1

1 MISSOURI GAMING COMMISSION

MEETING

- - -

JANUARY 21, 2004

- - -

6 BE IT REMEMBERED, that the Missouri Gaming

7 Commission held the following meeting at the

8 Riverside City Hall, 2950 Northwest Vivion Road, in

9 Riverside Missouri, on the 21st day of January,

10 2004, commencing at 9:00 a.m. in the morning of that

11 day, said meeting having been called by members of

12 the Missouri Gaming Commission, pursuant to the

13 issuance of due notice to all parties in interest,

14 and the following is a transcript of the records of

15 proceedings had during the course of said meeting.

16 A P P E A R A N C E S

17 Mr. Floyd Bartch, Chairman

18 Ms. Judith Sutter-Hinrichs, Commissioner

19 Mr. Jack Gant, Commissioner

20 Mr. George Hartsfield, Commissioner

21 Ms. Angie Franks, Designated Principal Assistant

22 Mr. Kevin Mullally, Gaming Commission

23 Executive Director

24 Ms. Jennifer Shoemaker, Shorthand Reporter

25 of Cross Reporting

CROSS REPORTING SERVICES, INC. (816)252-8883

1 MS. ANGIE FRANKS: Chairman Bartch?

2 MR. CHAIRMAN: Present.

3 MS. FRANKS: Commissioner Hinrichs?

4 COMMISSIONER HINRICHS: Present.

5 MS. FRANKS: Commissioner Gant?

6 COMMISSIONER GANT: Present.

7 MS. FRANKS: Commissioner Hartsfield?

8 COMMISSIONER HARTSFIELD: Present.

9 MR. CHAIRMAN: Kevin, first I would like

10 to take this opportunity to welcome the new

11 commissioner to the board. We are really anxious to

12 have a new commissioner. We now are four and

13 hopefully shortly we will have a fifth member. And

14 it is very important to gaming and the State of

15 Missouri that we have a full board to do the

16 business of this industry. So very happy that he is

17 here.

18 He spent the -- and comes to us from

19 Jefferson City and the YMCA as executive director

20 there now I believe. He has spent a lot of time

21 there, spent an awful lot of time with United

22 Telephone over the years and has been the past mayor

23 of Jefferson City. So that, plus many, many

24 organizations that he belongs to and has been a part

25 of and has been on their boards makes him ultimately

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1 qualified to serve with us on this board. We

2 certainly welcome him and thank you very much for

3 choosing to be on this board, also.

4 COMMISSIONER HARTSFIELD: Glad to be here.

5 MR. CHAIRMAN: Kevin.

6 MR. KEVIN MULLALLY: Mr. Chairman, as you have

7 been notified, this morning one of the more

8 substantial agenda items we had for today has

9 been -- will not take very long now because we have

10 been enjoined, and we will get to that a little

11 later. So our agenda is markedly shorter than we

12 had anticipated. However, it creates a -- as every

13 adversity creates an opportunity.

14 You may have noticed a lot of the

15 tremendous development going on here in Riverside.

16 There is a lot of construction going on. Anybody

17 who was with us eight, nine years ago when we first

18 came to Riverside to look at this site would not

19 recognize Riverside today.

20 So I thought it might be helpful for the

21 Commission to get an update on a lot of the economic

22 activity that is going on in Riverside. And Brent

23 Miles, the Community Development Coordinator for the

24 city, has been kind enough to offer some of his time

25 this morning and bring you up to date on the things

CROSS REPORTING SERVICES, INC. (816)252-8883

1 going on in this community. Brent.

2 MR. BRENT MILES: Good morning. I'm Brent Miles

3 and these boards that I packed with me, I pack them

4 everywhere. I do this presentation a lot.

5 Like this gentleman said, if you came into

6 Riverside today, any way you came in you saw a city

7 under construction. If you came in off of Highway 9

8 on to West Platte Road you saw a demolition project

9 happening. We have purchased four buildings on West

10 Platte, they are demolished, a new roadway will be

11 going through, it will be a four lane, two lanes on

12 each side with a 16-foot center median. We have a

13 streetscape master plan going on right now for the

14 whole area that will encompass a landscaping,

15 lighting, signage, and then that is what we call the

16 West Platte Road project.

17 And here is an artist rendering of future

18 development that will occur in that area. And if

19 you can remember what it looked like just a few

20 weeks ago, this is a momentous drawing of what can

21 occur and what we think will occur.

22 You can see some of the renderings around

23 the room here today. Like I said, signage, a

24 16-foot center median, and then hopefully a

25 commercial development taking off on the south side

CROSS REPORTING SERVICES, INC. (816)252-8883

1 of West Platte.

2 As you go up to the city north you see --

3 you get into our second section of our road projects

4 which we call middle Gateway Road projects, and this

5 would be starting from where Highway 69 is up until

6 just north of the intersection here at Vivion and

7 West Platte.

8 You may remember there was a gas station

9 here on the corner, we have demoed that yesterday.

10 We are in the process of designing a new fountain

11 and a little pocket park that will go in there. And

12 this is a rendering of what that area will look like

13 when we are finished. This viewpoint is standing

14 where the Corner Cafe is. I'm sure most of you know

15 where the Corner Cafe is. This rendering is right

16 there, too.

17 Then we get into upper Gateway which is

18 our northern boundary which connects into I-29.

19 This, with the middle section of Gateway, will be a

20 three-lane, it will have a center turning lane and

21 the streetscape master plan also is for this area

22 and we are really looking at a nice pallet of

23 landscaping, new lighting, sidewalks on both sides.

24 Something that the people in Riverside can really

25 use. Most of them walk downtown.

CROSS REPORTING SERVICES, INC. (816)252-8883

1 We are creating a new master plan right

2 now, it is under way. We are looking at one

3 possibility of doing some kind of town center

4 overlay district and really make that intersection,

5 that quadrant right there, a focal point of

6 Riverside and really limit the uses and really up

7 the design criteria.

8 And then this is a rendering of what

9 northern Gateway will look like. We have one

10 project that is going to be taking off, just did the

11 preliminary site development on it, and it will be

12 one of the focal points of Riverside.

13 COMMISSIONER GANT: Will you turn that

14 just a little bit more this way?

15 MR. MILES: Oh, I'm sorry.

16 COMMISSIONER HINRICHS: Your audience is

17 actually right here.

18 MR. MILES: Okay. Then as you walked into

19 City Hall you saw a magnificent City Hall and then

20 you also saw our expansion over here. This is a new

21 public safety facility which will house police and

22 fire. With our money coming in from Argosy, which

23 we are really thankful for, we have purchased new

24 fire apparatuses and it is funding this.

25 Then we have a development that is going

CROSS REPORTING SERVICES, INC. (816)252-8883

1 to be going on to the south of Highway 9 north of

2 635, a new interchange off of -- on 635 will occur

3 and a new road -- four-lane road will connect. 635

4 to 9, I apologize, the rendering is in another

5 meeting right now so. And that would be a mixed use

6 development, industrial/commercial/retail office.

7 And we are using the funds to, like I said, fund the

8 interchange and fund all the infrastructure for that

9 project.

10 We have a trail system going on. It has

11 just been approved by our Board of Aldermen. It

12 would go on top of the levy system connected to EHM

13 Park, which I don't know if any of you have been to

14 EHM Park. It was funded with Argosy money, as well.

15 It is probably the most underrated park in all of

16 Kansas City in my opinion. Before I came here I

17 didn't know where it was. And if you guys get a

18 chance, it is something that you should really check

19 out. It is a riverfront park right next to Argosy

20 Casino. And the trail system will have a trail head

21 in there and the trail system will be running into

22 River Park and then eventually be running throughout

23 the city.

24 Do you have any questions? I would be

25 happy to answer them.

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1 COMMISSIONER GANT: What was your

2 population ten years ago and what is it now?

3 MR. MILES: Our population ten years ago

4 was almost the same as it is today, which is a

5 little over 3,000. So population hasn't changed,

6 but we have two housing developments that are

7 occurring right now. One is currently underway, the

8 other one will be starting hopefully this week. One

9 is 14 houses which is a pretty small subdivision.

10 And the other one is 56, which is a big number for a

11 city this size, especially when you look at our

12 owner/occupy rates. We have a lot of renters in our

13 city. And what we are trying to do is to fuel

14 single family development.

15 COMMISSIONER GANT: And what is the area

16 of the city?

17 MR. MILES: It is 11 square miles, I

18 believe.

19 MR. MULLALLY: What are the housing

20 prices?

21 MR. MILES: The one with 14, two houses

22 have sold, one was 260 and the other one was 320.

23 Platte County, in a lot of people's opinion, lacks

24 lower income housing, lower income meaning the 180s,

25 which is hard for me to say. But the subdivision

CROSS REPORTING SERVICES, INC. (816)252-8883

1 taking off the 56 will be from 180 to about 220,

2 which the developer thinks is a really good niche

3 for anyone wanting to live in Platte County. And we

4 just approved the plans last night and hopefully it

5 is going to be taking off this week.

6 COMMISSIONER GANT: Has your municipal

7 court gotten busier as a result of this?

8 MR. MILES: I couldn't fully answer that.

9 I don't know what the -- what it was before, so I

10 really couldn't put a number to that. My city

11 administrator could give you a better answer to

12 that.

13 MR. CHAIRMAN: In fact, my first exposure

14 to Riverside was in 1968, the summer, when I first

15 had reason to come over here. I don't think

16 population-wise it has probably changed all that

17 much in all these years.

18 MR. MILES: Uh-huh.

19 MR. CHAIRMAN: But certainly it looks like

20 a completely different place from back then and all

21 those projects will actually put you on the map.

22 MR. MILES: It will. And I attribute a

23 lot of that to, I think, in 1982 the city formed a

24 committee called Pride and Progress Committee. And

25 what that committee did was try to limit the amount

CROSS REPORTING SERVICES, INC. (816)252-8883

1 of liquor licenses in Riverside and maybe some sort

2 of stigma attached to its name, what people viewed

3 Riverside as. That has evolved in what you see

4 today.

5 And I think within the next -- I think

6 within the next six months, but I think definitely

7 within the next five years, you will see this

8 transformation. And a lot of people ask me, you

9 know, "do you really think it is going to look like

10 that?" And I say, "I sure hope not, I hope it looks

11 a lot better." So that is my answer.

12 MR. CHAIRMAN: Well, you have went a long

13 ways down the road, it used to be the reputation was

14 a very rough place to come.

15 MR. MILES: That's right.

16 MR. CHAIRMAN: And I don't think that is

17 the truth anymore.

18 MR. MILES: I don't think so either. And

19 I attribute, again, to the Pride and Progress

20 Committee. We have a wonderful Public Safety

21 Committee, which is our public safety force which is

22 police and fire together. The chief of police

23 does -- he does a very good job. I think that it

24 even boils down to the point of code enforcement,

25 community caring, community outreach, and the idea

CROSS REPORTING SERVICES, INC. (816)252-8883

1 of fixing broken windows and things like that can

2 really transform a community.

3 And we are hoping that this

4 redevelopment -- we have increased design standards,

5 we have a grant and loan program that we do, if you

6 come in we do matching funds, $5,000, that we will

7 match it with $5,000 to do landscaping or facade to

8 your building. And we think that those will be the

9 real catalyst and springboard to an entire

10 redevelopment.

11 What we have here is two different types

12 of development, which is odd to say. The more

13 redevelopment that will occur in this downtown area,

14 then basically have a greenfield development that

15 will occur out in the bottoms area off 635. The

16 greenfield development is five minutes from

17 downtown, five minutes from the downtown airport,

18 ten minutes from KCI.

19 So it is -- when the levy project is

20 complete, hopefully July, probably August, and the

21 interchange comes in, this city will transform.

22 MR. CHAIRMAN: Did anything get damaged by

23 the tornado that came through this summer?

24 MR. MILES: Yes, it did. We had -- it

25 came up Highway 9, took out roughly four or five

CROSS REPORTING SERVICES, INC. (816)252-8883

1 businesses, damaged some houses across there, then

2 shot right north of City Hall here and took out

3 houses up here to our north off High Drive, and then

4 shot over on its way to Northmoor and took out a

5 multifamily development. About six of those

6 fourplexes were heavily damaged, all of them had

7 some sort of roof damage.

8 The insurance has been taken care of with

9 that, we have a developer in here and the progress

10 on that is unbelievable. I mean, they are making it

11 a lot better than it was before the tornado came,

12 which was the hopes of everyone.

13 And that is sort of the motto we have

14 in-house is that every day we just try to get better

15 and better and better and eventually we will surpass

16 even these renderings that you see around.

17 COMMISSIONER HINRICHS: Sounds like your

18 tornado did you a favor.

19 MR. MILES: I -- I can't --

20 COMMISSIONER HINRICHS: You won't speak to

21 that. Has -- the population numbers haven't

22 changed, has the composition changed?

23 MR. MILES: We have done some initial

24 demographic studies for this master plan. The

25 things that really stand out when you look at the

CROSS REPORTING SERVICES, INC. (816)252-8883

1 demographics for Riverside is -- especially in

2 comparison to the rest of Platte County is you --

3 the major one is income. Platte County, I think,

4 averages about 55, median income is about $55,000.

5 Riverside is about 35, which is a sizable

6 difference.

7 Then also levels of education, and one

8 thing that I think is really going to springboard

9 that number to shoot up is you are in, what I

10 consider, one of the best school districts in all of

11 Kansas City and all of Missouri, the Park Hill

12 School District. And I can't think of a nicer

13 looking high school that I have seen, especially if

14 you go up to Park Hill South and you look, you have

15 a perfect vantage point of the Kansas City skyline,

16 perfect school.

17 And then when we get some new housing

18 developments going in, especially in that 180 to 220

19 range and then up from the 220s to the 400 range,

20 obviously the education level, the demographic, will

21 raise. So I just think it is taking time. And also

22 with that quality of life increases with new houses,

23 new businesses.

24 If you come through Riverside you will see

25 a lot of people are walking. Our demographics show

CROSS REPORTING SERVICES, INC. (816)252-8883

1 that a lot of people don't have computers, they

2 don't have access to the internet. And we are

3 addressing all those things.

4 The master plan is what I call issue-

5 oriented. And we are going to look at possibly ten

6 or a dozen issues that we should be addressing, you

7 know, education level, well, they don't have

8 internet access or they don't have transportation to

9 a place where they can go and work and maybe not

10 stay at home or go and be able to receive a degree

11 at UMKC or Avila or William Jewell or something like

12 that.

13 I think that they all integrate into one

14 thing and all these issues are part of a big puzzle,

15 so those are being addressed. And you know, we have

16 to admit that Argosy's revenue stream really helps

17 us implement those things and that is what we looked

18 at, the master plan is. We looked at a lot of

19 master plans and they gave document upon document of

20 what needed to be done and what we should do or

21 where the problems were, but then they give about

22 two paragraphs on how to implement that. We looked

23 at it from the point as how are we going to

24 implement that as our main focus point. And how can

25 we use this capital money to do that and what is

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1 best for the citizens.

2 If you talk to or you come to a board

3 meeting, I have been associated with a few different

4 cities, you have to admit that you can see personal

5 agendas and I have to say with this board you don't

6 see that, they always say, "Is this what is best for

7 the city, is this what is best for the citizens?"

8 It is kind of a relief to see that because of the

9 amount of progress that we have had and the amount

10 of progress that is to come.

11 MR. CHAIRMAN: Is any of the building that

12 is occurring east and south of Brissway in your

13 city, does that stretch that far down?

14 MR. MILES: No, it does not. East and

15 south of Brissway like off of 64th Street, 45

16 Highway?

17 MR. CHAIRMAN: Right.

18 MR. MILES: No, that is in Kansas City,

19 but by the same token I look at a large -- what we

20 did was a five-mile radius and a ten-mile radius and

21 look at the developments and the housing stock and

22 the demographic numbers of those areas. And we are

23 surrounded by -- we are lucky, we are surrounded by

24 really nice housing stock. We have Briar Cliff West

25 in Kansas City to our east and then to our west we

CROSS REPORTING SERVICES, INC. (816)252-8883

1 have what is called Riss Lake National, really nice

2 housing stock and houses that range from $400,000 or

3 $500,000 up into the $5 million and $6 million

4 houses.

5 I don't know if we will ever see a housing

6 stock like that here, but with this development that

7 will occur off of 635 we will capture a huge revenue

8 stream off of those housing stocks.

9 MR. CHAIRMAN: Thank you very much.

10 MR. MILES: Okay. Thank you.

11 MR. MULLALLY: Thank you, Brent.

12 Mr. Chairman, the first item on the permanent agenda

13 is consideration of the November 21, 2003 minutes.

14 COMMISSIONER HINRICHS: I move to approve

15 those minutes.

16 COMMISSIONER GANT: Second.

17 MR. CHAIRMAN: Any discussion? Please

18 call the roll.

19 MS. FRANKS: Chairman Bartch?

20 MR. CHAIRMAN: Approve.

21 MS. FRANKS: Commissioner Hinrichs?

22 COMMISSIONER HINRICHS: Approve.

23 MS. FRANKS: Commissioner Gant?

24 COMMISSIONER GANT: Approve.

25 MS. FRANKS: Commissioner Hartsfield?

CROSS REPORTING SERVICES, INC. (816)252-8883

1 COMMISSIONER HARTSFIELD: Approve.

2 MS. FRANKS: By your vote you have adopted

3 the minutes of the November 21, 2003 meeting.

4 MR. MULLALLY: Mr. Chairman, under Tab B

5 through G you have a list of certain suppliers that

6 are up for consideration for re-licensure and

7 Lieutenant Keith Johnson is here to make a

8 presentation.

9 LT. KEITH JOHNSON: Good morning, Mr. Chairman,

10 Commissioners. Background investigations, to

11 include criminal history checks and tax reviews, of

12 the following suppliers and their respective key

13 persons have been conducted in conjunction with

14 their re-licensing. As a result of the

15 investigations, the following suppliers have been

16 found suitable for re-licensing by the Commission:

17 Osborne Coinage Company; United States Playing Card

18 Company; Acres Gaming, Incorporated; George C.

19 Matteson Company, Incorporated, doing business as

20 GEMACO; Atronic Casino Technology, L.L.C.; Mikohn

21 Gaming Corporation. Thank you.

22 MR. CHAIRMAN: Do we do one motion on all

23 of them?

24 MR. MULLALLY: If you do it unanimously,

25 yes. If there is no objection to doing it that way.

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1 MR. CHAIRMAN: Do we have a motion?

2 COMMISSIONER HARTSFIELD: So moved.

3 COMMISSIONER HINRICHS: Second.

4 MR. CHAIRMAN: Any discussion or

5 objections?

6 COMMISSIONER GANT: No.

7 MR. CHAIRMAN: Please call the roll.

8 MS. FRANKS: Chairman Bartch?

9 MR. CHAIRMAN: 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: Approve.

16 MS. FRANKS: By your vote you have adopted

17 Resolutions 04-001 through 04-006.

18 MR. MULLALLY: Mr. Chairman, under Tab H

19 is the appeals for the Consideration of the

20 Licensure of Level I and Key Applicants, and

21 Lieutenant Johnson is here for that presentation.

22 LT. JOHNSON: The background teams

23 conducted investigations of the following Level I

24 applicants that included, but were not limited to,

25 criminal, financial, and general character inquiries.

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1 The following individuals have been investigated and

2 found to be suitable for licensing by the

3 Commission: Michelle A. Shriver, Vice President and

4 Assistant General Manager at Ameristar Casino Kansas

5 City, Incorporated and Jeffrey M. Jackson, Director

6 of Internal Audit at Ameristar Casinos,

7 Incorporated. Thank you.

8 MR. CHAIRMAN: Motion for approval?

9 COMMISSIONER HINRICHS: I will move that

10 we approve Commission Resolution No. 04-007.

11 COMMISSIONER GANT: Second.

12 MR. CHAIRMAN: Any discussion? Call the

13 roll.

14 MS. FRANKS: Chairman Bartch?

15 MR. CHAIRMAN: Approve.

16 MS. FRANKS: Commissioner Hinrichs?

17 COMMISSIONER HINRICHS: Approve.

18 MS. FRANKS: Commissioner Gant?

19 COMMISSIONER GANT: Approve.

20 MS. FRANKS: Commissioner Hartsfield?

21 COMMISSIONER HARTSFIELD: Approve.

22 MS. FRANKS: By your vote you have adopted

23 Resolution No. 04-007.

24 MR. MULLALLY: Mr. Chairman, the next

25 agenda item we had intended to present to you, the

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1 results of an investigation into Sierra Design

2 Group, which prompted the staff to recommend a

3 revocation of their temporary supplier's license.

4 However, yesterday at approximately 4:30,

5 Mike Bradley was summoned to the Cole County Circuit

6 Court in front of Judge Callahan. Sierra Design

7 Group sought a temporary injunction enjoining the

8 Gaming Commission and myself from taking any action

9 against -- to revoke Sierra Design Group's temporary

10 supplier's license. At approximately 5:00

11 Judge Callahan issued that temporary order. It is

12 my understanding that Assistant Attorney General

13 Bradley will convene before Judge Callahan next

14 Friday.

15 MR. MIKE BRADLEY: A week from Friday.

16 COMMISSIONER HINRICHS: A week from Friday

17 to discuss that further extension of that order.

18 MR. BRADLEY: Right.

19 MR. MULLALLY: Or a rescission of that

20 order that would allow us to proceed. So we are not

21 able to present that to you today.

22 The next item on the agenda is under Tab

23 J, Consideration of Disciplinary Action, and legal

24 counsel, Keith Essmyer, will make a presentation.

25 MR. KEITH ESSMYER: Mr. Chairman, Commissioners,

CROSS REPORTING SERVICES, INC. (816)252-8883

1 you have before you a proposed preliminary order for

2 disciplinary action against Brian Johnson, a Level I

3 licensee. On October 14, 2003, Mr. Johnson was

4 informed of a possible loss limit violation having

5 occurred at the River King Casino. Mr. Johnson

6 failed to report this possible loss limit violation

7 to the Commission as required by Title 11, Division

8 45, Chapter 10 of the Code of State Regulations.

9 And this violation remained unreported until it was

10 brought to the Commission's attention by the River

11 King's compliance director, Matthew Block, on

12 October 21, 2003.

13 For his failure to report this possible

14 loss limit violation to the Commission, staff

15 recommends that Mr. Johnson's license be suspended

16 for a period of 16 hours. Also, I need to draw the

17 Commission's attention to Paragraph 12 of the

18 proposed order which contains a typo listing Mr.

19 Johnson as a Level II licensee, and ask that this

20 order is approved by the Commission and be approved

21 under the amended form so that it is listed as a

22 Level I, Mr. Johnson is listed as a Level I

23 licensee.

24 COMMISSIONER HINRICHS: I move that we

25 approve Disciplinary Order DC-04-010.

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1 COMMISSIONER HARTSFIELD: Second.

2 COMMISSIONER GANT: I have a question

3 first, though. I mean, is this 16 hours going to

4 take effect immediately, is that --

5 MR. ESSMYER: Under our rules it will --

6 he will have up to 30 days to appeal it. He has 30

7 days to appeal, it is final in 30 days unless it is

8 appealed.

9 COMMISSIONER GANT: Is 16 hours a

10 normal --

11 MR. ESSMYER: It is the normal penalty for

12 a person of supervisory position such as

13 Mr. Johnson.

14 COMMISSIONER HINRICHS: So it is basically

15 two days?

16 MR. ESSMYER: Yes, ma'am.

17 COMMISSIONER GANT: That is all I have.

18 MR. CHAIRMAN: Did I hear a second?

19 COMMISSIONER HARTSFIELD: Yes.

20 MR. CHAIRMAN: Call the roll, please.

21 MS. FRANKS: Chairman Bartch?

22 MR. CHAIRMAN: Approve.

23 MS. FRANKS: Commissioner Hinrichs?

24 COMMISSIONER HINRICHS: Approve.

25 MS. FRANKS: Commissioner Gant?

CROSS REPORTING SERVICES, INC. (816)252-8883

1 COMMISSIONER HINRICHS: Approve.

2 MS. FRANKS: Commissioner Hartsfield?

3 COMMISSIONER HARTSFIELD: Approve.

4 MS. FRANKS: By your vote you have adopted

5 Disciplinary Complaint DC-04-010 as amended.

6 MR. MULLALLY: Mr. Chairman, there are

7 three remaining proposed disciplinary actions

8 against companies and General Counsel Mike

9 Bushmann will make those presentations.

10 MR. MIKE BUSHMANN: Good morning, Mr. Chairman

11 and Commissioners. Welcome, Mr. Hartsfield. I

12 would also like to welcome officially Keith Essmyer,

13 who you just heard from. He is our new legal

14 counsel. He has been with us just a couple of

15 months, and he has already made major contributions

16 to the staff. I just wanted to acknowledge that.

17 And I do have three preliminary orders

18 against casinos for you. And as was alluded to, if

19 you approve a preliminary order the company has the

20 right to request a hearing in front of a hearing

21 officer and that order only becomes final if they

22 fail to request a hearing or if you approve

23 the recommendations of the hearing

24 officer.

25 Case No. 04-024 is against President

CROSS REPORTING SERVICES, INC. (816)252-8883

1 Riverboat Casino-Missouri, Inc. and involves playing

2 cards that were used in the company's poker room.

3 The Commission staff received a complaint from one

4 of the company's patrons, stating that on October

5 29, 2003 the patron was playing poker in the poker

6 room when he noticed that the cards in use were in

7 poor condition. He pointed this out to the dealer

8 and requested new cards, but the poker room

9 supervisor refused to replace them.

10 On November 10, 2003, when the Commission

11 agents inspected the poker room cards in response to

12 the complaint, they found the cards in use at the

13 poker tables were in poor condition, having smudges,

14 bends and crimps on their surface. The agents

15 required the company to immediately replace those

16 cards with new ones.

17 Commission rules contain detailed and

18 specific procedures on inspection of playing cards

19 and removal of any damaged cards. These procedures

20 are in place to prevent any person from marking

21 cards to increase their odds of winning a table

22 game. The company's employees failed to follow

23 those inspection and removal procedures, which could

24 affect the integrity and fairness of the game. In

25 fact, the poker room supervisor and the table games

CROSS REPORTING SERVICES, INC. (816)252-8883

1 manager stated to agents that they were not familiar

2 with the card inspection procedures. For these

3 violations, the staff recommends that

4 President-Riverboat Casino Missouri be fined in the

5 amount of $25,000.

6 COMMISSIONER GANT: I have a question.

7 Suppose it -- what do they do on all the decks of

8 cards, say that you see smudges and say I ask for

9 new cards, do they replace all of the decks then or

10 just --

11 MR. BUSHMANN: I believe they replace the

12 damaged cards. They are required to also, once they

13 replace them, to examine them and make sure that

14 they match the cards that are already in use.

15 COMMISSIONER GANT: Okay. I move that the

16 DC-04-024 is approved by the Commission.

17 COMMISSIONER HARTSFIELD: Second.

18 MR. CHAIRMAN: Any further discussion?

19 And this is pretty much the normal fine for this

20 type of --

21 MR. BUSHMANN: There was a prior case, I

22 went back and looked to see if we had any precedent

23 for this finding. There was a prior case in

24 December of 2001 where a company was fined $25,000

25 for conducting a table game that had a deck of 54

CROSS REPORTING SERVICES, INC. (816)252-8883

1 cards instead of 52. So in that case they had

2 failed to inspect and they had let the defective

3 deck go into the game. So it was the same fine.

4 MR. CHAIRMAN: Further discussion? Call

5 roll.

6 MS. FRANKS: Chairman Bartch?

7 MR. CHAIRMAN: Approve.

8 MS. FRANKS: Commissioner Hinrichs?

9 COMMISSIONER HINRICHS: Approve.

10 MS. FRANKS: Commissioner Gant?

11 COMMISSIONER GANT: Approve.

12 MS. FRANKS: Commissioner Hartsfield?

13 COMMISSIONER HARTSFIELD: Approve.

14 MS. FRANKS: By your vote you have adopted

15 Disciplinary Complaint DC-04-024.

16 MR. BUSHMANN: Case No. 04-025 is also

17 against President-Riverboat Casino. This case

18 involves failure to follow Commission requirements

19 on the storage of slot machines. On May 14, 2003,

20 Steve Johnson, the Commission's Chief Deputy

21 Director of Enforcement, sent a letter to the

22 general managers of all Missouri casinos setting

23 forth requirements for storage of slot machines.

24 The letter allowed for temporary storage of the

25 machines, but required that slot machines in

CROSS REPORTING SERVICES, INC. (816)252-8883

1 temporary storage be monitored by surveillance

2 cameras.

3 On October 22, 2003, Trooper Flannery,

4 a Commission agent, observed ten slot machines being

5 stored in front of the stage in the company's

6 theater. And there were no surveillance cameras

7 monitoring the theater, which violated the order

8 that was contained in Mr. Johnson's letter. And for

9 this violation, the staff recommends that

10 President-Riverboat Casino be fined in the amount of

11 $5,000.

12 COMMISSIONER HINRICHS: Has that been

13 rectified since, have they been removed --

14 MR. BUSHMANN: They were removed.

15 COMMISSIONER GANT: Has this happened

16 before or this is a lower fine for this one?

17 MR. BUSHMANN: I could find no precedent

18 for this -- that situation so I don't have any prior

19 fines to present to you.

20 COMMISSIONER GANT: How long had they been

21 there?

22 MR. BUSHMANN: I don't believe that was

23 determined.

24 COMMISSIONER GANT: Mr. Chairman, I move

25 that the DC-04-025 be approved and adopted by the

CROSS REPORTING SERVICES, INC. (816)252-8883

1 Commission.

2 COMMISSIONER HINRICHS: Second.

3 MR. CHAIRMAN: Any further discussion?

4 Please call roll.

5 MS. FRANKS: Chairman Bartch?

6 MR. CHAIRMAN: Favor.

7 MS. FRANKS: Commissioner Hinrichs?

8 COMMISSIONER HINRICHS: Favor.

9 MS. FRANKS: Commissioner Gant?

10 COMMISSIONER GANT: In favor.

11 MS. FRANKS: Commissioner Hartsfield?

12 COMMISSIONER HARTSFIELD: In favor.

13 MS. FRANKS: By your vote you have adopted

14 Disciplinary Complaint DC-04-025.

15 MR. BUSHMANN: Case No. 04-026 is against

16 Aztar Missouri Riverboat Gaming Company which does

17 business as Casino Aztar. The facts in this case

18 are that on October of 2001, the Commission created

19 a new internet website designed to keep casinos

20 informed of changes in approved software and

21 hardware for slot machines. The Commission staff

22 notified all Missouri casinos several times that

23 they were expected to access the website regularly,

24 download the revoked report, and compare that to

25 their slot data file to ensure that no revoked

CROSS REPORTING SERVICES, INC. (816)252-8883

1 software was used on the gaming floor.

2 The Commission uses an independent

3 electronics testing laboratory, GLI, to certify slot

4 machines for proper functioning. On January 29,

5 2002, GLI notified the Commission that it was

6 revoking the certification from some software that

7 was used in slot machines Aztar had purchased from

8 International Game Technology. The revocation

9 required that Aztar replace the revoked chips within

10 45 business days.

11 The Commission and GLI revoked the

12 certification for these chips because testing

13 indicated that in certain circumstances a

14 non-clearable error could occur, resulting in a RAM

15 clear which clears all the accounting and play

16 history. That error would cause a new game to

17 begin, which would change the game's payout

18 probabilities.

19 The Commission posted the revoked

20 certification of the software on its website on

21 February 4, 2002, notifying Aztar of the revocation.

22 International Game Technology also notified Aztar on

23 February 4th that the revoked chips had to be

24 removed and offered to provide alternate software.

25 On October 15, 2003, Commission agents

CROSS REPORTING SERVICES, INC. (816)252-8883

1 inspected slot machines located in the company's

2 casino, and they discovered that at least six slot

3 machines in operation in the casino contained those

4 revoked chips. Aztar removed the revoked chips from

5 operation that day.

6 Aztar violated Commission regulations by

7 failing to remove and replace the revoked chips from

8 slot machines in operation in its casino within the

9 45 business days after certification of the software

10 had been revoked. For this violation the staff

11 recommends that a fine be imposed on Aztar Riverboat

12 Gaming Company in the amount of $10,000.

13 COMMISSIONER GANT: I had a question.

14 MR. BUSHMANN: Yes?

15 COMMISSIONER GANT: How many days did it

16 take for them to --

17 MR. BUSHMANN: I think it was like 19

18 months, so it was quite a while.

19 COMMISSIONER GANT: That is what I heard,

20 it was about 20 months, looked like, but was there

21 any excuse, reason or alibi given for waiting that

22 long?

23 MR. BUSHMANN: I believe it was just an

24 oversight by their slot department.

25 COMMISSIONER GANT: Well, these are -- did

CROSS REPORTING SERVICES, INC. (816)252-8883

1 we follow up on it on a certain case? Why did 20

2 months go by before somebody told them different?

3 MR. BUSHMANN: Well, we have agents that

4 go out and inspect the slot machines, but we have

5 two persons that are specialized in that area in the

6 enforcement section to cover the number of

7 chips, which run into the hundreds of chips that get

8 revoked and replaced, it is hard for them to be able

9 to keep track of them, they do try and find those.

10 In this case there were only six of them in the

11 casino that contained those revoked chips.

12 COMMISSIONER GANT: On the oversight did

13 they blame the secretary? That's usually what

14 happens.

15 MR. BUSHMANN: I don't know what their

16 excuse was, sir.

17 COMMISSIONER GANT: Have we had this occur

18 in the past?

19 MR. BUSHMANN: We have actually had this

20 -- yes, a number of times. The range of fines has

21 been anywhere from $10,000 to $25,000. In this case

22 there were six machines, which is a relevantly low

23 number. In other cases there have been quite a few

24 more which generated the $25,000 fines. And because

25 of the small number of machines involved that is why

CROSS REPORTING SERVICES, INC. (816)252-8883

1 we are recommending the lower range of the fines.

2 COMMISSIONER GANT: Do you take into

3 consideration the length of time that elapsed as to

4 what the numbers are?

5 MR. BUSHMANN: Yes. And I think that part

6 of the reason of the length of time involved was

7 that came in at the very beginning of this process,

8 when the website was just being developed, and there

9 was a learning curve involved and that may have

10 contributed to why they missed it. The casinos had

11 to get used to using the website and how to use it.

12 And since this was at the very beginning of the

13 process that could have contributed to why they

14 missed it.

15 MR. CHAIRMAN: Do I have a motion?

16 COMMISSIONER HARTSFIELD: Mr. Chairman, I

17 move for adoption of Resolution DC-04-026.

18 COMMISSIONER HINRICHS: Second.

19 MR. CHAIRMAN: Any other discussion?

20 Please call the roll.

21 MS. FRANKS: Chairman Bartch?

22 MR. CHAIRMAN: In favor.

23 MS. FRANKS: Commissioner Hinrichs?

24 COMMISSIONER HINRICHS: Favor.

25 MS. FRANKS: Commissioner Gant?

CROSS REPORTING SERVICES, INC. (816)252-8883

1 COMMISSIONER GANT: Favor.

2 MS. FRANKS: Commissioner Hartsfield?

3 COMMISSIONER HARTSFIELD: In favor.

4 MS. FRANKS: By your vote you have adopted

5 Disciplinary Complaint DC-04-026.

6 MR. MULLALLY: Mr. Chairman, under Tab N

7 are a couple of proposed rules. The first of which

8 is something that we have -- Commission previously

9 discussed, granting the chairman the authority to

10 take certain actions for a temporary period of time,

11 thus avoiding the necessity we sometimes have of

12 having these emergency telephone meetings to take

13 care of relatively mundane matters that could

14 be handled by the chairman. Mike Bushmann is here

15 to explain the staff's proposal to the Commission's

16 request for that type of a mechanism and then you

17 are certainly free to debate it amongst yourselves

18 and decide what you want, but perhaps it is

19 something that we hope articulates what you would

20 like.

21 MR. BUSHMANN: This amendment to Rule

22 1.020 provides a mechanism for the Commission to

23 delegate limited authority to the Chairman to extend

24 existing licenses for up to 90 days, in cases where

25 a company's license comes up for renewal and the

CROSS REPORTING SERVICES, INC. (816)252-8883

1 schedule doesn't permit a regular Commission meeting

2 prior to that deadline. Any extension issued by the

3 Chairman would have to be ratified by the full

4 Commission within 90 days, and the delegation of

5 authority would expire after 12 months unless it

6 was rescinded or reviewed by the full Commission.

7 MR. CHAIRMAN: I think what they tried to

8 do was, we have discussed this, obviously, several

9 times. And to bring everything into play just

10 simply giving the Chairman the ability to handle

11 that situation so a meeting doesn't have

12 to be called until the next board meeting. And to

13 do that in such a way that it has to be revisited at

14 the first of every year, simply for the fact that

15 boards change and people change and, you know, is

16 that what they want to continue to do. So that is

17 what we have and certainly before we approve any

18 discussion we should have.

19 COMMISSIONER HINRICHS: My only concern is

20 why 90 days when we meet basically every 30 to 60

21 days. I mean, it really doesn't make any

22 difference, I'm just asking why.

23 MR. BUSHMANN: I think the arbitrary

24 decision --

25 MR. CHAIRMAN: It could be 60. I don't --

CROSS REPORTING SERVICES, INC. (816)252-8883

1 30 might not quite do it because we might skip a

2 meeting, but 60, I have been here, what, a year and

3 a half, Kevin, and I don't think we have ever gone more

4 than 60 days without a meeting.

5 MR. MULLALLY: I don't believe and I have

6 been here for every meeting, and I don't believe the

7 Commission has ever gone more than 60.

8 COMMISSIONER HINRICHS: And that is why I

9 think 60 seemed like a reasonable number since we

10 do.

11 MR. CHAIRMAN: Certainly.

12 COMMISSIONER GANT: Are you --

13 COMMISSIONER HINRICHS: I would propose an

14 amendment that it be 60 days rather than 90.

15 COMMISSIONER GANT: I will second. And I

16 have got a question, too. Here, I read that -- in

17 here that it be ratified by a certain majority of

18 the Commission at a public meeting, shouldn't that

19 say at the next public meeting instead of at public

20 meeting?

21 MR. BUSHMANN: It certainly could say

22 that, that would be your choice.

23 COMMISSIONER GANT: See where I'm -- see

24 where I saw --

25 MR. BUSHMANN: Yes, sir.

CROSS REPORTING SERVICES, INC. (816)252-8883

1 COMMISSIONER HINRICHS: If you are making

2 a motion to amend it I second that.

3 COMMISSIONER GANT: I so move.

4 MR. CHAIRMAN: Is there any other

5 discussion? If not, could we have a motion to put

6 those two amendments in there for approval of the

7 entire 45-1.020.

8 COMMISSIONER HINRICHS: I would so move.

9 COMMISSIONER GANT: I will second.

10 MR. CHAIRMAN: If there is no other

11 discussion would you call roll?

12 MS. FRANKS: Chairman Bartch?

13 MR. CHAIRMAN: 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: By your vote you have adopted

21 proposed amendment 11 CSR 45-1.020 as amended.

22 MR. BUSHMANN: On 11 CSR 45-10.030,

23 licensees' duty to report and prevent misconduct,

24 you may remember that some time ago the staff

25 proposed a rule amendment requiring licensees to

CROSS REPORTING SERVICES, INC. (816)252-8883

1 take reasonable actions to safeguard assets and

2 information, as well as to follow the orders of

3 Commission persons -- or excuse me, Commission

4 employees pertaining to gaming. During the public

5 comment period several industry members expressed a

6 grave concern with this rule, and after further

7 discussion this Commission withdrew the rule in

8 order to rewrite it. The amendment before you today

9 is the revised version, which has been edited and

10 streamlined to address the industry's concerns. The

11 provision relating to complying with orders has been

12 removed, and the assets and information provisions

13 were simplified to require licensees to take

14 reasonable actions to safeguard assets and

15 information. Examples of these kinds of actions

16 would be closing doors, locking compartments and

17 securing keys. And the staff recommends that this

18 new amendment be approved.

19 COMMISSIONER GANT: Mr. Chairman, I move

20 that 11 CSR 45-6.030 are withdrawn at this time.

21 MR. BUSHMANN: That is the next one, sir.

22 We were on 10.030.

23 COMMISSIONER HINRICHS: 11 CSR 45-10.030?

24 MR. BUSHMANN: Yes, ma'am, that is the

25 one.

CROSS REPORTING SERVICES, INC. (816)252-8883

1 MR. CHAIRMAN: Do we have a second?

2 COMMISSIONER GANT: You got me.

3 COMMISSIONER HINRICHS: Second.

4 MR. CHAIRMAN: Could you please call the

5 roll.

6 MS. FRANKS: Chairman Bartch?

7 MR. CHAIRMAN: Approve.

8 MS. FRANKS: Commissioner Hinrichs?

9 COMMISSIONER HINRICHS: Approve.

10 MS. FRANKS: Commissioner Gant?

11 COMMISSIONER GANT: Well, having been

12 corrected, I still approve.

13 MS. FRANKS: Commissioner Hartsfield?

14 COMMISSIONER HARTSFIELD: Approve.

15 MS. FRANKS: By your vote you have adopted

16 proposed amendment 11 CSR 45-10.030.

17 MR. BUSHMANN: Now we are on 6.030 and

18 that is firearms on the riverboat. The House bill

19 known as the concealed weapons bill that passed over

20 the Governor's veto last fall contained a provision

21 that addresses taking firearms into casinos in

22 Missouri. That provision stated that firearms may

23 not be carried into casinos without the consent of

24 the owner or manager of the casino pursuant to rules

25 promulgated by the Gaming Commission.

CROSS REPORTING SERVICES, INC. (816)252-8883

1 Because of this language, on October 28th this

2 Commission adopted a proposed amendment to that rule

3 that described how an owner or manager of a casino

4 can give that consent.

5 The concealed weapons bill is not now in

6 effect because of an injunction issued by a circuit

7 court in St. Louis. That case, which is Alvin Brooks

8 versus State of Missouri, et al., was appealed to

9 the Missouri Supreme Court, and is set to be heard

10 by that court tomorrow, January the 22nd. The

11 court's ruling will come at some point in the future

12 on whether the law will be allowed to go into

13 effect. In the meantime, however, our proposed rule

14 is ready to be made final. Since the law underlying

15 this amendment is not in effect, it would be

16 inappropriate to proceed with the rule change. At

17 the time the amendment was proposed, we were

18 attempting to get a quick start on compliance with

19 the new rule -- excuse me, new law, and didn't know

20 that it would be hung up in court for such a long

21 time. At this point, the staff recommends that the

22 rule be withdrawn, pending the outcome at the

23 Supreme Court. And if the law is allowed to go into

24 effect, we will come back to you at that point with

25 this rule amendment.

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1 MR. CHAIRMAN: Motion?

2 COMMISSIONER HINRICHS: Move to approve

3 final order of Withdrawal 11 CSR 45-6.030.

4 COMMISSIONER GANT: Second.

5 MR. CHAIRMAN: Any other discussion? If

6 not, please call the roll.

7 MS. FRANKS: Chairman Bartch?

8 MR. CHAIRMAN: 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: By your vote you have adopted

16 final order of Withdrawal 11 CSR 45-6.030.

17 MR. MULLALLY: Mr. Chairman, the final

18 item on the agenda is a report on the Kansas City

19 area gaming market. And financial analyst Jim

20 Oberkirsch will make a presentation.

21 MR. JIM OBERKIRSCH: Good morning, Chairman

22 and Commissioners. In lieu of a short meeting Kevin

23 said I could have an hour, which is not quite enough

24 time but I will see what I can do. We thought we

25 would give you the initial numbers coming out of the

CROSS REPORTING SERVICES, INC. (816)252-8883

1 Kansas City market to kind of color your upcoming

2 visit to the Argosy Casino.

3 As you know, Argosy recently expanded

4 their casino. They spent about $110 million, which

5 added about 50 percent to the current gaming

6 capacity. They used to work off of a three level or

7 a three-deck boat, which was one of the last three

8 boats operated in the State of Missouri. But now

9 they are on one level -- it is really a deck

10 suspended, it is in water, but it is a deck

11 suspended to the floor, to a base. So it is kind of

12 an unusual architectural design. They have got

13 about 2,000 slot machines now which is almost double

14 what they used to have and some additional

15 restaurant amenities.

16 The Kansas City market, as you see on this

17 chart, is doing about $614 million in annual gaming

18 revenue. And it has been stuck at that level for

19 about six to eight months, and it has been stuck

20 there despite a high promotional -- a high level of

21 promotional activity in the market, and it has been

22 stuck there despite some smaller expansions. I

23 think Isle of Capri added 400 slot machines not too

24 long ago and Ameristar rolled out some significant

25 restaurant portfolio.

CROSS REPORTING SERVICES, INC. (816)252-8883

1 Nevertheless, we think that the Argosy

2 expansion is going to add about $31 million to the

3 overall market in the next year. And that is just

4 due to the expansion, not anything else that could

5 happen over the next year. So that is about a five

6 percent growth. And since it is -- and since it is

7 new growth, it is new taxes to the state and the

8 local communities to the tune of about $8.4 million.

9 Now, that 5 percent growth rate is a little bit

10 conservative there, I think it could be a little

11 higher than that.

12 But now I would like to move on to what

13 that is actually doing to Argosy. Argosy's 2003

14 gaming revenue was $96.4 million. And they also

15 have been in that range over the last year and

16 actually recently declined due to the construction

17 associated with the expansion. And they are going

18 to realize the benefit of the overall market world

19 of $31 million. We also think they are going to

20 realize some additional revenue coming from the

21 competitors in the market to the tune of about

22 $18 million. So we think over the next year they are

23 going to show a gaming revenue of about $145 million,

24 which is about a 50 percent increase over what they

25 are doing now.

CROSS REPORTING SERVICES, INC. (816)252-8883

1 So they are going to get some significant

2 benefit out of the 100 plus million dollars they are

3 spending. Prior to the expansion they only had

4 about $90 million, so add $110 million to that, it is

5 a rather significant amount.

6 You will see on the second chart, kind of

7 shows how the market share is going to adjust due to

8 the expansion. You really had Ameristar -- prior to

9 the expansion you had Ameristar and Harrah's vying

10 for the top two spots. Ameristar recently took the

11 lead due to their expansion. Then you had Isle of

12 Capri and Argosy battling off for the bottom two

13 spots, and their market share was roughly around 15

14 percent. Now Argosy is going to jump to about 22.5

15 to 25 percent. Isle of Capri will remain where they

16 are. So things have come together in general, but

17 you know how -- in the market. That is about all I

18 have. I couldn't use the whole hour, but I will

19 take any questions you might have.

20 COMMISSIONER GANT: When is their grand

21 opening, the last of this month? I saw something in

22 the newspaper.

23 MR. OBERKIRSCH: Right. From a marketing

24 prospective they usually like to wait until all the

25 wrinkles are ironed out with regard to an operation

CROSS REPORTING SERVICES, INC. (816)252-8883

1 before they have their grand opening, their

2 advertised grand opening. You're right, I think it

3 is later this month, but they opened December 10th

4 on their new facility. I think the boat is still

5 there, you can really see the contrast and what

6 patrons had to deal with prior to the expansion. It

7 was a three-deck boat, low ceilings, very smoky.

8 MR. CHAIRMAN: How much have they talked

9 about or are they concerned with or are they even

10 concerned at all with Wyandotte County and the State

11 of Kansas if they ever get their act together, which

12 they are trying, what effect it is going to have

13 on Argosy, probably more than the other boats?

14 MR. OBERKIRSCH: Certainly more with

15 compared to Argosy than the other boats. We haven't

16 put any hard figures to that. The proposals coming

17 out of Kansas are too widespread to really try to

18 nail down what could happen. We would rather wait

19 and see something start to formulate, but then Kevin

20 will certainly want to know what the impact will be

21 to Missouri and we will certainly report to you on

22 that. Right, Kevin?

23 MR. MULLALLY: Yes.

24 MR. CHAIRMAN: You know, we read what is

25 said in the paper, Kevin, but what are the chances

CROSS REPORTING SERVICES, INC. (816)252-8883

1 that Wyandotte County and Kansas will actually do

2 something in this area, over by Cabela's or

3 whatever?

4 MR. MULLALLY: Yeah, I mean, it is just

5 incredibly hard to judge, I mean, you know, frankly,

6 Rick Alm probably has a better idea than I do about

7 what the percentage chances are. But it is -- I'm

8 not real in tune with Kansas politics. They have

9 been talking about it for so long that sometimes you

10 get a little jaded with it. But at least I think

11 there are some observers that think there is a

12 better chance this year than in the past. They

13 certainly have the aggressive support of the

14 governor for something.

15 MR. CHAIRMAN: Well, they see it as a

16 source for their revenue problems.

17 MR. MULLALLY: Yeah.

18 MR. CHAIRMAN: Is one reason why it --

19 MR. MULLALLY: Well, in addition to that,

20 I think there is a lot of development out there that

21 has been fairly successful. And they would like to

22 see the momentum keep going. And they think that a

23 casino could be a good part of that. Again, you

24 still have a lot of Kansans with their values who

25 don't see that as something they would like in their

CROSS REPORTING SERVICES, INC. (816)252-8883

1 community, which is what had prevented it in the

2 past.

3 MR. OBERKIRSCH: Thank you very much.

4 MR. MULLALLY: Mr. Chairman, the only

5 thing I have left is just a couple of

6 acknowledgments. He is not here today, but I think

7 I would be remiss if I didn't at least mention in

8 the public session. Larry Buschjost, one of our

9 gaming enforcement managers, is retiring at the end

10 of next month, I believe. But he was absolutely

11 instrumental in getting the Argosy Casino opened.

12 He spent many, many nights away from home here and

13 working late hours and extra time to make sure that

14 we had proper regulatory oversight and did a lot of

15 the slot -- a lot of gaming device work there.

16 We had a retirement celebration for him at

17 the office, but I thought I would acknowledge him in

18 front of you as well.

19 MR. CHAIRMAN: Certainly we congratulate

20 him and I hope his retirement is nice.

21 MR. MULLALLY: He has got about eight of

22 them.

23 MR. CHAIRMAN: And thank him very much.

24 MR. MULLALLY: He has retired from the

25 patrol and a number of institutions along the way.

CROSS REPORTING SERVICES, INC. (816)252-8883

1 But I thought I would also acknowledge two new

2 lieutenants that we have with us today, Lieutenant

3 Keith Johnson, you heard from today, he is going to

4 be in charge of the background unit. We also have

5 Lieutenant Tim McDonald -- raise your hand. He just

6 joined us several weeks ago and he is going to be in

7 charge of administration as well as other duties as

8 assigned. So they have quickly adapted to their new

9 environment and are doing well.

10 We had the first of what is going to be

11 regularly scheduled meetings with the Colonel,

12 Colonel Stottlemyre, at Patrol headquarters. We

13 are going to meet once a month with Captain

14 Bloomberg and other key Patrol staff.

15 Lieutenant McDonald was there at the last meeting.

16 And so we think those will be very productive and

17 fruitful and help improve the communication between

18 the Commission and further augment what has been an

19 excellent working relationship over the years.

20 MR. CHAIRMAN: Kevin, I saw in the paper

21 where Senator Bartle introduced legislation to raise

22 the admission or mandatory admission of $5 a person

23 at such, although I don't think it will have a great

24 deal of chance of passing. Are there any other

25 bills in there that would affect the gaming

CROSS REPORTING SERVICES, INC. (816)252-8883

1 situation in Missouri?

2 MR. MULLALLY: Yes, there are several.

3 Harold Bailey will be preparing a legislative

4 tracking report and forwarding it to you. We are

5 kind of waiting today. The governor introduces his

6 State of the State address. There is some

7 speculation that there will be casino taxes and

8 other gaming legislation as a part of that. So we

9 will be forwarding your report, you know, I don't

10 know how much chance any of those things have of

11 passing, but I'm sure there will be a lot of

12 discussion again this year.

13 MR. CHAIRMAN: Has it been introduced on

14 the loss limit, this session --

15 MR. MULLALLY: I think there is a loss

16 limit bill already introduced. There are three or

17 four of them Harold says, so it will certainly be a

18 topic of conversation once again.

19 COMMISSIONER GANT: It will be because

20 what I heard on the radio this morning, too, was that

21 some of the legislators thought that we are going to

22 have a general tax increase, but they could look

23 toward the gaming industry to increase taxes. So it

24 is going to be an interesting session, I think.

25 MR. CHAIRMAN: Kevin, could you bring us

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1 up to date on Sigma?

2 MR. MULLALLY: Mike Bushmann would

3 probably be better to do that.

4 MR. BUSHMANN: Mr. Chairman, as you know,

5 Sigma is operating on a temporary license, which

6 this Commission has granted to them. That license

7 will expire at the end of February or I think the

8 last week. Kevin directed myself and some of the

9 Highway Patrol investigators to form a working group

10 to determine exactly where Sigma is on their

11 compliance under the settlement agreement, find out

12 exactly what they need to do to finish that. I know

13 that you are wishing to move that along, get that

14 process over with, so hopefully in the next week or

15 so we will be able to get together and communicate

16 with Sigma and find out where they are as far as

17 their compliance with other jurisdictions.

18 MR. CHAIRMAN: You know, the reason I ask

19 is I know the feeling of the Commission was wanting

20 that to be resolved and losing patience with the

21 time with Sigma themselves so.

22 MR. BUSHMANN: I received no

23 correspondence from them indicating approval from

24 those other jurisdictions at this point, that

25 doesn't mean that they haven't, they just haven't

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1 communicated anything to me at this point.

2 MR. CHAIRMAN: Do they truly realize at

3 this point that they are on limited time?

4 MR. BUSHMANN: I'm hoping so. It has

5 certainly been mentioned many times by yourself and

6 Director Mullally. So I would hope they know that.

7 MR. MULLALLY: We did receive notification

8 from the Illinois Gaming Control Board, they had

9 completed their action against Sigma which included

10 a $5,000 fine. So we continue to be the

11 jurisdiction that has proposed the harshest penalty

12 against them, at least as far as I'm aware.

13 MR. CHAIRMAN: Any other items?

14 COMMISSIONER GANT: No.

15 MR. CHAIRMAN: Do I have a motion for

16 adjournment then?

17 COMMISSIONER HINRICHS: So moved.

18 COMMISSIONER HARTSFIELD: Second.

19 MR. CHAIRMAN: Call the vote, please.

20 MS. FRANKS: Chairman Bartch?

21 MR. CHAIRMAN: Approve.

22 MS. FRANKS: Commissioner Hinrichs?

23 COMMISSIONER HINRICHS: Approve.

24 MS. FRANKS: Commissioner Gant?

25 COMMISSIONER GANT: Approve.

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1 MS. FRANKS: Commissioner Hartsfield?

2 COMMISSIONER HARTSFIELD: Approve.

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2 C E R T I F I C A T E

4 I, JENNIFER SHOEMAKER, Court Reporter, do

5 hereby certify that I appeared at the time and

6 place hereinbefore set forth; I took down in

7 shorthand the entire proceedings had at said time

8 and place, and the foregoing fifty-one pages

9 constitute a true, correct and complete transcript

10 of my said shorthand notes.

12 Certified to this __day of ______________,

13 2004.

16 _______________________

17 Court Reporter

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