve.
23 MS. FRANKS:
Commissioner Hinrichs?
24
COMMISSIONER HINRICHS: Approve.
25 MS. FRANKS:
Commissioner Gant?
26
1 COMMISSIONER GANT: Approve.
2 MS. FRANKS:
Commissioner Hartsfield?
3 COMMISSIONER HARTSFIELD: Approve.
4 MS. FRANKS:
Commissioner Biele?
5 COMMISSIONER BIELE:
Approve.
6 MS. FRANKS:
By your vote, you've
7 adopted Resolution No. 04-066.
8 MR. STARK:
The next case is the case
9 of Ms. Misty
Denninger. Ms. Denninger is a
10 licensee.
Again, this is a case where the
11 application asked for any arrests or criminal
12 convictions.
And Ms. Denninger did not reveal
13 that she had been arrested for possession of an
14 illegal controlled substance. However, more
15 importantly, I suppose, is the fact that she
16 requested a hearing and did not appear at the
17 hearing.
18 The regulation of the Commission says
19 failure to appear at a hearing constitutes an
20 admission of the facts as alleged. So,
21 actually, based on two grounds, the criminal
22 conviction and the failure to appear at the
23 hearing would be basis for affirming the denial
24 of the license for Ms. Denninger.
25 COMMISSIONER BARTCH: Anyone to speak
27
1 on behalf Of Ms. Denninger? If not, do we have
2 a
motion?
3 COMMISSIONER HARTSFIELD:
4 Mr. Chairman, I'll move to adopt Resolution No.
5 04-067.
6 COMMISSIONER GANT: Second.
7 COMMISSIONER BARTCH: Any further
8 discussion? If
not, please call the roll.
9 MS. FRANKS:
Chairman Bartch?
10 COMMISSIONER 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:
Commissioner Biele?
18
COMMISSIONER
BIELE: Approve.
19 MS. FRANKS:
By your vote, you've
20 adopted Resolution No. 04-067.
21 MR. STARK:
The next case is the case
22 of Mr. Mark
Brown. Mr. Brown has a Level II
23 occupational license working as a bartender.
24 And he was arrested and plead guilty to a
25 case of driving while intoxicated, resisting
28
1 arrest and assault on a law enforcement
2 officer. Those
three incidences occurred
3 at the same time on the same date. The
4 Commission's preliminary order recommended a
5 revocation of his license. Mr. Brown's defense
6 was that first he was a bartender, not handling
7 money,
not really, in effect, in the casino
8 operation.
9 My understanding is that for anybody to be
10 on the casino, there has to be a license,
11
whether you're a
bartender, waitress or a
12 dealer. So I
didn't find that to be a credible
13 defense at all, the fact that he didn't handle
14 money as a bartender.
15 Secondly, one of his plea bargain
16 arrangements was based upon an Alford plea. An
17 Alford plea is basically you're saying that the
18 evidence is against you, or at least the
19 evidence as presented would be against you, but
20 you're not believing that you are guilty. So
21 an Alford plea is kind of a hybrid of a
22 guilty plea. However,
there were three
23 different guilty plea arrangements, and two of
24 them are not with regard to the Alford plea.
25 Regardless, an Alford plea by case law is
29
1 considered as equal to a guilty plea. So the
2 legal argument that the Alford plea should not
3 be taken against him didn't really hold -- hold
4 his case or his defense up. So based upon his
5 criminal behavior and conviction, I would
6 recommend that the preliminary order for
7 discipline in the revocation of his license
8 would be proper.
9 COMMISSIONER BARTCH: Anybody to
10 speak on behalf of Mr. Brown?
11 COMMISSIONER GANT: Mr. Chairman, I move
12 that Resolution No. 04-069 be approved and adopted.
13 COMMISSIONER BIELE: Second.
14 COMMISSIONER BARTCH: Any further
15 discussion?
Please call the roll.
16 MS. FRANKS:
Chairman Bartch?
17 COMMISSIONER BARTCH: Approve.
18 MS. FRANKS:
Commissioner Hinrichs?
19 COMMISSIONER HINRICHS: Approve.
20 MS. FRANKS:
Commissioner Gant?
21 COMMISSIONER GANT: Approve.
22 MS. FRANKS:
Commissioner Hartsfield?
23
COMMISSIONER HARTSFIELD:
Approve.
24 MS. FRANKS:
Commissioner Biele?
25 COMMISSIONER BIELE: Approve.
30
1 MS. FRANKS:
By your vote, you've
2 adopted Resolution No. 04-069.
3 COMMISSIONER BIELE: Before we go on,
4 I know there's several people here from
5 Ameristar, Harrah's, people from Missouri
6 Gaming Company.
Just a question, because I
7 think this is the last of the cases that deal
8 with this type
of thing of reporting -- failed
9 to report arrests.
It's -- I'm interested in
10 anyone from the industry -- do you have any
11 comments whatsoever of why this is happening?
12 I mean, because I think we feel that it's made
13 very plain in the beginning. At least we
14 understand -- our understanding as the
15 Commission it's stressed to these people. But
16 it seems like every time we have these
17 disciplinary hearings there's many, many cases
18 like this. So
is something falling through the
19 cracks? Or is there a way that
20 we should be doing something different? Is
21 there a way that you should be doing something
22 different? Or
I guess I'm just interested in
23 any
comments from the industry at all.
24 COMMISSIONER GANT: I'd like to add I
25 think we've got four or five of these today.
31
1 And, you know, I don't know what you can do or
2 whether you need to renew it but they all come
3 in and say, well, they didn't realize there's a
4 time limit, they were supposed to update
5 things. And
some of them may be
6 truthful and some of them may not be
7 truthful.
8 COMMISSIONER BIELE: Some of them are
9 fairly good employees and so forth.
10 COMMISSIONER GANT: Maybe selective
11 amnesia is what it might be. But there ought
12 to be something -- in fact, I thought maybe we
13 ought to put it in red or something, put arrows
14 there to -- because it's obvious if you read
15 it. But nobody
seems to pay much attention to
16 it.
17 MR. TROY STREMMING: First of all, I'm
18 Troy Stremming.
I'm vice president of
19 governmental affairs for Ameristar Casino.
20 I'm also
president of the Missouri Riverboat
21 Gaming Association.
And I think that I heard
22 -- Tony Raymon, general manager in St. Charles
23 had recognized one of these cases that was from
24 some time ago and I think it's taken it a while
25 to get through the system. But it's something
32
1 that we don't
like as well because you start --
2 once the application process is on file
3 and the investigation ball begins, you start
4 training these employees. And the last thing
5 you want to do is be training these employees
6 and have to start the process over again. So
7 it is something that we through HR --- I know
8 that Ameristar does.
I can't speak for the
9 other companies, but to make sure they
10 understand that when they're filling out the
11 application.
And to further that, I think I
12 sent Steve some
information that we came across
13 in filling out a Colorado application where
14 purchasing a casino in Colorado. And they
15 actually step through the process that says
16 even if you don't think it meets the standard,
17 it does. And
then they explain a little
18 further. So I
don't know if that's something
19 we can all implement in our application
20 process. But
it's something that we're aware
21 of and certainly something that through the
22 Human Resources department we try to make sure
23 this doesn't happen.
24 But you always have those people
25 that think no one is going to find --
33
1 COMMISSIONER BIELE:
And my comment
2 wasn't to suggest this could be a problem in
3 the industry.
It's a -- but it's definitely a
4 problem. And I
am just interested in how to
5 correct this
problem. That's all. The ones
6 you said -- you don't like it. We don't like
7 it. And so --
8 MR. TONY RAYMON: I'm Tony Raymon. I'm
9 the GM of Ameristar
of St. Charles. I think
10 one thing we can do from the industry side --
11 at least definitely our property and I'll talk
12 to Kansas City about it is when we go through
13 orientations with the new team members,
14 reinforce it.
And when we have our all team
15 member meetings every quarter or every four or
16 five months
again to reinforce it. And we have
17 a newsletter that goes out. So I think we can
18 -- you know, we can maybe help the situation
19 out some by continuing to support it after the
20 fact. For us,
we just think it's
21 automatic. But
I think for some of
22 the folks, I think somebody hit it on the
23 head. I think
a lot of it's selective. So
24 it's just more convenient to forget about it
25 than it is to actually report it. So
34
1 we'll pick it up on our end as well.
2 COMMISSIONER HINRICHS: Well, one of
3 the -- I think one of our issues today has to
4 do with someone who was sued for divorce, and
5
people don't realize
that divorce is a lawsuit.
6 And that's another thing that just slips by
7 easily because you don't think of it as a
8 lawsuit, which, in fact, it is.
9
COMMISSIONER GANT: Yes, they do.
10 They'd like to kill each other.
11 COMMISSIONER BARTCH: Well, and it's
12 obvious the whole problem is that in some
13 cases, they don't tell you or us because they
14 know they won't be hired if it's
15 disclosed. And
that's it. But it's obvious
16 also that a lot of these situations that if
17 they would just disclose it then the problem
18 kind of goes away.
So there is a --
19 as the Judge was saying, you know, they're doing
20 something that's silly that costs them in the
21 long run. And
if we could prevent it, we would
22 like to. Last
meeting in St. Jo, there were
23 several of those things. And part of
24 our problem is that since we haven't had
25 hearing officers for some time, these are
35
1 stretching on past when they normally would.
2 And since we had so many meetings
3 because of the situation in St. Louis,
4 but even once we catch up, the problem still
5 exists that people are not putting in their
6 application what they should and it costs them
7 down the road.
And, Steve, is there anything
8 else we can do on that?
9 MR. STEVE JOHNSON: No, sir. I don't think
10 so. I think
we've nailed it in our discussion
11 today. And
what happens oftentimes is the
12 failure to disclose becomes the problem and not
13 what
they're not disclosing. And that's hard
14 to understand.
15 COMMISSIONER BARTCH: And then they
16 lie.
17 MR. JOHNSON: Absolutely.
18 COMMISSIONER BARTCH: And then it
19 becomes something that it really isn't, and
20 that is the problem.
Sorry, Kevin.
21 MR. MULLALLY: No. That's -- you're
22 exactly right.
And many times the underlying
23 conduct, as you pointed out, it may be grounds
24 for discipline of some kind. I mean, they may
25
get suspended or, you
know, have some type of a
36
1 short-term problem.
But the failure to
2 disclose becomes a long-term problem.
3 COMMISSIONER BIELE: Thank you,
4 Mr. Chairman.
I just thought it was something
5 we should discuss.
6 COMMISSIONER HINRICHS: One other
7 issue is I think the general layperson is
8 confused by legal language and it has to be
9 very explicit so that they can understand and
10 people don't recognize, for instance, what a
11 lawsuit is.
And is getting arrested for
12 speeding the same as getting arrested for DUI
13 and some of those things maybe need to be --
14 the only
arrests we are not interested in is
15 speeding tickets or regular traffic tickets.
16 Other than that, anything is considered an
17 arrest.
18 MR. MULLALLY: Yeah. And I think if
19 you look at the precedential history of the
20 Gaming Commission and how things end up shaking
21 out, that there are distinctions drawn between
22 offenses of
stupidity or carelessness and
23 offenses of dishonesty or that go to the core
24 of one's character.
So -- and I think a lot of
25 times people commit offenses of stupidity or
37
1 carelessness.
But because they intentionally
2 deceive, they end up with a long-term
3 consequence because they've revealed that they
4 can't be trusted.
5 COMMISSIONER GANT: I'd like to have
6 -- and probably I can understand the employee's
7 position. Lawyers for years have told people
8 that a suspended imposition of sentence is --
9 if you comply with the terms of the probation,
10 your record will be expunged. I've told people
11 that. And it's
probably -- if you ask 90
12 percent of the lawyers, they would say that
13 that -- you don't have a record. And, you
14 know, we've had the one that I was probably
15 more upset about was when the police promised
16 somebody if they turned State's evidence, they
17 wouldn't have any record. And then the record
18
is still there. But we've got to educate
19 probably the attorneys and everybody else that
20 under the Gaming laws it's a different
21 situation. But
I'll guarantee you that if a
22 lawyer filled this out, he wouldn't fill anything
23 in if it came -- if he had suspended imposition
24 of sentence in something. And then you've got
25 the poor client saying, well, I paid the lawyer
38
1 for advice and here's what he told me. And
2 then they end up -- you know, it's distasteful,
3 and I don't like to see anybody lose their job
4 just before Christmas. And yet that's what
5 we're doing.
And that's because we're backed
6 up probably on these things. But there must be
7 some way -- also, maybe you could stress the
8 suspended imposition of sentence does not mean
9 that you do not have a record. Ninety percent
10 of things
that would have, but not with the
11 Gaming Commission.
And, you know, that's -- I
12 talked to Kevin.
They're fairly innocent. If
13 I paid a lawyer for advice and he told me that,
14 then I would say I don't have to report this or
15 do anything.
Hopefully, if you stress that --
16 you need to stress it, suspended imposition of
17
sentence. And we've talked about an Alford
18 plea. And I
agree with you that that's a --
19 that's merely a plea that they think they're
20 going to get more -- or more severe punishment
21 if they go to trial than if they enter a plea
22 of guilty.
23 And secondly, that the -- that doesn't
24 help. And that
they've got to report anything
25 that happens subsequently. But, you know --
39
1 and I agree with you, sir, that when I was
2 reading these, I thought, you know, it's got to
3 cost you a lot of money to retrain people. We
4 have to have our staff investigate it. We have
5 to have a hearing officer hear this. And then
6 we
have to read it. And it's kind of like
a
7 domino situation that just -- everything falls
8 over when people -- they just -- I don't have
9 any sympathy for the ones that have selective
10 amnesia and don't tell anybody about that. But
11 there are the innocent ones in there. And
12 especially if they've had a lawyer that said
13 that -- you
know, you're not going to have a
14 record. Maybe
we ought to have seminars for
15 the attorneys and educate them on it. But, you
16 know, it puts a person in a real bind, I think,
17 that has had a lawyer tell them that.
18 COMMISSIONER HINRICHS: However,
19 Judge, you can't cure stupid.
20 COMMISSIONER BARTCH: And, you know,
21 Judy, you're right.
But what the Judge says is
22 perfectly right.
You know, after -- we had
23 several of those in St. Jo, imposition of
24 sentences. And,
coincidentally, I was
25 talking to a neighbor of mine after that
40
1 meeting, and he had described something that he
2 had went through and, you know, what he
3 was asking was my advice as to where he should
4 go serve his time in Missouri, what jail he
5 should go to and serve a couple days
6 that he had been given as a result. And that's
7 what he had done is imposition of sentence. He
8 had done that, and he was absolutely under the
9 impression that once it was all done that it
10 was gone forever.
And that's what his attorney
11 had told him.
And, as we well know, that's
12 just not true.
And this -- you know, he's a
13 gentleman just like the rest of us, just
14 happened to get involved in something while he
15 was hunting that he shouldn't have done, will
16 probably never do anything again in his life.
17 But because he did this, he was under the
18 impression it would go away. And it's just not
19 true. Steve, I
think we do everything
20 that we can do to try to tell these people
21 that. Maybe we
could stress it more somehow.
22 I just don't know.
23 MR. JOHNSON: We certainly do. We
24 adopted or have adopted many of the provisions
25 of this other jurisdiction relative to that
41
1 disclosure.
And, in fact, on each of the
2 points when
we sit down with these folks, our
3 licensing folks are instructed to talk with
4 them about advice from counsel. And we repeat
5 irrespective of advice that you have had from
6 your attorney or a judge, you must report this,
7 which flies in the face of that. And what we
8 are hoping to do is encourage them at the very
9 least to
revisit the attorney to talk about
10 what it is that we have said. But we stress it
11 on each question, irrespective of what you've
12 been told by counsel and/or a judge in regard
13 to reporting these offenses.
14 COMMISSIONER HARTSFIELD:
15 Mr. Chairman, I'd like to make one comment. I
16 think over-riding -- I'd like to tell you, the
17 companies, you can't emphasize honesty too much
18 in your employment process and your ongoing
19 supervision and training. And this is a
20 bipartisan comment, so I think it's safe to
21 make it in the 20th century. We had two
22 presidents who got in very, very serious
23 trouble, not so much for the initial infraction
24 or indiscretion
but for lying. And you can use
25 those for examples.
If it can happen to the
42
1 most powerful member in the world, it can
2 happen to anybody.
3 COMMISSIONER BARTCH: I'm sorry.
But
4 I've lost my place.
Where are we --
5 COMMISSIONER HINRICHS: We're at
6 Treva Gage.
7 COMMISSIONER BARTCH: Are we asking
8 for a motion on that or -- we're ready to
9 start --
10 COMMISSIONER HINRICHS: We haven't
11 started it.
12 MR. STARK:
I think we finished the
13 Brown case.
We're on to Treva --
14 COMMISSIONER HINRICHS: Treva Gage.
15 COMMISSIONER BARTCH: Okay.
16 MR. STARK:
Treva Gage and Shari
17 Douglas, the next case on the list, those two
18 individuals were represented by the same
19 attorney who made the motion, which I accepted,
20 to consolidate those two cases. The evidence
21 was equal with regard to both of them, so my
22 recommendation
is drafted with both their
23 names. So if
we could take both those cases at
24 the same time, that would be the way I handled
25 it. Ms. Gage
was employed as a Level I
43
1 occupational license level, and Petitioner
2 Douglas had a Level II occupational license.
3 The two worked for the Isle of Capri Boonville
4 gaming boat.
This is a case where there was a
5 camera in the computer room, information
6 technology room, that was covered by another
7
employee as a means to
play a prank is what was
8 the evidence in order to test the
9 individual working in the surveillance room.
10 The camera was covered for a period of some 30
11 minutes before it was uncovered. What happened
12 between Ms. Gage and Ms. Douglas was an
13 agreement that they would have a different set
14 of facts as to what actually occurred if any
15 investigation was conducted.
16 The surveillance manager of the casino,
17 along with the Highway Patrolman gaming agent,
18 interviewed both Ms. Gage and Ms. Douglas
19 individually and separately. The story between
20 Ms. Gage and Ms. Douglas was that one of them
21 was -- let's see.
I think it was Ms.
22
Gage was coming into
the computer room wanting
23 to change her clothes. Therefore, she covered
24 the camera in order to change her clothing.
25 And after she changed her clothing, it was just
44
1 forgotten to remove the paper from covering the
2 camera. That
was the information that the two
3
of them gave to the
investigators regarding why
4 the camera was covered up.
5 Then later on, actually, both of them
6 provided written statements indicating that
7 that was not the truth, that they did not tell
8 the truth to the initial investigators, that
9 the purpose of covering the camera was to play
10 this prank. So
we have the admissions of both
11 of them individually that they, in effect, lied
12 to the Gaming Commission investigator.
13 Now, an issue was raised during the
14 hearing with regard to the status of this
15 particular camera.
The camera was just a
16 single camera focused on the entrance of the
17 information technology room, basically,
18 recording who
came in, who left that particular
19 room. The
issue raised was whether or not that
20 particular camera was regulated by the Gaming
21 Commission.
And then I guess the
22 conclusion to be
drawn is if that camera
23 was not regulated by the Commission, then
24 whatever happened with that camera, regardless
25 of what the employees said about the camera,
45
1 could not be the basis for discipline.
2 The Commission, in its preliminary order,
3 identified
several regulations related to the
4 camera. One
regulation was just a generic
5 regulation that did not identify the camera.
6 But there were some other regulations that said
7 that there had to be a surveillance system in
8 place to protect the assets of the casino and
9 to provide a way to monitor any possible
10 criminal activity.
So it was my opinion that
11 that camera was, indeed, regulated, was, in
12 fact -- had a purpose to serve in regulating
13 this particular casino.
14 Now, the surveillance plan of the casino
15 apparently didn't identify necessarily this
16 camera. Or at
least the evidence didn't show
17 that this camera was identified particularly.
18
And there was no
evidence that the Gaming
19 Commission itself had approved this camera or
20 had required this particular camera. So it was
21 a good argument to say that maybe the
22 Gaming Commission should not concern itself
23 with this particular camera because there was
24 no approval, there was no identification of
25 this particular camera. But given the fact
46
1 that the gaming industry is a highly regulated
2 field and that there are regulations that say
3 there has to
be obviously surveillance, I found
4 that the issue of whether or not
5 the camera was regulated was not a valid
6 excuse for covering up the camera or even not
7 being truthful as to the events surrounding
8 that camera.
9 But regardless of the status of the
10 camera, it goes back to lying to the
11 investigators. That
alone, in my opinion, is
12 adequate grounds for discipline. And that
13 seems to me to be pretty clear in the statutes
14 that misconduct, gross negligence, fraud,
15 misrepresentation, dishonesty are not to be
16 tolerated in the gaming industry. So it would
17 be my recommendation that both Ms. Gage and Ms.
18 Douglas would have their license revoked.
19 COMMISSIONER GANT: I have a
20 question.
Steve, are there -- you know, if we
21 call it a surveillance camera, are there
22 cameras that we don't have jurisdiction over
23 or --
24 MR. JOHNSON: Yes, sir. But we're
25 correcting that.
What it amounts to is that
47
1 each property is required by CSR and internal
2 controls to provide a surveillance plan. We
3 have found those surveillance plans to be
4 somewhat
incomplete or at least inconsistent
5 from property to property. We have asked that
6 those be updated to include all cameras. And
7 simply what we have simply relied on to
8 date is an agent approving the scope, span and
9 the clarity of that camera position. They have
10 not checked some that were off of the gaming
11 floor or in other areas besides the gaming
12 floor. Those
will all be included in a
13 comprehensive surveillance plan that we've
14 mandated occur.
15 COMMISSIONER HINRICHS: I'm not sure
16 I care whether we have jurisdiction or not.
17 They lied.
18 COMMISSIONER HARTSFIELD: Right.
19 MR. JOHNSON: Yes, ma'am. That's
20 part two of this problem.
21 COMMISSIONER GANT: I was just
22 curious since it was called a surveillance
23 camera whether it should come under our -- I
24 guess the other thing that's kind of -- is the
25 computer room usually a place where the ladies
48
1
change their clothes or
--
2 COMMISSIONER HINRICHS: There's a
3 restroom across the street -- across the hall.
4 MR. JOHNSON: No. And I think herein
5 lies the
problem. We're not really sure. We
6 know what we have been told occurred, but we're
7 not really sure what occurred, Judge.
8 COMMISSIONER GANT: Okay.
9 COMMISSIONER BARTCH: Is there anyone
10 to speak on behalf of Ms. Gage or Douglas?
11 COMMISSIONER HINRICHS: I'll move
12 that we approve Resolution Nos. 04-070 and No.
13 04-071.
14 COMMISSIONER GANT: Second.
15 COMMISSIONER BARTCH: Any further
16 discussion? If
not, please call the roll.
17 MS. FRANKS:
Chairman Bartch?
18 COMMISSIONER BARTCH: Approve.
19 MS. FRANKS:
Commissioner Hinrichs?
20 COMMISSIONER HINRICHS: Approve.
21 MS. FARNKS:
Commissioner Gant?
22 COMMISSIONER GANT: Approve.
23 MS. FRANKS:
Commissioner Hartsfield?
24 COMMISSIONER HARTSFIELD:
Approve.
25 MS. FRANKS:
Commissioner Biele?
49
1 COMMISSIONER BIELE: Approve.
2 MS.
FRANK: By your vote, you've
3 adopted Resolution Nos. 04-070 and 04-071.
4 COMMISSIONER BIELE: And, also,
5 regardless of whose command it's under, it was
6 under no one's command for 35 minutes and no
7 one realized that it was covered up, which
8 bothers me. It
has nothing do with this
9 discipline.
But I'd hope that the Isle would
10 take a look at that.
And --
11 COMMISSIONER GANT: Somebody was on a
12 long break.
I'd like to add, also, you
13 know, that's the third person now that we have
14 -- has lost their job because of a stupid,
15 silly prank or whatever was going on there.
16 And as I say, there's a time to joke and a time
17 not to joke. And things like that, you know,
18 we can't regulate the intelligence of people.
19 And, hopefully, others will learn from this.
20 COMMISSIONER BARTCH: I would hope
21 that in the orientation -- it's been said -- we
22 talk a lot about this, and we don't enjoy doing
23 this part of it.
And -- but it has to be done.
24 And hopefully, some way, we can convince these
25 people that they have to be honest. They --
50
1 you know, it's -- there's -- when they lie
2 about these things, the inevitable is
3 almost always going to happen.
4 COMMISSIONER HINRICHS: There was a
5 fourth individual involved in this?
6 MR. STARK:
Yes.
7 COMMISSIONER HINRICHS: What has
8 happened to him?
9 MR. STARK:
I don't know. There was
10 no case
brought before me with regard to --
11 actually, there were two other individuals
12 involved.
13 COMMISSIONER HINRICHS: Why do we
14 have these
three and not the others? Do you
15 know?
16 MR. STARK:
I don't know.
17 MR. BUSHMANN: They were the only
18 ones that requested a hearing.
19 MR. JOHNSON: The others took -- they
20 accepted the recommendation.
21 COMMISSIONER HINRICHS: Okay.
Thank
22 you.
23 COMMISSIONER GANT: That's five
24 people that ended up --
25 MR. STARK:
Yeah. There were five
51
1 people
involved in that particular instance.
2 The next case is the President Riverboat Casino
3 Missouri, Incorporated. This case is actually
4 against the gaming boat itself. It
5 relates to a late filing of a daily tax return
6 that's required by e-mail. And there were some
7 -- several legal issues with regard to this
8 particular case.
So I'll probably bore you a
9 little bit with it all.
10 But nevertheless, the parties did come up
11 with a stipulation of facts. The President
12 Riverboat
Casino did admit on three occasions
13 they met -- they did not meet the 12:00 noon
14 deadline for the daily transmission of a tax
15 return. Now,
one issue was raised with regard
16 to jurisdiction of the Commission to even
17 listen to this case, and that related to the
18 fact that the request for hearing made by the
19 President Casino was filed by a non-attorney.
20 Apparently, one of the managers who was not an
21 attorney made the initial request within the
22 thirty days for a hearing on this matter.
23 So the question
is does the Commission have
24 subject jurisdiction when a non-attorney, in
25 fact, represents a corporation. There is
52
1 case law that says that a non-attorney -- well,
2 first of all, a corporation can only act
3 through agents.
And in order to assert the
4 legal rights in a representative capacity, that
5 individual acting on behalf of the corporation
6 has to be an attorney. There is case law that
7 says that filing a request for hearing where legal
8 rights and theories are expressed, that
9 that is the practice of law. An attorney would
10 need to represent the corporation.
11 In this particular case, the non-attorney
12 made the filing.
There was a hearing
13 scheduled, I believe, for October. In
14 September, the Attorney General's office, on
15 behalf of the Commission, raised this issue for
16 the first time.
The hearing officer at that
17 time made no ruling, made no decision as to
18 whether or not the non-attorney issue would
19 create a
jurisdiction problem. The hearing did
20 not occur. It
was postponed. The hearing
21 didn't occur until June, I guess. But before
22 the hearing occurred, the Attorney General's
23 office asked the President Casino to file an
24 entry of appearance by an attorney and to,
25 again, make another request for a hearing.
53
1 That occurred in April.
2 And in May, the parties got together and
3 created a Stipulation of Facts. So there was a
4 negotiation process going on before the
5 hearing. Given
the fact that there was no
6 ruling on the jurisdiction question, the fact
7 that the two parties actually prepared for a
8 hearing and
that there exists the regulation
9 for the Commission to decide that an extension
10 of time can be granted, it would be my opinion
11 that the Commission should grant the extension
12 of time, except the attorney's entry of
13 appearance, even though it's past the 30-day
14 time period, and accept the request for hearing
15 as filed.
16 Now, there is another case out there that
17 says that a request for hearing -- it doesn't
18 require some reasoning or some type of
19 discussion with regard to assertion of legal
20 rights that maybe a non-attorney can make that
21 filing. Now,
it's interesting to note that the
22 non-attorney made reference to a regulation
23
that basically says
that if you get to a
24 hearing in front of the Gaming Commission, just
25 file for a request.
But the particular
54
1 regulation on a request for hearing does
2 require some detail with regard to your basis
3 for making your request for hearing. Arguably,
4 that would require an explanation of your legal
5 rights and legal theories. But based on the
6 fact that the parties were acting as if the
7 hearing was proper, the jurisdiction was
8 proper and
the fact that we have a regulation
9 on the books that says the Commission can
10 extend time limits, my recommendation is that
11 it's proper to have jurisdiction in this case
12 and to go forth with it.
13 Now, the merits of the case. The issue is
14 with regard to the taxes. There's a regulation
15 that requires payment of taxes on a daily basis
16 into an account, an escrow account, basically.
17 Then there's another regulation that requires
18 payment on a weekly basis of those taxes. And
19
then there's a third
regulation that a return,
20 the accounting, if you will, of the taxes. The
21 deadline for payment of the daily taxes is at
22 12:00 noon.
The deadline for the weekly tax
23 payment is a 12:00 noon deadline after the week
24 has passed.
But the third regulation with
25 regard to the return does not identify a
55
1 particular time.
It doesn't say that the
2 return has to be with the payment of --
3 deposited into the escrow account on a daily
4
basis. It doesn't say that the
return has to
5 be with the weekly payment, the actual payment
6 of the taxes.
So the argument is where did
7 this 12:00 deadline come from for the purpose
8 of filing a return?
9 And the Commission has developed a manual
10 for tax reporting purposes. And in that manual
11 -- and the parties did stipulate that the
12 manual exists, that the manual does have a
13 12:00 noon deadline on a daily basis for filing
14 returns. The
President Casino raised the issue
15 as to whether
or not that manual would have
16 binding effect in that it's not part of the
17 regulation, not part of the existing
18 regulation, was not properly promulgated as a
19
regulation. It's just a manual
out there that
20 gives guidance to the industry. In my review
21 of what makes up a rule, what is required to be
22 promulgated as rules and the authority given to
23 the Commission by the legislature, it
24 specifically says that, The Gaming Commission
25 shall issue rules and regulations with regard
56
1 to its general authority at the beginning of
2 the statutory requirements. And then
3 specifically with regard to taxes, it again
4 repeats the fact that the Gaming Commission
5 should issue rules and regulations on
6 the tax issues.
I found -- it would be my
7 opinion that the manual does not have the legal
8 effect of law for which to be a basis for
9 discipline. It
was not promulgated as a
10 regulation as required by the statutes. And
11 there are a couple cases out there that would
12 support that.
13 The state welfare agency has an income
14 maintenance manual that they used in one case
15 with regard to Medicaid payments. The
16 particular manual, the income maintenance
17 manual, is used to deny payments to this
18 particular individual. He sued, and the court
19 found that use of this manual had not been
20 promulgated as a regulation properly. And,
21 therefore, the state welfare agency was without
22 authority to make that particular Medicaid
23
calculation.
24 Another case was the Highway Department in
25 taking property for building highways had a
57
1 manual that was used to calculate a particular
2 compensation amount similar to the state
3 welfare agency, and the court said that that
4 manual outside the regulation, not being
5 properly promulgated as a regulation itself,
6 would have no binding effect, would not have
7 the effect of law.
8 So it would be my recommendation that
9 since the manual -- and even though the
10 industry has been following that manual all
11 these years, that to assert discipline, that
12 manual itself cannot be the basis for the
13 discipline that's proposed in this case. And
14 my recommendation would be that the preliminary
15 order be dismissed and held to be void.
16 COMMISSIONER BARTCH: Does President
17 wish to speak to this? How about you Jane?
18 MS. JANE RACKERS: If you have questions,
19 we can answer questions. Or if you have
20 anything --
21 COMMISSIONER GANT: I have a
22 question. Do
we need to do anything else to
23 have a rule?
24 MR. MULLALLY: Yeah. The -- it's my
25 understanding the tax manual is being submitted
58
1 as a rule.
It's being prepared as a rule as we
2 speak?
3 MR. BUSHMANN: Yes.
4 COMMISSIONER GANT: Okay. This was
5 the least and most interesting thing we had to
6 read. This --
7 COMMISSIONER BARTCH: Any other
8 questions?
Have a motion? I'm sorry.
9 MS. RACKERS: This is Samantha Harris
10 with the Attorney General's Office. She was
11 primarily responsible for litigating the case.
12 So --
13 MS. SAMANTHA HARRIS: Thanks, Jane.
14 MS. RACKERS: She was solely
15 responsible.
No. But if you have any
16 questions or -- or anything that we can answer
17 before we -- we'd be happy to.
18 COMMISSIONER GANT: When I was
19 reading this, they do it daily, but then they
20 have the weekly return also. Is that just to
21 summarize what took place during the week? Or
22 how does the
audit work on this?
23 MR. STARK:
Is that my question?
24 COMMISSIONER GANT: I don't care.
25 Either one of you.
59
1 MR. STARK:
My understanding is that
2 there's not a weekly return. There's a weekly
3 payment.
4 MR. MULLALLY: Daily tax return --
5 tax returns are submitted daily and paid
6 weekly. And
they pay into an escrow account
7 and we check that on a daily basis. But we --
8
the actual transfer is
made weekly.
9 COMMISSIONER HINRICHS: So there's no
10 requirement for them to do this other than this
11 book?
12 COMMISSIONER GANT: The
manual.
13 COMMISSIONER HINRICHS: Or the
14 manual.
15 MR. STARK:
The regulation says
16 something to the effect that as this Commission
17 desires with regard to the return. But there's
18 no specific time limit. And, I mean, there's
19 argument of construction that you should read
20 the regulations
together. But when you read
21 the three regulations together, it still
22 doesn't tell you what is the time limit
23 on the return.
Is it daily or is it weekly
24 if you read
the -- read it with the other two
25 regulations.
So I couldn't figure out how you
60
1 would say that it's on a daily basis when
2 there's another regulation that says you do
3 something on a weekly basis. So when you read
4 the three regulations together, you can't
5 really construe
what the time limit is for the
6 third regulation.
7 COMMISSIONER HINRICHS: What was the
8 rationale for the original rule that 12 noon --
9 MR.
MULLALLY: Well, certainly,
10 historical practice and the way that we
11 instruct licensees when they're first licensed,
12 when our tax people go in and say, okay,
13 here's
how you do this. The problem
14 is that the manual wasn't promulgated as a
15 regulation.
There was a problem, evidentiary
16 -- there was an evidentiary problem having the
17 documents and the rules in place to be able to
18 proffer that they were violating this. I think
19 that our feeling was that certainly by
20 practice, for the past ten years, licensees
21 have been very familiar that this is an
22 obligation that they have.
23 COMMISSIONER HINRICHS: What is the
24 rationale for that practice?
25 MR. MULLALLY: For the practice that
61
1 they pay daily?
2 COMMISSIONER HINRICHS: Yeah.
Or
3 that they pay by noon daily.
4 MR. MULLALLY: Well, I mean, there
5 has to be a time.
You know, I don't know that
6 noon was -- it allows them time to close out
7 the gaming day and give you sufficient time to
8 prepare that return and make that payment.
9 COMMISSIONER HINRICHS: So we can
10
benefit --
11 MR. MULLALLY: And to be honest with
12 you, I think we took it from Illinois. The
13 original tax system was simply imitating what
14 they were doing
in Illinois at the time, which
15 at the time Illinois was held up
16 to be one of the leading regulatory agencies in
17 the country.
Shows what political meddling can
18 do to a once fine
agency.
19 COMMISSIONER BARTCH: The bottom line
20 is that we need to make this a rule, and
21 that's obviously a problem. And if we do that,
22 then that solves this issue. And if there's
23 not any further discussion, we need a motion.
24 COMMISSIONER HINRICHS: I'll move
25 that we adopt Resolution No. 04-072.
62
1 COMMISSIONER HARTSFIELD: Second.
2 COMMISSIONER GANT: And for
3 clarification,
that is voiding what was done
4 before --
5 MR. STARK:
There was a preliminary
6 order that the President Casino pay a $5,000
7 forfeiture, $5,000 fine for the three instances
8 of being late in filing a return at the 12:00
9 deadline.
Basically --
10 COMMISSIONER GANT: Voiding that
11 preliminary order then?
12 COMMISSIONER BARTCH: I think that's
13 what this motion does.
14 MR. STARK:
This motion would avoid
15 asserting any penalty against the President.
16 COMMISSIONER GANT: Okay.
17 COMMISSIONER BARTCH: Any other
18 discussion? If
not, please call the roll.
19 MS.
FRANKS: Chairman Bartch?
20 COMMISSIONER BARTCH: Approve.
21 MS. FRANKS:
Commissioner Hinrichs?
22 COMMISSIONER HINRICHS: Approve.
23 MS.
FRANKS: Commissioner Gant?
24 COMMISSIONER GANT: Approve.
25 MS. FRANKS:
Commissioner Hartsfield?
63
1 COMMISSIONER HARTSFIELD: Approve.
2 MS. FRANKS:
Commissioner Biele?
3 COMMISSIONER BIELE: Approve.
4 MS. FRANKS:
By your vote, you've
5 adopted Resolution No. 04-072.
6 MR. STARK:
Commissioners, I believe
7 that's all the cases I have to present today.
8 I appreciate your time.
9 COMMISSIONER BARTCH: Thank you very
10 much.
11 COMMISSIONER HINRICHS: Thank you.
12 COMMISSIONER HARTSFIELD: Thank you.
13 COMMISSIONER BARTCH: You did a great
14 job first time out.
15 MR. STARK:
Yeah.
16 COMMISSIONER GANT: Got everything
17 sustained.
18 MR. MULLALLY: Mr. Chairman, I think
19 in order to prepare for the next presentations,
20 I need some set-up time. So if we could take
21 a --
22 COMMISSIONER BARTCH: Five minutes?
23 We need to get prepared for the next item, so
24 we'll take a five-minute break.
25 (Break in proceedings.)
64
1 COMMISSIONER BARTCH: Call the
2 meeting back to order.
3 MR. MULLALLY: All right. Mr.
4 Chairman, the next item on the agenda is the
5 consideration of the renewal of a couple of
6 Class A licensees.
The first presentation
7 coming from Ameristar Kansas City, Inc. And
8 Troy Stremming is here on behalf of the
9 company.
10 MR. STREMMING: Good morning,
11 Chairman Bartch, Commissioners, Kevin. We're
12 actually -- in a manner to try to save a little
13 time, we're going to do both these
14 presentations at the same time. So a lot of
15 information is consistent for both properties.
16 So we're hopeful that will move us along a
17 little bit on the agenda. I have with me today
18 David Albrecht, who is our senior vice
19 president
and general manager of the Ameristar
20 Casino Kansas City property. Tony Raymon is
21 the general manager of the St. Charles
22 facility. And
helping us out on the projector
23 today is Matt Block who is our director of
24 compliance at the Kansas City property.
25 We're before you here today to make a
65
1 presentation in association with the renewal of
2 our Class A licenses.
We're requesting that
3 both those licenses be renewed at this time for
4 a period of two
additional years. We believe
5 that the information provided to you this
6 morning in the slide presentation in
7 the flip book that you should have in front of
8 you will show that we have upheld all
9 commitments to the respective communities, the
10 team members and the state of Missouri.
11 Specifically, the information provided will be
12 in the response for the request for information
13 that we received from the Commission staff.
14 And in addition, after I am done answering
15 those questions, Tony and Dave will talk to you
16 briefly about some of the exciting projects
17 they have ongoing or coming in the near future
18 at each of those facilities. And then we'll be
19 more than happy to answer questions at the end
20 of the presentation or any time you'd like to
21 stop us.
22 Our first slide talks a little bit about
23 Ameristar's philosophy. We're a leading Las
24 Vegas based gaming entertainment company. Our
25 premier property is characterized by innovative
66
1 architecture, state of the art casino floors,
2 superior dining, lodging and entertainment
3 philosophies.
Ameristar is focused on the
4 total entertainment experience. And the
5 highest quality guest services have earned it
6 the leading market share position in the past
7 year in each of the five markets in which we
8 operate.
9 Ameristar is also dedicated to generating
10 economic development in the communities where
11 we reside, offering our team members rewarding
12 careers while being good corporate citizens
13 through charitable giving, volunteerism and
14 social sound responsibility, which we'll touch
15 on today.
16 Our quality products are popular
17 entertainment destinations for local and
18 regional vendors as well. We're proud of our
19 significant capital investments in the casinos,
20 and we continue to reinvest and enhance the
21 properties that we have here in this state. We
22 also create jobs to grow the local economies.
23 And a
significant percentage of our purchases
24 are made there from vendors within a 100 mile
25 radius, which has a secondary economic effect
67
1 in the local community as well. The tax
2 payments that we make support improvements to
3 city infrastructure like roads, community
4 centers and schools.
I know that we have a
5 representative here today from the City of
6 Kansas City as well as the City of St. Charles
7 who should be able to give you a better
8 understanding
how that money is used in the
9 local community.
10 Our next slide will talk a little bit
11 about the summary of commitments that we've
12 made in those local communities. And we'll
13 keep with that requested format. And the first
14 item of discussion is the Ameristar Casino
15 Kansas City development agreement. We have an
16 agreement with the City of Kansas City through
17 the Port Authority in the local community, and
18 we have maintained those commitments over the
19 last several years.
Through those commitments,
20 we contribute $250,000 annually to the river
21 front project fund.
$50,000 of this amount is
22 utilized for local scholarship programs.
23
$200,000 is used to
assist the development of
24 the river front in Kansas City. And it's also
25 used for public improvement and infrastructure.
68
1 Additionally, $100,000 is paid annually to the
2 Kansas City Port Authority for the
3 awareness and research of problem gambling
4 disorders in the local community. Finally, a
5 one million dollar fund was recently
6 established to provide development --
7 developmental support for minorities and women
8 in business in
the local community. ACKC
9 contributes $200,000 to this fund annually.
10 All these commitments are current and Ameristar
11 Casino Kansas City continues to work closely
12 with the Port Authority for the betterment of
13 the local community.
14 In St. Charles, we do not have a
15 development agreement with the City of St.
16
Charles. However, the completion
of the
17 entertainment facility and casino are evidence
18 of our commitment to the city and our
19 commitment to growth.
Ameristar Casino St.
20 Charles' level of reinvestment in the property
21 as well as it's philanthropic involvement in
22 the community further confirms our commitment
23 to the local environment. And Tony will
24 provide you with some of those details as I
25 mentioned earlier.
69
1 We'll now
look at adjusted gross
2 revenues in the associated projections for the
3 remainder of the year. Ameristar Casino Kansas
4 City's AGR was just over $204 million and
5 $209 million
respectively for 2002 and 2003.
6 Actual AGR through September, with budgeted AGR
7 through the fourth quarter, will result in AGR
8 total of almost $235 million for 2004. That is
9 about a million dollars more than what was
10 projected during the year. And we're talking
11 two different projections here. Since we're
12 not finished with 2004, we're giving a
13 projection on what we think the revenues will
14 be in the last quarter and how that will
15 compare to the projection that we've made in
16 the last time we had licensure. The increase
17 over this period can be attributed to the
18 increased business attained as a result of
19 substantial investment in the property and
20 through the capital investment and the
21 commitment to our quality service.
22 In Ameristar Casino St. Charles, AGR was
23 just over $196.4 million and $263.4 million for
24 2002 and 2003.
Actual AGR through September
25 with budgeted AGR through the fourth quarter
70
1
will total approximately
$295 million. That's
2 almost -- that's about $20 million more than
3 what we had projected for 2004. The increases
4 over this period, for some of the new
5 Commissioners, are the substantial growth that
6 we've had at that property and moving into the
7 new facility since our last period of
8 relicensure.
9 The
summary of admissions also will show
10 some growth as well.
The projections for the
11 remainder of the year in Kansas City are just
12 over 8.9 and 8.8 million respectively for 2002
13 and 2003. And
the actual admissions of what we
14 anticipate over 2004 will be 9.3 million. Our
15 original projection admissions were just short
16
of this amount. And the fluctuations over this
17 period were caused by decreased visitation
18 through the construction period as we grew that
19 facility. And
now we're seeing those
20 numbers go back up.
21 And St. Charles admissions were just over
22 8.1 million and 10.1 million respectively for
23 2002 and 2003.
The actual admissions through the
24 end of the year we're budgeting at over 11
25 million. The
Ameristar Casino St. Charles had
71
1 originally
projected those admissions to be
2 about 11.1 million, so we're just shy of what
3 the projection was.
The increase over this
4 period of time is going from one facility to a
5 much newer facility and a much larger facility
6 that Tony will tell you about. We also think
7 it's worth noting that now with 11 million
8 admissions, which every customer stays about
9 two -- a little over two admissions, so that
10 takes you about five and a half million bodies
11 that we move through that facility a year,
12 which makes
Tony's facility in St. Charles the
13 No. 1 tourist destination in the state.
14 Our philosophy is to continue to make
15 improvements and reinvest in the property to
16 grow the revenues and admissions. Missouri
17 properties are no exception to our philosophy.
18 Since December of 2002, the Kansas City
19 property's initiated 11 major capital
20 improvement projects in an effort to continue
21 to enhance the property. These projects have
22 included a new steakhouse, 24-hour diner, a
23 pastry kitchen and cabaret. The casino floor
24 and surveillance rooms were also refurbished so
25 even on ticket and even on the technology all
72
1 the slot products were updated as well. The
2 total amount spent on these projects was just
3 shy of $50 million.
Additional property has
4 undertaken smaller capital improvements to
5 improve the day-to-day operations at the
6 facility, and those total around 14 million
7 dollars for the same period. It's important to
8 note that these
figures represent about a 17
9 percent increase in the value of the property.
10 In St. Charles, three major capital
11 improvement projects have been undertaken to
12 continue to enhance that property. These
13 projects included the addition of a preferred
14 guest lounge, cabaret and an enhanced deli
15 area. The
total amount spent on the project
16 was just over $8 million. Additionally, the
17 property has already undertaken many smaller
18 capital improvements, which have totaled around
19 $17.4 million
and represent a 7.7 percent
20 increase in the investment of the property.
21 Regarding employment policies and
22 practices, our properties strive to be an
23 employer
of choice. Both Missouri properties
24 have improved their hiring practices
25 and made many enhancements over the
73
1 recent period of licensure. In Kansas City, we
2 employ around 1,900 team members. Impressively,
3 1,731 of which resides in the state of
4 Missouri.
5 ACKC's minority and women employment
6 percentages are 34 percent and 48 percent
7 respectively.
The average compensation
8 computed by the Equal Employment Opportunity
9 Commission or EEOC by job group is officials
10 and managers just shy of $60,000 a year;
11 professionals, around $41,000 a year;
12 technicians, $29,000; office and clerical, $26,000;
13 staff workers which are skilled at $38,000; and
14 operations, semi-skilled at $47,000; and service
15 worker at about $17,000 a year. I think it's
16
important to note that these numbers do
17 not include additional compensation in the form
18 of benefits which our team members receive.
19 And as service workers in many of these
20 positions they're also in tipping positions
21 which makes up a majority of their income,
22 which is not included in that $17,000 figure
23 that you see.
24 In St. Charles, we employ about
25 1,783 team members that reside in Missouri and
74
1 have a total team member population of about
2 1,938. And
without boring you with
3 each number by job classification again, it
4 ranges somewhere from $56,000 to $15,000,
5 again, excluding tips and benefits. As
6 mentioned, in addition to the direct
7 compensation, all the team members are eligible
8 for a multitude of benefits, including health
9 insurance, disability insurance, life
10 insurance, 401-K and also an Employee
11 Assistance Program that we have implemented at
12 both properties.
13 We were
next asked to speak to minority
14 utilization.
Ameristar's properties are
15 committed to providing opportunities to
16 minority and women business enterprises, or MBEs
17 and
WBEs. The property is able to achieve
this
18 objective by increasing awareness of vendor
19 diversity and opportunities on a quarterly
20 basis, increasing company-wide awareness of the
21 vendor diversity, initiatives objectives,
22 giving every reasonable opportunity to
23 businesses owned by MBEs and WBEs as well as
24 setting goals and trying to meet those goals
25 and continuing to grow our utilization. ACKC
75
1 utilizes MBEs and WBEs for just over 23 percent
2 of its purchases in 2003. Through August 2004,
3 we've utilized MBEs and WBEs for about 15
4 percent of its purchases. Although 2004 is not
5 complete, the decrease from 2003 was largely
6 contributed to the loss of a couple key MBE
7 vendors as well as 12 and a half million
8 dollars less in construction. And it's much
9 easier finding
MBEs and WBEs in the
10 construction field than it is in some of the
11 other specialized services that we need
12 provided as well as some of the products that
13 we've purchased.
14 At Ameristar Casino St. Charles, the
15 figures, unfortunately, were not as impressive.
16 The purchase of MBEs and WBEs in 2003 were
17 about 4
percent. Although the percentages are
18 low, it's important to note that that's still
19 contributing to about $1.6 million in goods and
20 services. In
2004, we're proud to report that
21 that number has almost doubled to 7 percent.
22 And we expect to spend an additional $500,000
23 with the MBEs and WBEs before the close of this
24 licensing year.
Or, actually, before the close
25 of 2004.
76
1 In addition to that, Tony and his team
2 have implemented an action plan to combat that
3 and increase these numbers over the next period
4 of licensure.
And as you might note through
5 the development in Kansas City, we're required
6 to meet certain goals. So there's a more
7 structured program in place in Kansas City that
8 we're going to initiate in St. Charles.
9 Next, we were asked to speak to crime in
10 the community and the impact or comparison that
11 it might have on other venues in both Kansas
12 City and St. Charles.
We strive to maintain a
13 safe and secure
environment for our team
14 members and our guests. This is achieved
15 through various forms of ongoing team member
16 training including verbal and physical
17
de-escalation tactics. Team
members are also
18 trained to be aware of situations which could
19 lead to trouble.
In addition, security
20 departments are trained to maintain a high
21 profile within our well-lit facilities. The
22 surveillance teams also do their part to
23 monitor operations while remaining aware of
24 suspicious situations.
25 Looking at crime rates, you will see that
77
1 the number of crimes committed at the Ameristar
2 properties were
very low over the last two
3 years. It's
important to talk
4 specifically about what are described in these
5 because it can -- when you look at violent
6
crime, it can kind of
get your attention when
7 you look at these numbers. These are compared
8 to the uniform crime reporting figures compiled
9 by the FBI in Kansas City and St. Charles.
10 Violent crimes are new murders, forcible rape,
11 robbery and assault.
The only violent crimes
12 occurring at either of our properties over the
13 last two years were either robbery or assault.
14 Or, actually, I'm sorry. Just assaults.
15 Those referred to as property crimes include
16 burglary, larceny and theft and motor vehicle
17
theft. The increase in Kansas
City crimes
18 was attributed to the corresponding increase in
19 business and the number of people that we
20 actually moved through that facility in a given
21 year. We have
also changed the reporting
22 process in the security department to
23 make sure we're properly reporting some of
24 these alleged assaults. It used to be for
25 information only if there was an alleged
78
1 assault, we did not see what happened, but we
2 heard from
two different guests. Now,
3 we actually report that as an assault. So
4 that's why that number is up a little bit.
5 The numbers in St. Charles are actually down
6 over the last year.
7 Next, we were asked to speak to problem
8 gambling and what we do regarding that at our
9 facility.
We're pledged to make responsible
10 gaming an integral part of our daily
11 operations.
Both properties are able to
12 achieve this objective through adhered -- by
13 adhering to the initiatives adopted at either
14 property.
These include the recent
15 implementation of enhanced training programs to
16 ensure that all required team members receive
17 responsible gaming training when hired and
18 they're retrained on an annual basis. Also,
19 the guests indicating the need for responsible
20 gaming information are informed of the 888 BETS
21 OFF
number as well as the DAP program in the
22 State of Missouri, and they're directed to the
23 local agent's office for the Gaming Commission.
24 In addition, we put the 888-BETS OFF number on
25 all of our promotional mailings. And you can
79
1 actually ask to be taken off from our marketing
2
materials, which when you get your card, if you
3 would like to not receive material in
4 the mail, you can ask and we'll take you out of
5 our database program.
6
Both properties also utilize signage and
7 brochures to communicate responsible gaming to
8 guests and to team members throughout
9 facilities.
Annual participation in the
10 American Gaming Association, Responsible Gaming
11 Education Week also occurs at each property.
12 The week includes many property events
13 regarding responsible gaming to heighten guests
14 and team member awareness about problem gaming.
15 And, finally, all of our print, television and
16 on property and off property advertisements
17 contain
the gaming problem, call 888-BETS OFF
18 the Missouri message.
Our Star Awards Club also
19 includes that message.
20 In addition, as we had spoken
21 to previously, Kansas City contributes
22 $100,000 annually to the Port Authority for
23 responsible gaming awareness and research.
24 Another, I think, interesting note is that
25 through live performances that we have through
80
1 entertainers at the Kansas City property we
2 actually have access to these entertainers and
3 we've asked them to do public service
4 announcements on radio or television regarding
5 problem gambling, and two or three of them have
6 actually
responded to that and actually done
7 that for us.
Crystal Gale did one. And do you
8 remember --
9 MR. DAVID ALBRECHT: Wynona Judd.
10
MR.
STREMMING: And Wynona Judd as
11 well.
12 Next, under-aged gambling. Both
13 properties ensure that the laws concerning the
14 legal gambling age is vigorously upheld on a
15 daily basis.
So to do this the property has
16 implemented a program to ensure all required
17 team members receive under-age gaming
18 prevention
training when hired and retraining
19 again on an annual basis. As you know, guests
20 are not allowed to access the casino floor if
21 they're under the age of 21. To ensure this is
22 the case, any guest appearing under the age of
23 30 at any of our properties is required to
24 produce identification prior to entering the
25 casino floor.
It is also our practice to
81
1 randomly card individuals under the age of 30
2 once they are on the casino floor. As another
3 way to ensure no minors are able to gamble,
4 state or federal-issued photo identification is
5 required prior to the issuance of a Star Awards
6 Club card which is required to gain access to
7 the casino floor.
Both casinos also have
8 signage at the entrances which state that the
9 guests must be 21 years old to enter, and we
10 prosecute those
that do enter the casino and
11 are under the age of 21. The message is also
12 included on our print, television, on property
13 and off property advertising. I think one
14 other interesting note, we -- in Kansas City,
15 we kind of have an onslaught of minors trying
16 to gain access to the casino floor. And Dave
17 and his staff implemented a program that any --
18 even though in cases we get fined when minors
19 gain access to the floor, we actually
20 have a reward program that any employee that
21
recognizes a guest and
brings it to our
22 attention that is under the age of 21 we award
23 them with $100.
24 On the impact on local businesses, we were
25 asked to
provide a report on the number of
82
1 business closings during the current periods of
2 licensure as well as a number of new business
3 start-ups in 2002, 2003 and 2004. Almost 2,000
4 new businesses creating 15,000 jobs were
5 started in the Kansas City metropolitan
6 area. During
the same period only 39 major
7 businesses closed, downsized or relocated,
8 resulting in a loss of approximately 4,600
9 jobs. We
believe we contribute to the business
10
growth in Kansas City
through our contributions
11 to the developmental support of MBEs and WBEs,
12 as well as our use of local vendors. We do not
13 believe that we had a direct effect on the
14 businesses that closed as many of those
15 closures are down-sizing were in the technical
16 and telecommunications fields in Kansas City.
17 During 2003, 15 new businesses were
18 started in St. Charles. Unfortunately, job
19 creation is not tracked by the City. However,
20 there's no doubt that these new businesses
21
contributed to growth
as well. Impressively,
22 St. Charles has added 700,000 square feet of
23 commercial space, 154,000 square feet of
24 convention space, and the new town development
25 will include an expected 4,000 new homes in the
83
1 local community.
With this type of business
2 growth, there
is no doubt that business and
3 employment will be substantial in future years
4 in the city of St. Charles.
5 Although the charitable contributions were
6 not requested as a part of this presentation,
7 we feel that our commitment to the communities
8 in which we operate through charitable
9 contributions and volunteerism is such a big
10 part of who we are as a company that we wanted
11 to share it with you today.
12 During 2003, Ameristar Casino Kansas City
13 made approximately 200 separate contributions
14 to various local and state charities, schools,
15 community clubs, fraternal organizations, et
16 cetera that totaled over $200,000. Through
17 October of 2004, 87 contributions totaling over
18 $256,000 have also been made. Additionally,
19 Ameristar Casino Kansas City makes an annual
20 and voluntary contribution of $200,000 to Clay
21 County.
Finally, Ameristar Casino and its team
22 members contributed almost $117,000 to the 2003
23 United Way campaign and expect to give over
24 $125,000 to the 2004 work place giving
25 campaign. The
amount given by team members
84
1 this year will also be matched by the company.
2 And the
funds given to fiscal rehabilitation
3 efforts are matched again by our CEO's
4 foundation.
5 During 2003, St. Charles made 374
6 contributions totalling over $136,000.
7 This amount included $50,000 for a van to
8 transport senior citizens from St. Andrews
9 Research Center to the bank, the grocery store,
10 et cetera.
Through its improved charitable
11 giving campaign, St. Charles expects its
12 contributions in 2004 to exceed $350,000. This
13 amount will include annual payments to capital
14 campaigns which include a $100,000 commitment
15 to the Art Boundary Center in historical St.
16 Charles, a commitment of $150,000 to the SSM
17 St. Joseph Hospital Education and Resource
18 Center for the treatment of problem gambling.
19 And, finally, St. Charles team members
20 contributed over $35,000 in 2003. But it made
21 significant improvements in 2004 where they
22 expect to give approximately $153,000 to the
23 work place giving campaign. Again, this is
24 also matched by the company as well as our CEO.
25 Again, even though it was not requested,
85
1 we wanted to talk just briefly about the
2 volunteer-type
charitable causes in the
3 community that we think are noteworthy. In
4 Kansas City, team members were very active in
5 putting together a multi-talented NBA telethon
6 which
was actually held at our Kansas City
7 facility. The
other things in Kansas City were
8 Operation Breakthrough and Minority Supplier
9 Council in which I serve as vice chair of the
10 Board of Directors.
11 At Ameristar Casino St. Charles, the team
12 members were focused on again, in addition to
13 many others, Habitat for Humanity, the American
14 Heart Walk, St. Mary's Center for Kids, and the
15 Missouri River Relief Clean-up.
16 Finally, as mentioned earlier, ongoing
17 property improvements are an integral component
18 of Ameristar's operating strategy. In March,
19 Ameristar is committed to maintaining the most
20 advanced casino floors and premier properties
21 in each of its markets. The Missouri
22 properties have continued this objective by
23 undertaking several large projects at each
24 property, some of which have already begun.
25 I'll now turn the presentation over to
86
1 Dave and Tony, and I'll turn it over to Dave
2 first to talk
about some of the exciting things
3 he has going on in Kansas City.
4 MR. ALBRECHT: Well, at our property
5 in Kansas City, it's not only good to add
6 things to
your property, but also to maintain
7 them and enhance what you already have. One of
8 the projects that we have going on right now is
9 we have an Italian restaurant called Bigottis',
10 which is going on with the $1.2 million
11 renovation to actually take one restaurant and
12 make it into two separate restaurants. One
13 area of the restaurant will become more of a
14 fine dining facility and be enclosed while the
15 other part of the restaurant, which you can see
16 up here on the board, is going to be a patio
17 area, more like a street-type venue that
18 will have a different type of menu, more casual
19 dining, pizza, salads and things like that.
20 Our second renovation, which just started
21 a couple weeks ago, is our hotel
22 renovation.
And this is a rendering which
23 includes also our additional 300 rooms, which
24 we are planning on doing in the next two, three
25 years. The
current hotel is over on the left
87
1 here. And that
is going through a $12 million
2 renovation right now.
It's a 184-room hotel
3 currently with some banquet space, meeting
4 space in it.
And the entire interior of the
5 hotel is being renovated at a cost of about
6 $60,000 per room.
There is also an additional
7 $2 million renovation going on to the exterior
8 of the hotel to replace windows, to improve
9 balconies, improve the roof and also to
10 aesthetically make it match the new additional
11 hotel which will be going up.
12 And as you can see here with the
13
additional hotel, we
will also have in the
14 future indoor/outdoor swimming and a large
15 convention center added to that.
16 COMMISSIONER GANT: What's your
17 occupancy on
the hotel? Or do you have a
18 certain amount that you have to break even on
19 and obviously -- but is it usually pretty full
20 on weekends or --
21 MR. ALBRECHT: We run 99 percent
22 occupancy year round, weekends, weekdays.
23 That's why we are strongly looking at the
24 additional 300 rooms because it is to the point
25 that we turn away a lot of guests. And
88
1 I think the hotel expansion would greatly
2 enhance the availability to guests outside of
3 our area and more of an attraction as a
4 destination resort compared to a local market
5 where 80 percent of our business right now
6 comes from the
local market and 20 percent of
7 our business comes from outside of 75 miles.
8 So that enhancement would increase our
9 opportunity to attract guests from more of a
10 regional area and not just a local area.
11 COMMISSIONER HINRICHS: When do you
12 propose these new 300 rooms?
13 MR. ALBRECHT: I wish I could tell
14 you a definite time.
But it's in the
15 planning stages.
It's gone from the back
16 burner to the front burner. So I think Tony
17 will talk to you about what's going on in St.
18 Charles. And
probably shortly after their
19 completion there, we will probably be moving
20 forward with ours.
Another project that's
21 scheduled for shortly after the first of the
22 year is a renovation of our buffet. We
23 currently have a 755 seat buffet, and we will
24 be making a two and a half million dollar
25 renovation to this buffet, again, just to
89
1 enhance it, always make it fresh, always make
2 it new for the guests.
3 And not to forget about the important
4 people at our property, our team members, we
5 are doing a half a million dollar renovation to
6 the team dining room, which will happen in the
7 first quarter of next year. We are also doing
8 a small renovation to our deli to the tune of
9 about $700,000, which, again, will also happen
10
in the first quarter of
next year.
11 MR. RAYMON:
In St. Charles, we are
12 very proud to announce that we will begin
13 construction on our long-awaited hotel. It
14 will be
a 300-room all suite hotel. It will
15 include swimming pool, indoor/outdoor pool,
16 exercise facility, spa, and that will be about
17 an 80 million dollar project. Every
18 room will be a suite.
So it will be a very
19 nice upgraded hotel.
And St. Charles is in
20 great need of more hotel space. We also plan
21 in the first six months of 2005 to begin
22 construction on 20,000 square feet of meeting
23 and banquet facility space. And that is
24 actually located and already shelled in above
25
the streetscape in the
current facility. There
90
1 will be a 10,000 square foot ballroom in
2 there, state of the art audio/video capability.
3 There will be a separate kitchen so we'll be
4 able to offer full catering service to any
5 events that are held up there. Executive
6 conference rooms and a state of the art
7 business center.
That is about a $9 million
8 project.
9 Third, which is also very exciting for us,
10 is a 12 million dollar project, and it's an
11 entertainment pavilion. This will allow us to
12 bring top rank regional and national acts in,
13 boxing, music -- all sorts of entertainment,
14 state of the
art lighting and sound and full
15 bar and concession service. So we hope to
16 start all of these projects -- we're planning
17 on starting all these projects in the first six
18 months of this year.
19 COMMISSIONER GANT: What are
20 your boxing facilities?
21 MR. RAYMON:
We currently don't have
22 boxing
facilities.
23 COMMISSIONER GANT: Kansas City?
24 MR. RAYMON:
Yes. Kansas City. Dave
25 would probably speak to that.
91
1 MR. ALBRECHT: We do boxing in Kansas
2 City once every six weeks. We can seat roughly
3 400 people.
And we sell out 90 percent of the
4 seats in those events. So we usually attract
5 right around 1,300 guests for a boxing event.
6 COMMISSIONER GANT: One of those --
7 it's an interesting mixture of individuals.
8 MR. ALBRECHT: It can be, yes.
9 MR. RAYMON:
Yes, it is.
10 MR. MULLALLY: What percentage of
11 those tickets are comped at a boxing match?
12 MR. ALBRECHT: Usually, in all of our
13 entertainment, we sell about 60 percent of our
14 tickets and we comp about 40 percent of our
15 tickets. And
that includes boxing and/or
16 national acts that we have in there, which we
17 have those every other week in Kansas City.
18 COMMISSIONER BIELE: Tony, you talked
19 about your completion date on the hotel. Do
20 you have any idea --
21 MR. RAYMON:
Well, the beginning date
22 of construction should be in the first six
23 months, and we think it's about an 18 month
24 build period.
25 COMMISSIONER BIELE: Okay.
92
1 MR. RAYMON:
And along with that, the
2 last thing is the -- we'll have -- we're going
3 to add 1,200 to 1,500 more parking spaces in a new
4
garage. So when we're finished, it will be a
5 very nice destination resort.
6 COMMISSIONER GANT: While we're
7 asking questions, is your traffic problem
8 getting resolved?
9 MR. RAYMON:
We are -- that's a very
10 good question.
We're working very closely with
11 the City of St. Charles on a -- what's called a
12 TDD. And, Troy, I don't know if you want to
13 touch on that, where we're at with that or --
14 Mr. STREMMING: We've been working
15 very closely with the City to try to get
16 this resolved for some time. And we found that
17 the best route to take in actually to expedite
18 this process would be through a transportation
19 development
district and, potentially, even a
20 city improvement district at the same time to
21 get this completed on a little bit of a fast
22 track. So we
are moving forward in that
23 process and also
staying in close contact with
24 the city to make sure that we're all on the
25 same page.
93
1 COMMISSIONER GANT: Okay.
2 COMMISSIONER HINRICHS: I have some
3 questions about employment policies and
4 practice. This
is my usual platform.
5 MR. STREMMING: Okay.
6 COMMISSIONER HINRICHS: How many
7 women do you have in managerial positions?
8 MR. STREMMING: You know, I don't
9 know --
10 COMMMISSIONER HINRICHS: A
11 percentage, what do you --
12 MR. STREMMING: Do you guys know the
13 number off the top of your head?
14 MR. ALBRECHT: Well, I know -- I
15 could give you a number. In our executive team
16 upper level management, we have six women that
17 are on the executive committee. We have two
18 that are Level I licensees. I cannot -- and I
19 -- I will get the information for you, the
20 exact percentage of women that we have in
21 management positions.
We have that information
22 as part of our development agreement with the
23 city and actually have a concerted effort not
24 only for women in managerial positions but also
25 minorities in those positions.
94
1 COMMISSIONER HINRICHS: And that's
2 always going
to be my soap box. And the same
3 thing with you.
4 MR. RAYMON:
All right.
5 COMMISSIONER HINRICHS: You've got 48
6 percent of your
employees are female, 34
7 minority in Kansas City and 48 percent and 27
8 minority in -- and your managerial team should
9 reflect that as -- that's in my view anyway.
10 And then in St. Louis you've already said
11 you've got a -- it's -- your record isn't very
12 good with minority utilization of
13 businesses.
And what -- can you give us a real
14 quick overview of your plan?
15 MR. RAYMON:
Yeah. What our plan is
16 -- and we have actually been pretty aggressive
17 with it. It's
a difficult situation because
18 there just aren't that many minority and women-
19 based owners.
And so what we're doing is we're
20 becoming much more aggressive through the
21
purchasing
department. And I work closely with the
22 Director of Purchasing to get out and look for
23 this. In fact,
we're meeting with some people
24 in Columbia on a chicken -- that's a chicken
25 vendor. It's
ranged chicken as minority owned.
95
1 So we're going to bring her in and try
2 it. You know, there's a lot of steps to go
3 through. But
we are being very, very
4 aggressive, and I've set some pretty high
5 standards for the purchasing department and the
6 accounting
department and all the department
7 heads to really look in that direction.
8 MR. STREMMING: One thing I might
9 just add to that that does create somewhat of a
10 problem is that when you -- in this industry, a
11 large majority of your purchasing dollars are
12 in specific areas, liquor, slot machines, et
13 cetera, and
there are no, for example,
14 qualified MBEs or WBEs that sell slot machines
15 in the State of Missouri. And when you
16 actually purchase your liquor, for example, in
17 Kansas
City, is a perfect example, it just so
18 happens that the jurisdiction we're in, that
19 distributor just doesn't happen to be a
20 minority or a woman, but the jurisdiction next
21 to it, it is a minority. We've tried to get
22 them to swap.
And basically what we were told
23 is if you're willing to give up the casino for
24 the stadiums, then we'll swap. And so you can
25 imagine that doesn't go over too well with the
96
1 distributor.
2 COMMISSIONER HINRICHS: Oh, I see. I
3 think you mentioned -- one of you mentioned
4 that you're actually putting money into a
5 hospital for problem gaming.
6 MR. RAYMON:
Yes. That's the SSM St.
7 Joseph's Hospital, which is right at our
8 corner, about five minutes away. It's a
9 $150,000 commitment, $50,000 a year.
10
COMMISSIONER HINRICHS: I think
11 that's terrific.
And you ought to look into
12 the same sort of thing in Kansas City. Since
13 you all are contributing to that problem, it
14 would be good if you contributed to helping it.
15 MR. STREMMING: Commissioner, I just
16 might add, in Kansas City we make an annual
17 contribution of
$100,000 each year, and that's
18 a 10-year commitment that we're in the last few
19 years of which will ultimately be a million
20 dollars that we've given to the Port Authority
21 for the treatment of problem gambling.
22 COMMISSIONER HINRICHS: That's
23 $10,000 a year?
24 MR. STREMMING: That's $100,000 a
25 year for a
ten-year commitment.
97
1 COMMISSIONER BARTCH: Okay.
2 COMMISSIONER HINRICHS: With regard
3 to the businesses in your community, I
4 notice you take credit for all the increases
5 but not for any of the losses. And I can't
6 believe that there isn't some correlation on
7 both sides.
And you say that your MBE -- or
8 your minority and women owned businesses are
9 down in Kansas City and you -- if you were then
10 to utilize --
why would -- let me -- is there
11 some specific reason why they're down?
12 MR. ALBRECHT: Well, year over year,
13 I think the reason that we are down is
14
basically because of the construction business
15 in the fact that we were able to utilize in the
16 past couple years more construction companies
17 that were women-owned or minority-owned
18 businesses.
And we went through a year where
19 we didn't have very much construction, so the
20 number of businesses that we used will go down.
21 But now as we
go into the first quarter of this
22 next year and we have some construction going
23 on again, we should see those numbers go back
24 up because, you know, over the last three years
25 we've done about 75 million dollars worth of
98
1 construction.
A lot of that in -- with
2 minority and women-owned businesses and we just
3 have a period -- a lull where we weren't doing
4 construction and, therefore, those business
5 opportunities went away.
6 MR.
STREMMING: It's also important
7 to note we lost two very large MBEs over that
8 period as well.
One of them was -- which was a
9 meat purveyor which is an area where we spend a
10 lot of money.
And like I said, I'm the vice
11 chair of the Minority Supplier Council. And
12 one of the things we tell our members is you've got
13 to be careful when you try to eat an elephant,
14 because that's what happens a lot of times, is
15 no one wants the smaller projects. They want
16 the big project.
And in this case, we had a
17 meat purveyor that we tried to bring along, but
18 it just overwhelmed them and they couldn't
19 survive. So
you have to be very careful when
20 you bring them along to make sure you're not
21 hurting them and you are helping them.
22 COMMISSIONER HINRICHS: I appreciate
23 the fact that there are 1,999 new businesses in
24 Kansas City
with 15,000 new jobs. But do you
25 really have a whole lot to do with creating
99
1 those jobs?
And the same thing in St.
2 Charles, which was before you existed, was one
3 of the fastest growing counties in the country.
4 So, you know, it's all -- those are great
5 statistics, but what did you really do?
6 MR. STREMMING: I think we had a lot
7 to do with it.
I'm very proud of this industry
8 and us as operators and what we do in our local
9
communities. I think the fact
that St. Charles
10 might have been growing at a very fast rate per
11 capita -- I used to live over there. But I can
12 tell you that when I started in the industry in
13 1996 there were a lot of people that still
14 lived in St. Charles that if you didn't drive a
15 pickup truck and have, you know, a hay seed in
16
your mouth, then you
didn't fit in there.
17 COMMISSIONER HINRICHS: We still feel
18 that way.
19 MR. STREMMING: But I think the
20 perception has changed. And when you put 2,000
21 new employees in any jurisdiction, there is
22 growth that's going to occur. And Tony has
23 known a lot of local vendors in that St.
24 Charles
market that would not have otherwise
25 grown had he not been there. And I think the
100
1 same thing in Kansas City. We're in Kansas
2 City in a very industrial part of the
3 community. If
it wasn't for gaming and it
4 wasn't for Harrah's in Kansas City and Isle of
5 Capri, those areas would be extremely
6 dilapidated.
And I think Pat Sterrett from the
7 Port Authority would tell you that the money
8 that we've contributed to the riverfront
9 property in Kansas City has allowed that area
10 to grow at a faster rate than it ever could
11 have.
12 COMMISSIONER HINRICHS: Well, I can't
13 speak for
Kansas City. I can only speak for
14 St. Louis and St. Charles. But you say you
15 were not required to have contributions, and I
16 would ask that they be required because I think
17 that's a very important part of your
18 contribution to any community.
19 MR. RAYMON:
We've always been very,
20 very involved.
In fact, we're really proud of
21 our team members this time. They've just --
22 out of their paychecks and our paychecks we
23 pulled together 150-some-thousand dollars. And
24 after the company matched and Craig Neilson's
25 matched it came out to about $360,000. So it
101
1 was really a wonderful year for us. It really
2 makes everybody feel good on the property, too.
3 MR. STREMMING: I think it might be
4 helpful for you, too -- I mean, we have
5 representatives from the city of Kansas City
6 and St. Charles here today. Ask them. It's
7 easy for me to toot our own horn, so --
8 COMMISSIONER BARTCH: And I think
9 you're exactly right.
10 MR. MULLALLY: Just to clarify
11 something with regard to the charitable
12 contributions, they are required to be
13 submitted as a part of supplemental information
14 that came in the second binder. We just simply
15 took them out on the oral presenations that had
16 gotten to be 45 minutes long and -- and it's
17 something
that's a very quick read. And so we
18 just said it's not mandated to be part of your
19 oral presentation.
But it's -- it still is
20 required as part of the supplemental.
21 COMMISSIONER BARTCH: And I think we
22 are going to give Kansas City and St. Charles
23 an opportunity to talk.
24 MR. STREMMING: Great. Any other
25 questions?
102
1 COMMISSIONER GANT: I have a couple
2 questions that -- on page 12 of the -- I'm
3 reading this as security statistics, and it
4 says intoxicated persons 3,580. Is that for a
5 one year period or --
6 COMMISSIONER HINRICHS: It's a
7 misprint.
8 MS. DEBBIE FERGUSON: It's the
9 Commission's report.
10 MR. STREMMING: I don't have the
11 Commission's report.
12 MS. FERGUSON: Here, Troy.
13 COMMISSIONER GANT: Two years on the
14 report.
Accounting violations 2,989.
That's a
15 lot of accounting violations. What do you
16 count as an accounting -- first, I guess, the
17 intoxicated people.
And my concern would be is
18 that -- are you supervising these people or --
19 or getting them intoxicated or are they getting
20 them out of there when they are and what
21 happens to them when they leave the place?
22 Do they -- are the Kansas City Police notified
23 so they can keep a guy from killing somebody on
24 these intoxicants?
25 MR. STREMMING: Well, I think that
103
1 the important thing to remember is -- not
2 making excuses, but when you have 3,500
3 instances, you --
4 COMMISSIONER GANT: Two year report
5 apparently on this one.
6 MR. STREMMING: Right. And not only
7 that, when you consider the fact of the
8 millions of people that we move through there
9 on an annual basis, I think as a percentage
10 that's not a very high percentage. I also
11 think it's worth noting that if someone comes
12 to the casino
and attempts to gain access to
13 the casino, they might have been intoxicated
14 somewhere else, but we're obligated under the
15 law to not allow them on the casino floor. So
16 they might have been intoxicated somewhere
17 else. But when
they get to our front door, if
18 we feel they're intoxicated, we turn them away.
19 And at the time we turn them away, that
20 goes into this number right here. And then to
21 -- the second part of your question about what
22 do we do? Our
security officers are trained
23
very well in how to
handle these guests. And
24 the last thing we want to do is put what we
25 believe is an intoxicated guest into a vehicle.
104
1 So we have a process that we go through.
2 The first is, is there someone else there that's
3 with them that's not intoxicated that can
4 drive? If
that's not the case, then the second
5 stage is we try to get them to call someone to
6 come get them.
If that does not work, we offer
7 them a cab to take them home. Most of the
8 cases, as you would imagine, they continued to
9 deny, deny, deny, deny, and they still think
10 that they're fine to drive home. At that point
11 in time, we talk with them. We continue to
12 discourage them.
And although we can't hold
13 them against their will and not allow them to
14 leave, we have ways of somewhat getting in
15
their way so it might be
a little difficult to
16 leave.
17 And at the same time, we tell them, you
18 can call someone right now and get up tomorrow
19 morning and have a good day. Or you can get in
20 that car and we're going to call Kansas City PD
21 and you won't make it to the first stoplight.
22 MR. RAYMON:
And we don't allow them
23 to leave the property in their vehicle to
24 drive. We do
not. We're very, very good with
25 that. For the
exact reason you brought up, we
105
1 don't want anyone to get into a car and hurt
2 someone.
3 COMMISSIONER GANT: What about the
4 accounting violations? 3,000 of those --
5 MR. MATT BLOCK: Yeah. Those Kansas
6 City reports that are completed by the finance
7 department, and those are something as trivial
8 as missing a signature or Missouri gaming
9 number, which is part of their signature, a
10 date, a time, to missing copies of possibly
11 something that wasn't in the accounting
12 department. So
that's just every time any of
13 those incidents that they go through on
14 a daily basis.
The audit team when they audit
15 that paperwork to ensure that it's all there,
16 those would be situations where those would be
17 lacking, you know, again, a signature, a date,
18 a time, a copy was incorrectly attached to
19 something, so
that, again, over the course of
20 two years and all the documents that they would
21 handle, it really is a low percentage in the
22 whole scheme of things.
23 COMMISSIONER GANT: Okay.
24 COMMISSIONER BARTCH: But the
25 question is kind of left up to me. You said
106
1 that you do not allow them to leave the
2 property. And
I doubt if you legally can do
3 that. So you
--
4 MR. RAYMON:
Yes, we can.
5 COMMISSIONER BARTCH: -- call the
6 Kansas City Police?
Is that what you do?
7 MR. STREMMING: The actual procedure
8 is to put out on the table, we don't block them
9 in, but we make it -- they can still get out
10 about, but it looks kind of tough. And at the
11 same time we contact the local authorities.
12 MR.
RAYMON: Most --
13 COMMISSIONER BARTCH: So in the end,
14 that's what you have to do?
15 MR. STREMMING: Right. Right.
16 MR. RAYMON:
And we do. We have a
17 very good relationship with the city police and
18 they get over there quickly. And we
19 just can't allow that. A lot
20 of the guests, like Troy said, when they get to
21 us, we have a problem walking in the front door
22 of the streetscape and they never made make it
23 to the casino.
But we -- once they cross the
24
threshold, our saying is we own them.
So, you
25 know, it's our problem.
107
1 COMMISSIONER BARTCH: All right.
The
2 court reporter needs to change her tape. So if
3 you could just break for just a couple seconds.
4 MR. STREMMING: Sure.
5 (Break in proceedings.)
6 COMMISSIONER BARTCH: Okay.
We can
7 go on.
8 COMMISSIONER GANT: The reason I ask
9 about the intoxication is I noticed that in
10 October you were fined $15,000 for allowing a
11 patron to play for 13 minutes longer than --
12 after it was discovered intoxicated. The --
13 probably -- the other one says on three
14 occasions the patron was evicted while playing
15 black jack.
Was it one day he got kicked out
16 three times?
That was in 2002 -- or three.
17
MR.
STREMMING: The second one -- I
18 don't know that I can speak to directly. One
19 of these gentlemen might be able to. The first
20 I can speak very directly to on the $15,000 for
21 the intoxicated guest. That was on the agenda
22 in St. Jo. The
first thing I did on the drive
23 home was call Tony and say, let me see a copy
24 of the tape.
And it was very discouraging for
25 us at that meeting that the fine was tripled.
108
1 And so I wanted to see what it was like. And I
2 would encourage you to review the tape.
3 Because, arguably, I do not believe that the
4 guest was intoxicated. We had an individual who
5 was there celebrating her 21st birthday.
6 And she might have been loud and she might have
7 been a little obnoxious, but I don't think she
8 was intoxicated.
She was clearly under -- she
9 didn't
know how to play craps. And the dealer
10 was explaining it to her. But this is
11 a young lady who, you know, had extremely high
12 heels on, and we had her on tape the entire
13 time. She
didn't seem to be staggering in her
14 gait at all.
At one point in time she even
15 stopped and stood on one foot while she wiped
16 something off of her leg. So I don't know
17 necessarily in that case that the fine fits the
18 facts to be quite honest.
19 COMMISSIONER GANT: You should have
20 shown us the
tape.
21 MR. STREMMING: That's -- I wish I
22 could. Part of
the problem I -- you
23 know, personally with the disciplinary process
24 is that I'm -- you know, I'm not in a position
25 -- you know, once you forward with a proposed
109
1 disciplinary action, this is a new rule, which
2 I will exercise later today on another issue of
3 being actually able to present to the
4 Commission.
Because in the past, we have not
5 been able to present to the
6 Commission prior to you making a decision on a
7 proposed disciplinary action. And it kind of
8 puts the burden on the accused without
9 ever having the opportunity to discuss
10 the facts first with the decision
11 maker. And in
that case, it's very
12 discretionary I believe, you know, to determine
13 if someone's intoxicated or not. And $5,000
14 fine, to be quite honest with you, I didn't
15 necessarily think that that was worth fighting
16 about because there is a lot of discretion
17 involved. But
we're still considering whether
18 or not $15,000 gets you to the threshold that
19 it makes sense to bring that to the hearing
20 officer's attention.
21 COMMISSIONER GANT: Okay. I think I
22 had one other -- another page that's got
23 associated investigations in it. And I'm on
24 page 18 for our staff. It says, at this time,
25 it was written that Missouri Gaming Commission
110
1 has not completed the investigation or ruled on
2 the
matter. Kevin, what's the status of
that?
3 Or does somebody know?
4 MR. MULLALLY: Well, if it's an
5 investigation that's pending, it would be a
6 closed session
item. Are you under Ameristar
7 Kansas City or Ameristar St. Charles?
8 COMMISSIONER GANT: I'm under --
9 MR. JOHNSON: That's coming up today.
10 That would be the superlink issue on page 18.
11 COMMISSIONER HINRICHS: Under R, last
12 line.
13 MS. FERGUSON: Yes.
14 MR.
JOHNSON: We'll hear
15 about that later.
16 COMMISSIONER HINRICHS: I have one
17 more question.
18 COMMISSIONER GANT: I think that's
19 all I've got.
20 COMMISSIONER BARTCH: Judy?
21 COMMISSIONER HINRICHS: I have one
22 more question.
That was why is there just such
23 a big
discrepancy in the salaries of the
24 service people between St. Louis and Kansas
25 City?
111
1 MR.
STREMMING: I don't know --
2 COMMISSIONER HINRICHS: $3,000 when
3 you're at that level.
4 MR. STREMMING: Fourteen, I
5 believe --
6 COMMISSIONER HINRICHS: $14 versus $17.
7 MR. STREMMING: That can't be
8 accurate. That
needs to be something that we
9 can look at and verify. Unless there is --
10 because have you a difference between the
11 properties, you should be following the EEOC
12 guidelines.
I'm just curious if certain
13 employees
didn't fall into a category that
14 bumped that number up.
15 COMMISSIONER HINRICHS: It's a big
16 difference at that level.
17 MR. STREMMING: It's a big difference
18 and it can't -- it -- that just can't be
19 accurate.
20 COMMISSIONER BIELE: Tony's a better
21 negotiator.
22 MR. ALBRECHT: Well, it could
23 also be -- I don't know how many people -- when
24 the new St. Charles property opened, the
25 increase in the number of people --
112
1 COMMISSIONER HINRICHS: New hire?
2 MR. ALBRECHT: New hires that came on
3 board in St. Charles is starting at a starting
4 wage compared to Kansas City, which has been
5 there for many years and has sustained
6 that 1,900 number for many years. We have a lot
7 of senior people and a lot of people that have
8 stayed with the company for a long time. And
9 just through the course of time, have
10 increased their wage because of the service to
11 the company.
12 COMMISSIONER HINRICHS: Would that
13 also explain the not as big as a difference but
14 the difference in the managerial salaries?
15 MR. ALBRECHT: Absolutely. Because I
16 know, you know, our property, compared to
17 Tony's, just in restaurants alone, the increase
18 that they have had and the number of
19 restaurants that we've had all along and being
20 able to increase those people's salaries over
21 the course of, you know, eight or nine years
22 compared to
Tony hiring a lot of new managers
23 that have only been there for two years
24 now or three years.
25 MR. RAYMON:
Just over two years.
113
1 COMMISSIONER HINRICHS: That struck
2 me, the $3,000 difference at $14 to $17 level,
3 pretty big.
4 COMMISSIONER BARTCH:
Off the top of
5 your head, somebody that starts out compared
6 to somebody that's been there eight or nine
7 years in that category, what would the
8
difference be?
9 MR. ALBRECHT: Well, on
10 average, you're probably looking at anywhere
11 from 3 to 5 percent increase for a person. So,
12
you know, that could be
as much as
13 somebody in a $10 an hour job over eight years
14 or an additional five years that's saying that
15 they're there.
That could be as much as $2.50
16 an hour. So
that's almost -- that could amount
17 to as much as $5,000 if the -- if you calculate
18 it out as a 5 percent increase every year.
19 COMMISSIONER BARTCH: Okay.
20 COMMISSIONER GANT: I have one other
21 question.
You're spending a lot of money on
22 your eating facility.
And I know that I've
23 gone over just
to eat dinner in various casinos
24 because I think the food is great. But do you
25 have a lot of -- and you had the movie
114
1 situation there and the other entertainment.
2 Do you have a breakdown as to how -- since you
3 spent all that money on the eating facilities,
4 I would assume you still get a lot of local
5 people that come in maybe not to gamble but to
6 spend the evening there eating and --
7 MR. RAYMON:
Absolutely.
8 COMMISSIONER GANT:
-- and kind of
9 watching things and just to have a night out.
10 MR. ALBRECHT: Absolutely. Do we
11 have quantifiable data that can tell you that?
12 No. But is it
something that we're looking at
13 to track our patrons in our restaurants to see
14 what percentage of them use our restaurants and
15 then also use our gaming floor. Yeah.
16 That's something that we're taking the next
17 step to recognize that customer. But yeah.
We
18 have, you know, a lot of our patrons that come
19 in and just use our restaurants and, you know,
20 that's why we try to promote our facilities as
21 all entertainment destinations because you can
22 realistically come there on a Friday or
23 Saturday night and spend three or four or five
24 hours at Ameristar Kansas City and never step
25 foot on a gaming floor. You can go to a movie.
115
1 You can go to a restaurant. You can go to a
2 national concert.
You can do a myriad of
3 things and never step foot on the gaming floor.
4 So we would like to think that our business is
5 gaming. But we
also offer an entertainment
6 destination.
7 COMMISSIONER HINRICHS: There's good
8 news and bad news in that. Because then local
9 businesses are not having the movie houses and
10 the restaurants and it's all located on
11 the gaming floor.
So, you know, I look on that
12 as a good news/bad news deal.
13 MR. STREMMING: Or the customer
14 is the one who wins because these local
15 businesses have to step it up a notch to
16 compete with what we have.
17 COMMISSIONER HINRICHS: Absolutely
18 true.
19 MR. ALBRECHT: And I would say, going
20 back to
the area that we're located in that our
21 facility offers in that area something that
22 isn't necessarily offered locally around the
23 area such as movie theaters.
24 COMMISSIONER HINRICHS: But St.
25 Charles is different.
116
1 COMMISSIONER HARTSFIELD:
2 Mr. Chairman, I have a question. I don't want
3 to belabor last month's agenda item that you
4 talked about earlier.
But did you not have an
5 opportunity to make your case on whether this
6 person was intoxicated or not and show your
7 film to the discipline committee or earlier
8 stages of the case?
9 MR. STREMMING: I had not. Again, it
10 was based -- I mean, I could have. I'm not
11 making an excuse.
I just -- it was just a
12 little discouraging that based on the
13 recommendation
of the staff who had reviewed it
14 and based on the fact that the individuals who
15 were working at that table game
16 were not disciplined for what occurred.
17 And then the fact that it was tripled, that got
18 our attention a little more to pay a little
19 closer attention to the amount of the fine as
20 opposed to what -- again, with the fact that's
21 very discretionary decision or judgment call.
22 You know, $15,000 is a little different than
23 five.
24 MR. JOHNSON: Commissioner
25
Hartsfield, to go to that issue also, it's
117
1 relatively new, but we are permitting folks to
2 come in now.
We're giving them advanced notice
3 when a fine is leveled to the company. We're
4 giving them -- between seven and ten working
5 days. And we
do hear these sorts of things,
6
these objections or
what we are looking for in
7 specific is material changes in facts. And I
8 can tell you that as a result of these
9 prehearings before the items are brought
10 forward to this very Commission meeting, items
11 were pulled from the agenda because it was
12 called to our attention that material facts had
13 surfaced that altered our position. So we are
14 providing that opportunity now.
15 COMMISSIONER GANT: Usually, we don't
16 -- if we follow the staff's recommendation, if
17 we increase it,
there's something that happened
18 that upset us, obviously. And so probably,
19 Steve, if they're doing this now, then those
20 ought to be brought to -- because as long as I've
21 been on the Commission, we have probably only
22 done that about four or five times. And it's
23 been problem gamblers aren't sending out on the
24 lists of people that have asked to be excluded
25 from the -- or there's been some basic reason.
118
1 Not an excuse in an alibi to do this. So if
2 you have something like that in the future, you
3 sure ought to bring that up then to Steve's
4 people and and to us when we have this.
5 Because we -- and that's why you heard George
6 ask is there something on the sixteen eight --
7 the 16-hour suspension situation? And we all
8 learn from these things. It's discretionary,
9
but I -- you know,
I've always said in the law
10 you ought to be consistent with your punishment
11 with people.
You can't -- with one person a
12 dollar fine and another one $15,000. If
13 there's anything you can educate us with on
14 that, I would be willing to listen, too. But
15 you've got to come here and tell us that.
16 MR. STREMMING: I will take you up on
17 that in about 15 minutes.
18 COMMISSIONER BARTCH: And in this
19 particular case, you were really caught
20 unawares. If
you had realized it was going to
21 be tripled, maybe you would have said
22 something.
23 MR. STREMMING: Absolutely. I would
24 have looked at that tape before I got there.
25 COMMISSIONER BARTCH: In this case,
119
1 you still have an opportunity to take it to
2
hearing.
3 MR. STREMMING: That's correct.
4 That's correct.
5 COMMISSIONER HARTSFIELD: Maybe you
6 learned as well.
7
MR.
STREMMING: I did. Two things we
8 will get for you, the difference in the wages.
9 We'll verify what those differences are, and
10 we'll also get you the women and minorities in
11 management at both facilities.
12 COMMISSIONER GANT: Did you ask her
13 whether she considers women as minorities?
14 Because I think women out-number us, don't
15 they? But I
don't think she'll answer that
16 question.
17 COMMISSIONER HINRICHS: I'll answer
18 it. But I can
tell you, I can give you a
19 single digit response if you'd like that.
20 COMMISSIONER GANT: You did.
21 COMMISSIONER BARTCH: I think we
22 still need to offer an opportunity to Kansas
23 City and St. Charles to speak.
24 MR. STREMMING: Yes. Okay.
25 COMMISSIONER BARTCH: Thanks.
120
1 MR. STREMMING: Thank you.
2 MR. RAYMON:
Thank you.
3 MR. MULLALLY: Pat Sterrett and Mike
4 Lansing are here on behalf of the City of
5 Kansas City and City of St. Charles,
6 respectively.
The one thing I will say is I
7 think it's important to note during this
8 renewal process when properties do something
9 particularly well.
And I think that both of
10 these properties have done a good job
11 of meshing with their communities. And it's
12 two
different stories. And I think Pat and
13 Mike will speak to this. But in Kansas City,
14 it's been a -- a lot of it has been monetary in
15 nature and their contributions to the river-
16 front development.
And I know that has
17 the pace of the riverfront development in
18 Kansas City has been frustrating to some. But
19 for those who have been involved in it for more
20 than three decades, the fact that at least
21 we're -- there is progress -- significant
22 progress has been made in the last decade.
23 And I think the horizon is quite bright. I
24 think it's encouraging. And I do not think --
25 in fact, I'm quite confident that it would not
121
1 have occurred, had not the funds been available
2 from the riverboat project, in
3 particular, the one from Ameristar.
4 Similarly, in St. Charles, that was a
5 challenging environment for casino to
6 mesh into. I
mean, you had a very historic St.
7 Charles downtown area. It's not exactly
8 something that a casino is necessarily ideally
9 suited to merge into.
And I think that
10 they have done that quite successfully as
11 evidenced by the support that they continually
12 get from
the government of St. Charles as well
13 as the various community associations that are
14 in downtown.
The historical
15 society there, I think in particular, has been
16 very pleased with the outcome of the buildings
17 in the way that it merges in St. Charles.
18 So I think those are two areas
19 that as a staff, we have watched this
20 company do quite successfully. So I'll turn it
21 over to the cities.
22 MR. PAT STERRETT: Thank you, Kevin.
23 Thank you Mr. Chairman, members. My name is
24 Pat Sterrett.
I'm executive director of the
25 Port Authority of Kansas, City Missouri. And
122
1 on behalf of
Mayor Kay Barnes and of chairman
2 district just recently elected Linda Ward, new
3 chairman of the Port Authority, both send their
4 regrets that they could not be here this
5 morning.
6 I wanted to kind of echo I think what
7 Kevin just mentioned, that certainly Ameristar
8 in Kansas City has been a very important
9 corporate
citizen, particularly with regard to
10 the development of the riverfront. For a
11 number of years, development of the riverfront
12 has not been able to proceed, as Kevin
13 mentioned, primarily because of some
14 environmental considerations, some concerns
15 there at the site.
16 And I'm pleased to say that with the
17
contributions that Ameristar has made as well
18 as those from Isle of Capri what we've been
19 able to do, I think, is that we are now here at
20 a point within the next couple of weeks where
21 we'll be able to announce that we've secured
22 all the funding necessary to move forward with
23 the remainder of the mediation of that
24 contamination.
And, in fact, in about a year
25 from now we will have as clean a site as we're
123
1 going to have.
It won't be a hundred percent
2 clean but it's enough from the Department of
3 Health here in the state to allow us to proceed
4 with our vision for the development of that 55
5 acres which is a mixed use, urban village,
6 predominately residential, but with some
7 commercial retail, some services, some
8 things for people to come and do and have fun
9 down at the
riverfront as much as they want to
10 do.
11 We are certainly very much in favor of the
12 application that Ameristar has before you for
13 their relicensure.
We are very pleased
14 with their meeting and satisfying the
15 requirements included within our development
16 agreement. We
are -- have expressed concerns
17
about the participation
numbers on the minority
18 and women owned business enterprises. However,
19 we do and are actively working with them as we
20 have for the past couple years on a strategic
21 plan to enhance those numbers to improve those
22 numbers. And
we know that we do have
23 challenges in front of us in this particular
24 industry.
25 With regard to the economic impact, I'm
124
1 not sure that I can state -- I know I
2 can't state that Ameristar is directly
3 responsible for a certain number of jobs gained
4 or a number of companies that have started or
5 jobs lost, for that matter. But what I can do
6 is speak
directly to the economic impact that
7 the casino has with respect to property taxes,
8 with regard to the taxes that come back from
9 the casinos from the state and do know that we
10 do -- the city does roughly receive between --
11 it varies annually, about $24 to $25 million in
12 those funds every year, of which a little more
13 than two-thirds of that comes from Ameristar
14 there in Kansas City.
With those funds, we
15 have been able to use primarily to address our
16 preferred maintenance back log that totals in
17 excess of $1 billion in the city of Kansas
18 City. As well,
have also been able to devote
19 funds from those revenues to our parks and
20 recreation department.
21 Something
that has become increasingly
22 important over the last couple of years with
23 the economy in the shape that it has been in
24 and even with the improvements in that area
25 here recently, the city is still looking at a
125
1 shortfall next year of $20 million. And so the
2 money that is contributed from the casinos
3 certainly on an annual basis is extremely
4 important to the operation of the city.
5 With respect to crime, in fact, we
6 just received this
morning a letter from the
7 Chief of Police from Kansas City. And when
8 comparing Ameristar to other large gathering
9 facilities such as shopping centers there in
10 Kansas City, we do note that crime is
11 considerably less at the casino than at any of
12 the other shopping malls, not just taking a
13 look at crime statistics for the city as a
14 whole and that cooperation and coordination
15 between the Kansas City, Missouri Police
16 Department and the security personnel there at
17 the casino has been extraordinary.
18 Finally, I think I was asked to
19 discuss the revenue agreements. I think
20 Mr. Stremming did a very good job of running
21 through
those. They will expire in 2006, and
22 certainly we will be very interested in perhaps
23 talking about the casino and what their
24 interests may be and continuing some of those
25 contributions.
126
1 That concludes my remarks. But I'd
2 certainly be happy to answer any questions you
3 may have about the casino from our
4 standpoint or from the development of the river
5 front.
6 COMMISSIONER BIELE: The question I
7 would
have is they were talking about how they
8 gave a hundred thousand dollars annually for
9 responsible gaming and research. I guess I'd
10 like you to comment on how you're using that
11 money. Is it
definitely -- is it fair giving?
12 Is it going for that or something else?
13 MR. STERRETT: It is definitely going
14 for that. In fact, we have a specific -- what
15 we call a problem gaming committee of the Port
16 Authority that oversees the funds. The funds
17 are actually deposited in an account at the
18 Greater Kansas City Community Foundation. They
19 staff that fund.
We, along with
20 Mr. Stremming, the representative from the Isle
21 of Capri as well as a few or folks from the --
22 who have -- stake holders, for lack of a better
23 term, in problem gaming meet each year.
24 They get together and review what areas would
25 be best --
would that money be best addressed
127
1 to. In the
past, we have given that to an
2 advertising campaign with regard to BETS OFF
3 as well as treatment facilities in Kansas
4 City. We've
also given funds directly to
5 treatment facilities for counseling and for the
6 training of additional counselors for people
7 with problem gaming addictions. And most
8 recently, probably in conjunction, and I think
9 probably what we'll be seeing as our greatest
10 accomplishment to date, here in about another
11 14 or 18 months is partnership with Missouri
12 Gaming Commission whereby we have a study by a
13 team of folks from Harvard University who are
14 conducting a study, voluntary exclusion program
15 here in the state.
But I think it will have
16 significance really in the industry throughout
17 the country.
18 COMMISSIONER BIELE: Thank you.
I
19 just wanted to make sure if they're giving the
20 money for that that it's being used for that.
21 MR.
STERRETT: Yes.
22 COMMISSIONER GANT: This is -- I'm
23 probably one of the ones that’s kind of
24 disappointed as to the development of the river
25 front
area. How long are these
128
1 environmentalists, corporations been studying
2 the environmental situation? I know they study
3 them ad nauseam and then they come back and
4 want more time to study them further ad
5 nauseam. Do
you really think you'll get it
6 done by next year?
7
MR. STERRETT: I do. Very optimistic
8 about that.
Our biggest problem in the past
9 hasn't been so much the amount of studies that
10 have been needed as it was mainly in
11 negotiating an agreement with the -- I should
12 say the potentially responsible party. In this
13 case, Missouri Gas Energy and their parent
14 company, Southern Union. There had been a
15 former -- a manufactured gas plant that used to
16 be located right off the property that operated
17 between about roughly 1860 and 1910 and left
18 behind a residue
from burning the coal to light
19 the gas lamps in town, this sticky coal tar,
20 which goes at least as deep as 65 feet at the
21 site. We had
some shallow contamination that
22 the State said, that's all you really need to
23 clean up. You
don't need to clean up all the
24 coal tar that's underneath the site. But it
25 was really our
negotiations with
129
1 Missouri Gas that took a very long
2 time, took approximately two and a half years
3 from
the time that we engaged with them until
4 the time that we actually received the funds
5 from them. And
to this date, they still
6 will not accept any responsibility for it.
7 They simply gave us the money
8 as a good corporate citizen that they are. But
9 that's primarily the main reason why some of
10 those barriers have taken so long
11 has just primarily been the due diligence
12 needed to find out just exactly what was there.
13 And then in the case of having a responsible
14 party, negotiating with them a settlement that
15 would allow us to be able to clean up the site
16 and get development moving without going
17 to a lawsuit and dragging it out in the courts
18 for
years to come.
19 COMMISSIONER GANT: Okay. Thank you.
20 COMMISSIONER HINRICHS: Has the EPA
21 approved the development?
22 MR.
STERRETT: The EPA does not need
23 to approve the development. All that is
24 actually administered by the Missouri
25 Department of Natural Resources.
130
1 COMMISSIONER HINRICHS: DNR?
2 MR. STERRETT: Yes.
3 COMMISSIONER HINRICHS: Generally
4
speaking, 18 inches of dirt, 6 inches of
5 asphalt over a building are sufficient to
6 cover? Is that
what will be happening to those
7 -- that piece of property?
8
MR. STERRETT: On that piece of
9 property, we will actually be putting an
10 additional 6 to 10' of fill on top of
11 dirt in which the coal tar is still yet another
12 12 to 18' deep before you reach it. And then
13 it goes down for another 65'. So the State has
14 signed off on that.
We do have a
15 contingency plan in place. In the event we
16 come across this contamination, everybody knows
17 what to do.
But we will have restricted deeds
18 as we move forward, and we will be able to
19 proceed with
any kind of development there at
20 the site with the exception of single family
21 detached housing.
22 COMMISSIONER HINRICHS: Okay.
23 COMMISSIONER BARTCH:
Thank you.
24 MR. STERRETT: Thanks.
25 MR. MIKE VALENTI: May I have a seat at
131
1 the table, please?
2 COMMISSIONER BARTCH: Yes, sir.
3 MR. VALENTI: Thank you. Good
4 morning, Chairman Bartch and members of the
5
Commission. My name is Mike
Valenti. I'm the
6 city attorney for the City of St. Charles,
7 Missouri. And
I'm also in the role of acting
8 city administrator for right now. I'm here on
9 behalf of the City Council and Mayor Patricia York
10 to talk to you about the relicensure of
11 Ameristar Casino St. Charles and our complete
12 support for that relicensure. Mayor York
13 planned on being here today to speak with
14 you all. She
likes talking in public to groups
15 like this and talking about all the great
16 things that
are happening in the City of St.
17 Charles. But
she had a personal family
18 commitment.
She couldn't make it today. So
19 she asked me to step in and talk to you all.
20 The first thing I'd like to talk to you a
21 little bit about is Ameristar's involvement in
22 the community.
Ameristar is a very generous
23 and active participatory partner in our
24 community.
They contribute a lot of money to
25 various good causes.
They assist with fund
132
1 raising. I'll give you a couple of good
2 examples. One
is Ameristar has contributed a
3 hundred thousand dollars as Mr. Stremming had
4 indicated to our city Foundry Arts Center, and
5 the gallery has been named after Ameristar.
6 They've also helped contribute to our Lewis and
7 Clark bicentennial celebration that we had in
8 May of this
year. Basically, Ameristar is
9 always there, willing and ready to help us in
10 any regard with regard to our community.
11 Talk to you a little bit about crime. I
12 spoke with our acting Chief of Police last
13 week. He
indicated about 3 percent of our
14 calls, total calls for service originate from
15 the Ameristar facility. He says that's
16 consistent with the type of facility that has
17 that many -- much customer traffic coming
18 through it.
The police chief said, we have an
19 excellent working relationship with the
20 dedicated people, with the Highway Patrol
21 assigned to that facility and any security
22 personnel assigned to that facility also. The
23
majority of criminal
activity that we
24 find there is sometimes car theft is probably
25 the most serious.
133
1
With regard to
the economic activity that
2 the facility generates for state generated,
3 this year we estimated about 16 and a half
4 million dollars worth of gaming tax and
5 admission fee revenue to the city. We spend
6 approximately about four and a half million of
7 that on personnel costs related to law
8 enforcement and fire suppression. In your
9 appendix to your 2004 annual report, we have a
10 list of how we actually spend the money. I'm
11 more than happy to talk to you about specific
12 projects that
we have. We spend a lot of money
13 on road improvements.
Approximately $5 million
14 will be spent on the reconstruction of two of
15 our major arteries, Elm Street, which goes from
16 basically downtown up towards Highway 370 in
17 the Fountain Lakes Business Park, a new town
18 center, and the 5th Street extension on Highway
19 370 are two of the more major projects that we
20 have underway.
21 With regard to economic development, the
22 downtown area, the Ameristar casino is one of
23 the catalysts for the re-development and the
24 group along the south Main Street area from the
25 trail head at Booneslick South to the Ameristar
134
1 facility. As a
catalyst, it's generated the
2 development of another 110-room hotel that is
3 currently under construction there. There is
4 some residential construction in the form of
5 condominiums and attached duplexes there that
6 have a price tag of about $300,000 per unit.
7 There's also a restaurant that's located along
8 that area
and that area is really starting to
9 re-develop. As
Troy indicated earlier, and
10 Tony, in 2005, Ameristar looks forward to
11 building a 300-room all suite hotel, which the
12 city is behind 100 percent. We believe it will
13 compliment the 300-room Embassy Suites Hotel
14 which will be adjacent to the convention center
15 that the city is building and will have
16 completed by April of 2005.
17 Basically, the City is behind Ameristar a
18 hundred percent.
We agree with the relicensure
19 of
Ameristar. They are one of our best
20 corporate citizens that we have in the City,
21 and I'm here to take any questions that you all
22 might have.
23 COMMISSIONER BARTCH:
Any questions?
24 COMMISSIONER GANT: Good to hear a
25 good report.
You did great.
135
1
COMMISSIONER BARTCH: You did a
great
2 job. Thank
you.
3 MR. VALENTI: Thank you.
4 COMMISSIONER BARTCH: Do you have any
5 -- ready to
approve the motion or do you have
6 a --
7 MR. MULLALLY: Two more things. This
8 is the point in the proceedings where we ask if
9 there are any members of the public that would
10 like to offer testimony with regard to the
11 relicensing of Ameristar either in Kansas City
12 or St. Charles.
No one has contacted the staff
13 prior to the meeting.
But I thought we'd make
14 the offer available.
15 COMMISSIONER BARTCH: Is there anyone
16 in the audience that would like to speak to
17 this issue?
18 MR. MULLALLY: And then if none, then
19 the -- we have a presentation from Sergeant
20 Gary Baker with regard to the results of the
21 background investigation conducted by the
22 Missouri State Highway Patrol and our Missouri
23 Gaming Commission financial investigators.
24 SGT. GARY BAKER: Good morning,
25 Mr. Chairman and Commissioners.
136
1 COMMISSIONER BARTCH: Good morning.
2 COMMISSIONER HINRICHS:
Good morning.
3 COMMISSIONER HARTSFIELD: Good
4 morning.
5 COMMISSIONER BIELE: Good morning.
6 COMMISSIONER GANT: Good morning.
7 SGT. BAKER:
Investigators of the
8 Missouri Gaming Commission conducted a
9 relicensing background investigation of
10 Ameristar Casino Kansas City and Ameristar
11 Casino St. Charles.
Ameristar Casino Kansas
12 City and St. Charles are wholly owned
13 subsidiaries of Ameristar Casinos, Incorporated,
14 a publicly-traded Nevada corporation.
15 Ameristar Casinos, they were incorporated in the
16 state of Missouri on October 10, 2000 for the
17 purpose of acquiring, owning and operating river
18 boat gambling operations in Kansas City and St.
19 Charles.
20 Ameristar Casinos was incorporated as an
21 established multi-jurisdictional gaming
22 enterprise that currently owns and operates six
23 properties in four gaming jurisdictions in
24 Iowa, Mississippi, Missouri and Nevada. I
25 checked with the state gaming authorities, and
137
1 those jurisdictions revealed no significant
2 issues or concerns.
Credit and criminal
3
background checks were
conducted on Ameristar
4 key and Level I personnel. No discrepancies or
5 concerns were noted.
The criminal background
6 checks included, but were not limited to,
7 checks with federal, state, county and
8 municipal law enforcement agencies where the
9 individuals have lived, worked and frequented.
10 The city administrators, city prosecutors,
11 police and fire departments of Kansas City and
12 St. Charles were contacted referencing any
13 concerns with the operations of Ameristar
14 Casinos in
their cities. All indicated they
15 had no negative information to provide.
16 Ameristar Casino Kansas City and St.
17 Charles have been issued docking permits by the
18 Department of
Army, Corp. Of Engineers with no
19 negative comments received. The Missouri
20 Department of Natural Resources was contacted
21 concerning waste water handling fill at both
22 facilities and found them to be in compliance
23 with existing regulations. The investigation
24 conducted did not produce any information that
25 would preclude
Ameristar Casino Kansas City or
138
1 Ameristar Casino St. Charles from relicensing
2 with the Missouri Gaming Commission.
3 COMMISSIONER BARTCH: Any questions?
4 COMMISSIONER HINRICHS: I'll move
5 that we approve Resolutions 04-073 and 04-074.
6 COMMISSIONER BIELE: I
second.
7 COMMISSIONER BARTCH: Any other
8 questions? If
there's no other discussion,
9 please call the roll.
10 MS. FRANKS:
Chairman Bartch?
11 COMMISSIONER BARTCH: Approve.
12 MS. FRANKS:
Commissioner Hinrichs?
13 COMMISSIONER HINRICHS: Approve.
14 MS.
FRANKS: Commissioner Gant?
15 COMMISSIONER GANT: Approve.
16 MS. FRANKS:
Commissioner Hartsfield?
17 COMMISSIONER HARTSFIELD: Approve.
18
MS. FRANKS: Commissioner Biele?
19 COMMISSIONER BIELE: Approve.
20 MS. FRANKS:
By your vote, you've
21 adopted Resolution Nos. 04-073 and 04-074.
22 MR. MULLALLY: Mr. Chairman, the next
23 item on the agenda is the consideration of
24 relicensure of certain suppliers.
25 SGT. GEORGE HAMILTON: Good morning.
139
1 COMMISSIONER BARTCH: Good morning.
2 COMMISSIONER HINRICHS: Good morning.
3 COMMISSIONER GANT: Good morning.
4 COMMISSIONER HARTSFIELD: Good
5 morning.
6 COMMISSIONER BIELE: Good morning.
7 SGT.
HAMILTON: Mr. Chairman and
8 Commissioners, a background investigation, to
9 include criminal history checks and tax reviews
10 of the following suppliers and their respective
11 key persons has been conducted. They have been
12 found suitable for relicensing by the Commission.
13 Atlantic City Coin and Slot Service Company,
14 Incorporated, and Western Money Systems. Thank
15 you.
16 COMMISSIONER BARTCH: Motion?
17 COMMISSIONER HARTSFIELD: I move
18 Resolution 04-075 and Resolution 04-077.
19 COMMISSIONER GANT: I second.
20 COMMISSIONER BARTCH: Any other
21 discussion?
22 COMMISSIONER GANT: Yeah. That was
23 easy.
24 SERGEANT HAMILTON: Yeah. Thank you.
25 COMMISSIONER BARTCH: Please call the
140
1 roll.
2 MS. FRANKS:
Chairman Bartch?
3 COMMISSIONER BARTCH: Approve.
4 MS. FRANKS:
Commissioner Hinrichs?
5 COMMISSIONER HINRICHS:
Approve.
6 MS. FRANKS:
Commissioner Gant?
7 COMMISSIONER GANT: Approve.
8 MS. FRANKS:
Commissioner Hartsfield?
9 COMMISSIONER HARTSFIELD: Approve.
10 MS. FRANKS:
Commissioner Biele?
11 COMMISSIONER BIELE: Approve.
12 MS. FRANKS:
By your vote, you've
13 adopted Resolution Nos. 04-075 and 04-077.
14 SGT. HAMILTON: Okay.
15 Consideration of licensure on Level I and Key
16 Applicant, Resolution 04-076. Mr. Chairman and
17 Commissioners, the Missouri State Highway
18 Patrol investigators, in conjunction with the
19 Gaming Commission financial analysts, have
20 conducted background investigations of the
21 following Level I key applicants. The
22 investigations included, but were not limited
23 to, criminal, financial and general character
24
inquiries. The following applicants have been
25 found suitable for licensing by the Commission.
141
1 James Christopher Abbas, Information Technology
2 Manager for Harrah's Maryland Heights Casino.
3 Mark Phillip Hughes, Director of Security,
4 President Riverboat Casino, Incorporated. Juan
5 Carlos Tolosa,
Eastern District President for
6 Harrah's Entertainment, Incorporated, Las
7 Vegas, Nevada.
Thank you.
8 COMMISSIONER BARTCH: Have a motion?
9 COMMISSIONER HINRICHS: I move to --
10 COMMISSIONER GANT: I move for
11 04-076, to approve and adopt.
12 COMMISSIONER HINRICHS: Second.
13
COMMISSIONER BIELE: Is this for
all
14 three or just individually?
15 COMMISSIONER GANT: Is that right,
16 Kevin? It
includes all three?
17 MR. MULLALLY: Yes. It includes all
18 three.
19 COMMISSIONER BARTCH: Any comments
20 then before we vote?
21 COMMISSIONER BIELE: On Mark Phillip
22 Hughes, because of -- there's a little
23 different case there because it's financial
24 background and so forth. And I know in here
25 that you recommended timely relicensing after
142
1 one year that his financial status should be
2 revisited to see if there's any improvement.
3 I think I'd like to make a motion -- or Judge
4 probably could do that, maybe a quarterly
5 update of his financial resources instead of
6 waiting for a year, I think there's sufficient
7 reason there I think we should do this on a
8 quarterly basis.
Again, I don't know what the
9 rest of the Commission feels. But that's --
10
COMMISSIONER
GANT: Okay.
11 COMMISSIONER BARTCH: I think we can
12 make that provision rather than a year, make it
13 a quarterly on that particular person.
14 MR. MULLALLY: Yes. We can do that.
15 COMMISSIONER HINRICHS: Are amending
16 the resolution?
17 COMMISSIONER BIELE: Amending the
18
resolution, yes, to include that, yes.
19 COMMISSIONER HINRICHS: Second your
20 motion.
21 COMMISSIONER BARTCH: Any other
22 discussion? Call the roll.
23 MS. FRANKS:
Chairman Bartch?
24 COMMISSIONER BARTCH: Approve.
25 MS. FRANKS:
Commissioner Hinrichs?
143
1 COMMISSIONER HINRICHS: Approve.
2 MS. FRANKS:
Commissioner Gant?
3 COMMISSIONER GANT: Approve.
4 MS.
FRANKS: Commissioner Hartsfield?
5 COMMISSIONER HARTSFIELD: Approve.
6 MS. FRANKS:
Commissioner Biele?
7 COMMISSIONER BIELE: Approve.
8 MS. FRANKS:
By your vote, you've
9 adopted Resolution No. 04-076 as amended.
10 COMMISSIONER GANT: Well, for the
11 record, we adopted the amendment. We need to
12 vote again then on the adoption, don't we, of
13 the resolution as amended because we just voted on
14 the amendment first?
15 MR.
MULLALLY: Okay.
16 COMMISSIONER GANT: So I'll move that
17 Commission Resolution No. 04-076 as amended be
18 adopted.
19 COMMISSIONER HARTSFIELD: Second.
20 COMMISSIONER BARTCH: Any other
21 discussion?
Approved, recommend -- call the
22 roll.
23 MS. FRANKS:
Chairman Bartch?
24 COMMISSIONER BARTCH: Approve.
25 MS. FRANKS:
Commissioner Hinrichs?
144
1 COMMISSIONER HINRICHS: Approve.
2 MS. FRANKS:
Commissioner Gant?
3 COMMISSIONER GANT: Approve.
4 MS. FRANKS:
Commissioner Hartsfield?
5 COMMISSIONER HARTSFIELD: Approve.
6 MS. FRANKS:
Commissioner Biele?
7 COMMISSIONER BIELE: Approve.
8 MR. MULLALLY: All right.
9
Mr. Chairman,
Commissioners, beginning with Tab
10 B, there are a series of proposed disciplinary
11 actions, and General Counsel Mike Bushmann is
12 here to make the presentation.
13 MR. BUSHMANN: Good morning,
14 Commissioners.
I have several disciplinary
15 cases for you today.
And as you know, these
16 are only proposed disciplines. They're not
17 final yet.
They only become final if they fail
18 to request a hearing or if you approve the
19 recommendations of the hearing officer. The
20 first case is DC-04-227 against Harrah's
21 Maryland Heights, LLC. This case involves two
22 separate counts of failing to remove revoked
23 software from the slot machines in the casino.
24 In
Count I, the company failed to remove and
25 replace bill validator software from seven
145
1 slot machines in a timely manner. Three of
2 the machines were operating for 105 days past
3 the deadline for removal. Four machines were
4 operating -- or excuse me -- were placed in
5 operation after
the deadline had already
6 occurred and remained in operation for an
7 additional 37 days past the deadline.
8 In Count II, Harrah's failed to replace
9 main game
software from eight slot machines
10 that had been operating for 20 days past the
11 deadline for removal.
In both incidents, these
12 violations were discovered by Commission
13 agents. In
these types of cases, the
14 Commission has imposed fines ranging from $5,000
15 to $30,000 depending upon the number of
16 machines that were involved and the length of
17 time that the revoked software is operating.
18 The staff recommends that in this case
19 Harrah's Maryland Heights be fined in the
20 amount of
$15,000 on Count I and $10,000 on
21 Count II, for a total fine of $25,000.
22 COMMISSIONER HINRICHS: Move to
23 approve DC-04-227.
24 COMMISSIONER GANT:
Second.
25 COMMISSIONER BARTCH: Is there any
146
1 other discussion?
Correct me, Kevin, now, in
2 this
case, you don't open -- the open
3 discussion in that goes to if they disagreed,
4 we'll go to hearing?
5 MR. MULLALLY: Yes. If we have a
6 previous
request that the licensees are all
7 mailed drafts of these orders, what, ten
8 or more days prior to the meeting date?
9 MR. JOHNSON: Seven days.
10
MR. MULLALLY: If they request an
11 opportunity to be heard, we have the discretion
12 to grant that.
There has only been one request
13 with regard to that, and that would be with
14 regard to the last disciplinary order Tab AA.
15 COMMISSIONER BARTCH: Is there any
16 other discussion?
Please call the roll.
17 MS.
FRANKS: Chairman Bartch?
18 COMMISSIONER BARTCH: Approve.
19 MS. FRANKS:
Commissioner Hinrichs?
20 COMMISSIONER HINRICHS: Approve.
21 MS. FRANKS:
Commissioner Gant?
22 COMMISSIONER GANT: Approve.
23 MS. FRANKS:
Commissioner Biele?
24 COMMISSIONER BIELE: Approve.
25
MS. FRANKS: By your vote, you've
147
1 adopted preliminary order for disciplinary action
2 DC-04-227.
3 COMMISSIONER GANT: I'd like to a add
4 -- I hope that Harrah's -- as I look at this
5 situation, 105 days bothers me that long
6 occurring in time.
So if there's any future
7 occurrences, I think we ought to increase the
8 fine because that's, you know, a long time. So
9 hopefully that will be taken into consideration
10 in checks of
these things.
11 MR. MULLALLY: It's certainly been an
12 area of emphasis from the staff's perspective.
13 We spent a good deal of time explaining the
14 importance
of this to the companies. You know,
15 frankly, if they pay attention to this,
16 it avoids, you know, bigger problems because of
17 the -- you know, depending on what
18 malfunctioned and chip resulted in it being
19 revoked. It
can be a relatively minor issue in
20 some cases or it can be, you know, fairly
21 significant. In the future, there will be, I
22 think, both greater scrutiny but also greater
23 assistance provided to the companies through
24 the hiring of the electronic gaming device
25
technicians that we
were allocated during last
148
1 year's budget.
So that I think will give the
2 companies more assistance in this area, more
3 technical assistance from the regulatory side,
4 but also give them more scrutiny. We've also
5 tried to make it as convenient as possible for
6 the companies
to be able to get this
7 information quickly.
It's all posted on a web
8 site. They're
encouraged to look at it on a
9 regular basis.
In fact, we have even developed
10 a way to where we can tell when they've logged
11 in and looked at it.
So I think our folks --
12 Clarence Greeno, Todd Nelson, Blaine Preston,
13 if the company hasn't logged in and looked at
14 that in a while I suspect they get a call from
15 our folks saying, hey guys, you might want to
16 pay a little closer attention to business.
17 COMMISSIONER BIELE: I was going to
18 ask that question.
Is there a way we could
19 maybe spot check this a little quicker than the
20 105 days just to -- you've still got a
21 violation.
It's just -- the violation is not
22 continuing on before we find it for 105 days.
23 MR. MULLALLY: Clarence could
24 probably talk a little more specifically about
25 what we're doing in that way.
149
1 MR. CLARENCE GREENO: Any time a revocation
2 or any information from our independent gaming
3 laboratory is received we put that out to each
4 of the casinos via e-mail as well as post it on
5 our web site.
So we send the slot director,
6 general managers, anyone that's on EGD
7 distribution list an e-mail telling them a new
8 posting has been received and it's been put on
9 our web site, be sure to go to that web site to
10 access that information. Also, we
11 have a listing of the revocations.
12 And we know when the time limit is up for a
13 particular
revocation so that we can go to the
14 field and spot check those particular gaming
15 devices on the casino. We do not check every
16 one of the games.
17 COMMISSIONER BIELE:
Right. I
18 understand that.
19 MR. GREENO:
When they go out, we do
20 spot check. In
this case, I think these games
21 were missed.
22 COMMISSIONER HINRICHS: I may sound
23 petty, but some -- I don't know who is more
24 frequently in arrears in this situation, but we
25 seem to get these every time we have
150
1 disciplinary actions.
I'd be curious to see a
2 list of who has been penalized in the past and
3 those that are more relaxed than others
4 perhaps should be fined more than the ones who
5 are better at keeping track.
6 MR. BUSHMANN: I can certainly
7 provide that list to you, Commissioner, and the
8 rest of the Commission as well.
9 COMMISSIONER HINRICHS: It would be
10 helpful to know who has been messing up a lot.
11 And maybe we can find out why.
12 COMMISSIONER GANT: I'd like to know
13 that, too, because the -- if you look at this
14 -- if they're ignoring -- you know, they were
15 notified on the 15th of June and September 28th
16 still going on that that discussion we had -- a
17 $15,000 fine in this one probably doesn't
18 compare to the one -- the $15,000 fine that you
19 were talking about.
And that's why I think we
20 need to evaluate these things and make them
21 more consistent.
If we don't have the
22 information, it's difficult to do that.
23 COMMISSIONER BARTCH: And we always
24 seem to ask that question. So maybe for a
25 listing of disciplinary actions in the last
151
1 couple years might -- to the Commissioners
2 might -- would bring us up to date.
3 MR.
BUSHMANN: Sure.
4 COMMISSIONER BARTCH: We always seem
5 to ask that same question. So --
6 MR. BUSHMANN: Ready for the next
7 case?
8 COMMISSIONER BARTCH: I think so.
9 MR. BUSHMANN: DC-04-228 is also
10 against Harrah's Maryland Heights. This case
11 involves four separate counts of incidents
12 involving alcohol violations, both in the
13 casino and in non-gaming areas. Counts I and
14 IV involve Harrah's failure to prevent persons
15
from consuming alcohol
in non-gaming areas
16 after 1:30 a.m., which is closing time for
17 everything but the casino itself. Counts II
18 and III involve company employees serving
19 alcohol to persons who were visibly intoxicated
20 and in one case allowing that person to gamble
21 while intoxicated.
In the past, the Commission
22 has imposed fines for similar violations
23 ranging from $1,000 to $15,000. The staff
24 recommends a fine for Counts I and IV of $5,000
25 each and for Counts II and III in the amount of
152
1 $10,000 each for a total fine of $30,000.
2 COMMISSIONER GANT: How does that
3 compare to --
4 COMMISSIONER HARTSFIELD:
5 Mr. Chairman, I move for approval of the
6 Resolution 04-228.
7 COMMISSIONER HINRICHS: Second.
8 COMMISSIONER BARTCH: Any
further
9 discussion? If
not, please call the roll.
10 MS. FRANKS:
Chairman Bartch?
11 COMMISSIONER BARTCH: Approve.
12 MS.
FRANKS: Commissioner Hinrichs?
13 COMMISSIONER HINRICHS: Approve.
14 MS. FRANKS:
Commissioner Gant?
15 COMMISSIONER GANT: Approve.
16
MS. FRANKS: Commissioner
Hartsfield?
17 COMMISSIONER HARTSFIELD: Approve.
18 MS. FRANKS:
Commissioner Biele?
19 COMMISSIONER BIELE: Approve.
20 MS. FRANKS:
By your vote, you've
21 adopted the preliminary order for disciplinary
22 action DC-04-228.
23 MR. BUSHMANN: The next one is
24 DC-04-229 against Maryland Heights. In this
25 case, Harrah's employees moved six slot
153
1 machines into a bank of slot machines in their
2 casino.
Employees then installed new game
3 software chips into these machines. Commission
4 regulations require that before a slot machine
5 may be
placed in operation, the chips have to
6 be sealed with evidence tape by a Commission
7 agent in order to prevent tampering. In this
8 case, however, company employees put those six
9 machines up for play without having a
10 Commission agent seal the chips with tape.
11 The Commission has imposed fines in the
12 past for this type of violation ranging from
13 $15,000 to $30,000.
Staff's recommending a
14 fine in this case of $25,000. Now, the
15 violation was self-reported by the company, but
16 the six machines that were involved is a
17 relatively high number compared to prior cases.
18 So the recommended fine is near the high end of
19 the range.
20 COMMISSIONER BIELE: And it's no
21 secret that you put tape on those. Everybody
22 in the business understands that
23 that's a basic preliminary parameter of how
24 they do
business. So not much of an excuse
25 there.
154
1 COMMISSIONER BARTCH: Motion?
2 COMMISSIONER HINRICHS: I move that
3 we approve DC-04-229.
4 COMMISSIONER HARTSFIELD: Second.
5 COMMISSIONER BARTCH: Any other
6 discussion? If not,
please call the roll.
7 MS. FRANKS:
Chairman Bartch?
8 COMMISSIONER BARTCH: Approve.
9 MS. FRANKS:
Commissioner Hinrichs?
10
COMMISSIONER HINRICHS: Approve.
11 MS. FRANKS:
Commissioner Gant?
12 COMMISSIONER GANT: Approve.
13 MS. FRANKS:
Commissioner Hartsfield?
14 COMMISSIONER HARTSFIELD: Approve.
15 MS. FRANKS:
Commissioner Biele?
16 COMMISSIONER BIELE: Approve.
17 MS. FRANKS:
By your vote, you've
18 adopted preliminary order for disciplinary
19 action DC-04-229.
20 COMMISSIONER GANT: Mike, I would
21 say, even though it is self-reported, it was 12
22 days later that they self-reported probably --
23 if it comes up again, I may want to have a
24 higher fine.
That doesn't -- I mean, I'm glad
25 they reported
it. But it still took 12 days.
155
1 MR. BUSHMANN: Yes. The next case is
2 DC-04-230 against The Missouri Gaming Company, which
3 does business as Argosy Riverside Casino. The
4 Commission requires that each casino in the
5 state download an updated list of disassociated
6
persons each week. We call this the DAP list.
7 These are people who have voluntarily excluded
8 themselves from casinos in Missouri. When a
9 company data entry clerk performed this
10 download on April 23, 2004, she compared the
11 updated DAP list with the company's player
12 tracking database to flag any names that
13 overlapped. A
new person was on the DAP list
14 and it was in the company's database under the
15 same exact name and the same date of birth.
16 However, the company clerk failed to notice
17 that this
person had an existing account at the
18 casino and created a new account that was
19 flagged as being on the DAP list.
20 Since the clerk failed to flag the
21 existing account, the person continued to
22 receive advertising material and promotional
23 coupons during the months of May, June and
24 July, which is a violation of Commission
25 regulations.
This person complained to the
156
1 Commission and an investigation followed in
2 which the company cooperated fully.
3 Prior fines for this type of violation
4 range from $25,000 to $50,000. The larger fine
5 was in a case where an employee did not
6 cooperate with
the investigation. Since the
7 company was cooperative, the staff recommended
8 that a fine of $25,000 be imposed against The
9 Missouri Gaming Company.
10
COMMISSIONER
GANT: Did we have some
11 of these at our last meeting also?
12 MR. BUSHMANN: Did you come up --
13 there was one.
14 COMMISSIONER GANT: All
this happened
15 in April.
16 COMMISSIONER HARTSFIELD: It was
17 September. We
had somewhere they had done
18 this. There
were six people that complained.
19 MR. BUSHMANN: Yes, sir.
20 COMMISSIONER GANT: For everybody's
21 benefit here, you know, we had a long
22 discussion at that particular time about just
23 this not happening to those people. So I guess
24 I'm all right with the fine this time. But
25 next time if it comes up -- that's why I'd like
157
1 to have a list of violations. If it's a
2 continued practice, then something has to be
3 done to correct it.
4 MR. MULLALLY: Frankly, I don't know
5 that we're going to get to a point where you
6 won't see any of these, but it's just simply
7 the realities of dealing with giant databases.
8 I mean, it's very difficult to over a long
9 period of time with databases with, you know,
10 over a million people in those most of these
11 databases. With some of the
12 multi-jurisdictional companies like Harrah's,
13 dealing with databases that have tens of
14 millions of people in them. And to be able to
15 without ever making an error,
16 to be able to have perfect, I mean, no
17 one does it.
The Department of Revenue doesn't
18 do it. The IRS
can't do it. The yellow pages
19 can't
do it. So you're just -- you're
20 occasionally going to have these things. And,
21 frankly, we don't bring every -- it's only when
22 we think there's enough negligence involved
23 that it merits a fine. Sometimes it's just,
24 you know, there just isn't enough negligence to
25 merit a fine.
In this particular instance,
158
1 after reviewing the facts, the disciplinary
2 committee felt like there was. I don't know
3 whether they'll try this case or not. But I
4 don't think we'll ever get to a point where you
5 just -- you're able to -- people are going to
6 make mistakes with that much data involved.
7 COMMISSIONER BIELE: The sad part is
8 you don't get fined $25,000 for the yellow
9 pages, but you do on the DAP.
10 COMMISSIONER HINRICHS: I move that
11 we approve disciplinary action DC-04-230.
12 COMMISSIONER BIELE: Second.
13 COMMISSIONER BARTCH: Any discussion?
14 Call the roll.
15 MS. FRANKS:
Chairman Bartch?
16 COMMISSIONER BARTCH: Approve.
17 MS. FRANKS:
Commissioner Hinrichs?
18 COMMISSIONER HINRICHS: Approve.
19 MS.
FRANKS: Commissioner Gant?
20 COMMISSIONER GANT: Approve.
21 MS. FRANKS:
Commissioner Hartsfield?
22 COMMISSIONER HARTSFIELD: Approve.
23
MS. FRANKS: Commissioner Biele?
24 COMMISSIONER BIELE: Approve.
25 MS. FRANKS:
By your vote, you've
159
1 adopted preliminary order for disciplinary
2 action DC-04-230.
3 MR. BUSHMANN: DC-04-231 is against
4 Ameristar Casino St. Charles, Inc. In offering
5 the game of roulette in its casino, Ameristar
6 uses a primary set of roulette chips and a
7 reserve set.
The Commission rules require
8 that a Commission agent be notified when
9 primary chips are removed from play and that
10 both primary and reserve chips be stored in
11 locked compartments in certain designated
12 areas.
13 In this case, two employees were
14 performing a routine inventory of roulette
15 training chips when they discovered 357 reserve
16 chips in the table in the training room. This
17 is not a designated storage area, and both
18 licensed employees and unlicensed prospective
19 employees have access to this room. A few
20 minutes later, the employees also discovered 90
21 primary chips in the drawer of a desk in the
22 shift manager's office which is also not a
23 proper storage area.
The employees notified
24 the Commission about these discoveries, but no
25 one could provide an explanation as to how
160
1 these chips got
to that location.
2 A few days later, Commission staff
3 conducted an audit in the casino and found 1.7
4 percent of the primary chips and 3 percent of
5 the reserve
roulette chips were missing. This
6 is a violation of the notification rule and the
7 rule requiring proper storage of the chips for
8 security purposes.
I could find no other cases
9 similar to this that have come up in the past.
10 But the staff recommends that a fine be imposed
11 on Ameristar Casino St. Charles in the amount
12
of $10,000 for these
violations.
13 COMMISSIONER HINRICHS: What would be
14 the value of those missing chips?
15 MR. BUSHMANN: Theoretically, they
16 could be brought into play, into a live game.
17 They don't have a specific value, but they
18 could be brought into play in a game.
19 COMMISSIONER HINRICHS: So they're
20 worth an awful lot of money, probably, that
21 percentage?
22 MR. BUSHMANN: Potentially.
23 COMMISSIONER HINRICHS: Okay.
But we
24 don't know their face value?
25 MR. BUSHMANN: They don't have a face
161
1 value.
2 COMMISSIONER HINRICHS:
They don't.
3 COMMISSIONER BARTCH: Only if they're
4 brought into a game.
5 COMMISSIONER HARTSFIELD:
6 Mr. Chairman, I move approval of Resolution
7 04-231.
8 COMMISSIONER HINRICHS: I'll second
9 that.
10 COMMISSIONER BARTCH: Do we have a
11
second? I'm sorry.
12 COMMISSIONER HINRICHS: Yeah.
13 COMMISSIONER BARTCH: Any other
14 discussion?
Please call the roll.
15 MS.
FRANKS: Chairman Bartch?
16 COMMISSIONER BARTCH: Approve.
17 MS. FRANKS:
Commissioner Hinrichs?
18 COMMISSIONER HINRICHS: Approve.
19 MS.
FRANKS: Commissioner Gant?
20 COMMISSIONER GANT: Approve.
21 MS. FRANKS:
Commissioner Hartsfield?
22 COMMISSIONER HARTSFIELD: Approve.
23 MS.
FRANKS: Commissioner Biele?
24 COMMISSIONER BIELE: Approve.
25 MS. FRANKS:
By your vote, you've
162
1 adopted preliminary order for disciplinary
2 action DC 04-231.
3 MR. BUSHMANN: The last case this
4 morning is 04-232 against Ameristar Casino St.
5 Charles. This
case involves progressive slot
6 machines in Ameristar's casino. The facts are
7 quite complex and technical, so Steve Johnson
8 is here to
brief you on the facts of the case
9 and describe the Commission's investigation.
10 COMMISSIONER BARTCH: Okay.
And this
11 is the one where we had previous -- a previous
12 request to --
13 MR. JOHNSON: Yes. That's correct.
14 COMMISSIONER BARTCH: -- speak to the
15 Commission?
All right.
16
MR.
JOHNSON: Mr. Chairman, members
17 of the Commission, can you hear me okay on this
18 microphone?
19 COMMISSIONER BARTCH: Yes.
20 MR.
JOHNSON: In March of 2004, while
21 reviewing Superlink controller configurations,
22 Ameristar St. Charles noticed that several EGDs
23 on a controller link to which they were not
24 assigned -- this matter was not related at all
25 to the ongoing investigation but led into the
163
1 investigation.
Upon investigating the issue,
2 it was found that the slot interface boards for
3 these devices were not communicating to the
4 controller even though the system indicated
5 they
were, in fact, online and communicating.
6 When these boards were rebooted, they shifted
7 back to the controller link to which they were
8 assigned and they began reporting to the system
9 as they were supposed to do. This situation
10 caused Ameristar to immediately look at the
11 Superlink system in total. This resulted in
12 the finding
that the 135 progressive links
13 connected to Superlink since the casino's
14 opening on August 6, 2002, approximately
15 36 of those 135 links had experienced some sort
16 of malfunction
that likely created
17 under-incrementation of the progressive meters.
18 Of the roughly 800 EGDs or slot devices that
19 were connected to these 135 links, as many as
20 200 of these devices may have experienced a
21 board failure to communicate.
22 While several conditions may have
23 contributed to create the situation, the single
24 process that had it been in place would have
25 immediately identified the problem and kept it
164
1 from exacerbating was the audit process of
2 reconciling the coin in against the progressive
3 meter reading, and this should be done on a
4 daily basis.
This audit process was in place
5 at the sister property in Kansas City. The
6 non-communicating slot interface boards create
7 a situation in which the system failed to
8 receive approximately 2 percent of the total
9 coin in resulting in an under-incrementation to
10 the progressive meter of $152,811.20.
11 Upon identification of the problem,
12 Ameristar
immediately notified the Commission,
13 and they implemented procedures to ensure the
14 progressive meters were incrementing
15 appropriately and making daily adjustments and
16 any instances of under-incrementation were
17 identified.
They also immediately retained the
18 services of Westcom, LLC to review, analyze and
19 reconcile any possible under-incrementation of
20 progressive meters at the St. Charles property.
21 We feel like it is critically important to note
22 that no patron received less than was displayed
23 on the
progressive meter of any gaming device
24 that they were playing and no gaming device to
25 our knowledge paid out less than the 80 percent
165
1 required by regulation. No slot machine, once
2 again, paid out less than the 80 percent
3 required by the CSR, which is 45-5. And
4 progressive
incrementation rates typically
5 increased the minimum theoretical payback
6 percentage calculated to the main game program
7 on which they were used. The progressive
8 incrementation rate is established by the class
9 A licensee.
And they can adjust this at any
10 time. There is
no progressive wager.
11 The incrementation emanates from the
12 casino's hold, a part of which the licensee has
13 elected to award patrons over and above the
14 gaming devices top award for those who attain
15 the winning combination. Progressive
16 incrementation rate, as a matter of fact, is
17 transparent to the patron. The patron has no
18 idea of that rate.
He has no idea how much
19 goes to the
primary meter. She or he has no
20 idea if they're secondary or tertiary meters or
21 how much of the incrementation goes to each of
22 those. In
other words, the patron has no idea
23 what that meter should read. They are playing,
24 as a matter of fact, for the amount shown on
25 the meter. The
progressive display is the
166
1 amount set aside for that player. No patron
2 received less than the amount displayed on the
3 progressive meter. Patrons were playing for the
4 amount displayed, and that is what they
5 received.
6 In this instant case, the money did not
7 reach the meter.
Therefore, it was never set
8 aside for the player.
There are two sets of
9 rules that govern the incrementation process
10 for progressive games. The first set of rules
11 is the public safety, comprised primarily of
12 statute and CSR.
The second set is known
13 only to the property and subject to the
14 approval of the Commission.
15 Currently, we are aware of the use of this
16 Superlink system in seven games jurisdictions
17 where there are approximately 4,500 individual
18 games communicating to progressive controllers
19 within these jurisdictions outside of Missouri.
20 To date, we are aware of no failures in the
21 communication links of these systems from these
22 other jurisdictions.
23 On
the morning of November 20th of
24 this year, Ameristar St. Charles returned the
25 aforementioned 152 plus thousand dollars to the
167
1 progressive meters on the Mikohn Superlink
2 progressive system.
Ameristar St. Charles had
3 demonstrated a willingness to return this money
4 to the system
immediately upon receiving the
5 accounting from Westcom. It is important to
6 note that this matter was, in fact,
7 self-reported by the casino when the anomaly
8 was discovered.
9 Ameristar St. Charles has been forthright
10 about the situation.
They have cooperated
11 entirely in the investigation, and they have
12 expended a
significant amount in personnel time
13 and resources in an effort to resolve the
14 situation. It
is patently clear to the
15 Commission that there was no intent on the
16 casino's part in any matter to defraud or
17 under-pay any patron.
We've anticipated
18 several questions from you, two of which I'll
19 offer and we'll be happy to take your questions
20 about this.
21 One of the questions that you might have
22 are there concerns that the manufacturer of the
23 Superlink progressive controller system has
24 any liability for the problems experienced at
25 Ameristar, which would be Mikohn. At this point
168
1 in time,
we have identified none. The Missouri
2 Gaming Commission employs the services of an
3 independent testing lab to examine all hardware
4 and software components of electronic gaming
5 devices and we employ them to examine the
6 peripherals of those devices to ensure proper
7 functionality and operating inventory. These
8 devices and
software are tested in the lab
9 against exact technical standards and are not
10 approved for use in any gaming jurisdiction or
11 if the issues are not met or would compromise
12 operational liability.
13 The problem is these systems cannot be
14 tested in a load environment such as you'll
15 find in a casino.
They're tested in a
16
laboratory environment. Once
they
17 go into service, then it is incumbent upon
18 casino operators themselves to have in place
19 mechanisms that work to ensure integrity and
20 functionality and to identify anomalies in the
21 operation of these devices should these
22 malfunctions occur.
23 Mikohn and the manufacturer of this system
24 have cooperated fully with Ameristar, with the
25 independent testing laboratory and the
169
1 Commission to identify the cause of the anomaly,
2 and they're working to improve any system
3 components that may assist the casino property to
4 more clinically identify a like occurrence should
5 one occur in the future.
6 The second question that you might have -
7 was there previously not a required audit and
8 do all other casinos now have audit procedures
9 in place to prevent a like situation from
10 occurring? It
was the Commission's
11 understanding that a daily reconciliation of
12 meter incrementation of coin in to be an
13 industry best practice, a standard, if you
14 will. That is
why Missouri, like any other
15 gaming jurisdictions, had in place a regulation
16 requiring casinos to daily record the amount of
17 each progressive jackpot meter. Unfortunately,
18 in this particular instance, we found that a
19 daily reconciliation on this property was not
20 being conducted.
21 To preclude this event from happening at
22 other casino properties, we, the staff, have
23 issued a letter to each general manager
24 directing that
they ensure the required
25 reconciliation that was being required each day
170
1 and we're in the process of reviewing their
2 reporting back to us on the status of their
3 reconciliation procedures and audit procedures.
4 To further bolster this necessity, the
5
Commission is amending
the Code of State
6 Regulations, which will specifically spell out
7 the required reconciliation and how it is to be
8 performed. And
our audit person has personally
9 contacted each casino property in the state to
10 ensure compliance with the Commission
11 directives.
And with that, I'll be more than
12 happy to try to answer any questions about the
13 investigation and the issues set forth.
14 COMMISSIONER GANT: One instance, was
15 there any explanation why it was functioning
16
properly in other
jurisdictions and not
17 functioning properly in this one?
18 MR. JOHNSON: Well, actually, sir,
19 it's not so much a matter of functioning as it
20 is
process. In one property, the process
was
21 in place for the reconciliation of coin in by
22 reading the meters on a daily basis for the
23 reconciliation of coin in against the meter
24 incrementation.
In this particular property,
25 the process was not in place.
171
1 COMMISSIONER GANT: The
other one
2 question I --
3 COMMISSIONER HINRICHS: Do you know
4 why?
5 MR. JOHNSON: No, I don't. It just
6 was not
in place and I don't know
7 why. The
company may be in a better position
8 to answer that.
9 COMMISSIONER GANT: We've faced this
10 before. There are three possible alternatives
11 in this. One
is the casino keeps the $152,000.
12 The people that played didn't get a chance to
13 win that $152,000.
And then new players now
14 get a chance to profit by the mistake that was
15 made in that the other people didn't get a
16 chance to win on.
Are those the alternatives?
17 MR.
JOHNSON: Yes, sir. One of the
18 issues that drive the staff recommendation to
19 you that Counsel Bushmann is going to talk
20 about is the fact that there is no good -- or
21 no
resolution to the problem of putting what to
22 do with the $152,000 plus -- 152 plus thousand
23 dollars that won't meet with some opposition
24 from some affected group of patrons. However,
25 it's clear Ameristar fully intended to put the
172
1 money where it was appropriate, which was back
2 on the
meters. We can identify a certain
3 percentage of jackpot winners, that being those
4 that won $1,200 or more that filed a W-2G. But
5 as you correctly pointed out, that leaves a lot
6 of jackpot winners under that amount who we
7 could not identify, therefore, could not be
8 compensated for the difference in jackpots that
9 they won or
could have won. Therefore, if you
10 pay a percentage back and then post
11 the remaining money for the meters, the
12 winners, the W-2G winners and above get to play
13 to the other
folks money again. It seems that
14 the appropriate solution is to re-post it to
15 the progressive meters. But then that leaves
16 that group of people that we could identify
17 that are going to be disparaged by that
18 position. So
they have really no good
19 alternative.
However, they've taken what we
20 consider could be a fair and reasonable
21 alternative and posted the money back to the
22 meters.
23 COMMISSIONER GANT: They just decided
24 not to keep the $152,000.
25
MR. JOHNSON: Sir?
173
1 COMMISSIONER GANT: At least they
2 decided not to keep the $152,000.
3 MR. JOHNSON: I think that they
4 considered that some as much as they possibly
5 could make a case for legally doing that. But
6 I don't think that's Ameristar's intent from
7 day 1 and they can speak for that issue, too.
8 COMMISSIONER GANT: Okay.
9 MR. BUSHMANN: Based on the facts
10 that Steve has reported, Ameristar has violated
11 at least two gaming laws, 11 CSR 45-5.200
12 subsection 7, which requires that progressive
13 controllers must continuously monitor each slot
14 machine on the link to inserted coins and
15 multiply the accepted coins by the rate of
16 progression and denomination in order to
17 determine the correct amount to apply to the
18 progressive jackpot.
The progressive display
19 must be constantly updated in a manner approved
20 by the Commission as play is continued.
21 Ameristar's communication problems involved in
22 these progressive slot machines violated this
23 rule. In
addition, and perhaps more
24 importantly, Ameristar is required by law to
25
conduct its operation
in a manner that does not
174
1 discredit the Missouri gaming industry or the
2 state of Missouri.
Ameristar's failure to
3 detect, prevent and correct improper
4 incrementation of progressive jackpots for a
5 period of over one and a half years has
6 jeopardized the integrity and reputation of
7 gaming in Missouri.
8 Because these violations could potentially
9 affect a large number of players, many of whom
10 cannot be identified, and because those persons
11 will justifiably be confused and angry about
12 this incident, the staff has concluded that a
13 substantial fine is necessary. The staff
14 recommends
that Ameristar Casino St. Charles be
15 fined in the amount of $250,000 for these
16 violations.
17 COMMISSIONER HARTSFIELD: Why?
Could
18
you or any three of you
review for us cases
19 with fines of this -- you know, $200,000 or more
20 whatever -- whatever benchmark you want to use?
21 But this is pretty unusual, I assume, this
22 amount.
23 MR. MULLALLY: On the high end of the
24 fines that have been imposed, there was the $1
25 million penalty paid by Station Casinos in
175
1 association with the settlement of all its
2 discipline as it sold its casinos to Ameristar.
3 That was the top penalty that's ever been
4 imposed by the Commission. As far as
5 preliminary disciplinary orders with regard to
6 penalties, the top one was a $250,000 fine
7 against Station
Casino St. Charles in the mid
8 '90s for allowing a 12-year-old to gamble for a
9 considerable period of time. She actually won
10 a jackpot was the only reason that she was
11 discovered.
And there was a $250,000
12 fine imposed against The Missouri Gaming
13 Company for its involvement in the
14 NII-JII transaction in Wisconsin where they
15 associated with people who had been found to
16 have connections with organized crime. That
17 was lowered through a settlement conference for
18 $200,000.
19 COMMISSIONER HARTSFIELD: Okay.
20 Thank you.
21 COMMISSIONER HINRICH: Do we have any
22 audit process with regard to this? We don't --
23 we never know
whether they're -- they
24 self-reported this.
Can we walk into a -- can
25 our investigators walk in and see if this sort
176
1 of thing is going on or --
2 MR. JOHNSON: It's very difficult to
3 detect, Commissioner Hinrichs, because it won't
4 cause enough of a spike, the failure to
5 increment on a daily basis. Particularly if
6 you have multiple links on that, it will not
7 cause enough of a spike to be readily detected.
8 The answer
simply lies in having a procedure
9 that guarantees that it's re-incremented on in
10 regular intervals and that the money is posted.
11 So, once again, it is a difficult problem. We
12 are, however, considering a uniform
13 application, a
uniform rule that will work --
14 that will cause a daily reconciliation of coin
15 against meter to be -- can be spelled out as
16 opposed to be expected.
17 COMMISSIONER HINRICHS: So we haven't
18 seen such a thing in the past?
19 MR. JOHNSON: To our knowledge, no.
20 COMMISSIONER HINRICHS: So we've not
21 looked for it?
We've not seen it?
22 MR. JOHNSON: It's very difficult to
23 detect, as I've
indicated.
24 COMMISSIONER BIELE: And I guess the
25 question I've got to ask, you probably can't
177
1 answer. I'll
have to wait until his -- why was
2 it in place in one property and not in place in
3 the other property?
I mean, it was
4 important enough to be in place in Kansas City.
5 Why wasn't it important enough to be in place
6 in St. Charles?
And I guess that's -- I'll
7 wait for you to get up here and expect to hear
8 that.
9 MR. JOHNSON: Mr. Stremming is
10 waiting to address those issues.
11 COMMISSIONER BIELE: Yeah.
12 COMMISSIONER BARTCH: Any other
13 questions?
Sir, I believe you would like to
14 address the Commission?
15 MR. STREMMING: Yes, I would. Well,
16 first of all, good afternoon this time. Troy
17 Stremming again, vice president of Governmental
18 Affairs for Ameristar casinos. And thank you
19 for giving us the opportunity to speak. I
20 think this process is a much better
21 process. And
we're certainly glad that we have
22 the opportunity to tell you a little bit
23 about our side of the facts. And I will be
24
brief and we won't try
the case up here today.
25 but I think it's -- first, to explain why
178
1 it's crucial to speak to you now before you
2 make this ruling and that is that you obviously
3 have broad discretionary powers on the level of
4 fines that you have the ability to institute.
5 I think, as
Steve and I have talked about this
6 issue for about four months now as we went
7 through the audit process with Whetstone,
8 et cetera, and I don't believe that for the
9 most
part the facts really here are in dispute.
10 I think that there are a couple issues
11 that need to be addressed and given a little
12 further, I guess, consideration
13 before you rule on this matter. But for the
14 most part, as Steve explained, I think we're on
15 the same page as far as the facts that
16 he set forth are accurate. In the proposed
17 order for disciplinary action, the staff states
18 that we're being fined for, and I'm quoting
19 here, a failure to detect and prevent
20 communication
problems with EGDs connected to
21 the Superlink system in a timely manner which
22 resulted in improper incrementation of
23 progressive jackpots, which I don't disagree
24 with. But it's
critical to understand that we
25 purchased a progressive controller from Mikohn,
179
1 a licensed supplier in the State of Missouri
2 that carries out this function. That function,
3 that software was approved by GLI, which is the
4 entity that this Commission relies on to ensure
5 integrity of systems as they come into this
6 state. And
that system was to monitor each
7 machine on the link as Steve set forth to make
8 sure that the inserted coins were multiplied,
9 the accepted coins by the rate of the progress
10 and the denomination in order to determine the
11 correct amounts to apply for the progressive
12
jackpots.
13 Unfortunately, during this time in
14 question, the system reports that were produced
15 incorrectly indicated that the EGDs
16 experiencing communication failures were online
17 and communicating properly. The Commission
18 staff goes on to state in the order that we
19 failed to perform any secondary audit procedure
20 to identify
whether the Superlink EGDs were
21 communicating properly with the progressive
22 controllers despite the fact that the GLI
23 approved software that we had in place was
24 giving us the false impression that the systems
25 were communicating properly. And that's what
180
1 that system is
there for. And as Steve said,
2 recognizing the difference, there's no spike
3 that's going to draw anyone's attention to that
4 issue.
5 What the staff fails to mention is that
6 there is no internal control. There's no rule.
7 There's no regulation and there's no statute
8 that requires that secondary audit to be in
9 place. And we think that is the key in
10 this case. We
had a case earlier this morning
11 that was overturned by a hearing officer that
12 you as a Commission made the decision that
13 there is no rule, regulation, statute in place to
14 require that.
And although it's a good
15 procedure and it's a procedure that we have
16 implemented immediately upon finding out about
17 this malfunction, we agree with the
18 process. We
wish it would have been in place.
19 But I think -- and to be honest with
20 you,
Commissioner Biele, I don't have a good
21 answer of why it was in our sister property in
22 Kansas City and it wasn't in St. -- or I'm
23 sorry -- and it wasn't in St. Charles. We
24 would like to believe as a company that we
25 operate in a best practices mode. So that if
181
1 we recognize something that's working in
2 another jurisdiction or another facility that
3 it's implemented in all of our facilities. But
4 there is a lot of things that we wish for as
5 companies
that don't always
6 make the grade.
And not making excuses for
7 this. Again,
we implemented this process
8 immediately upon finding this malfunction. But
9 I
think it is extremely important again to
10 recognize that this secondary audit is not
11 required by rule, by statute, by regulation,
12 by internal control.
And that's the reason, as
13 Steve addressed, that there will be a rule
14 proposed that will put this in place.
15 But to fine a licensee for not
16 having a secondary audit in place, it's not
17 required by law.
Although our sister property
18 had a belt and suspenders approach, we had a
19 belt approach.
It was not the best approach,
20 but we've
implemented that now. And I think to
21 go to this level of a fine, this amount,
22 when you compare it to other fines that have
23 been handed down by this Commission, I do not
24 believe we acted in a manner as has been
25 expressed in some of these other examples of
182
1 fines. I can
give you a couple more. I think
2 there was a couple out there that won't
3 appreciate this in the audience. But Argosy
4 Casino was fined -- was previously fined
5
$150,000 for 42 counts
of violating their
6 internal controls or the audit process. We
7 have one issue here that is not required by law
8 to be in place.
And we're talking about a
9 $250,000 fine, one-fourth the equivalent of
10 what Station Casino's paid for the turmoil that
11 they put this industry and the state through
12 when they were in the state. And I just
13 think it's out of line. You know, I guess
14 just -- in closing, you know, to fine us this
15 amount for a rule or for a secondary
16 audit that does not -- is not required by law
17 I think would be unprecedented. And I would
18 respectfully request that the
19 Commission deny this proposed disciplinary
20 action, or, in
the alternative, propose a fine
21 that is more in line with previous fines that
22 have been handed down by this Commission.
23 COMMISSIONER GANT: Any recourse
24 against the supplier?
25 MR. JOHNSON: Well, as has been
183
1 pinned out by both Mr. Stremming and myself,
2 they built a device.
They sold this device.
3 They tested this device. Our independent
4 laboratory approved this device and it failed
5 under a load condition. Is it reasonable to
6 have recourse against them? I think it was
7 good faith all the way down. They've
8 cooperated fully.
But the facts are that, to
9 the best of
their knowledge, it's a functional
10 device and it failed under load. And we're
11 back again, then, to the consequence of that
12 failure under load and the under-payment of
13 jackpots to patrons.
14 COMMISSIONER HINRICHS: So would you
15 point to Mikohn as the fault here or -- where is
16 there a fault here?
17 MR. JOHNSON:
No, ma'am. Well -- no.
18 It's a very -- as we've indicated, it's a very
19 complicated issue.
It's a multi-faceted issue.
20 Certainly, they have supplied something
21 that failed under load conditions. And it's
22 safe to say in this industry that happens with
23 some degree of regularity. Mechanical
24 electrical devices fail and this one did under
25 a load application.
Totally unanticipated by
184
1 anyone. And
Ameristar responded immediately.
2 But in the absence -- with the understanding
3 that these things occur, these mechanical
4 failures occur, we feel like it's incumbent
5 that you have in place a process to ensure that
6 integrity on the back side, and that's why
7 we're where we're at.
8 COMMISSIONER HARTSFIELD: What's
9 staff's response to the company's allegation
10 that no rule or statute's been violated?
11 MR. BUSHMANN: Mr. Stremming is
12 correct up to a point. He is correct that
13 there is no rule requiring an audit process
14 that he described.
However, it's clear
15 that the two gaming laws were violated because
16 they didn't have that process. Their lack of
17 having that audit procedure created the
18 violations that occurred. So there is a clear
19 violation of gaming laws.
20 With regards to the amount of the fine,
21 it's not just an audit issue. You have to look
22 at it in a more global sense. This issue, when
23 made public, will cause a lot of people to be
24 very upset and angry about this. People that
25 had played in the casino at one time or another
185
1 that maybe had won a jackpot. They will not
2 understand all the technical details of this
3 and they will be very upset. That has a
4 definite damage to the integrity of the gaming
5 industry, to the reputation of this Commission
6 and to the -- and to the company itself who
7 will have to deal with these people. So I
8 believe that it's not just an audit violation
9 that we're looking at here. It's an integrity
10 issue.
11 MR. STREMMING: I would include us in
12 the group that's angry. You know, we rely on
13 GLI and we rely on the suppliers to provide us
14 with a software program that works. And
15 Mr. Bushmann is exactly right. We will be
16 responsible to those guests, and we will have
17 to deal with
these problems. But from moment
18 one that it was brought to our attention and --
19 there was no reason to believe that the system
20 would fail. It
did fail under the load. There
21 was no reason to anticipate that it would fail.
22 But when it did, we notified the Gaming
23 Commission immediately. We stopped the system.
24 We flew in Mikohn representatives to
25 figure out what the problem was and fix it,
186
1 established the secondary audit system which is
2 in place
today to make sure that it doesn't
3 occur again, and we returned the money to the
4 meters. And I
will be quite honest with you.
5 I don't believe that we're legally obligated to
6 return that money to the meters. I don't know
7 how familiar you are with the progressive
8 system. But we
make a decision as an operator
9 to what percent
of money that goes into that
10 money goes to the meter. But the piece
11 that we are pulling from it is our
12 profit. So we
have a 6 percent hold on a
13
machine, we might take
.125 percent of that
14 hold and put it to that progressive meter.
15 But persons that sat down at that machine and
16 had an incentive in front of them of a progressive
17 amount right there on the meter in front
18 of them was paid exactly what it said on that
19 machine because we intended for that money to
20 go there. Along
the lines of what Steve said,
21 we think it's in the best interest of us --
22 from our perspective.
We think it's in the
23 best position for the integrity of gaming in
24 this state to put that money back out there to
25 give the public the chance to win that money,
187
1 which is exactly what we did. And we are still
2 -- we'll probably have issues that we have to
3 deal with with some of these patrons that hit
4 at a level that's a reportable jackpot that are
5 going to come back.
But it would have been
6 just as easy for us to keep that money to pay
7 those people.
We put that money back out there
8 so our integrity wasn't called into question
9 nor was the integrity of the Gaming Commission.
10 And the only other thing I was going to
11 add, Mr. Bushmann said I was correct to a
12 point. I think
the CSR he is quoting is in the
13 disciplinary action paragraph 16, it says,
14 during the normal mode of progressive slot
15 machines, the progressive controller or other
16 approved
device, must continously
17 monitor each machine on the link
18 to inserted coins and multiply the accepted
19 coins by the rate of progression and
20
denomination.
21 COMMISSIONER GANT: Sir, she's taking
22 all this down --
23 MR. STREMMING: I'm sorry.
24 COMMISSIONER GANT: You might slow
25 down a little bit.
She's been here a long
188
1 time, too.
2 MR. STREMMING: By the progression
3 and denomination in order to determine the
4 correct amounts to apply to the progressive
5 jackpot. And
the progressive display must be
6 constantly updated in a manner approved by the
7 Commission as playing on the link continued.
8 That is what we did.
That is what the system
9 was that we paid for and put in place.
10
Unfortunately, it
didn't work. The real key
11 here is the next piece that Mr. Bushmann talked
12 about, and that's the secondary audit. We rely
13 very heavily on the fact that there is no rule,
14 no regulation, no statute, no internal control that
15 requires that.
16 MR. MULLALLY: I think to try to wrap
17 this up, the -- I that Mr. Stremming has
18 correctly identified the very issues that we're
19 talking about here.
One, he said that
20 they had a software system in place and there
21 was no reasonable expectation that it would
22 fail. Well, I
hate to tell you this, folks,
23 but software fails and --
24 COMMISSIONER HINRICHS: That's what
25 I'd reasonably
expect.
189
1 MR. MULLALLY: If you have no
2 reasonable expectation, then you are no expert.
3
It might mean you
don't understand software.
4 There have to be manual and audit processes in
5 place to check software, I don't care who the
6 software is, from Microsoft who is one of the
7 biggest companies, most successful companies in
8 the world to your local guy, to Mikohn.
9 Software not only can fail, but it's almost
10 inevitable at some point in time it will. So
11 those processes have to be in place.
12 Second of all, the last sentence of that
13 rule, I think it's particularly important; the
14
progressive display
must be constantly updated
15 in a manner approved by the Commission.
16 Ameristar submitted a profile of this machine
17 to the Gaming Commission that said it is going
18 to work in this way.
It is going to increment
19 this amount to the progressive controller. It
20 didn't. Now,
the public was playing for the
21 amount on the meter.
And that's what they were
22 playing for.
And so in that regard, they were
23 not cheated.
However, I think the public has
24 to understand, and I think that they do have
25
confidence in there is some third party
190
1 watching the casino to make sure that those
2 behind the scene mechanics are working the way
3 that they are supposed to, that there are at
4 least -- even though they may not be on their
5 face known to the customer, even though the
6 customer
doesn't know the pay-out percentage, I
7 think they have faith that there is some third
8 party, being the Gaming Commission, back there
9 checking to make sure that those unwritten
10 rules that aren't known to the customer are
11 being followed.
And in this case they aren't.
12 And therein lies -- we talked about a lot of
13 very complicated issues, but there in a
14 nutshell is this case.
15 MR. STREMMING: I have one --
16 COMMISSIONER BARTCH: One more?
17 MR. STREMMING: One closing comment.
18 Based on what Kevin said, we are not being
19 fined for violating a law. We are being fined
20 to make a statement to the public. And that
21 does not make
sense.
22 MR. MULLALLY: I don't think that's
23 what I said, but that's okay.
24 COMMISSIONER BARTCH: Any other
25 questions?
191
1 MR. HARTSFIELD: I would just add to
2 what Mr. Biele said.
I have a hard time and I
3 know it's not an ideal world we live in,
4 understanding how the same company in the same
5 state could have a totally different procedure
6 on something this important or no procedure
7 here and one here.
It's just difficult.
8 COMMISSIONER BARTCH: Judge?
9 COMMISSIONER GANT: I have -- since
10 you brought it up, I don't remember the Argosy
11 in the case if we fined Argosy $150,000 for 42
12 violations and they have two. And I know each
13 case is determined on its factual basis and
14 what we heard.
But was that taken into
15 consideration, Mike, when staff recommended the
16 $250,000 fine?
17 MR. BUSHMANN: That case in
18 particular was not taken into consideration,
19 sir.
20 COMMISSIONER GANT: Were those
21 egregious violations that --
22 MR. BUSHMANN: Frankly, I'm not
23 familiar with
the facts either in this case.
24 Maybe that was before my time.
25 COMMISSIONER HINRICHS: So it was
192
1 long enough ago
that it's not really a relevant
2 number anymore.
3 MR. BUSHMANN: I mean, the type of
4 violation was different.
5 MR.
JOHNSON: These were purely
6 procedural issues detected by our audit, which
7 is an ongoing thing.
It's not usual to see any
8 number of violations as a result of an audit in our
9 procedure issues, and we look at the number and
10 scope before we bring these before this group.
11 Typically, you do not see them. We cause the
12 companies to correct them unless they stack up
13 pretty significant in a given area or just
14 egregious in the number.
15 COMMISSIONER BIELE: And I am
16 familiar with that.
And at that point, that
17 the company was a disaster. I don't know a
18 nicer way to say it.
There were so many
19 violations there -- like I say, and this was
20 just a combination and we had to come up with
21 some type of a number to drive home our
22 point at that point on the Commission on the
23 enforcement staff.
And every place you looked
24 there was something wrong.
25 MR. MULLALLY: I think they could
193
1 make an argument that that fine may have been
2 too low rather than it was too high.
3 MR. STREMMING: I can make the same
4 argument that mine's too high.
5 COMMISSIONER HINRICHS: I would echo
6 one thing that you say and that is that one
7 must always assume that software will fail,
8 regardless, especially if it's very
9 sophisticated software. And it needs to be
10 monitored very carefully.
11 COMMISSIONER HARTSFIELD: I will make
12 one comment. I
feel like -- and I
13 expressed some reservations or had reservations
14 after I read the material that staff's
15 recommendation is too high. I think some
16 penalty is in order, but I don't feel a quarter
17 of a million
dollars is probably justified with
18 the immediate reporting and cooperation, all
19 the factors involved comparing to two or three
20 others casinos that were pretty blatant. I
21 don't know what the right amount is, but I
22 think it's too high.
23 COMMISSIONER BARTCH: Certainly, the
24 issue is very complicated. And it has been
25 discussed and very hard to understand, and I
194
1 think that we probably could go on discussing
2
it for some time. Is there any
3 Commission member that's willing to make a
4 motion --
5 COMMISSIONER HARTSFIELD: I can put
6 an amount out and we can vote it down or out.
7 But I would move that we amend the penalty and
8 the resolution to $175,000.
9 COMMISSIONER BARTCH: Do we have a
10 second on that amendment? If not, could we
11 have a different motion?
12 COMMISSIONER GANT: Strike two.
13 COMMISSIONER HARTSFIELD: Good try.
14 COMMISSIONER GANT:
The only thing
15 that bothers me is that if I -- we've got to be
16 consistent.
And there was another one where
17 somebody was imposed a fine of $250,000 that it
18 was a settlement for $200,000. I don't know the
19 reasons for the settlement or something like
20 that. But if
they'd have come in and tried to
21 reach a settlement, they might have gotten a
22 lesser recommendation or can somebody
23 enlighten me on the $200,000 fine? We approved
24 the settlement obviously. But are the
25 conditions different here that make it that
195
1 much better for than the $250,000.
2 MR. BUSHMANN: The case that you're
3 referring to, the company had already taken
4 substantial steps to resolve the problem that
5 were the causes of their initial case. It was
6 a 2-year-old case because of the loss of
7 hearing officers and resignation of the
8 Assistant Attorney General. So the case
9 languished for a long period of time and the
10 company in the meantime had taken substantial
11 steps to fix those problems. So that's why the
12 staff was willing to consider a settlement of a
13 lower amount in that case.
14 COMMISSIONER GANT:
Well, did they
15 immediately correct their situation?
16 MR. BUSHMANN: Ameristar has been
17 very cooperative in their investigation
18 process.
19 COMMISSIONER HINRICHS: I would like
20 to propose that in light of their
21 cooperativeness and the fact that they are
22 returning the $152,811.20 to the system
23 that we reduce the fine to $200,000.
24 COMMISSIONER GANT: I'll second it.
25 COMMISSIONER BARTCH: Is there any
196
1 other discussion?
If not, would you call the
2 roll. Chairman
--
3 COMMISSIONER HINRICHS: We need to --
4 we need to
vote on the amendment first?
5 COMMISSIONER BARTCH: This is on the
6 amendment.
7 MS. FRANKS:
Okay. Chairman Bartch?
8 COMMISSIONER BARTCH:
Approve.
9 MS. FRANKS:
Commissioner Hinrichs?
10 COMMITTEE HINRICHS: Approve.
11 MS. FRANKS:
Commissioner Gant?
12
COMMISSIONER GANT: Approve
13 MS.
FRANKS: Commissioner
14 Hartsfield?
15 COMMISSIONER HARTSFIELD: Approve.
16 MS. FRANKS: Commissioner Biele?
17 COMMISSIONER BIELE: Approve.
18 COMMISSIONER BARTCH: Now, could I
19 have a motion on I believe 04-232?
20 COMMISSIONER GANT: I
move that it be
21 approved.
22 COMMSSSIONER HINRICHS: I second.
23 COMMISSIONER BARTCH: As amended?
24 COMMISSIONER GANT: As
amended, yes.
25 COMMISSIONER HARTSFIELD: Second.
197
1 COMMISSIONER BARTCH: Any other
2 discussion?
Please call the roll.
3 MS. FRANKS:
Chairman Bartch?
4 COMMISSIONER BARTCH: Approve.
5 MS. FRANKS:
Commissioner Hinrichs?
6 COMMISSIONER HINRICHS: Approve.
7 MS. FRANKS:
Commissioner Gant?
8
COMMISSIONER
GANT: Approve.
9
MS.
FRANKS: Commissioner Hartsfield?
10 COMMISSIONER HARTSFIELD: Approve.
11 MS. FRANKS:
Commissioner Biele?
12 COMMISSIONER BIELE: Approve.
13 MS. FRANKS:
By your vote, you've
14 adopted preliminary order for disciplinary
15 action DC-04-232, as amended.
16 MR. STREMMING: Thank you.
17 COMMISSIONER BARTCH: Thank you, sir.
18 MR.
MULLALLY: Mr. Chairman, the next
19 item on the agenda is consideration of
20 relicensure of Bingo manufacturers and
21 suppliers. And
Sergeant Dwight Franklin, I
22 believe, is
here. Somebody walked off with my
23 agenda.
24 SGT. DWIGHT FRANKLIN: Good afternoon.
25 Members of the Commission, today I'm presenting
26 several
companies for relicensure as suppliers
198
1 and manufacturers of bingo products in the
2 state of Missouri.
You may note that some of
3 the companies mentioned hold dual licenses.
4 The primary difference in relicensing a
5 manufacturer and a supplier is a bond
6 requirement which is incumbent upon a supplier
7 as they are responsible for paying the tax on
8 items sold.
The relicensure of suppliers
9 should include, but is not limited to the
10 following checks of the company and its key
11 persons: Bond
requirements, federal and state
12 tax checks, customer and products list,
13 corporate organization chart, gaming license
14 checks,
as well as the following checks on the
15 key persons:
NCIC and MULES, credit checks and
16 IRS tax checks.
17 The following companies have applied for
18
relicensure of a supplier's license.
Games
19 Galor, All American Bingo, Bingo Supply Center,
20 Bingo Brain, Incorporated, Game Tech
21 International, Incorporated, and California
22 Concepts.
23 COMMISSIONER BARTCH: Do I have a
24 motion on --
25 COMMISSIONER HINRICHS: I move to
199
1 approve Commission's Resolution No. 04-007B.
2 COMMISSIONER BIELE: Second.
3 COMMISSIONER BARTCH: Any other
4
discussion? Call the roll.
5 MS. FRANKS:
Chairman Bartch?
6 COMMISSIONER BARTCH: Approve.
7 MS. FRANKS:
Commissioner Hinrichs?
8
COMMISSIONER HINRICHS: Approve.
9 MS. FRANKS:
Commissioner Gant?
10 COMMISSIONER GANT: Approve.
11 MS. FRANKS:
Commissioner Hartsfield?
12 COMMISSIONER HARTSFIELD: Approve.
13 MS. FRANKS:
Commissioner Biele?
14 COMMISSIONER BIELE: Approve.
15 MS. FRANKS:
By your vote, you've
16 adopted Resolution No. 04-007B.
17 SGT.
FRANKLIN: Relicensure for
18 manufacturers includes but is not limited to
19 the following checks of the company
20 and its key persons:
Federal and state
21 tax checks, customer product lists, corporate
22 organization charts, gaming license checks, as
23 well as the
following checks on the key persons
24 with NCIC and MULES, credit checks and IRS tax
25 checks. The
following companies have applied
200
1 for relicensure of their manufacturer's
2 license.
Universal Manufacturing Company,
3 Douglas Press, Incorporated, International
4 Gameco, Incorporated, Earl International,
5 Incorporated, Bingo Brain, Incorporated, Game
6 Tech International, Incorporated, Western Bingo
7 Supplies, Incorporated, Video Kings Gaming
8
Systems, Incorporated
and Applied Concepts.
9 COMMISSIONER HINRICHS: I move that
10 we approve Resolution No. 04-008B.
11 COMMISSIONER BARTCH: Second?
12
COMMISSIONER HARTSFIELD: Second.
13 COMMISSIONER BARTCH: Any other
14 discussion?
Please call the roll.
15 MS. FRANKS:
Chairman Bartch?
16
COMMISSIONER BARTCH: Approve.
17 MS. FRANKS:
Commissioner Hinrichs?
18 COMMISSIONER HINRICHS: Approve.
19 MS. FRANKS:
Commissioner Gant?
20 COMMISSIONER GANT: Approve.
21 MS. FRANKS:
Commissioner Hartsfield?
22 COMMISSIONER HARTSFIELD: Approve.
23 MS. FRANKS:
Commissioner Biele?
24 COMMISSIONER BIELE: Approve.
25 MS. FRANKS:
By your vote, you've
201
1 adopted
Resolution No. 04-0008B.
2 MR. MULLALLY: The next item on the
3 agenda includes Consideration of Settlement
4 Agreements, and Assistant Attorney Jane Rackers
5 is here to present them.
6 MS. RACKERS: Good afternoon.
7 COMMISSIONER BARTCH: Good afternoon.
8 MS. RACKERS: The first licensee that
9 I'd like to discuss with you is Best Bet Bingo,
10 doing business as Good Time Bingo. This is a
11 bingo supplier as opposed to a
12 bingo operator.
There was an audit conducted
13 and a number of violations were found during
14 that audit, including invoices from the month
15 of September that did not contain the license
16 number of the
operator to which the materials
17 were sold and selling of bingo licenses to
18 unlicensed entities.
And a contract employee
19 for the licensee was also listed in that
20 database as a bingo worker for Alliance Club.
21 And so the recommended settlement which has
22 been agreed to by the licensee is a monetary
23 penalty of $7,350, plus some special conditions
24 to ensure that there will not be violations in
25 the future. We
have submitted this agreement
202
1 for
review by the Administrative Hearing
2 Commission, and they have determined that the
3 facts agreed to by Best Bet Bingo do violate
4 the Bingo laws.
So I recommend that this
5 settlement be approved.
6 COMMISSIONER BARTCH: Any questions?
7 Motion?
8 COMMISSIONER HINRICHS: I move we
9 approve
Resolution No. 04-009B.
10 COMMISSIONER BIELE: Second.
11 COMMISSIONER BARTCH: Call the roll,
12 please.
13 MS. FRANKS:
Chairman Bartch?
14 COMMISSIONER BARTCH: Approve.
15 MS. FRANKS: Commissioner Hinrichs?
16 COMMISSIONER HINRICHS: Approve,
17 MS. FRANKS:
Commissioner Gant?
18 COMMISSIONER GANT: Approve.
19 MS. FRANKS:
Commissioner Hartsfield?
20 COMMISSIONER HARTSFIELD: Approve.
21 MS.
FRANKS: Commissioner Biele?
22 COMMISSIONER BIELE: Approve.
23 MS. FRANKS:
By your vote, you've
24 adopted Resolution No. 04-009B.
25
MS.
RACKERS: Thank you. The second
203
1 case involves the Echmo Shrine Club, which
2 group holds a bingo license. And this case
3 comes before you as a result of a complaint as
4 opposed to simply an audit. The organization
5 had a couple of separate pull tab games. In
6 the first game, there were a couple of problems,
7 including that winners’ pull tabs for the
8 winners were signed, but not dated. But
9 probably the bigger problems were found in Game
10 2, where there were a total of over 2,000 pull
11 tabs but only 1,007 were sold. There was a
12 winning pull tab from that game. And I believe
13 that the -- a big prize was the Rams leather
14 jacket. That
was not won in -- or wasn't won
15 before that game 2 was declared dead.
16 After the game was declared dead, then the
17 organization
president has generously offered
18 to buy the remaining pull tabs. And when he
19 did so, he ensured that he would be the winner
20 of the major prize of the game. And then there
21 were some other violations as well with that
22 pull tab in terms of postdating pull tabs as
23 they are required.
So those violations
24 occurred. The
organization has agreed to a
25 one-month suspension as well as the
204
1 organization president is removed from any
2 further
involvement. And another individual
3 with the organization will also be removed from
4 further involvement in the bingo operations.
5 And other special conditions to ensure their
6 future compliance.
This agreement also has
7 been submitted to the Administrative Hearing
8 Commission.
They have reviewed that the facts
9 agreed to by the Echmo Shrine Club do violate
10 the Bingo statute and regulations. So I
11 recommend the agreement, settlement
12 agreement be approved by the Commission.
13 COMMISSIONER BARTCH:
Any other
14 questions?
15 COMMISSIONER GANT: I have a
16 question, I guess on -- it's a one month -- is
17 there some assurance that this guy will never
18 do a Bingo thing again? It's pretty -- I can't
19 -- you know, he bought the rest of the raffle
20 tickets so he was sure to win the jacket. And
21 that really
bothers me. Is there something
22 that we have to check to try if he goes with
23 some other group or --
24 MR. MULLALLY: Yes, sir. He would be
25 flagged in the database as somebody who has
205
1 been involved in this investigation. And
2 should he ever appear again on another
3 officer's list or a workers' list of another
4 club, we would take the appropriate action.
5 COMMISSIONER HINRICHS: Can we
6 require that he return that jacket for --
7 MS. RACKERS: I don't know what
8 happened to the jacket, so --
9 COMMISSIONER BIELE: Yeah.
I think
10 it's important that it happens, I
11 guess, to the individual that did that because,
12 again, when you shut the bingo down, all you're
13 going to do is take money away from the people
14
that the organization
gives money to. It's
15 very important that the people involved never
16 have anything to do with Bingo again.
17 SGT. FRANKLIN: He did bring the
18 jacket back.
We checked on it.
19 COMMISSIONER BARTCH: That was nice
20 of him.
21 COMMISSIONER HARTSFIELD:
22 Mr. Chairman, I'd move approval of Resolution
23 04-010B.
24 COMMISSIONER GANT: I'll second.
25 COMMISSIONER BARTCH: Let's go.
206
1 Please call the roll.
2 MS. FRANKS:
Chairman Bartch?
3 COMMISSIONER BARTCH: Approve.
4 MS. FRANKS:
Commissioner Hinrichs?
5 COMMISSIONER HINRICHS: Approve.
6 MS. FRANKS:
Commissioner Gant?
7 COMMISSIONER GANT: Approve.
8 MS. FRANKS:
Commissioner Hartsfield?
9 COMMISSIONER HARTSFIELD: Approve.
10 MS. FRANKS:
Commissioner Biele?
11 COMMISSIONER BIELE: Approve.
12
MS.
FRANKS: By your vote, you've
13 adopted Resolution No. 04-010B.
14 MS. RACKERS: Thank you.
15 COMMISSIONER BARTCH: Thank you.
16
MR.
MULLALLY: Mr. Chairman, the next
17 item on the agenda is what appears Tab I, a
18 rather lengthy list of rules, but Legal Counsel
19 Keith Essmyer assures me this is a very simple
20 explanation.
21 COMMISSIONER BARTCH: That's good.
22 MR. KEITH ESSMYER: Good afternoon. It's --
23 Kevin -- we put -- we have a number of bingo
24 rule amendments, proposed amendments, a couple
25 of new rules and a good number of rescissions --
207
1 proposed rescissions.
So I would ask that in the
2 interest of paperwork reduction, simplicity and
3 all the sanity of everybody involved that we
4 just take that up as one item. Also, since
5 each rule starts with 11 CSR 45-30, I am just
6 going to refer to the last three digits when
7 talking about a rule, and I will try to run
8 through them as quickly as possible.
9 With the proposed amendment to 025 Bingo
10 Promotions, that simply is correcting a
11 misspelling of the word shoes in paragraph 2.
12
The proposed
amendment to 030 clarifies
13 that the definition of a special bingo game is
14 simply one that is designated as a special
15 bingo game by a bingo organization. And they
16 are only allowed to charge $.50 for a playing
17 card or less as proposed by -- as mandated by
18 statute.
19 040, the proposed amendment makes it clear
20 that you cannot have a bingo session on the
21 special bingo license on the same day you use
22 your regular license for a bingo session. This
23 will prevent bingo licensees from violating the
24 62 game limit.
25 The proposed amendment to 060 requires
208
1 each bingo organization to designate a person
2 in charge of bingo as a bingo chair person.
3 That way, it will be the staff goes to audit a
4 bingo organization, they know just to ask for
5 the bingo
chair person because a lot of
6 organizations have been using different titles,
7 and we don't really know who to ask for when we
8 get there.
9
Proposed amendment
070 is just a repeat --
10 just the way the rules are written. It's a
11 repeat that you can't use a special bingo
12 license on the same day you do your regular
13 bingo.
14 Proposed amendment to 140 restricts Bingo
15 workers from participating in the conduct and
16 management of bingo and doing -- participating
17 in a
raffle or sweepstakes at the same time.
18 We want to keep funds from raffles and
19 sweepstakes separate from bingo funds. Because
20 if you co-mingle funds, they're going to be
21 counted as bingo money and falls under our
22 regulations of what you could do with it.
23 The proposed amendment to 155, bingo
24 equipment is simply incorporating the
25 definitions from 160.
We're combining two
209
1 rules together to make one -- just one rule.
2 And it also corrects a misspelling of the word
3 pull tabs in paragraph 1-B.
4 Proposed amendment to 175 makes it clear
5 which records and how long a licensee must keep
6 them. In
particular, winning bingo cards have
7 to be kept for a year and so do winning pull
8 tabs.
9 Proposed amendment to 180 incorporates the
10 definition
of co-ownership of bingo equipment
11 found in 290 and the permissible rental terms
12 of bingo equipment found in 300 into paragraphs
13 3 and 4 of that rule.
14
Proposed Amendment 2 -- 200, merchandise
15 pricing spells out how you're supposed to keep
16 records of the amount that you value the prizes
17 at such as you need to keep your receipts for
18 prizes. Or
documentation documenting fair
19 market value of the prizes.
20 Proposed Amendment 205, gaming operation
21 definitions, this clarifies the definition of
22 gross receipts and essentially gross receipts
23 come from the sale of any regular or special
24 Bingo games or any supplies and the proceeds
25 are co-mingled is bingo funds. We make that
210
1 uniform throughout the rules as there was some
2 confusion on exactly where to find that
3 definition.
4 Proposed Amendment to 210 makes it clear
5 that you don't have to put in a summary of all
6 of your four quarterly reports to be in
7 compliance with regard to reporting to the
8 Commission.
Just need to have those four
9 reports in there.
10 Proposed Amendment 235, again,
11
incorporates the conditions and restrictions of
12 leasing bingo locations that's currently found
13 on the 240 into this rule, namely into
14 paragraphs 3, 4, 5 and 6.
15
Proposed Amendment to 270 makes it clear
16 that bingo licenses are not to have any illegal
17 gambling equipment or run illegal gambling
18 games on their premises. It's subject to
19 revocation.
They're only allowed to do Bingo
20 and licensed activity.
21 Proposed Amendment to 280, the net
22 receipts from bingo and the bank account, this
23 is making -- clarifies the proper
24 definition of bingo receipts, namely bingo
25 for lawful, charitable, religious or
211
1 philanthropic purposes. And it also
2 incorporates the provisions of 220 into
3 paragraphs 3, 4, 5, 6 and 7.
4 Proposed Amendment to 340, the
5 participation of full time employees, full time
6 staff member or ordained member of the clergy.
7 This lays out a procedure by whether we
8 approve a full time employee, gives the
9 Commission 30 days to respond to the receipt of
10 an application.
And it also allows the
11 organization if an application is turned down
12 to resubmit that application up to two times in
13 the same year if they can prove that the
14 employee is eligible at the time of
15 re-submission.
16 Proposed
Amendment 355, sale of pull tabs
17 by bingo licensees, this incorporates the
18 statutory definition of pull tab cards into the
19 rule and also makes it clear that no pull tabs
20 can be sold before 10 a.m. No bingo sessions
21 could be started before 10 a.m. And it also
22 makes it clear that you can only sell pull tabs
23 up to two hours before a bingo session starts,
24 if that bingo session starts at 10, after
25 10 a.m. And
also, it says pull tabs must stop
212
1 at the
end of all occasions. There was some
2 confusion about that.
People wanted to sell
3 pull tabs after the last bingo game had been
4 played.
5 Proposed
Amendment 370, progressive games
6 makes it clear that you can play progressive
7 games using the electronic bingo card
8 monitoring device.
There was some confusion as
9 to whether that was allowed or not.
10 The proposed amendment to 525 makes it
11 clear that you have to purchase bingo products
12 only from licensed suppliers in Missouri and
13 that suppliers can sell bingo products to
14 unlicensed entities upon the approval of the
15 Commission if they're to be used for a free no
16 charge Bingo game.
But each time that sale is
17 made, they have to get prior approval for each
18 sale. It can't
just be a blanket approval.
19 545, contraband, it identifies bingo paper
20 that doesn't meet our statutory requirement as
21 contraband that can be seized by the
22 Commission.
23 COMMISSIONER HINRICHS: What is bingo
24 paper?
25 MR. ESSMYER: It's a -- it's just
213
1 bingo cards.
There is a -- there's a statutory
2 requirement for each -- that they have to meet.
3 COMMISSIONER HINRICHS: Okay.
4 MR. ESSMYER: You can have like --
5 some of them a lot of times will come in a
6 sheet of four.
Just four bingo cards.
7 Amendment to 575, corrects a misspelling of
8 pull tabs and also makes it clear that it --
9 the manufacturer is required to make sure that
10 there is no way that you can tell a winner of a
11 pull tab before it's opened.
12 On 600, electronic bingo card monitoring
13 devices. The
original rule read that all the
14 numbers had to be downloaded into the device at
15 the beginning of the session, which meant all
16 of your numbers for all 62 games had to be
17
downloaded if you read the rule that way. This
18 means we just want to download it before the
19 game begins.
And that way you can go back and
20 re-do the numbers for the next game.
21 We have two new rules proposed as 035,
22 there's no -- we do not have a definition of
23 bingo cards in the rules. So we incorporated
24 the definition of bingo card that's found in
25 Section 313.005(1).
And we also prohibit the
214
1 use of Bingo cards for any purposes not
2 permitted by the bingo statutes. We had
3 trouble with some people taking the bingo cards
4 and using them to run the raffle. We wanted to
5 discourage any commingling or use of bingo
6 materials for raffles because you can run into
7 commingled funds.
If you commingle a fund from
8 bingo -- from raffle into bingo, then you're
9
going to fall under our
rules of what you do
10 with those funds.
So we want to keep those two
11 pieces of charitable gaming separate.
12 We also had another proposed rule 135
13 which gives a definition of bingo worker which
14 includes anybody that has anything to do with
15 participating in the game, that's from selling
16 paper, to overseeing the game, to selling pull
17 tabs, to tallying up the receipts.
18 And then we have a list of rescissions. I'm
19 not going to run through those because we
20 actually
touched on them with the amendment.
21 Those are all being rescinded because they're
22 being incorporated into existing rules to make
23 the rules simpler, easier to read and shorter.
24 COMMISSIONER GANT: Let me ask you
25 how -- Mr. Chairman, I guess we have a number
215
1 of proposed rule amendments and then we've got
2 the two new rules.
I guess we should vote on
3 those separately?
We can include all the ones
4 on the proposed rule amendment in one motion, I
5 would think, couldn't we, as long as the
6 reporter's gotten down all the numbers and
7 things?
8 COMMISSIONER HINRICHS: Can we vote
9 on these as presented?
10 MR. MULLALLY: Yeah. I think -- as
11 long as there's no objection, there would be
12 nothing that would prohibit you from
13
adopting the
recommendation of the staff with
14 regard to all the rules under Roman Numeral X,
15 double F of the agenda and that way it gives
16 the reporter a record.
17 COMMISSIONER HINRICHS: Some of --
18 COMMISSIONER GANT: I second.
19 COMMISSIONER BARTCH: Any other
20 discussion?
Call the roll.
21 MS. FRANKS:
Chairman Bartch?
22 COMMISSIONER BARTCH: Approve.
23 MS. FRANKS:
Commissioner Hinrichs?
24 COMMISSIONER HINRICHS: Approve.
25 MS. FRANKS:
Commissioner Gant?
216
1 COMMISSIONER GANT: Approve.
2 MS. FRANKS:
Commissioner Hartsfield?
3 COMMISSIONER HARTSFIELD: Approve.
4 MS. FRANKS:
Commissioner Biele?
5 COMMISSIONER BIELE: Approve.
6 MS.
FRANKS: By your vote, you've
7 adopted all rules under Tab X.
8 MR. MULLALLY: The last thing we have
9 for you are three final orders of rule making
10 under tab
double G. They are -- they were
11 subject of a public hearing. We did not
12 receive any testimony with regard to the
13 proposed rules in order to receive any nor did
14 we receive any written comments. The first one
15 1.100 allows licensees to apply for and receive
16 waivers and variances with regard to regulatory
17 requirements.
4.260 eliminates the need for
18 any just cause language as grounds for
19 discipline.
And 12.090 allows casino employees
20 to receive non-alcoholic drinks from patrons
21 and
eliminates the rule prohibiting them from
22 sitting or dancing with patrons. Prohibition
23 on tips and gifts are also deleted, but they
24 are governed by other regulations in other
25 chapters. And
they are submitted --
217
1 COMMISSIONER BARTCH: Would this be
2 the same thing if there's not any discussion?
3 COMMISSIONER GANT: I move that we
4 approve and adopt the recommendations under
5 Section GG.
6 COMMISSIONER HARTSFIELD: I second
7 it.
8 COMMISSIONER BARTCH: Any other
9 discussion?
Please call the roll.
10 MS. FRANKS:
Chairman Bartch?
11
COMMISSIONER BARTCH: Approve.
12 MS. FRANKS:
Commissioner Hinrichs?
13 COMMISSIONER HINRICHS: Approve.
14 MS. FRANKS:
Commissioner Gant?
15 COMMISSIONER GANT: Approve.
16 MS. FRANKS:
Commissioner Hartsfield?
17 COMMISSIONER HARTSFIELD: Approve.
18 MS. FRANKS:
Commissioner Biele?
19 COMMISSIONER BIELE: Approve.
20 MS. FRANKS:
By your vote, you've
21 adopted the final orders of rulemaking under
22 Tab GG.
23 COMMISSIONER BARTCH: Do we need
24 closed session?
25 MR. MULLALLY: We do not need closed
218
1 session.
2 COMMISSIONER BARTCH: Motion to
3 adjourn.
4 COMMISSIONER HARTSFIELD: So moved.
5 COMMISSIONER GANT:
Second.
6 COMMISSIONER BARTCH: Call the roll.
7 MS. FRANKS:
Chairman Bartch?
8 COMMISSIONER BARTCH: Adjourned.
9 Approve.
10 MS. FRANKS:
Commissioner Hinrichs?
11 COMMISSIONER HINRICHS: Approve.
12 MS. FRANKS:
Commissioner Gant?
13 COMMISSIONER GANT: Approve.
14 MS. FRANKS:
Commissioner Hartsfield?
15 COMMISSIONER HARTSFIELD: Happily
16 approve.
17 MS. FRANKS:
Commissioner Biele?
18 COMMISSIONER BIELE: Approve.
19
20
21
22
23
24
25
219
1 REPORTER'S CERTIFICATE
2
3
STATE OF MISSOURI )
)ss.
4
COUNTY OF OSAGE )
5
6 I, Monnie S. VanZant, Certified Shorthand Reporter,
7
Certified Court Reporter #0538, and Registered Professional
8
Reporter, and Notary Public, within and for the State of
9
Missouri, do hereby certify that I was personally present at
10
the proceedings as set forth in the caption sheet hereof;
11
that I then and there took down in stenotype the proceedings
12
had at said time and was thereafter transcribed by me, and
13
is fully and accurately set forth in the preceding pages.
14
15 IN WITNESS WHEREOF, I have hereunto set my hand and
16
seal on December 8, 2004.
17
18
19 ______________________________
20 Monnie S. VanZant, CSR, CCR #0539
21 Registered Professional Reporter
22
23
24
25