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1 MEETING OF:
2 MISSOURI STATE GAMING COMMISSION
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10 MARCH 30, 2005
11 9:00 a.m.
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16 CARUTHERSVILLE PUBLIC LIBRARY AUDITORIUM
17 707 WEST 13TH
18 CARUTHERSVILLE, MISSOURI
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1 MR. MULLALLY: Mr. Chairman, I think we've reached
2 the appointed hour.
3 COMMISSIONER BARTCH: Angie, would you call role.
4 MS. FRANKS: Chairman Bartch.
5 COMMISSIONER BARTCH: Present.
6 MS. FRANKS: Commissioner Hinrichs.
7 COMMISSIONER HINRICHS: Yes, sir.
8 MS. FRANKS: Commissioner Gant.
9 COMMISSIONER GANT: Yes.
10 MS. FRANKS: Mr. Hartsfield.
11 COMMISSIONER HARTSFIELD: Present.
12 MS. FRANK: Commissioner Biele.
13 COMMISSIONER BIELE: Present.
14 MR. MULLALLY: Mr. Chairman, before we get into the
15 items on the agenda, there's one brief other matter that
16 emerged just a few days ago. This was a venue for at least
17 one of our applicants, Mr. Bill Young is here with his
18 counsel, Jerry Carmen. They are the entity that has purchased
19 the present river boat casino on the River Front St. Louis
20 and would just like to take a couple of brief minutes to
21 update you, to introduce themselves and update you on the
22 status of their franchise. So, I'll introduce Mr. Young, if
23 that's okay with the counsel.
24 MR. CARMEN: Thank you, Kevin.
25 Good morning, Mr. Chairman, members of the
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1 commission. My name is Jerry Carmen and I represent Columbia
2 Sussex Corporation in connection with this licensing
3 commission in connection to the casino and I thought this
4 morning would be an opportune time to put a face with a name
5 and introduce you to Bill Young who is the chairman and owner
6 of Columbia Sussex and just simply to introduce him to you
7 and you to us and answer any questions that you may have at
8 the present time regarding Columbia Sussex, it's intentions
9 with respect to the present casino, and it's license
10 application. So, at this time, I would introduce Mr. Bill
11 Young.
12 MR. YOUNG: Thank you for letting us speak to the
13 commission. Just thought I'd give you an update of where we
14 stand with the present casino. As you know, we are awaiting
15 licensure by the Missouri Gaming Commission. The, as far as
16 a new boat is concerned, we, the plans are all drawn, and,
17 and in fact, we've even bid out the new boat, and, obviously,
18 we're waiting on, till we reserve the eminent domain on the
19 parking lot. Our parking garage has, is, basically, the
20 preliminary plans are completed. It would take us another
21 month to complete the rest of the plans for the parking
22 garage. The mayor assures me that he's not gonna play games
23 with us getting a building permit for the parking lot. But,
24 obviously we didn't want to spend that money until the
25 parking lot issue is resolved. So, that is pretty much, you
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1 know, we're sort of at a stand still. We are going to the
2 court on Tuesday to ask the judge to enforce the agreement we
3 had that the city refused to, you know, the deal was done,
4 and, they even stopped the legal proceedings, and, at the
5 last minute, the city backs out of the deal to settle all the
6 issues, and we're asking the judge to do, make that deal go
7 through. So, that happens on Tuesday. So, if you have any
8 questions, I'd be happy to answer them.
9 COMMISSIONER BARTCH: Any questions? Thank you,
10 sir. It's kind of you to talk.
11 MR. CARMEN: Thank you, very much.
12 MR. MULLALLY: Mr. Chairman, members of the
13 commission, first of all, I want to thank the city of
14 Caruthersville for the hospitality and making this wonderful
15 facility available to us. With that in mind, the first item
16 of the agenda and the current licensure of Class A licensees,
17 the Aztar Missouri Riverboat Gaming Company would like to
18 depart a little bit from the standard agenda, and, ask Mayor
19 Diane Sayre to appear before you first, and, comment on the
20 city of Caruthersville's experience over the last decade with
21 it's casino. If there are no objections from the
22 commission.
23 COMMISSIONER BARTCH: That will be fine, thank you.
24 MR. MULLALLY: Mayor.
25 MAYOR SAYRE: Good morning. Thank you for letting
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1 me address you first. I, again, I'm pleased to have you all
2 in Caruthersville. It's a beautiful day, and we're glad
3 that you're gonna conduct business here and I'm pleased to
4 welcome you and we're always glad to have visitors,
5 especially those who are here to conduct such important
6 business as you are here with us here today. I'm proud this
7 morning to offer comments from the home dock relating to
8 Casino Aztar and it's operation in the city. As you
9 probably know, we're a small city with a population of about
10 6, 6700 hundred residents which composes about one-third of
11 the population of Pemiscot County. In 1994, when Aztar
12 first became a corporate citizen, the unemployment rate for
13 the county was 15.6 percent. The 2004 average annual
14 unemployment rate was 9.3 percent. In tough times, we've
15 been able to sustain an unemployment rate somewhat lower than
16 that of 1994, in rural Missouri a challenge continues to be
17 the creation of new jobs and the sustaining of existing jobs.
18 More specific information regarding employment data is
19 included in the tab section of a handouts which you will have
20 provided to you later. Most of the information you
21 requested of the home dock city is addressed in the tabbed
22 sections, however, I'll share a few informal comments with
23 you about the impact the casino has had on this community.
24 The Aztar Missouri Riverboat Gaming Company has a strong
25 working relationship with the city of Caruthersville. The
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1 original development agreement, contained obligation's from
2 the casino for a $3 million payment up front, with a million
3 dollar payment being paid annually for the next three years.
4 As I said to you all earlier, this doesn't sound like a lot
5 of money and it isn't in the scheme of things when you are in
6 a large city where other gaming facilities are located. But
7 for rural Missouri, this has had a definite positive impact
8 on our ability to do some things that are important to
9 enhance the quality of life here in Caruthersville. In
10 April of 1998, the agreement with Aztar was amended to an
11 annual payment of $100,000 in any fiscal year in which Aztar
12 Casino revenue is less than $30 million. In the event it is
13 more than $30 million, the payment increases to 250,000.
14 All payments are paid in quarterly installments. This
15 agreement has always been met and no issues or concerns exist
16 relative to the development agreement. Casino Aztar is a
17 very positive corporate citizen that contributes to many
18 worthwhile community projects that improve the quality of
19 life in this area. Not only have I observed their financial
20 contributions to help with local projects, but the
21 volunteerism of their crew members of helping with various
22 fund raising efforts of clubs, churches, and various fund
23 raising goes far beyond the realm. The most recent was the
24 Clete Stanfill Scholarship Benefit that was hosted by Casino
25 Aztar through the partnership of family, over $32,000 to
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1 establish an endowment scholarship fund at Arkansas State
2 University in honor of Mr. Stanfill. The success of this
3 concert would not have been possible without the leadership
4 and expertise of the casino staff, and for this, and many
5 other community wide fund raising efforts, we are extremely
6 grateful for all they do for us. I also know that Casino
7 Aztar employees are actively involved in many community
8 functions. Their presence is always there when community
9 events are scheduled. Data from the casino in a 2005
10 employee survey indicated that the crew members donated
11 approximately $61,000 and gave about 480 hours of their
12 personal time to various churches and charitable
13 organizations. Casino Aztar has had a very positive impact
14 on the overall economics of the city of Caruthersville. The
15 overwhelming impact of the casino is the creation of jobs,
16 and always has been, from the very beginning, our main issue
17 with establishing river boat gaming with the creation of
18 jobs. The casino located here when our community was faced
19 with the loss of a shoe factory which had been the major
20 employer for 50 years. We were also concerned at that time
21 with the longevity of the Trinity Shipyard being sustained
22 which employed about 500 people. So it was not by accident
23 that we felt that the gaming city could provide us with a
24 two-fold opportunity, by, first of the creation of jobs, and,
25 then, by the creation of additional revenues to the city
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1 which would hopefully be a jump start for a local economy.
2 Approximately $1.3 million annually is what we receive from
3 the river boat gaming. We use the money, primarily for
4 various capital improvements. This administration feels
5 very strongly that it's not a wise thing for the gaming
6 revenue to be used for the day-to-day operations of the city.
7 We have done fairly extensive planning to help us focus on
8 long-range goals and projects to improve the overall quality
9 of life for our residents. As you all know, the wheels of
10 progress turn very slow, slowly, but we are realizing the
11 positive effect of deliberate and persistent planning for our
12 future. We have been cautious in using the gaming revenue
13 for what I consider to be long-range capital improvements
14 projects. With the exception of the use of about 20 to 25
15 percent of the gaming funds being used for the police
16 department, other revenue is considered for major capital
17 improvements. Certainly our gaming revenue does not allow
18 us to work quickly on addressing the many infrastructure our
19 needs to a city like ours has. However, it does help in our
20 project planning to accomplish things that would not be
21 completed without the gaming revenue. A listing of how
22 these funds have been used over these years is included in
23 your booklet. Our future plans call for the gaming revenue
24 to help us complete the downtown revitalization plan which
25 includes a museum and visitor center. We realize that we
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1 have got to find ways to keep the gaming customer in our
2 community longer so that some of their revenue can be spent
3 in our local economy and not just at the gaming facility.
4 It was pretty clear to us that not too many of their guests
5 buy clothing or furniture, or hard goods such as that, so
6 we're trying to focus our efforts on tourism and opportunity
7 for more of a destination than just a brief visit at the
8 casino. Many improvements have been made through the use of
9 gaming revenue, such as new street construction, construction
10 of a new veterans park, the restoration of the historic water
11 tower, new park equipment, the construction of a new
12 sportsplex, improved technology for the library, the
13 construction of a new Humane Shelter, and, major drainage
14 improvement throughout the city. This was just to name a
15 few of the major things that we've tried to do with the
16 revenue we've received from gaming. Gaming operations have
17 had no adverse effect on crime in the community. Statements
18 from both the city's chief of police and the county sheriff
19 validate this fact. Quite honestly, with the use of gaming
20 revenue, the city has been able to increase it's police
21 protection, and to provide more and better state-of-the-art
22 equipment for our officers, which leads to more efficient and
23 effective law enforcement. We provide funding to the
24 community for the Drug Task Force, which is an across
25 jurisdictional task force which works on clandestine
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1 operations to alleviate drugs in the area, especially
2 methamphetamines. We also provide money annually to the
3 community to provide dispatching services through the
4 community to the criminal justice center. We've been able
5 to accomplish much due to the increased revenue from the
6 casino. We, we have more yet to be done, and we are pleased
7 to have the positive working relationship with your chosen
8 gaming operator and we look forward to continued progress for
9 our communities and the area in the future.
10 In regard to the Section 31382 of Missouri
11 statutes, Casino Aztar does have in place an alternative
12 action plan. And it appears that they re-committed to
13 providing equal employment opportunity to all crew members
14 and applicants. To my knowledge, Aztar is in full
15 compliance with all applicable laws relating to affirmative
16 action, and we are also well aware that as to the water front
17 development, that as it continues to expand, we too would be
18 subject to all of the affirmative action criteria.
19 Certainly the city has no revenue sharing agreement with any
20 adjoining political subdivisions for the county. As I have
21 stated to this commission before, the voters of Pemiscot
22 County defeated the gaming issue in November of 1993. And,
23 likewise, the county has assumed none of the risks, or cost
24 of infrastructure improvements associated with the gaming
25 located within the city. It was the voters of the city of
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1 Caruthersville who favorably voted to allow river boat
2 gaming, and due to that, the county and the schools are
3 receiving additional taxes due to the location of the gaming
4 boat here. At the current time it is the consensus of the
5 city leadership that we have substantial needs of our own,
6 such as fulfilling long-range capital improvements for the
7 downtown revitalization. The cost of these improvements
8 would be funded through the use of gaming revenue, until we
9 have completed the necessary improvement of our city. It
10 would be difficult for us sharing the revenue with any other
11 political jurisdiction. In the future, the city would
12 perhaps be agreeable to sharing revenues, but so long as we
13 have documented needs of our own, they will improve and
14 enhance the quality of lives for our residents.
15 In closing, I am pleased that you have been able to
16 schedule your meeting here in Caruthersville. I hope you
17 have enjoyed your short visit with us, and I have made a
18 point that the Gaming Commission in Caruthersville has made a
19 positive impact on the city. The working relationship with
20 the casino is strong, continues to be strong, and we look
21 forward to continue such a positive relationship with them in
22 the future. Again, I hope you enjoyed your visit and I hope
23 your meeting today is productive. Thank you.
24 Do you have a --
25 COMMISSIONER GANT: I have a question. I'm
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1 interested in younger people, I think, that would keep them
2 busy, or, so they won't get in trouble, and we won't have to
3 have them in court and penitentiaries. What's your
4 sportsplex, is it a baseball field, basketball field, or what
5 does it involve?
6 MAYOR SAYRE: We have a quad sports plex, which
7 takes, we have soccer, baseball, and, girls and boys leagues.
8 We have a multi-million dollar recreation center with an
9 olympic-size swimming pool, basketball, racketball, and a
10 gym. We also have other things throughout the community to
11 enhance the youth. I'm a retired school administrator,
12 worked in the public school for 33 years, and, too, we, we
13 too share that same feeling, that the future, and our most
14 precious asset is our children and see to it that they have a
15 positive quality community in which to live and hopefully
16 return here after they return to higher education.
17 COMMISSIONER GANT: I'm glad to hear that.
18 Because, I've heard from other communities, but they didn't
19 build a sports plex and other things, but I'm glad you did
20 that and I'm sure it will be very beneficial.
21 MAYOR SAYRE: Thank you.
22 Other questions?
23 COMMISSIONER BARTCH: Thank you, Mayor. Obviously
24 you have the support of the casino here in the city and help
25 your city to do what it needs to do to create a better
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1 quality of life for your citizens, and I think that's what we
2 look for and for your support, and, that you like them being
3 here.
4 MAYOR SAYRE: Thank you. Good day.
5 MR. MULLALLY: Mr. Chairman, at this time I'd like
6 to ask George Stadler to make a presentation on behalf of the
7 applicant, Aztar of Missouri River Boat Gaming.
8 MR. STADLER: Good morning. Well, I can honestly
9 say out of the four out of five relicenses, I've gone before
10 the mayor, and usually when I get out to the car, she says
11 you said everything I wanted to say and I've got to listen to
12 her all the way home, and I guess, touch off, it's right back
13 at me. In the packet I have before you, I provided three
14 photographs with being the first trip down here, and,
15 Commissioner Biele, you might remember the first photograph
16 from the book. The first photograph is what the property
17 looked like before the Aztar came from the old Tipton Box
18 Company. The second photograph is when we were open and the
19 construction of the pavilion is going on and we were
20 operational at that point, and the boat, it's a great picture
21 because we were cruising at that time and going by the
22 guideline. And the third picture is what we look like now.
23 And, Steve, this is the catfish fry that we've been trying to
24 get you down here for, so we fed about 2600 people down there
25 in the amphitheater and showed our new RV park which is doing
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1 great, and this is what we've become and it's really a joy
2 over the nine years that I've been here to watch it happen.
3 So I'm real proud of those pictures and I figured it would be
4 nice to have those for keepsakes. With me, with me today, I
5 have members of our executive committee, I'd like to
6 introduce them. First, Joann Jones, director of marketing.
7 Lyle Randolph, director of casino operations. Denny Callen,
8 director of operations. Shayne Hollomon, controller. Jeff
9 Lawrence, director of surveillance. And Lisa McMahon,
10 marketing manager. I'm real proud of them. Also, I have
11 Thomas Starks, captain in security, and he's also in charge
12 in all of our safety, not only just of our land-based
13 operations, but our river-based operations. And I'm real
14 proud of his efforts. Thank you.
15 I'm gonna go back through a little bit of where
16 we've been and I always like to show this page, and, again,
17 talking about in 2003, in 2003, be page 4 of the book, 2003,
18 we experienced a 4.1 percent decline in casino revenue and a
19 6.9 percent decline in cash flow. This downturn can be
20 attributed, to a depressed agricultural industry and the
21 beginning of the Gulf War which was quite notable at the end
22 of the first quarter. 2004 we experienced a slow start.
23 However, two things changed. The local farmers experienced
24 their best and most profitable year out of the last four.
25 And, electronic boarding and bill validators were finally
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1 active with the install of the Loss Limit software. And by
2 the time we got to October, that's really been the number one
3 thing to show the difference in our operations. These two
4 items provided us with a record fourth quarter and returned
5 us to 2002 operating levels. Even though we still have not
6 generated a profit on our $61 million investment on our
7 project here, for the year of 2004, net income loss was just
8 over $4.8 million. This amount was inclusive of all debt
9 service and management fees. We recognize that the property
10 is still not generating a return, but we continue to project
11 many efforts from the management team to improve our
12 financial performance. In to the development agreement with
13 the, the mayor has already explained, which is on page 7, you
14 know, our goal here is quite simple, to get this option to
15 $30 million. When we made that agreement, we really
16 thought, with things like the removal of the loss limit and
17 automatic boarding fee, we would get there. They are on our
18 way to a record year this year, and, again, not talking about
19 performances, but we're shooting for 26 million. 27 million
20 is also where I think the loss limit comes in. We're gonna
21 get to 30 million and that this development agreement goes up
22 to $250,000, and the mayor and I have a goal to make sure
23 that happens.
24 On AGR projections versus actual ACR, there's a
25 graph there showing 46 million versus an actual in yellow,
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1 it's 44 million, and, again, on our last recorded million, we
2 were around 46 million, so it just shows how much we were
3 affected in 2003. Farming is, is just such a factor down
4 here, especially in gaming table business where in the city
5 you don't notice, but farming does impact us.
6 Projected admissions of 1.5 million, and, just
7 about 1.5 million, about the same, and we were about 1.573
8 the prior year. Capital investment, our average capital
9 investment was 52 million for the years of '96 to 2002, and
10 we put in 6.3 million. Over 2003 and 2004 we have put in
11 just under 1.5 million in each one of these years, and our
12 projected capital investment for 2005 is at 1.5 million. So
13 we kind of upgrade our, our property as we move along.
14 Employment. At Casino Aztar we employ, employer
15 for 350 people. That little astriks is inconclusive of
16 Corky's and some of our outside functions of our crew
17 members. 266 are full time, 33 are part time, and of these
18 crew members, 150 or 56.4 percent, have more than five years
19 of service. That same figure, and when I reported three
20 years ago, was about 46.3 percent. Now, with tenures, we
21 have 70 hitting the tenure mark here, and have others coming
22 up at the end of this point, which calculates 26.3 percent
23 with our tenure, which in this city is a huge number, and
24 average compensation is $29,132 which is a 5.6 percent over
25 the prior licensing period, we're pretty proud of that as
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1 well. With employment demographics, I have it broken down
2 into both years. But, roughly, it still remains that 80
3 percent come from Missouri, 15 percent from Tennessee, and 5
4 percent from Arkansas. And, we still remain very proud of
5 our females and minority employees. Our female rate is 60
6 percent and the minority is at 25 percent. I have a graph
7 on the next page showing exactly those facts. And the
8 following graph shows the female to male ratio. On the
9 following graph there on page 20, employment demographics, we
10 are at 74 percent non-minorities, 25 percent, and one percent
11 hispanic. And, they are very compatible along with what the
12 county is. The county presently is at 71.8 non-minority, and
13 26.2 non-minority, and 26.2 other, which also includes
14 Hispanics, so we're right along with the guidelines of the
15 population of the county. Our turnover rate for 2003, we
16 are at 46.1, and for 2004, 47.3. Again, we do experience
17 turnover on the lower end of our employment scale. We are
18 under constant competition for departments like engineering
19 which probably went for four or five years with zero percent
20 turnover. This past year we, year we lost four which, of
21 course, we lost these people to higher paying jobs in other
22 states, and, you know, it's quite understanding, we hired
23 these people in at minimum wage and we got them up to 10 or
24 $11 an hour, and they're able to go to Arkansas or Tennessee
25 and make 14 or $15 an hour, they still live in the community,
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1 but they drive to Arkansas. Affirmative action plan, we are
2 in full compliance with everything set forth in the plan.
3 That's never been an issue. The mayor has touched base on
4 it, but we follow it to a tee and we're very proud of that as
5 well. Unemployment rate for 2003, again with that downturn I
6 talked about in the beginning, we popped up, we popped back
7 up to 11.6. This year we're at 9.3. Unfortunately, I wasn't
8 able to get the information for November and December, it
9 wasn't released yet this year, which was comparable to 2001.
10 But with things like the Gulf War and the downturn in farming
11 can affect those issues. Use of majority contractors,
12 remains, remains a difficult thing down here. We have
13 improved with, it's up to $92,000 worth of purchases. Our
14 last reporting period we were around $77,000. We are, we
15 have improved and it continues to do so. Sez Sew leads the
16 way and they do a great job for us out of Dyersburg,
17 Tennessee. Total purchase in Missouri, out of our purchase
18 of $7.7, 34.7 percent were made in Missouri which is somewhat
19 of an increase. Again, we're up against, and I have some
20 economical -- simple things like Coke and Sysco and Turner,
21 and they're billed to one state and serviced out of another
22 state, and not in Missouri and, again, I have a list where
23 the, where it does list the vendors we use. Crime rate is
24 the major issue reported. There's been no significant, here
25 is the chart with the actual index. I always like to include
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1 the 12 prior years as well, but it shows a major improvement
2 in the city itself.
3 And the next page is the county, with the pain
4 improvement in violent crimes being down in the county
5 itself. But, again, talking with both the police chief and
6 the sheriff, there's been no significant increase there.
7 Problem gaming. We take it, we take it very
8 seriously and we've made a few changes that I'll point out as
9 we go through. But, again, I think we're in full compliance
10 with everything to do with problem gaming where everything is
11 posted, our BETSOFF phone number, the STEP program. The we,
12 the way we train our staff, and so on and so forth. I think
13 we do a great job. Obviously we do participate in
14 Responsible Gaming Week. We've taken that a step further,
15 down here and all the casinos we play a video during that
16 week and talk about responsible gaming. We've included that
17 in our lobby and a piece of that is going each month on
18 what's going on around the casino each month and we, we're
19 real proud, because we think it was something that needs to
20 be dealt with and we recognize that people can have a problem
21 with gaming. Moving onto page 38, we do still contribute one
22 cent of every admission, which roughly comes up to about
23 $15,000, and, as well, about 25 of MRGA goes to fund the
24 BETSOFF line and roughly 32,000 around there, so we do a
25 substantial contribution there to fund that line.
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1 Disassociated programs, Dissociated persons program
2 or DAP, we have finally entered into electronics with
3 everybody else, so it makes it a lot easier and from the
4 manual reporting we had to do before, and from everything we
5 need to track and don't get through turnstiles and everything
6 else that you're familiar with, but our system is with the
7 rest of the casinos now, not the manual system that we had
8 before. On the next page, we made a switch, we had our own
9 program where if someone came to us and wanted to be barred
10 from the casino, we made a decision about two years ago, and,
11 not to do that. If somebody says, look we want to be band,
12 we sent them right down to the office. We do believe this
13 does not include someone that is removed from our bar and so
14 on and so forth, or anything that does not have too do with
15 gaming, but anything to do with gaming, that's the only
16 operation, they go, and we do not have anybody left on our
17 program that we originally have in place before DAP.
18 Underage gaming, we take it very seriously. You
19 know, in the I.D.'s that are validated, no I.D. you don't get
20 on, and we just follow all the rules and regulations and
21 that's the way it should be.
22 As well on the next page, with our service of
23 alcoholic beverages, you know, security, and beverage and
24 casino supervisors are with a casino supervisor are certified
25 in the TIPS program. We presently have two instructors own
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1 our payroll now.
2 There's been a significant job increase, which a
3 lot of people that live in this community work there's been a
4 significant increase in jobs with two Missouri corporations,
5 Segal & Roberts, which employees almost 1100. They are in
6 the business of making parts for GM and such. And then
7 Nordyne is up to 400 employees. Nordyne has took the place
8 of last year, or two years ago, 4,000 jobs were lost in the
9 tri-state area. One of the biggest was Dyersburg Fabric
10 which employed 400, and, Nordyne has taken over their
11 factory, which employee 400 and they expect to be up to 800.
12 In Arkansas both Nucor and Maverick, which three years ago
13 were experiencing some downturn, Nucor is one of the most
14 booming companies in the country now. Their work force is at
15 about 2300 and their pay scale is excellent.
16 Charitables. As Diane has, the mayor has
17 eloquently put it already, we've made 152 separate donations
18 during this licensing period which total about $36,000 cash,
19 excuse me, this is just for 2004, and 4800 in kind, for a
20 total of about $40,800. We continue to support the local
21 Chamber of Commerce, and especially the one here in town.
22 Two things have changed that we're pretty proud of. Diane
23 has already talked about the Cleat Stanfill Benefit Concert
24 so I'll leave that alone, and the other thing that we've been
25 working on is Boss Hog's Motorcycle Rally which produced over
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1 in Dyersburg, it was a, motorcycle 350 CC engine on it, a
2 Corvette engine, and it's something that has a price of about
3 $35,000 to start out and most of them are about 65,000.
4 We've been working with the owner of the company. He's
5 always down the rally somewhere else, and the last year was
6 the first year to being this back to this area. Our property
7 was used last year in conjunction with the Shirners of
8 northwest Tennessee to host that. We were able to raise
9 $40,000. All of that money did not go to the Shriners
10 Hospital in Memphis, it went to the Shriners Hospital in St.
11 Louis. Diane has again talked about the other new program
12 that we've kind of played around with for a few years with
13 but we finally went ahead and did it. That every crew member
14 in good standing, his child or her child can go to college,
15 and we're providing all kind of scholarships. A lot of them
16 had to do with, we've no qualifiers on this scholarship, and
17 the reason we put no qualifiers on it, because we realize a
18 lot of these kids aren't meant to go to college. They go,
19 they can go to a trade school or vocational school, and, we
20 have, this is a big thing, and we presently have four
21 students that can receive this scholarship this year and we
22 hope that is going to do it.
23 Employee volunteer efforts, there's a list of
24 everything here that we are involved in and all of the
25 different, all of the different charities and clubs and so
23
1 forth. And as Diane mentioned, we did, we do a survey down
2 here each year on our own, and we do it in conjunction with
3 the charities in the state each year, and we are pretty proud
4 of the fact that we get 98 percent of our crew members to
5 respond, and it's just amazing when you get it back in and
6 add it all up and you see what it turns into $61,000 and 480
7 hours of their own time is given back to the community. And
8 I think it has to say a lot about what works here and the
9 people that are in this community. You know, presently our
10 management team, there's only two managers, and I think I
11 have said this before, and I'm not sure, but I presently have
12 two managers that weren't born here or raised here. It's
13 quite a simple fact, I know one of them, and everybody else
14 in the management team has a tie to this community, and they
15 had jobs before that produced X amount, and knew they're
16 pretty able to provide for their families, and they want to
17 give back to the community in which they live, and that is a
18 far cry from when I got here in the community.
19 Future development, they told me this is my hammer,
20 but it's a pretty good hammer and I like it. We are again
21 planning on spending $1.5 millin on slot products, table
22 games, new shufflers, extensive remodeling, which part of it
23 is underway right now, which all the decks in the boat and so
24 on and so forth. In fact, I think with our carpet laying
25 situation, we didn't have it in our lobby last night, but I
24
1 can assure you it's in there this morning, and, upgrade in
2 computer systems, and then obviously keeping up with the
3 surveillance camera upgrades. So it's going on pretty well.
4 In closing, we believe Casino Aztar has made a
5 difference in southeast Missouri by investing more than $61
6 million, employing 350 crew members with a payroll of $7.7
7 million, spending millions of dollars with local vendors,
8 paying fees to the state of Missouri and city of
9 Caruthersville. We are still, and I mention this all the
10 time, we're up against severe competition, not from within
11 the state, but Mississippi and Illinois. Mississippi with
12 effective tax rate of 14 percent, they continue to market our
13 customers in Tennessee and Arkansas. Mississippi and
14 Illinois, as they continue to attract our customers who just
15 simply don't want to hassle with the $500 loss limit.
16 Presently 33 percent of our customers come from the
17 state of Missouri, 32 percent from Tennessee, 19 from
18 Arkansas, and excuse me, 16 percent from Arkansas, and 10
19 percent from the rest. We just, quite simply, depend on
20 out-of-state customers, and they just don't get it, and, I
21 think this year we're hoping there might be some movement
22 along that. If the Loss Limit is removed with no increase in
23 taxation on less than $30 million, Aztar would be in a
24 position to evaluate the additional capital investments.
25 That includes a land based casino, hotel, RV park expansion,
25
1 and, again, we have 35 acres there, the sky is the limit.
2 We have plenty of ground and other ground around the casino
3 that is also available for future expansion. We have
4 continued to comply with all mandated statues, regulatory
5 laws, rules, resolutions and to meet or exceed al goals and
6 expectations placed upon us. We will continue to exercise
7 our diligence in our compliance and goal attainment effort in
8 the years ahead. We will proceed with conviction,
9 determination and good faith, and with the guidance and
10 counsel of the Missouri Gaming Commission. I am especially
11 proud of our relationship with MGC and with our Boat Sergeant
12 Fred Howard who I have had the pleasure of working with, and
13 his crew that monitors the property on a day-in-day-out
14 basis. It was a sheer joy to do business with them.
15 We are committed to making decisions necessary to,
16 in order to maximize our shareholders return on this
17 investment and provide maximum returns for the City of
18 Caruthersville, the State of Missouri, and its residents. We
19 are committed to following a strategic plan that ensures
20 long-term viability of our asset in Caruthersville.
21 Upon review, I feel we have met the requirements
22 set forth in the statutes and should be found suitable for
23 re-licensing within the state and I thank you.
24 COMMISSIONER BARTCH: Any questions?
25 COMMISSIONER HINRICHS: I have a question. You've
26
1 done very well with regard to female employees, but looking
2 at the key persons and Level I --
3 MR. STADLER: Yes.
4 COMMISSIONER HINRICHS: I think you could do
5 considerably better.
6 MR. STADLER: Well, we are a small propriety, we are
7 seven Level I's, which we have one female. I don't need a
8 calculator to figure out this percentage, but the thing is
9 our management team, 51 percent are women, and in key
10 positions, a lot of these women are behind folks that are
11 sitting here. This management team has been in place for
12 ten years with very little turnover at the top. I know when
13 I arrived here it was, I can honestly probably say it was
14 less than 10 percent, and I do not put them in management
15 because they were women, I put them in because they were
16 doing the best job. And we worked up in some departments so
17 strong it's unbelievable, things like accounting, which we
18 could not keep anybody. The two people behind my controller,
19 unless he wants to raise his hand and he can leave, are both
20 females, and we are providing for their education so they can
21 get degrees, which they were unable to do on their own, so we
22 do take that serious. We have one position that we put up
23 this year for aid, which did not get approved, and that
24 gentleman has moved on and we did not replace that position.
25 I think also, if you maybe ask my secretary, she says that
27
1 she runs the place. I know that women actually rule, and
2 that's okay.
3 COMMISSIONER HINRICHS: But they don't get paid to
4 rule.
5 MR. STADLER: Well, the second highest paid person
6 behind me is Jo Ann Jones, and she is the second highest paid
7 besides me and she started here as a secretary, was our first
8 hire, she's been wanting to retire for a year and a half now
9 and I keep stretching her out, but I cannot keep her away
10 from the daughter and the grandkids, so she will be moving to
11 Nashville, which is where she came from. And she is the
12 second highest --
13 COMMISSIONER HINRICHS: Well, I'd like to see, and,
14 this is my soap box, and --
15 MR. STADLER: I know.
16 COMMISSIONER HINRICHS: More key persons, well, in
17 the Level I persons also.
18 MR. STADLER: Well, I have another one right behind
19 me there in Lisa.
20 COMMISSIONER HINRICHS: Well, I think two names
21 there, Linda and Lisa in the list of key and Level I.
22 MR. STADLER: Lisa and Jo Ann.
23 COMMISSIONER HINRICHS: Pardon me.
24 MR. STADLER: Linda and Lisa.
25 COMMISSIONER HINRICHS: This is the only one at
28
1 Level I.
2 MR. STADLER: Yeah, she's in compliance of our --
3 COMMISSIONER HARTSFIELD: I have a couple
4 questions. First, I want to compliment you on the
5 scholarship. I think so often we make those purely
6 scholastic scholarships, and, so, we forget that you can have
7 a good future in different schools.
8 Do you know how your employee turnover compares to
9 the gaming institute in general?
10 MR. STADLER: I think in many cases we're far better
11 on the gaming institute. I'm not sure with the exact numbers
12 in the state, and I just know that with our retention rate
13 based on numbers out in Nevada if they're in here, they're
14 high for our company and just the whole amount. Obviously,
15 when your industry in markets like Atlantic City and Las
16 Vegas, you, I think when you move around, you do see a lot,
17 we do have the turnovers. Another area which I failed to
18 mention is table games. We do not have trained table game
19 staff around there, therefore, we have table game schools.
20 We provide those schools free of charge. Last year off of
21 top of my head, we probably spent 10 to 12 thousand. That's
22 a very conservative number providing schools. We put people
23 in these schools for six weeks. Typically in other
24 jurisdictions, they provide between 500 and 1500 for ALI.
25 Once we get them trained, you'd be surprised how many of them
29
1 jump ship, because in Mississippi they can make $12 more an
2 hour, and, I don't, we make them pay us something, they don't
3 stay long enough, but, that's another factor, where we have a
4 higher opportunity over, all and all, I'm happy with that 50
5 percent that we're at right now and the numbers behind are
6 stronger when we talk about in two years from now.
7 COMMISSIONER HARTSFIELD: You mentioned that you
8 weren't producing a positive return in your investment on
9 your business planning, and, do you have projections as to
10 when you, do you have any projections?
11 MR. STADLER: I have numbers that I've shared with
12 my staff as well, and my key points since I came in is to
13 take it from $23 million which we've been stuck at for many
14 years, we continue to put extensive funds through marketing.
15 It's not a loss there. Billboards alone, it's, we have them
16 on every road, every highway, but 26 million has been the
17 number where we also felt with our last CEO Paul Rubley,
18 where I have enough to go back and understand what we need to
19 do with this property. 30 million is a good number because
20 we are small and we would become more efficient, the more we
21 go up. The difference in our efficiency of a month where we
22 do a million 8 gaming, versus $3 million which we just did in
23 February. I got told when I came to the state, which we're
24 talking about cruising and everything else, and I said, gees,
25 it will be 12 years and I'll get a loss, and a colleague of
30
1 mine says you're going to be a lot older than that and the, I
2 think we can get there and then market this as a destination
3 to take care of and show the caring that I have with my staff
4 who want to be back there. And the infrastructure with the
5 locals, the mayor did talk about it, that they're putting
6 extensive improvement there with the infrastructure, we'll
7 see more business from an emphasis much more on the present
8 we have right now. Thank you.
9 COMMISSIONER BIELE: Just a comment, George, I
10 think you've done a very nice job down here and not always
11 under the most desirable circumstances. And this is really
12 not for -- but is the chief of police here?
13 MR. STADLER: I don't think so.
14 COMMISSIONER BIELE: That's what we question.
15 Okay. That's all I have.
16 COMMISSIONER BARTCH: Any other questions?
17 You obviously are doing a very good job with your
18 property, and relationship with this city is seen and we
19 congratulate you on this and keep up the good work.
20 MR. STADLER: Thank you. It's been a pleasure to be
21 here today.
22 MR. MULLALLY: Thank you, George.
23 Mr. Chairman, this is the point in this process
24 where we would ask for public comment from the citizens in
25 the area who would like to offer any testimony with regard to
31
1 the area's experience with casino gambling. We have been
2 contacted, the staff has been contacted sporadically over the
3 years from people in the Caruthersville community. Almost
4 invariably that has been positive. I'm not aware of anybody
5 who has asked to testify here today, but one of the reasons
6 that we have come to Caruthersville to hold this meeting, was
7 it's been sometime since we've been here, 10 years, I
8 believe, since they've been licensed and I certainly didn't
9 want to leave out anybody who did want to offer public
10 comment.
11 COMMISSIONER BARTCH: Was there any public comments?
12 MR. MULLALLY: Seeing none, I would ask Sergeant
13 Steve Akridge to come forward and present the staff
14 investigative report with regard to re-licensing.
15 SERGEANT AKRIDGE: Mr. Chairman and Commissioners.
16 Missouri State Highway patrol investigators conducted a
17 re-licensing background investigation of Aztar, Missouri
18 River Boat Gaming Corporation doing business as Casino Aztar.
19 On April 26th, 1995, the Aztar Missouri Gaming Corporation, a
20