00001

01 COVER SHEET INFORMATION

02 Hearing Before the: Missouri Gaming Commission

03 In Re: Commission Resolutions/Approvals

04 Date Taken: December 1, 2005

00002

01 PUBLIC HEARING BEFORE THE MISSOURI GAMING COMMISSION

03 BE IT REMEMBERED that the above-entitled matter

04 came on for a public hearing at the Renaissance Hotel,

05 9801 Natural Bridge Road, County of St. Louis, State of

06 Missouri, on the 1st day of December, A.D., 2005,

07 commencing at the hour of 9:00 in the morning of that

08 day, said hearing having been called by The Missouri

09 Gaming Commission pursuant to the issuance of due

10 notice to all parties in interest, and the following is

11 a transcript of the record made of all proceedings had

12 during the course of said hearing.

00003

01 APPEARANCES:

02 Kevin Mullally, Executive Director

03 Steve Johnson, Chief Deputy Director

04 Chairman Floyd Bartch

05 Commissioner Noel Shull

06 Commissioner Judy Hinrichs

07 Commissioner Darryl Jones

08 Commissioner Ralph Biele

10 I N D E X

11 SPEAKERS: Page

12 STEPHEN J. STARK . . . . . . . . . . . . . . . . 6

13 PAUL F. LITTLETON. . . . . . . . . . . . . . . . 14

14 CYNTHIA BOLDEN . . . . . . . . . . . . . . . . . 31

15 TOM CAMPBELL . . . . . . . . . . . . . . . . . . 39

16 KIM HARDY. . . . . . . . . . . . . . . . . . . . 40

17 DANIELLE BLANCK. . . . . . . . . . . . . . . . . 50

18 STEVE JOHNSON. . . . . . . . . . . . . . . . . . 58

19 MICHAEL BUSHMANN . . . . . . . . . . . . . . . . 62

20 JANE RACKERS . . . . . . . . . . . . . . . . . . 72

21 MARTHA LEMOND. . . . . . . . . . . . . . . . . . 90

22 WADE HUNDLEY. . . . . . . . . . . . . . . . . . . 92

23 CLIFF KORTMAN . . . . . . . . . . . . . . . . . . 99

24 MARK ANDREWS . . . . . . . . . . . . . . . . . . 105

00004

01 MISSOURI GAMING COMMISSION MEETING

02 CHAIRMAN BARTCH: We'll call the meeting to

03 order. Angie, would you call the roll?

04 MS. ANGIE FRANKS: Chairman Bartch?

05 CHAIRMAN BARTCH: Present.

06 MS. FRANKS: Commissioner Hinrichs?

07 COMMISSIONER HINRICHS: Present.

08 MS. FRANKS: Commissioner Biele?

09 COMMISSIONER BIELE: Present.

10 MS. FRANKS: Commissioner Jones?

11 COMMISSIONER JONES: Present.

12 MS. FRANKS: Commissioner Shull?

13 COMMISSIONER SHULL: Present.

14 MR. MULLALLY: Chairman, the first item on

15 the agenda is the consideration of minutes from the

16 September 28 and October 26 meetings.

17 COMMISSIONER HINRICHS: I would move to

18 approve the minutes of the September 28 Commission meeting.

19 COMMISSIONER JONES: Second.

20 CHAIRMAN BARTCH: So moved. Any further

21 discussion? If not, please call the roll.

22 MS. FRANKS: Chairman Bartch?

23 CHAIRMAN BARTCH: Approved.

24 MS. FRANKS: Commissioner Hinrichs?

25 COMMISSIONER HINRICHS: Approved.

00005

01 MS. FRANKS: Commissioner Biele?

02 COMMISSIONER BIELE: Approved.

03 MS. FRANKS: Commissioner Jones?

04 COMMISSIONER JONES: Approved.

05 MS. FRANKS: Commissioner Shull?

06 COMMISSIONER SHULL: Approved.

07 MS. FRANKS: By your vote, you've approved

08 the minutes from the September 28, 2005 meeting.

09 COMMISSIONER HINRICHS: I move we approve

10 the minutes from the October 26 Commission meeting.

11 COMMISSIONER JONES: Second.

12 CHAIRMAN BARTCH: So moved. Any further

13 discussion? Please call the roll.

14 MS. FRANKS: Chairman Bartch?

15 CHAIRMAN BARTCH: Approved.

16 MS. FRANKS: Commissioner Hinrichs?

17 COMMISSIONER HINRICHS: Approved.

18 MS. FRANKS: Commissioner Biele?

19 COMMISSIONER BIELE: Approved.

20 MS. FRANKS: Commissioner Jones?

21 COMMISSIONER JONES: Approved.

22 MS. FRANKS: Commissioner Shull?

23 COMMISSIONER SHULL: Approved.

24 MS. FRANKS: By your vote, you've approved

25 the minutes of the October 26, 2005 meeting.

00006

01 MR. MULLALLY: Mr. Chairman and Commissioners, we

02 have a series of seven hearing officer recommendations, and Hearing

03 Officer Steve Stark is here to make those presentations.

04 MR. STEPHEN STARK: Good morning, Commissioners.

05 If it may please the Commission, we'll start with

06 what's been marked with, I guess, Tab C, the President

07 Riverboat Casino, Missouri, Incorporated. This case

08 deals with the duties of a casino to prevent and to

09 report violations and misconduct.

10 The facts of the case, as presented at the

11 hearing, are that during the morning, very early

12 morning hours, of June 29, 2004, at approximately 12:33

13 a.m., an employee of the President Casino named Mr.

14 Terry Foerste gets into his car, located in the

15 casino's parking lot. Now, the parking lot is about

16 100 yards from the casino's boat, but is still part of

17 the casino's property.

18 Now, while Mr. Foerste drives out of the parking

19 lot, he hits another parked car that was located in the

20 lot. Then he runs into the metal gate, or railing, at

21 the entrance of the exit of the parking lot and then

22 upon exiting the parking lot itself, he runs into a

23 shuttle bus that is attempting to enter into the

24 parking lot, damaging the back bumper of that shuttle

25 bus. So property damage was done to the parked car, to

00007

01 the parking lot gate, to the shuttle van and to Mr.

02 Foerste's car, itself. However, Mr. Foerste continues

03 on driving without stopping.

04 At 12:35 a.m., the shuttle bus driver calls into

05 the casino to report the incident and soon thereafter,

06 two employees of the casino arrive at the scene to

07 investigate. At 12:52 a.m., less than 20 minutes after

08 the start of this incident, the casino dispatch calls

09 the St. Louis Police Department. Within ten minutes or

10 so, the police arrive at the casino parking lot, but

11 the police officer leaves after being told by the

12 casino employees that the casino would be conducting

13 its own investigation as an internal matter.

14 Approximately 1:30 a.m., Mr. Foerste returns to

15 the parking lot in his damaged car. He speaks with

16 some of the casino employees, admits to the property

17 damage. One employee stated in a written report that

18 was made later on that Mr. Foerste appeared that he may

19 have been drinking, and the employee even suggested to

20 Mr. Foerste that he take a taxi home or let someone

21 else drive him home. This was during a weekday, so the

22 casino closes at 4:00 a.m.

23 Then at 8:30 a.m., that same day, that same

24 morning, the human resource director of the casino does

25 call the Commission, the gaming agent, to report the

00008

01 incident, nearly eight hours after it all started.

02 Now, the Commission staff have alleged

03 violations of Regulation 11 CSR45-10.030. And that

04 regulation actually consists of several paragraphs, but

05 three are applicable in this case. The first part

06 requires that the licensee, the casino in this case,

07 promptly report to the Commission any violation of law,

08 internal control standards or Commission rule.

09 The second part of the regulation imposes a duty

10 to prevent unlawful conduct upon the licensed premises.

11 The third part requires that the casino has the

12 licensee immediately report to law enforcement

13 authorities any illegal or violent acts that are

14 committed on or about the licensed premises.

15 Now, paragraph 16 of the Preliminary Order for

16 Discipline recites this whole regulation. So I looked

17 at all three parts of this regulation to see if there

18 were, indeed, three separate violations. Now, when I

19 initially made my recommendations presented to the

20 Commission on September 28, I found that the President

21 Casino only violated part one of the three different

22 parts of this regulation.

23 Based upon our discussions on September 28, I

24 further reviewed the facts and law as presented in the

25 hearing record and now I present my recommendations to

00009

01 the Commission that the President Casino did violate

02 part one and part two of this regulation. I am still

03 finding that no violation occurred as to part three of

04 the regulation.

05 Now, if we may look at each part of the

06 regulation. Again, part one imposes the duty on the

07 licensee to promptly, again the emphasis on promptly,

08 report to the Commission violations of law. The facts

09 of this case show that there was property damage being

10 committed on the parking lot of the casino. The

11 employees of the President Casino had enough facts

12 before them from their physical examination of the

13 scene, the shuttle bus driver's report of being hit,

14 the surveillance tape. With all this information,

15 there was reasonable grounds to believe that a

16 violation of law had occurred.

17 The casino did report the incident to the

18 Commission's agents, but waited four hours. Or excuse

19 me, waited eight hours. Now, the casino's closed and

20 there's no gaming agent available from 4:00 to 8:00.

21 So even if we discount that fact that those four hours,

22 I still conclude that the President Casino did not

23 conform with this regulation in promptly reporting this

24 incident to the Gaming Commission. So my

25 recommendation is that cause does exist to discipline

00010

01 for this violation of part one of the Regulation

02 10.030.

03 Now, for part two of the regulation, a duty to

04 prevent violent and unlawful conduct upon the licensed

05 premises. Again, my initial recommendation made on

06 September 28, was that the President Casino did not

07 violate this part of the regulation based upon my

08 conclusion that the President Casino did not have the

09 opportunity to prevent the property damage that

10 occurred on the parking lot. However, I failed to give

11 consideration to the fact that Mr. Foerste returned to

12 the parking lot within an hour after the property

13 damage was committed. At that time, the President

14 Casino met with Mr. Foerste. Mr. Foerste admitted to

15 committing the property damage. The employees had an

16 opportunity to observe Mr. Foerste. One employee even

17 reported that it appeared that Mr. Foerste had been

18 drinking. He expressed concern that Mr. Foerste, about

19 Mr. Foerste driving home alone and this concern was

20 expressed after reviewing the surveillance tape by the

21 employee. So upon further review, the -- it's my

22 conclusion that the employees of the President Casino

23 did have the opportunity to prevent Mr. Foerste from

24 driving again and possibly committing unlawful conduct.

25 The employees did not fulfill their duty according to

00011

01 this regulation.

02 Now, however, this regulation is part two of the

03 regulation. It does have a limitation on it, which we

04 need to discuss. It says that the activity must occur

05 upon the licensed premises. Now, in order to determine

06 whether or not this regulation applies, we need to

07 decide whether or not the parking lot, which is

08 approximately 100 yards from the casino's, the gaming

09 boat's, entrance, is indeed part of the licensed

10 premises.

11 Now, the law dictionary did not give me a

12 definition of the word, "upon." However, it's

13 considered synonymous with the word "on" and the law

14 dictionary did define "on" as meaning, "connected with

15 or attached to." So my conclusion is that the parking

16 lot owned and monitored by the casino, even though

17 within a hundred yards of the gaming boat's entrance,

18 is so much connected with the President Casino so as to

19 constitute being upon the licensed premises.

20 Now, the President Casino does make a good

21 argument that the casino or the Commission's own

22 regulations has a definition that places a parking lot

23 with the term "support facility," being separate and

24 apart from the licensed premises. In reading that

25 regulation -- and let me cite that for you. Regulation

00012

01 11 CSR45-1.090, Paragraph 19 and Letter H. That

02 regulation actually includes several things in its

03 definition of a support facility, including offices and

04 river boats. So it's my belief that a support facility

05 can also be located upon the licensed premises.

06 Also of note is the regulation that deals with

07 making an application for a license. Regulation 4.030,

08 Paragraph 9, actually requires the applicant to give a

09 description of the parking facility. So it appears to

10 me that the parking lot is, indeed, an important part

11 of the licensed premises.

12 So it is my recommendation that cause does

13 indeed exist for disciplining the President Casino for

14 its failure to prevent misconduct when its employees

15 allowed a fellow employee, who had committed property

16 damage with his erratic driving, to drive away again.

17 So part two, I find a violation of that regulation.

18 Now, as to part three of that regulation, which

19 requires the licensee to immediately report to law

20 enforcement authorities any illegal or violent acts

21 committed on or about the licensed premises, I find

22 that the evidence did show compliance by the President

23 Casino. The police were indeed called. The police

24 arrived at the scene and the time frame was within the

25 definition of immediately. So my recommendation is

0013

01 that no discipline be asserted for the violation

02 alleged with regard to part three of the regulation

03 requiring contact with law enforcement officials.

04 Now, the next issue is the amount of the

05 monetary penalty. The penalty asserted by the

06 Commission staff is $50,000. My recommendation is that

07 that amount is excessive if we look at the preliminary

08 order alleging violations of three separate parts of

09 this regulation and that alleged violations of three

10 parts of the regulation constitute a $50,000

11 forfeiture.

12 My recommendation is that only two parts of that

13 regulation have been violated. Therefore, it would be

14 appropriate to reduce the proposed forfeiture amount,

15 and what I'd recommend is that if we decide that each

16 part of that regulation, each of the three parts are

17 given equal weight, then for having violated two of

18 the three parts of that regulation, it would seem

19 appropriate to take two-thirds of the proposed penalty

20 and arrive at three, excuse me, $33,333 as the

21 recommended forfeiture. I found nothing that would say

22 that any one of the three parts of that regulation

23 deserve any more weight than the other, and I

24 found nothing that said that if all three parts were

25 violated, that a $50,000 would be appropriate. But

00014

01 since one part I find not to have been violated, the

02 forfeiture, my recommendation, is that it be reduced.

03 CHAIRMAN BARTCH: Any discussion?

04 MR. MULLALLY: I think, first, it would be

05 appropriate to hear from the licensee. They have

06 submitted a written brief. If they desire to say

07 anything, then they should do that.

08 CHAIRMAN BARTCH: Does the licensee --

09 MR. PAUL LITTLETON: If I may?

10 CHAIRMAN BARTCH: Yes, you may.

11 MR. LITTLETON: If I could be seated?

12 CHAIRMAN BARTCH: Absolutely.

13 MR. LITTLETON: Thank you. Mr. Chairman,

14 members of the Commission, my name is Paul Littleton.

15 I'm an attorney for the Brasher Law Firm here in St.

16 Louis, Missouri, and our office represented the

17 President Casino at the hearing in March of 2005.

18 It's our position that Mr. Stark got the

19 decision right the first time. The change in the

20 findings are not appropriate in our view, because

21 they're not supported in the evidence. The finding

22 that the President Casino failed to present, prevent

23 unlawful conduct occurring upon the premises is related

24 to the assumption that the individual who drove from

25 the parking lot the second time was intoxicated.

00015

01 The findings of fact before you in paragraphs 12

02 and 13 in findings of fact, state that Mr. Foerste

03 returned to the parking lot a second time, and at that

04 time, had a conversation with a Mr. Williams, an

05 employee of President Casino. And Mr. Williams, then

06 has stated in the proposed findings of fact, stated

07 that he observed that Mr. Foerste appeared -- that he

08 may have been drinking. Now, that is the basis for the

09 unlawful conduct, the conclusion being or the

10 assumption, that Mr. Foerste was, in fact, intoxicated.

11 The conclusion of law for the unlawful conduct

12 specifically refers back to this finding of fact.

13 We don't think the facts support that. The

14 statement in the record by Mr. Williams is not that Mr.

15 Foerste appeared to be intoxicated but simply that Mr.

16 Foerste appeared that he may have been drinking. So

17 the finding of fact that Mr. Williams stated that Mr.

18 Foerste appeared intoxicated is not supported by the

19 facts. And that is the basis for the alleged unlawful

20 conduct, the initial violation that is being presented

21 to you this morning.

22 The second issue has to do with where the

23 violation occurred. And Mr. Stark has explained our

24 position that the regulations define a parking lot,

25 particularly at a distance of 100 yards, we think, as a

00016

01 support facility. That is the regulation that the

02 Commission has adopted as part of its definitions.

03 That is something different, a support facility is

04 something different than a licensed premises. And the

05 hearing officer has also talked about what the

06 definition or meaning of the word "upon" is and that --

07 we agree that, that is the, the given definition, that

08 it is somewhat interchangeable with the word "on".

09 I see some hesitation about my comments, but let

10 me point out that the particular regulation with which

11 the President is charged with violating requires

12 unlawful conduct upon licensed premises. The following

13 regulation that talks about failure to report to local

14 authorities incidences of unlawful conduct, refers to

15 incidents that occur upon or about the licensed

16 premises. The regulation that we're discussing simply

17 says upon. And Mr. Stark has talked about that.

18 But if you talk about what's meant by licensed

19 premises, I think it's clear that Mr. Stark got it

20 right the first time. He concluded the first time that

21 the licensed premises meant inside the casino facility.

22 We think that's the proper view and that Mr. Stark got

23 the finding of fact and conclusions of law right the

24 first time and we would ask that the Commission adopt,

25 rather than the most recent finding of fact and

00017

01 conclusions of law, but the original findings of Mr.

02 Stark presented at the September 28 meeting. Thank

03 you.

04 CHAIRMAN BARTCH: Thank you, sir.

05 MR. MULLALLY: Mr. Chairman,

06 Commissioners, Assistant Attorney General Jane Rackers

07 is here, and might have something to add to that.

08 MS. JANE RACKERS: I don't. Thank you.

09 MR. MULLALLY: The only -- I think from

10 the staff's perspective, there's one thing that sticks

11 out here was that we believe that the failure

12 to report is a very serious issue, has always been a

13 very serious issue, and has been treated seriously by

14 this Commission. I don't think that we have ever put

15 such tight restraints on disciplinary penalties that we

16 say, "Well, if it's one count, it's $15,000; if it's

17 two counts, it's $30,000." It's always been the

18 seriousness of the underlying conduct. So whether it's

19 one count or two counts, I don't necessarily think that

20 is the critically relevant factor in determining the

21 amount of penalty.

22 CHAIRMAN BARTCH: And, you know, another

23 factor here is that I don't believe that we're trying

24 to convict someone of drinking while driving. You

25 know, we're simply saying that the President had a

00018

01 responsibility when they appeared to have somebody that

02 had been drinking was to try to do something about

03 that, as any citizen would have before you that someone

04 on the road, if in fact, was drinking, that's true. I

05 don't think we are trying to convict somebody of

06 drinking while driving. It's a different standard.

07 It's a different set, and it is very critical that when

08 something happens that they report to the Commission

09 immediately, and they did not do that.

10 Any other discussion from the Commission?

11 COMMISSIONER HINRICHS: I thought it was

12 disturbing that they dismissed the police. That was,

13 that bothered me that they called the police, and when

14 the police arrived, they said they'd take care of it

15 internally. The amount of damage that apparently

16 happened -- I haven't had very much experience with

17 this, of course, but with automobile accidents, usually

18 when there's physical damage, the police get involved,

19 and I was surprised the police were so willing to leave

20 and that they said they'd take care of it internally.

21 That disturbed me.

22 COMMISSIONER BIELE: I'd like to make a

23 motion that the fine be the original amount that was

24 assessed by the Commission of $50,000.

25 COMMISSIONER HINRICHS: Second.

00019

01 CHAIRMAN BARTCH: The motion is seconded.

02 Is there any further discussion? If not, please call

03 the roll.

04 MS. FRANKS: Chairman Bartch?

05 CHAIRMAN BARTCH: Approved.

06 MS. FRANKS: Commissioner Hinrichs?

07 COMMISSIONER HINRICHS: Approved.

08 MS. FRANKS: Commissioner Biele?

09 COMMISSIONER BIELE: Approved.

10 MS. FRANKS: Commissioner Jones?

11 COMMISSIONER JONES: Approved.

12 MS. FRANKS: Commissioner Shull?

13 COMMISSIONER SHULL: Approved.

14 MR. MULLALLY: So just to make sure the

15 record is clear, the motion would be to amend -- I

16 should have stopped. I think what we need is a motion

17 to adopt the hearing officer's recommendations,

18 however, amending the final order to reflect that the

19 fine be $50,000, rather than the $33,333 that is in the

20 order. I think that that's the motion that we'll need

21 and we'll need to vote again. Do you agree?

22 COMMISSIONER HINRICHS: So we're going

23 back to disciplinary, what is it, DC-04-197??

24 MR. MULLALLY: Yes. So we need a motion

25 to amend the, amend --

00020

01 CHAIRMAN BARTCH: Amend 05-080.

02 MR. MULLALLY: Well, amend the

03 hearing officer's recommendation in Case 04-197, so

04 that the final order now reads that the amount of the

05 penalty assessed against the petitioner shall be $50,000.

06 COMMISSIONER BIELE: So be it.

07 COMMISSIONER JONES: Second.

08 CHAIRMAN BARTCH: Seconded. Please call

09 the roll.

10 MS. FRANKS: Chairman Bartch?

11 CHAIRMAN BARTCH: Approved.

12 MS. FRANKS: Commissioner Hinrichs?

13 COMMISSIONER HINRICHS: Approved.

14 MS. FRANKS: Commissioner Biele?

15 COMMISSIONER BIELE: Approved.

16 MS. FRANKS: Commissioner Jones?

17 COMMISSIONER JONES: Approved.

18 MS. FRANKS: Commissioner Shull?

19 COMMISSIONER SHULL: Approved.