1 BEFORE THE
2 STATE OF
3
4
5
6 Meeting
7 February 21, 2007
9
10
11
12
13
14
15
16 COMMISSIONERS PRESENT:
17 Noel Shull, Chairman
Samuel J. Hais, Commissioner
18 Darryl Jones, Commissioner
Larry W. Plunkett, Sr., Commissioner
19
20
21
22 REPORTED BY:
23 Tracy Patton-Shiver
25 (573)636-7551
1 A G E N D A
2 I. Call to Order
3 II. Minutes
A. November 29, 2006
4 B. January 17, 2007
5 III. Consideration of Relicensure of Class A Licensees
C.
6 Presentation by Applicant
Presentation by City of
7 Public Comment
Investigative Summary
8 Staff Recommendation
Resolution No. 07-011
9 D. Ameristar Casino Kansas City, Inc.
Presentation by Applicant
10 Presentation by City of
Public Comment
11 Investigative Summary
Staff Recommendation
12 Resolution No. 07-012
E. Ameristar Casino St. Charles, Inc.
13 Presentation by Applicant
Presentation by City of
14 Public Comment
Investigative Summary
15 Staff Recommendation
Resolution No. 07-013
16
IV. Consideration of Level I/Key Applicants
17 F. Resolution No. 07-014
18 V. Consideration of Disciplinary Action
G. Harrah's
19 1. DC-07-001
G. Harrah's
20 1. DC-07-002
21 VI. Consideration of Rules & Regulations
I. Final Orders of Rulemaking
22 1. 11 CSR 45-13.055 - Emergency Order
Suspending License Privileges -
23 Expedited hearing
24 VII. Consideration of Settlement Agreement
J. The Missouri Gaming Company
25 1. Resolution No. 07-015
1 A G E N D A (con't)
2 VIII. Caruthersville Update
3 IX. Closed Session
4 X. Adjournment
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1 P R O C E E D I N G S
2 CHAIRMAN SHULL: Good morning. If I could have
3 your attention and everyone take a seat, we'll be able to
4 start the meeting.
5 The first issue today is, the Commissioners and I
6 would like to pay tribute. Mr. Robert Wolfson, Sr., passed
7 away on February the 2nd. Robert Wolfson was the first
8 chairman of the Missouri Gaming Commission and was
9 appointed in 1993 by Governor Mel Carnahan and served until
10 December of 1998. During his tenure, Mr. Wolfson approved
11 the
expansion and sale of several casinos in the
12 area and was instrumental in the development of the
13 newly-formed Commission.
14 In addition to his service to the state,
15 Robert Wolfson was a World War II Veteran and a Board
16 member of the St. Louis Jewish Federation and Barnes-Jewish
17 Hospital Foundation. We wish today to honor his memory
18 with a moment of silence.
19 (Moment of silence taken.)
20 CHAIRMAN SHULL: Thank you.
21 The first issue will be a review of the minutes
22 from November the 29th, 2006.
23 There is one spelling error. It's on Page 57, I
24 believe, regarding Mr. Neilsen. His name was spelled
25 incorrectly. And, also, Page 49 was blank in my packet.
1 Is that --
2 MS. FRANKS: Yeah. I don't know why.
3 CHAIRMAN SHULL: Do we have Page 49?
4 COMMISSIONER HAIS: We can approve the minutes
5 to the extent that we have them and reserve approval for
6 the remainder.
7 MS. FRANKS: I think it's just a page break.
8 CHAIRMAN SHULL: Is there a motion to approve?
9 COMMISSIONER HAIS: I so move to -- motion to
10 approve the minutes of the last meeting, dated
11 November 29th.
12 COMMISSIONER JONES: I second.
13 CHAIRMAN SHULL: Is there any further
14 discussions?
15 COMMISSIONER HAIS: With the spelling
16 correction, of course, that you mentioned.
17 COMMISSIONER JONES: Right.
18 CHAIRMAN SHULL: Call the roll.
19 MS. FRANKS: Chairman Shull?
20 CHAIRMAN SHULL: Approved.
21 MS. FRANKS: Commissioner Jones?
22 COMMISSIONER JONES: Approved.
23 MS. FRANKS: Commissioner Hais?
24 COMMISSIONER HAIS: Approved.
25 MS. FRANKS: Commissioner Plunkett?
1 COMMISSIONER PLUNKETT: Approved.
2 MS. FRANKS: By your vote, you've adopted the
3 minutes of the November 29th, 2006, meeting as amended.
4 CHAIRMAN SHULL: The next issue is the
5 January 17th, 2007, minutes.
6 COMMISSIONER HAIS: Very well. Chairman, I
7 would move to approve the January 17th, 2007, minutes.
8 COMMISSIONER PLUNKETT: I'll second that.
9 CHAIRMAN SHULL: Is there any further
10 discussion?
11 (No response.)
12 CHAIRMAN SHULL: Call the roll.
13 MS. FRANKS: Chairman Shull?
14 CHAIRMAN SHULL: Approved.
15 MS. FRANKS: Commissioner Jones?
16 COMMISSIONER JONES: Approved.
17 MS. FRANKS: Commissioner Hais?
18 COMMISSIONER HAIS: Approved.
19 MS. FRANKS: Commissioner Plunkett?
20 COMMISSIONER PLUNKETT: Approved.
21 MS. FRANKS: By your vote, you've adopted the
22 minutes of the January 17th, 2007, meeting.
23 CHAIRMAN SHULL: The next issue is
24 consideration of relicensure.
25 Mr. McNary, do you want to proceed?
1 DIRECTOR McNARY: Mr. Chairman, first, let me
2 congratulate Commissioner Hais and Commissioner Plunkett on
3 being reappointed by the Governor. Glad to have you on
4 board -- continuing on board.
5 Item III, consideration of relicensure of the
6 Class A licensees at Harrah's
7 be a presentation by the Applicant, Arnold Block, who's the
8 General Manager.
9 MR. BLOCK: Good morning, Mr. Chairman,
10 Commission Board, Mr. McNary, Mr. Stottlemyre,
11 Commission staff.
12 We're here to present our performance and
13 accomplishments over the last two years since our last
14 relicensing and to talk a little bit about our capital
15 plans for 2007 and beyond.
16 What you have in front of you is a hard copy of a
17 PowerPoint presentation for our oral presentation and then
18 some information in the back.
19 I want to start off by talking about our combined
20 2005/2006 casino revenue and admissions.
21 For the last two years, we have shown total
22 gaming revenue of 623 million, 302 million in 2005 and
23 321 million in 2006, against our planned revenue of
24 293 million and 318 million in 2005 and 2006.
25 Our total patron admissions were 19 million 300
1 in both years, both -- for the two years, both planned and
2 what we accomplished.
3 The next page, we list our capital investment.
4 Our total prior year investment was 469 million dollars.
5 Since January of 2005, we have a list of our total capital
6 investment broken down by project, and then behind this
7 page, we have color copies of what those represent.
8 The first item is a land acquisition of
9 5.4 million. This was needed to accomplish our retail
10 development, which is the first page behind the summary,
11 showing a 309,000 square foot retail space that we are
12 going to break ground on starting May 1st.
13 We have slot machine upgrades of 2.9 million over
14 the last two years, a Mardi Gras casino master plan that we
15 have spent 2 -- 2.7 million to date, a new poker room,
16 1.3 million. We have buffet enhancements of 700,000. We
17 have worked on our back of the house for our employees, as
18 well. We show here an employee dining room remodeled for
19 400,000, a rotunda remodeled for 600,000, and other various
20 capital for 3 million.
21 In addition to that, in 2007, we have a planned
22 buffet enhancement of 17 million, which we'll be starting
23 in April, and then the retail development that I mentioned,
24 25 million invested by Harrah's, along with our land and
25 partner contribution of 100 million. This is a project
1 that will start May 1st and will take about 18 months to
2 complete.
3 In addition to that, in the Mardi Gras casino, we
4 have 11 million invested in 2007 for a high limit area.
5 The first phase of that opened this past Friday. We have a
6 rapid roulette and a casino bar reconfiguration, and we
7 have a new on-casino floor deli -- a sit-down deli,
8 made-fresh-to-order food, and a seating area for about
9 25 to 30 people, which will be opening later this year, as
10 well.
11 In terms of our 2006 employee demographics, we
12 have a slide that shows state of residence. 89 percent of
13 our
employees live in the state of
14
15 49 percent male. We have 250 employees and a supervisor
16 above position. 21 percent of those are minority. The
17 51 percent female represent 1,013 and 991 males. Our
18 executive staff is broken down into eight male, four
19 female, and one minority.
20 Our employment as of December 31st, 2006, we had
21 2,004 employees; 1,584 full time, 180 part time, 209 on
22 call, and 31 leave of absence. In 2005, our payroll
23 expense was over 60 million; 2006, a little over
24 61 million.
25 In terms of our Equal Opportunity Employment,
1
2 51 percent African-American;
3 Caucasian, 21 percent African-American. Harrah's staffing
4 mix as of December 31st was 60 percent Caucasian,
5 33 percent African-American, clearly in the middle of the
6 demographics of both city and the county. Harrah's has
7 1,194 white, 670 black, 104 Asian, 25 Hispanic, and
8 11 American-Indian.
9 Our positions are broken down by casino floor,
10 926; food and beverage, 496; hotel, 152; administrative,
11 158; and 272, other.
12 In terms of our minority contractors, for regular
13 non-gaming purchases, we utilize a competitive bidding
14 process to ensure that we obtain the best services and
15 products with the best possible price. The vendors that
16 participate in this process are selected based on a
17 St. Louis Minority Business Council, end users knowledge,
18 past history, business card file, and reputation from other
19 Harrah's properties. We make every effort to include
20 minority vendors in the bidding process. Their bids, like
21 all other companies, are attached to the back of the
22 requisition as documentation and may not contain
23 discriminating information to indicate that they are the
24 minority.
25 In 2006, of the funds with discretionary
1 spending, 7 percent of our spend was with minority vendors,
2 and we wanted to note in 2004, diversity spending was only
3 2 percent.
4 We're continually working to raise our minority
5 spending within the community. In December of 2005, Harrah's
6
7 to host a Casino Buyer/Supplier Forum. The purpose of this
8 forum was to bring the casino industry and minority
9 suppliers together to establish a business relationship.
10 On a monthly basis, we attend the
11 Minority Business Council meetings to build relations and
12 to identify new perspective minority vendors. This purpose
13 is being shepparded in part by Fred Keeton, our corporate
14 vice president of external affairs. One of his many
15 responsibilities is to serve as the chairman of the
16 American Gaming Association's National Diversity Task
17 Force. Through his dedication and leadership, he has
18 helped our casino continually grow our diversity spend.
19 In terms of responsible gaming, our code of
20 commitment is clear. We want everyone who gambles at our
21 casinos to be there for the right reasons, simply to have
22 fun. We carry out our code of commitment and to respond to
23 the Commission's Disassociated Persons Program, we have
24 instituted a corporate-wide Responsible Gaming Program.
25 All new employees receive two hours of training.
1 We utilize 22 Responsible Gaming Ambassadors, who are
2 specially-trained supervisors, and they offer assistance to
3 customers with whom we may be concerned. Their mission is
4 to address the concerns of our employees regarding guests
5 who may not be gambling responsibility and to offer those
6 guests alternatives for assistance.
7 I should note, in 2006, there were over 50 guest
8 interventions conducted by the Responsible Gaming
9 Ambassadors.
10 We also display 1-888-BETS-OFF and Guides to
11 Responsible Gaming brochures in several locations
12 throughout the casino to help our patrons identify
13 potential gaming issues and promote responsible gaming by
14 helping patrons establish personal guidelines for gambling.
15 Throughout 2006, Gary Loveman, our CEO, aired a
16 Responsible Gaming message across the country in all forms
17 of media, as well as being prominently aired nationally on
18 ESPN during the World Series of Poker broadcasts. The
19 following pages are collateral material regarding that
20 initiative.
21 As far as underage gaming, we have trained all of
22 our employees to identify false IDs. We strengthened that
23 training utilizing MGC agents this past year. Utilizing
24 the MGC agents training, we have created our own training
25 class and certification. Employees are recertified on a
1 quarterly basis. We have that on Page 30 and 31. We have
2 signage with strong messages advising underaged patrons of
3 the repercussions of illegal entry. We note that on
4 Page 32.
5 Black lights, flashlights, and magnifying glasses
6 have been issued to security and Total Rewards employees to
7 better see and evaluate potentially altered IDs.
8 We have implemented an $100 bounty on all
9 underaged patrons that attempt to enter in the casino or
10 the VooDoo Lounge. Since implementing, we have paid out
11 more than 10,000 in bounty money to employees.
12 Total Rewards has implemented a checklist when
13 reviewing a potentially underage patron. This checklist is
14 utilized when a patron appears to be under 30 or their
15 presented ID indicates that they are under 30. When
16 completed, this checklist must be reviewed by a supervisor,
17 guest safety officer, or MGC trooper prior to issuing a new
18 Total Rewards card and/or a reprint. This is noted on
19 Page 33.
20 In terms of our control of intoxicated patrons,
21 it was a big issue for us this past year. All employees
22 who are responsible for serving alcohol are required to
23 take a test, a CARE, an industry-wide standardized training
24 course. We have contracted with Maryland Heights Police
25 Department to provide two off-duty officers on Friday and
1 Saturday nights, as well as busy holidays, to provide a
2 visible deterrent to inappropriate guest behavior and
3 assist with guest evictions.
4 By 8 p.m., Total Rewards representatives set up a
5 gauntlet in front of the Island Casino. This gauntlet
6 serves as a mechanism to force patrons to walk
7 approximately 10 yards to enter the casino. During this
8 walk, all patrons are assessed by Total Rewards
9 representatives and security to evaluate if they are
10 intoxicated. All guests are required to exit out of the
11 Island side of VooDoo so they must walk through this
12 gauntlet to enter the casino.
13 In an effort to deter entry into the
14 Island Casino for the sole purpose of drinking, at
15 midnight, all drinks purchased at the I-BAR increase at
16 least $1.
17 All employees are vigilantly watched -- watching
18 guests to identify intoxicated patrons for the purpose of
19 either discontinuing alcohol service and/or eviction.
20 Going on to Community Partnership. We've
21 provided over 1.3 million in donations and sponsorship to
22 almost over 100 local organizations or businesses in the
23 years 2005 and 2006.
24 In the calendar years 2005 and 2006,
25 approximately 7,200 hours were donated to various
1 organizations, a few of which are listed below: Leukemia
2 and Lymphoma,
3 for Humanity, International Institute, National Kidney
4 Foundation.
5 The next page shows as at a Thanksgiving dinner
6 at the International Institute, donating the food and
7 volunteers to serve the residents in that area Thanksgiving
8 dinner.
9 Next is a National Kidney Foundation Chili
10 Cook-Off, where we raised money. Then on Page 38, we show
11 an outdoor that was erected on Highway 40/64 and
12 Kingshighway by our volunteers of the year. The Leukemia
13 and Lymphoma Society saluted our Man and Woman of the Year
14 with an outdoor board, which prominently displayed the St.
15 Louis market.
16 Page 39 shows that we were the recipient of the
17
18 a ERGC meeting about two months ago. Last year, the
19 Maryland Heights Chamber of Commerce presented Bill Keene,
20 the regional president, the Business Leader of the Year
21 award.
22 That completes our oral part of the presentation.
23 Do you want me to answer questions?
24 CHAIRMAN SHULL: Are there any questions at the
25 present time?
1 COMMISSIONER JONES: As I read the report, you
2 know, I'm kind of bewildered at the number of vendors that
3 you have, and you probably knew that I may ask about the
4 minority and women contractors that you have.
5 I'm looking at the reading material that you
6 have. You have 308 vendors, 85 Missouri-based vendors, but
7 only six minority and women vendors out of the 308, and
8 you're located inside -- or,
you know, within the
9 metropolitan area. I think the last time we were meeting,
10 we had the St. Jo group here, and it seems like they had
11 more vendors than Harrah's. Now, I can understand that
12 they're in an area where you don't have the access to
13
14 those types of organizations to assist.
15 But to have six vendors? Now, the Minority
16 Business Council, if I'm not mistaken, they've been in
17 existence for at least ten years, and you've had property
18 there for at least ten years, and you've only been able to
19 spend like 7 percent. I just have an issue with those
20 numbers, a big issue.
21 MR. BLOCK: Understood.
22 We've increased from 2 to 7 in the last two
23 years. The number of vendors can be increased. We have
24 initiatives in place to try to improve that this year. Our
25 spend has increased substantially from 2 to 7. It is a
1 priority for us that we plan to emphasize this coming year.
2 COMMISSIONER JONES: You have a plan?
3 MR. BLOCK: We do. We have -- we review this
4 with purchasing. We have -- our executive committee now
5 reviews this plan more diligently on a monthly basis than
6 we have in the past, to make sure that the spend is
7 appropriate and that we're making every effort to introduce
8 new minority vendors into our purchases.
9 COMMISSIONER JONES: You know, forgive me.
10 That just sounds like a lot of talk. I mean, a plan is,
11 hey, we're going to meet with the Urban League president
12 and, hopefully, they'll get on board. The plan is, we will
13 meet with MOCAN (ph.) and, hopefully, get them on board.
14 The plan is, we've already set up meetings with minority or
15 women on advertising and PR firms, to get them in place so
16 we can advertise these contracts that are being lit. That
17 sounds like a plan.
18 But what you're saying right now, it sounds, you
19 know, like a lot of talk. Everybody's always saying, Well,
20 hey, we're going to do this, but I need to see something in
21 writing or see something where I can just hold your feet to
22 the fire.
23 MR. BLOCK: Sure. And we can provide that to
24 you. We -- we put a lot of confidence in the
25 Minority Business Council this past year. And, quite
1 frankly, we just didn't get the numbers out of that Council
2 that we expected that we would, so we have to implement
3 something new, and that's the reason for taking a different
4 approach.
5 COMMISSIONER HAIS: Mr. Chairman, just one
6 housekeeping matter. And, Mr. McNary, you, I'm sure, will
7 recall, as will the Commissioners, that I mentioned at a
8 previous meeting in respect to some other matter relating
9 to Harrah's, that Mr. Block and I were high school
10 classmates. And I mention that, as obscure as it may
11 sound, I haven't been personally acquainted with anyone,
12 heretofore, any rendition of these matters.
13 So I just wanted to -- Mr. Block, if, at your
14 option -- how long has it been since we've seen each other?
15 40 years, 40-plus years?
16 MR. BLOCK: Probably. We're showing our age.
17 COMMISSIONER HAIS: I'm sorry.
18 MR. BLOCK: We're showing our age.
19 COMMISSIONER HAIS: Well, I am, anyway.
20 But at your option, if Harrah's wishes me to
21 refuse myself from voting on this relicensure, I will
22 consider doing so.
23 MR. BLOCK: We don't have any desire to do
24 that.
25 COMMISSIONER HAIS: All right. That's all,
1 Mr. Chairman.
2 CHAIRMAN SHULL: Thank you.
3 There are no other questions at this time, but we
4 would like to call the City of Maryland Heights in.
5 MR. MOELLER: Good morning, Mr. Chairman,
6 Members of the Gaming Commission.
7 COMMISSIONERS: Good morning.
8 MR. MOELLER: My name is Mike Moeller, and I'm
9 the mayor of the City of Maryland Heights. I appreciate
10 the opportunity to address you and to communicate the
11 city's support for relicensing of Harrah's Casino.
12 For the record, I would like to state the
13 following: The city established minimum development
14 standards as part of our approval of the original zoning
15 for
16 all requirements established by that ordinance and the
17 Developer's Agreement entered into at that time.
18 Harrah's Casino is an outstanding corporate
19 citizen. The corporation continues to be an active
20 community leader in collaborating with a very successful
21 Convention and Visitor's Bureau and in supporting numerous
22 other community activities.
23 While the city has done no independent analysis
24 regarding the economic impact of gaming on our community,
25 we do feel that local vendors have benefited from their
1 business with the casino. We have no evidence that local
2 businesses were harmed in any way by the casino operation.
3 The number of businesses licensed in the city has steadily
4 increased over the last five years.
5 Police Chief Tom O'Connor, addressing the
6 possible impact the gaming operation has had on crime in
7 our community, states that there has been no significant
8 increase in crime because of
gaming in
9 And to quote, the police department, on average, is called
10 about twice a day to handle incidents that are considered
11 beyond the scope of the uniformed security staff and the
12 agents assigned to the Missouri Gaming Commission.
13 Overall, the number of calls for service is well within the
14 range we would anticipate from this many people, and the
15 number of crimes reported compared to the number of
16 visitors makes this one of the safest locations in the
17 state, end of quote.
18
Additionally, the
19 Department maintains a substation within the casino
20 development, from which a sector car serves this complex,
21 as
well as the adjacent
22 surrounding non-urban area. It is the policy of the
23 City Council to allocate the gambling taxes in accordance
24 with a formula that requires these funds to be allocated as
25 follows: 25 percent toward the construction of regional
1 infrastructure; 50 percent to other capital improvement
2 projects, which have primarily been improvements to the
3 existing road and bridge system, as well as the
4 construction of the new government center to replace the
5 warehouse we converted into city hall 21 years ago --
6 COMMISSIONER HAIS: Is that different from
7 regional infrastructure?
8 MR. MOELLER: Yes.
9 COMMISSIONER HAIS: How is that different?
10 MR. MOELLER: This is more roads and
11 improvements with the city. The regional stuff, as I'll
12
explain later, is like the
13 Expressway extension and Dorsett, 270. But in all, about
14 70 percent of that money is spent for infrastructure
15 improvements.
16 -- 20 percent to general operations, which
17 includes expanded police services, residential trash
18 service, and general management services required to
19 administer these additional funds and capital projects; and
20 5 percent to a reserve fund. A more detailed report on the
21 use of these funds was presented to the Gaming Commission
22 and was published in your most recent annual report.
23 We continue to work with Harrah's to finalize a
24 plan for additional significant development adjacent to the
25 casino. We anticipate that this area will be a focus of
1 announcement in the next few months. The city is also
2 working with Harrah's and the land owners of land south of
3 the casino to finalize an amendment to the city's
4 comprehensive plan and zoning regulation that will result
5 in the development of up to 2,000 acres over the next
6 20 years. In fact, we anticipate the construction of
7 2 million square feet of commercial development in the next
8 two years.
9 While the city has not entered into any revenue
10 sharing agreements, we have designated a significant
11 portion of our gaming revenue to extend the construction of
12 Maryland Heights Expressway, a major highway project that
13 has regional significance. We spent 38 million dollars on
14 the first phase that opened in 2003.
15 The counsel has budgeted 6.5 million dollars in
16 the 2007 budget for the construction of one-mile extension
17 of the Maryland Heights Expressway south of
19
neighboring communities,
20 legislators to urge MoDOT to complete the final phase of
21 Missouri Route 141 that would eventually link to the
22
23 When completed, this new highway will be the last
24 piece of an outer belt that would link Interstate 370 on
25 the north to Interstate 55 on the south. We are also using
1 these funds to provide 6.1 million in local match for the
2 reconstruction of Dorsett and I-270 interchange, which
3 supported Edward Jones' decision in December of 2006 to
4 announce their plans to build 600,000 square feet of new
5 office space in
6 1,000 jobs in the next five years.
7 The City of
8 unambiguously supports the relicensing of Harrah's.
9 Thank you.
10 And I have copies of this, if you would like.
11 CHAIRMAN SHULL: Are there any questions?
12 (No response.)
13 DIRECTOR McNARY: I can tell you, that's
14 significant road improvements, having dealt with that.
15 CHAIRMAN SHULL: Is there anyone here from the
16 public that would like to comment?
17 (No response.)
18 CHAIRMAN SHULL: Mr. McNary, do you want to
19 introduce the investigative summary presented?
20 DIRECTOR McNARY: Mr. Chairman, Sergeant
21 Dave Leitman will make a presentation.
22 SERGEANT LEITMAN: Mr. Chairman, Commissioners,
23 good morning.
24 COMMISSIONERS: Good morning.
25 SERGEANT LEITMAN: On December 29th, 2006,
1 Harrah's Entertainment, Incorporated, submitted a
2 relicensing application to the Missouri Gaming Commission
3 for their property in
4 into that property has been
conducted by the
5 Highway Patrol's Gaming Division, with the assistance of
6 several Missouri Gaming Commission staff members.
7 The
8 licensed as Harrah's
9 as Harrah's St. Louis
Casino. The
10 Commission has previously licensed or granted renewals of
11 their Class A License on several occasions, the most
12 current renewal expires March the 11th, 2007.
13 Credit and criminal background checks were
14 conducted on all of the company's Key and Level I
15 personnel. No discrepancies were discovered. A financial
16 analysis of the company was conducted by the MGC staff. No
17 discrepancies or concerns were discovered. The city of
18
19 contacted regarding the casino. And, again, no
20 discrepancies or concerns were discovered.
21 However, the investigation did discover two
22 concerns. The first of which is the volume of intoxicated
23 patrons as identified by the Missouri State Highway Patrol
24 assigned to the detachment there on the facility. That
25 problem is being worked on by the troopers assigned to that
1 facility, the Maryland Heights Police Department, and
2 management of Maryland Heights Casino, as you previously
3 heard.
4 Secondly, there's a concern from the
5 American Bureau of Shipping Consultants. They do the
6 inspections of the hull and the life-safety issues with the
7 casino. They had some code violations reported in their
8 2006 ABS report -- or their report, and some of the fire
9 suppression issues are still present, according to them and
10 the fire department. However, a 2007 report has not yet
11 been issued.
12 There were no other discrepancies or concerns
13 found during the investigation. The report provided to you
14 was prepared for the purpose of assisting you in
15
determining the suitability of Harrah's
16 LLC, for relicensure. Thank you.
17 COMMISSIONER HAIS: Mr. Chairman, just a real
18 quick question. I'm a little confused.
19 I thought you said that the city of
20
21 you covered, about --
22 SERGEANT LEITMAN: The intoxicated patrons?
23 COMMISSIONER HAIS: Intoxicated --
24 SERGEANT LEITMAN: That's correct.
25 COMMISSIONER HAIS: Was it the highway
1 patrol's -- the investigator's concern?
2 SERGEANT LEITMAN: No. It's a concern that has
3 been put forth through all of the venues. In interviewing
4 all of the appropriate parties, there's a plan in place to
5 correct the problem, but they're ejecting several hundred
6 intoxicated pedestrians on a monthly basis, which has been
7 brought to the attention as an issue to be resolved. It is
8 being worked on, but there's a solution -- or an exact
9 solution to cut that number down, that's not -- I mean,
10 it's still out there.
11 COMMISSIONER HAIS: I'm not clear on why it's
12 not
a concern for the city of
13 SERGEANT LEITMAN: I interviewed the chief of
14 police. He said, that problem is there. It's not a
15 concern. We're working on it.
16 I interviewed the mayor. The problem is there.
17 It's being worked on. It's not a concern of ours. We
18 think we've got it under control.
19 COMMISSIONER HAIS: I understand. Let me
20 just -- one last question.
21 SERGEANT LEITMAN: Anything, sir.
22 COMMISSIONER HAIS: But under the categories of
23 offenses that you have listed here, there are family
24 offenses.
25 Are you familiar with those?
1 SERGEANT LEITMAN: What page are you on?
2 COMMISSIONER HAIS: I think it's 32 -- 32 and
3 33. They're listed alphabetically. Do you see family
4 offenses?
5 SERGEANT LEITMAN: Yes, sir, and there are none
6 listed.
7 COMMISSIONER HAIS: Yeah. I'm just wondering,
8 are those disturbances of the peace in addition to other
9 matters?
10 SERGEANT LEITMAN: Domestic issues are
11 primarily in there, and --
12 COMMISSIONER HAIS: You're -- we're supposed to
13 ban child support obligors, right, or obligees?
14 SERGEANT LEITMAN: No, sir. This is a database
15 that the Commission here keeps. In those categories, there
16 were no crimes, if you will, committed in the previous two
17 years that fit those categories. I guess I should have
18 went through and deleted them from Excel, but I just
19 printed them as they came to me.
20 CAPTAIN LESTER ELDER: Mr. Commissioner, these
21 are standards set by the FBI on the Uniform Crime Reporting
22 in
23 COMMISSIONER HAIS: Okay. Thanks.
24 SERGEANT LEITMAN: Anything else, sir -- or
25 gentlemen?
1 CHAIRMAN SHULL: I think we'd like for
2 Mr. Block to return.
3 I do have some questions about the alcohol
4 ejections.
5 According to the figures that were presented, in
6 '05, we had 1,690 ejections, both from the casino and the
7 other banned category, and then '06, we had 2,416
8 ejections.
9 I'm wondering why it took so long to discover
10 that there was a problem and how can we be certain it's
11 going to be corrected.
12 MR. BLOCK: I think the number increased
13 because we've been more rigorous and more diligent in
14 trying to identify these -- these people. We do market to
15 a younger audience in some of those venues, VooDoo Lounge.
16 We have a lot of assets on the property, and we program
17 them differently day-to-day, week-to-week.
18 We realize that when we do that, we invite
19 sometimes younger folks, but I will tell you that we have
20 had situations, as recently as two weeks ago, where a
21 St. Charles County Sheriff was intoxicated in our men's
22 room of the VooDoo Lounge and became sick and had a firearm
23 exposed in his waistband.
24 So it's not just younger folks that present that
25 kind of problem. Sometimes it's even law enforcement folks
1 that have been on property. That's not the only one that's
2 occurred, but just an example. We have a wide spectrum of
3 audience based on day parts, based on day of the week. And
4 in the evenings -- particularly on Friday and Saturday
5 night, we've elevated our awareness of this, not only with
6 our security officers, with the state police. And then
7 mid-year, we decided to try to improve that even further by
8 having uniform present with
9 So I think part of the reason our numbers have
10 increased dramatically is just that we have been more aware
11 and more diligent in identifying these people that maybe in
12 the past we missed.
13 COMMISSIONER HAIS: Let me just follow up. You
14 were present, Mr. Block, and you heard the question I asked
15 the officer about family offenses, family matters.
16 MR. BLOCK: Sure.
17 COMMISSIONER HAIS: One of those matters is
18 child support enforcement. You're not supposed to permit
19 people coming in who owe -- who are deadbeat parents, for
20 lack of a better term.
21 You're familiar with that, aren't you?
22 MR. BLOCK: Somewhat.
23 COMMISSIONER HAIS: Well, are you familiar with
24 what steps you take to do that, to accomplish that result?
25 MR. BLOCK: I'm not.
1 Fred, do you know?
2 COMMISSIONER HAIS: Is there a database that
3 you have in your possession?
4 MR. STUCKEL: Commissioner, could you expand on
5 that, please? Obviously, I'm a little bit lost right now,
6 in terms of a database that we're supposed to be getting
7 from the state of deadbeat parents. I was just kind of
8 presuming you're aware of that notice.
9 COMMISSIONER HAIS: Correct me, if I'm wrong,
10 Commissioner -- Mr. McNary, the status of child support
11 obligees is supposed to ban them from casinos; is that
12 correct, or not, if you know?
13 MR. STOTTLEMYRE: If I -- if I could, I believe
14 there's proposed legislation --
15 COMMISSIONER HAIS: Okay.
16 MR. STOTTLEMYRE: -- of that type out there;
17 however, there's nothing in place at this time.
18 COMMISSIONER HAIS: Well, that's fine. Either
19 way. If that's something that the legislature intends to
20 provide -- a bill that they intend to pass, would you have
21 any objection, offhand, to -- instead of doing that, to use
22 that same database that you would have to make reference to
23 anyway, to confiscate winnings of deadbeat parents who won
24 over a certain amount of money, as they do in some other
25 states?
1 MR. STUCKEL: I think if the Missouri Gaming
2 Commission passed such a regulation, I think we would be
3 compelled to comply with it, sir. I mean, at this time,
4 it's just a process that we haven't implemented yet. But
5 it could be implemented, yes. It could be implemented
6 where we could be checking, similar to the manner in which
7 we handle disassociated persons. When there's a jackpot
8 won, we go ahead and reverify through the Gold Card,
9 through our boarding card, you know, the status of that
10 particular patron. If we have a database, it could be
11 implemented, yes.
12 COMMISSIONER HAIS: Yeah. My point is, if
13 you're probably going to have to check the database anyway,
14 you wouldn't have any particular objection offhand to
15 holding that money and paying it over to the state --
16 MR. STUCKEL: No, no.
17 COMMISSIONER HAIS: -- in payment of child
18 support obligations that already exist?
19 MR. STUCKEL: Obviously, there will be
20 regulations that would guide us through the process of how
21 we could do that clearly, but if it's implemented, there's
22 not a problem.
23 COMMISSIONER HAIS: Thank you. That's all I
24 have, Mr. Chairman.
25 CHAIRMAN SHULL: Mr. McNary?
1 DIRECTOR McNARY: Mr. Chairman and Members of
2 the Commission, staff has problems in two areas. One --
3 and it's acknowledged by
Harrah's
4
5 persons. It's gone on for some time. It's eluded to in
6 their presentation -- or their written materials. All
7 employees are vigilantly watching guests to identify
8 intoxicated patrons for purposes of either discontinuing
9 alcohol service and/or eviction.
10 We believe that a plan needs to be in place to
11 deal with this problem. This is the only boat of 11 where
12 we have this amount of intoxication and the problem that it
13 brings with it. We'd like to see a more detailed plan as
14 to how they intend to cope with this problem.
15 Secondly, on February 13th -- and it may be there
16 just hasn't been enough time -- but our compliance auditor,
17 John Nathan, wrote to Harrah's, asking for documentation to
18 confirm their numbers, so far as they relate to minority
19 hiring and women hiring. We have not received those -- an
20 answer back from Harrah's.
21 And so those two matters, staff believes, require
22 a follow-up, and the recommendation, therefore, is that
23 their license be extended for 30 days and that renewal be
24 considered at the next commission meeting.
25 CHAIRMAN SHULL: What was the date of the
1 request for the information?
2 DIRECTOR McNARY: April 13th, so that would
3 have been -- or February 13th. That would have been a week
4 ago.
5 CHAIRMAN SHULL: Any comments, Mr. Block?
6 MR. BLOCK: Yeah. We received that on the
7 13th, and it was requested back on the 16th. It was
8 overnighted on the 15th.
9 DIRECTOR McNARY: You have submitted it?
10 MR. BLOCK: Yes.
11 DIRECTOR McNARY: Well, then, you know, we
12 probably have it, have not reviewed it, and same
13 recommendation.
14 COMMISSIONER HAIS: When is the next meeting?
15 CHAIRMAN SHULL: 28th of March.
16 Is there a motion to that?
17 COMMISSIONER PLUNKETT: I'll make a motion to
18 that.
19 COMMISSIONER JONES: And I'll second it.
20 CHAIRMAN SHULL: Is there further discussion
21 regarding a 30-day extension to obtain this information and
22 to review it?
23 COMMISSIONER HAIS: I just think, in view of
24 Mr. Block's response, it should be noted for the record,
25 although, it's obvious that it's just a circumstance, it's
1 no fault of Harrah's and certainly no fault of the staff,
2 because they haven't had time to review it. It's just one
3 of those circumstances that requires a little patience on
4 everybody's part.
5 But subject to that, yeah.
6 CHAIRMAN SHULL: Is there further discussion?
7 (No response.)
8 CHAIRMAN SHULL: Call the roll, please.
9 MS. FRANKS: Chairman Shull?
10 CHAIRMAN SHULL: Approved.
11 MS. FRANKS: Commissioner Jones?
12 COMMISSIONER JONES: Approved.
13 MS. FRANKS: Commissioner Hais?
14 COMMISSIONER HAIS: Approved.
15 MS. FRANKS: Commissioner Plunkett?
16 COMMISSIONER PLUNKETT: Approved.
17 MS. FRANKS: By your vote, you've extended the
18
license of Harrah's
19 CHAIRMAN SHULL: Thank you.
20 DIRECTOR McNARY: Mr. Chairman, I may have said
21 this, but there's some confusion. We want it on the record
22 that there needs to be a plan by Harrah's of how they
23 intend to deal with intoxicated persons.
24 CHAIRMAN SHULL: A written plan?
25 DIRECTOR McNARY: Yes, sir.
1 CHAIRMAN SHULL: Fine.
2 COMMISSIONER HAIS: Well, Mr. Chairman, I would
3 just -- just to take that one step further, if we're going
4 to consider the relicensure on the 28th of March, that plan
5 would need to be in, so that we don't have another problem
6 with having have time to consider it and discuss it, rather
7 than just doing it on the spot on the 28th.
8 CHAIRMAN SHULL: Mr. Block, how long would it
9 take you to develop a plan in response to that question?
10 MR. BLOCK: We can have a plan to you,
11 submitted within the week, next week.
12 DIRECTOR McNARY: That's fine.
13 CHAIRMAN SHULL: Thank you.
14 COMMISSIONER JONES: Wait a minute. Would that
15 include -- can we get a plan -- do we have to take another
16 vote for them to issue a plan on their minority contract --
17 minority and women contracts, or could that be part of it,
18 since we're going to review it in March?
19 DIRECTOR McNARY: That's already submitted,
20 Commissioner. We just need to review it, yes.
21 COMMISSIONER JONES: Okay.
22 CHAIRMAN SHULL: We'll just review it at the
23 next meeting and see if any further action is required on
24 their part.
25 Is that satisfactory with you?
1 COMMISSIONER JONES: I thought you had
2 mentioned that it was for hiring -- employee hiring and not
3 the contracts, not the vendors.
4 DIRECTOR McNARY: I think it includes all of
5 the above.
6 COMMISSIONER JONES: Okay.
7 DIRECTOR McNARY: What we asked for included --
8 it was general, and it was a documentation of their best
9 efforts in all of these areas, vendors, as well as
10 percentages, population numbers.
11 COMMISSIONER JONES: Okay.
12 DIRECTOR McNARY: In fact -- not to belabor
13 this, but the letter said -- Mr. Nathan said he needed to
14 know any and all organizations, company, and agencies that
15 they had worked with to make this happen.
16 So it was beyond just the documentation going
17 into those things that you inquired about.
18 CHAIRMAN SHULL: Well, we'll know more whenever
19 we have an opportunity to look at the report. And if
20 there's further action we decide to take, we can do that
21 next month.
22 COMMISSIONER JONES: All right. Thank you,
23 Mr. Chairman.
24 CHAIRMAN SHULL: The next issue to be
25 considered is the Ameristar Casino Kansas City, Inc.,
1 relicensure.
2 DIRECTOR McNARY: Mr. Chairman, Commissioners,
3 this is Gordon Kanofsky, who's the manager, CEO -- what are
4 you?
5 MR. KANOFSKY: I'm the co-chairman of the
6 Board of Directors of Ameristar Casino. I'm also the
7 Executive Vice President of the company. I'm also
8 co-personal representative of the Estate of Craig Neilsen
9 and a co-trustee of the Craig H. Neilsen Foundation. And I
10 never went to school with any of these guys.
11 Good morning, Chairman Shull, Commissioners, and
12 Executive Director of the Gaming Commission.
13 Also with me today is Troy Stremming, our
14 Chief Governmental Affairs Officer; Tim Wright,
15 Vice President and Interim General Manager of Ameristar
16
17 and
General Manager of
18 In terms of your Agenda, we intend to address
19
both the
20 at once, although we recognize that a separate vote will be
21 taken.
22 I'm here today to provide you with an update on
23 the Estate of Craig Neilsen and its holdings with
24 Ameristar. I'll also provide you with a glimpse of our
25 strategy for the future growth of the company, and then I'd
1 be happy to answer any questions you may have regarding
2 those issues.
3
4 connection with the renewal of our Class A Licenses, and
5 Tim and Jim will share with you some of the recent projects
6 that were recently completed during the licensure period,
7 as well as some of the exciting projects that we have under
8 construction primitively. They then will be happy to
9 entertain any questions you have concerning the properties
10 at the completion of our presentation.
11 I'd first like to recognize our late founder and
12 majority shareholder, as well as my personal friend and
13 mentor, Craig Neilsen. Along with the entire Ameristar
14 team, I continue to draw a tremendous inspiration from
15 Craig's example of hard work, compassion, and unfettered
16 dedication. Going forward, we are all focused on building
17 upon the tremendous legacy that Craig has left us. I'd
18 also like to recognize all of our Ameristar team members,
19 including the management team, who are helping Ameristar
20 through this transition.
21 Based on our past results, we believe our success
22 is driven by our key business strategies, which continue to
23 be: Creating the best facilities through upgraded design
24 and finishes; offering our guests the best gaming
25 experience and making sure that all of our offerings, from
1 our food and beverage, entertainment, hotel rooms, games,
2 and guest service, are top quality; and, finally,
3 positioning the Ameristar brand as the best in each market.
4 Our overall focus is on being the most profitable
5 operator in our markets through an active management
6 approach. Our centralized management structure provides us
7 with the flexibility and speed to adjust our business
8 strategies quickly to respond to the constant evolution of
9 our fast-paced industry. Our focus on maximizing
10 profitability will continue to enhance the company's
11 performance in the future. The expectations of our guests
12 are constantly rising, and our property investments are
13 designed to satisfy our guests' future expectations and to
14 capture additional revenues while achieving acceptable
15 returns on investment.
16 As a representative of Craig Neilsen's estate,
17 I'd like to update you on items related to the estate and
18 its shareholdings in Ameristar. I know you're interested
19 in the future ownership of the company following Craig's
20 unexpected death last November, and I'm pleased to be here
21 today to share it with you.
22 Craig owned approximately 31 million shares,
23 which is around 56 percent of Ameristar's stock. Those
24 shares are now held by the estate, of which Craig's son,
25 Ray, and myself are the co-personal representatives.
1 Ultimately, the estate plan provides for 25 million of
2 those shares to be distributed to the Craig H. Neilsen
3 Foundation, which is primarily focused on spinal cord
4 injury research and treatment programs. Ray and I are also
5 the co-trustees of the foundation.
6 The remainder of Craig's shares will be
7 distributed to Ray, as well as a trust for his benefit.
8 For an estate such as Craig's, we currently believe it will
9 take several years, perhaps in the range of four to five,
10 before the estate is administered and the Ameristar shares
11 are transferred to the estate's beneficiaries, including
12 the foundation.
13 There are restrictions prohibiting a private
14 foundation for owning more than a 20 percent interest in a
15 company. However, these requirements are only triggered
16 five years after the foundation takes title to the shares.
17 That's a good eight to nine years from now, or possibly
18 longer, before the foundation could face this 20 percent
19 requirement.
20 There has been some speculation that Craig's
21 estate would need to sell down its shares in order to pay
22 the necessary estate taxes. However, the estate has
23 significant other assets in addition to the shares, and we
24 anticipate that the estate taxes will be paid in
25 installments over several years. Accordingly, we do not
1 believe there is any immediate pressure on the estate to
2 sell any Ameristar shares.
3 Ray and I are well aware of Craig's intentions
4 and wishes with regards to Ameristar's future. Craig's
5 clear desire was for the company, through his estate and
6 eventually the foundation, to retain its holding in
7 Ameristar for the long-term. Ray and I have confidence in
8 the Ameristar growth plans and its ability to create
9 shareholder value as a stand-alone entity.
10 Accordingly, as personal representatives of the
11 estate, we have no plans to sell any Ameristar shares in
12 the near or intermediate term. Notwithstanding the changes
13 in shareholdings, we don't anticipate any changes in
14 operations that would be noticeable by our team members,
15 guests, or the communities in which we operate, or the
16 Commission. Ameristar will continue to be focused on
17 providing a premiere guest experience, while striving to be
18 the employer of choice and maintaining our commitment to
19 our host communities as a strong corporate citizen.
20 In looking toward the future, our strategic aim
21 is to double the size of the company on a cash flow basis
22 during the next three to five years. We estimate about
23 half of that increase will come from investing in our
24
existing properties, including those in
25 other half will come from acquisitions and new
1 developments. Our current pursuit of acquisitions is the
2 most aggressive in the company's history. We strongly
3 believe there is a significant unmet demand for the
4 Ameristar experience, and we have confidence in our ability
5 to drive accretive growth.
6 Over the years, Ameristar has developed and
7 executed a proven business strategy for the development,
8 acquisition, integration, and operation of properties with
9 strong growth in revenues and EBITA.
10 For example, as you know, in late 2000, we
11
acquired our two
12
13 improved the cash flow performance of that property by
14 almost 60 percent.
15
The Black Hawk acquisition in
16 at the end of '04, is another example of this strategic
17 approach. The casino, restaurant, and parking renovation
18 and expansion project has already yielded positive results,
19 and we expect the addition of the restaurant there to
20 further drive success of that property.
21 We also believe there's unmet demand for the
22 Ameristar experience in additional markets, and we intend
23 to aggressively seek additional regional and local markets
24
throughout the
25 acquisitions, but also selectively through new
1 developments. We'll also be opportunistic in considering
2 markets such as the Las Vegas
Strip and
3 objective is to significantly increase our distribution and
4 penetration in new markets with strong demographics. This
5 should allow us to diversify our revenue base and increase
6 our cash flow.
7 We will also selectively consider foreign
8 opportunities, in which we anticipate a significantly
9 higher return on investment than is achievable
10 domestically. We have proven flexible in terms of having
11 structured transactions, when and if the right opportunity
12 presents itself. At the same time, Ameristar has always
13 been and will continue to be a very disciplined buyer.
14 In closing, I'm proud to report that 2006 was the
15 most successful year in Ameristar's history. Earlier this
16 month, we reported a record fourth quarter and annual
17 financial results. And, in fact, this is our fifth
18 consecutive year of record results across, virtually, all
19 metrics.
20 We're delighted with these results, which
21 reinforce the success of our business strategies and which
22 will allow us to continue to grow our company and reinvest
23 in
our premiere properties here in
24 I'd be happy to answer any questions before we
25 turn it over to the license presentation.
1 CHAIRMAN SHULL: Are there any questions?
2 (No response.)
3 CHAIRMAN SHULL: Okay. I'll turn it over to
4 Mr. McNary.
5 MR. KANOFSKY: Thank you for your time.
6 DIRECTOR McNARY: Mr. Chairman, this is
7 Troy Stremming. He's well-known here.
8 MR. STREMMING: Good morning, Chairman Shull,
9 Commissioners, and Executive Director McNary.
10 We're here before you today to make a
11 presentation in association with the renewal of our
12 Class A Licenses. We believe that the information provided
13 to you this morning will support relicensure, as both
14 properties have upheld all commitments to their respective
15
communities, team members, and the state of
16 Specifically, the information provided will be in
17 response to the request for information we received from
18 the Commission staff. In the interest of time, we're going
19 to go through both properties at the same time.
20 Regarding Ameristar's philosophy, we touched on
21 that briefly, but in addition to being known as a company
22 that is known for its premiere properties characterized by
23 innovative architecture, state-of-the-art casino floors,
24 and superior dining, Ameristar is also dedicated to
25 generating economic development in the communities in which
1 we reside, offering its team members rewarding careers,
2 while being good corporate citizens through charitable
3 giving, volunteerism, and sound social responsibility.
4 Ameristar's quality properties are popular
5 entertainment destinations for local and regional visitors.
6 Ameristar's proud of its significant capital investments in
7 its casinos, and it continues to reinvest and enhance its
8 properties through ongoing expansion and capital
9 expenditures that Jim and Tim will speak to you about after
10 my presentation.
11 In keeping with the requested format, I'll now
12 summarize the commitments of Ameristar Casino Kansas City
13 and
14 The first item of discussion is the development
15 agreement with the Kansas City Port Authority. Through its
16 commitments under the development agreement, Ameristar
17
18 Riverfront Project Fund. $50,000 of this amount was
19 utilized for local scholarship programs. $200,000 was used
20 to assist with the development of the riverfront in
21
22 annually to the Kansas City Port Authority for the
23 awareness and research of problem gambling disorders.
24 The property also contributed $200,000 annually
25 to a foundation which was established to provide
1 developmental support for minorities and women in business.
2 This funding is available for M/WBE loans or as collateral
3 to secure loans from banks or other financial institutions
4 operating throughout the city
of
5 commitments have now been fully funded.
6 Since Ameristar
7 working closely with the Kansas City Port Authority to
8 further the local economy, it has voluntarily entered into
9 a new funding agreement. Under the new 5-year agreement,
10 we will annually provide $75,000 for general operational
11 expenses of the Port Authority and $100,000 to the
12
13
14 least $25,000 annually to the Port Authority's Problem
15 Gambling Awareness Fund.
16
In addition, the
17 to providing up to $100,000 for a disparity study to
18 analyze M/WBE contracting goals in its community. And,
19 finally, as part of the new agreement, Ameristar
20 contributed 2 million dollars to the Port Authority for the
21 completion of the Riverfront Heritage Trail at the ASB
22 Bridge.
23 All of these payments are being made while the
24
company continues to reinvest in its
25 Ameristar St. Charles does not have a development
1 agreement with the City of
2 property continues to display substantial commitment to the
3 city, in part through continued reinvestment. The recent
4 completion of the first-class conference facilities and the
5 current construction of our 400-room, all-suite hotel and
6 additional 2,000-space parking garage are evidence of this
7 fact.
8 The total cost of these projects is expected to
9 be around 265 million dollars, and Jim will provide you
10 with the specifics of this reinvestment later in the
11 presentation. In addition, Ameristar's philanthropic
12 involvement in the community further confirms our
13
commitment to the City of
14
Turning to the summary of
revenue,
15 AGR was over 237 million, 252 million, and 259 million,
16 respectively, for 2004 through 2006. The increases over
17 this period are attributable to increased business obtained
18 as a result of a substantial capital reinvestment in the
19
property and the
20 service.
21
In
22 305 million, and 303 million, respectively, through -- from
23
2004 through 2006.
24 has been modestly impacted by intense competition in the
25 marketplace and adjustments for our marketing program to
1 maximize profitability.
2 We'll turn now to
admissions.
3 admissions were over 9.1 million, around 9 million, and
4 8.7 million, respectively, from '04 -- I'm sorry -- through
5 2004 to 2006.
6
7 10.8 million, 10.1, and 9.5 million, respectively, for the
8 same period of time. We continue to see a slight decline
9 in the number of admissions, as more mature gamblers are
10 spending more money while gambling for shorter periods of
11 time; therefore, resulting in fewer stayovers in gaming
12 sessions.
13
In addition,
14 impacted by the same competitive factors that we discussed
15 regarding revenues.
16 Reinvestment. Ameristar's philosophy is to
17 continue to make improvements and reinvest in its
18 properties to grow revenues and admissions. Since
19
December of 2004,
20 capital improvement projects totaling over 28 million
21 dollars in an effort to continue to enhance the property.
22 These projects have included hotel room and lobby
23 renovations, buffet renovations, as well as changes to our
24 employee dining room. Additionally, the property has
25 undertaken many smaller capital improvement projects, which
1 have totaled over 7 million dollars for that same period.
2
3 improvement projects to continue to enhance its property.
4 These projects included a 55,000 square foot conference
5 facility, which will be integral to the hotel currently
6 under construction, and the reconfiguration of the casino
7 floor provides a state-of-the-art gaming experience. The
8 total amount spent on these projects was over 33 million
9 dollars.
10 Additionally, the property has also undertaken
11 many smaller capital improvement projects, which have
12 totaled over 7 million dollars for the same period of time.
13 As a point of clarification, neither the
14
15 hotel or the new garage that's been completed to date.
16 Regarding Ameristar's employment practices, our
17 properties strive to be an employer of choice. Both
18
19 and made many policy enhancements over the last period of
20
licensure.
21 of
which reside in the state of
22 minority and women employment percentages are 29 percent
23 and 48 percent, respectively.
24 The average cash compensation computed by the
25 EEOC job group ranges from officers and managers at just
1 over $62,000 a year to service workers at approximately
2 $21,000 a year. The service workers compensation may
3 appear low; however, the tips these team members receive,
4 which in many cases make up the majority of their income,
5 are not included in these figures.
6 Also, it should be noted that none of these
7 figures include additional compensation in the form of
8 benefits, which averages approximately $9,300 per year per
9 team member.
10
11
1,693 reside in the state of
12 minority and women employment percentages are 30 percent
13 and 47 percent, respectively. And, again, computing the
14 average cash compensation by EEOC job group, the pay ranges
15 of officers and directors is at $56,677 and ranges to
16 service workers at just over $23,000 per year. And, again,
17 benefits and tips are not included in those numbers.
18 Regarding other opportunities for women and
19
minority, Ameristar's
20 providing opportunities to minority and women business
21 enterprises. The properties work to achieve this objective
22 by increasing awareness of vendor diversity initiative
23 opportunities on a quarterly basis with the purchasing
24 department, increasing company-wide awareness of vendor
25 diversity initiative objectives, and ultimately giving
1 every reasonable business opportunity to businesses owned
2 by minorities and women to participate as direct suppliers,
3 contractors, and subcontractors. Results are monitored and
4 measured to the goals that are set.
5
6 17 percent for 2004, 13 percent in 2005, and 11 percent in
7 2006. During the same period of time,
8 purchases from MBEs and WBEs was 10 percent, 10 percent in
9 2005, as well, and then 7 percent in 2006. The reason for
10 the
significantly lower percentages in
11
12 construction purchases. Because of the significant amount
13 of capital that was spent on construction projects during
14 this period, the construction utilization numbers drove the
15 overall MBE and WBE percentages down.
16 I think it's also important to note what those
17 percentages equate to. For example, in 2006, those
18 figures, with those percentages, would equate to, in
19
20 about 4.7 million dollars.
21 We'd like to make it clear to the Commission that
22 the concept of diversity and inclusion is valued
23 significantly at Ameristar. And although we value the
24 importance of this concept and we've taken steps toward
25 improvement, we recognize that our overall diversity
1 efforts require additional focus and further development.
2 Our senior corporate management team has made the
3 diversity and inclusion program a priority for improvement.
4 To address our construction contracting shortfalls, we have
5 amended all construction-related bidding documents and
6 contracts to emphasize the importance of MBE and WBE
7 participation and that such participation will be one of
8 the criteria by which contracts are awarded.
9 In addition, we're also seeking to increase our
10 diversity purchases by operating goods and services, and we
11 are seeking to increase diversity among our management
12 ranks. Just last month, Ameristar launched a new automated
13 supplier registration process through the company's
14 website. The new online program will streamline bidding
15 and contracting with vendors and service providers. In
16 addition, Ameristar intends to utilize the supplier
17 database to generate additional opportunities for MBEs and
18 WBEs.
19 Ameristar Casinos also recently appointed
20 Carl Brooks to the Board of Directors. Mr. Brooks has had
21 a long and distinguished career in the electric utility
22 industry, and he currently is the president and CEO of
23 The Executive Leadership Council, the nation's premier
24 leadership organization representing the most senior
25 African-American corporate executives in Fortune 500
1 companies. In addition to the focus and leadership on
2 diversity initiatives we expect from Mr. Brooks'
3 participation on the Board, the company has also retained
4 the services of Jim Lowry at the Boston Consulting Group to
5 help steer these initiatives.
6 I think it's also important to note that I'm the
7 outgoing chairman of the Minority Supplier Council. I'm
8 also the incoming chair of the
Urban League in
9 So we do recognize the importance of these issues, and
10 we're working to continue to grow these numbers.
11 Regarding responsible gambling, Ameristar has
12 pledged to make responsible gaming an integral part of its
13
daily operation. Both
14 to achieve this objective by adhering to initiatives
15 adopted at each property. These include the recent
16 implementation of enhanced training programs to ensure that
17 all required team members receive responsible gaming
18 training when hired and that they're retrained on an annual
19 basis. Also, guests indicating the need for responsible
20 gaming information are informed of the 888-BETS-OFF option
21 and the state-wide DAP program. The properties also have
22 signage at the players club booths that alert guests -- I'm
23 sorry -- alert guests that they may be removed from
24 promotional mailings when requested.
25 Exclusion program brochures and applications to
1 discontinue ATM and check-cashing privileges at a casino
2 are also available at the cashier cages.
3
4 and brochures to communicate responsible gaming to guests
5 and team members throughout our facilities. Annual
6 participation in the AGA's Responsible Gaming Education
7 Week also occurs at each of our properties.
8 This week includes many property events regarding
9 responsible gaming to heighten guest and team member
10 awareness about problem gambling. Finally, all print,
11 television, on-property, and off-property advertisements
12 contain the, Gambling Problem? Call 1-888-BETS-OFF in
13
14 And, lastly, Ameristar has committed, as I spoke
15 of earlier, to a $100,000 annual contribution for problem
16 gambling awareness through the American Gaming Association.
17 Regarding underage gambling, both properties
18 ensure that the law concerning the legal gambling age is
19 vigorously upheld on a daily basis. To do this, the
20 properties have implemented a program to ensure that all
21 required team members receive underage gaming prevention
22 training when they're hired and that training is updated on
23 an annual basis. As you know, guests are not allowed to
24 access the casino floor if they're under the age of
25 21 years. To ensure this is the case, any guest appearing
1 to be under the age of 30 is required to produce
2 identification prior to entering the casino floor.
3 It is also our practice to randomly card
4 individuals under the age of 30 once they're on the casino
5 floor. Both casinos have signage at the casino entrances
6 which state that guests must be 21 years of age to enter.
7 And this message is also placed throughout the property, as
8 well as on our marketing materials, to make sure that the
9 message is out.
10
Finally,
11 reward for identifying guests under the age of 21 that are
12 on the casino floor. A similar program has been
13
implemented at
14 had
with that program in
15 I'll now turn to charitable efforts.
16
Ameristar Casino Kansas City and
17 commitment to the communities in which we operate, through
18 charitable contributions and volunteerism, is a big part of
19 who we are as a company. In 2005, contributions totaling
20 over $320,000 were made and $350,000 were made in 2006.
21
Additionally,
22
contributions of $200,000 to
23 members have also contributed $230,000 to our
24 2005 Workplace Giving Campaign and almost $250,000 to that
25 same campaign in 2006.
1 It's also important to understand that the team
2 member contributions which were made were matched by the
3 company, and any funds given to physical rehabilitation
4 efforts were matched again by our past CEO's foundation.
5 In
6 totaled over $430,00 in the local community. This amount
7 included annual payments for capital campaigns, which
8 included a $50,000 commitment
to
9 for the Family Support Services, both providing services
10 for disabled individuals.
11 In 2006, contributions totaled over $450,000,
12 which included annual payments toward a $120,000 capital
13 campaign for Habitat for Humanity, and, finally, among
14 other charities, ACSC's team members have contributed over
15 $196,000 in 2005 and $200,000 in 2006. And, again, all of
16 those funds were matched by the company once and twice by
17 our past chairman's foundation, if it regarded spinal cord
18 research rehabilitation.
19 Regarding employee volunteerism, Ameristar
20
21 causes in the community. Their contribution of time is
22
very noteworthy. The
23 in, among a multitude of others, the MDA Telethon, which is
24 held at Ameristar Casino Kansas City, the Urban League of
25
Greater
1
2
3 in addition to many others, the Susan G. Komen Race for a
4 Cure, Operation Food Search, Evangelical Children's Home,
5 and the
6 Finally, as mentioned earlier, ongoing property
7 improvements are an integral part of Ameristar's operating
8 strategy. In particular, Ameristar's committed to maintain
9 the most advanced casino floors and premiere properties in
10
each of its markets. The
11 objective by undertaking several large projects at each
12 property, some of which have already begun and others that
13 have been recently completed.
14 I'll now turn the presentation over to Tim Wright
15 and Jim Franke to share with you some of their exciting
16 improvements that are being made or have been recently
17 completed at each of the properties, and then I'm come back
18 up after they give that portion of the presentation for
19 questions.
20 Thank you.
21 MR. WRIGHT: Thank you,
22 Good afternoon, Chairman and Commissioners. I'd
23 like to take this opportunity to give you an opportunity to
24 see some of the wonderful improvements that we've made to
25 Ameristar Kansas City. The first slide -- we -- in 2004,
1 we initiated a hotel remodel. The renovation was completed
2 in September 2005 at a cost of 22 million.
3 The new bathroom finishes include rich granite
4 counter tops, marble flooring, and luxurious bath
5 amenities. All rooms have been updated to the grade of a
6 AAA Four Diamond-quality and include plush finishes,
7 upscale European-style bedding, 40-inch plasma televisions,
8 mini-bars in each room, and high-speed internet access.
9 We also renovated, to carry the thread of
10 consistency through the hotel experience, our hotel lobby,
11 which was completed in September of 2006. The cost of the
12 project was 3.6 million dollars. The dramatic new lobby is
13 enveloped in layers of chocolate brown, fire orange
14 textured walls with sheer drapery, glass mosaic tile, and
15 rich shaped wood columns. Contemporary seating provides a
16 living room feel next to the new front desk made of
17 ebonized wood with a floating glass top and a separate VIP
18 check-in room. New custom oil paintings, contemporary
19 artifacts, and glass sculptures complete the lobby art
20 collection.
21 Finally, we completed the buffet renovation in
22 November of 2005. The cost of this project was
23 3.2 million dollars. The renovation included new
24 upholstery, chairs, carpeting, artwork specifically
25 commissioned to reflect the midwestern themes. There are
1 also custom-made crystal chandeliers and new lighting
2 appropriate to each food venue. The trellises on that
3 front porch area with fans and bright lighting over the
4 patio, which create a cafe feel. The main dining room has
5 been enclosed and the seating capacity has been increased.
6 We intend to continue the reinvesting in our
7 properties regarding capital projects during the next
8 period of licensure, and we're committed to constantly
9 improving upon the master plan to ensure a fresh look for
10 our guests.
11 At this time, I'll turn the presentation over to
12 Jim Franke.
13 MR. FRANKE: Thank you, Tim.
14 Good morning Chairman Shull, Commissioners,
15 Executive Director McNary, Commission staff.
16 I, too, will take you through some of our
17 projects that have been completed during the last couple of
18 years and also a current project that's moving forward and
19 one that we're very excited to get started with.
20 First, we recently completed a new 55,000 square
21 foot conference facility. The cost of the facility was
22 20.1 million dollars. It includes two ballrooms, five
23 meeting rooms, an executive boardroom, and a
24 state-of-the-art business center. The 10,000 square foot
25 grand ballroom and pre-function event area are highlighted
1 with a rare onyx covered wall and 12-foot custom wood
2 doors. The grand ballroom can house a variety of
3 configurations with built-in audio/visual system, special
4 sound fabric, and acoustic ceiling and walls, touch screens
5 for lighting and room temperature, as well as WIFI
6 capabilities.
7 A separate kitchen offers full catering service
8 and one of the first American-made convotherm ovens that
9 combines steam with air cooking. The smaller meeting rooms
10 and executive boardroom also provide the same technical
11 features as those available in the ballroom. The business
12 center offers full-service presentation systems for our
13 guests to use, as well as internet, copy, fax, and mailing
14 services.
15 Something that's gotten the city definitely in a
16 buzz is the project of our new Ameristar St. Charles hotel.
17 It has 400 rooms, all suites, with an additional 2,000
18 space parking garage. The cost of this project, including
19 the
conference facilities, as
20 265 million dollars. This past Friday, 1,000 of those
21 parking spaces were turned over to operations, which will
22 partially alleviate capacity restraints during our peak
23 periods. The remaining 1,000 spaces will be turned over
24 along with the hotel in December of '07.
25 Room finishes will also be similar to
1
2 In addition,
3 living room area that will
showcase the
4 one side and
5 guest suites will measure at least 628 square feet. While
6 every room will be a suite, the hotel has 12 enhanced
7 suites, 10 king spa suites, and two presidential suites.
8 The indoor/outdoor pool will feature fountains and hot
9 tubs. The pool deck will include fire pits, cabanas,
10 daybeds, and a meeting area.
11 The 7,000 square foot destination full-service
12 spa will include private treatment rooms, steam rooms,
13 whirlpools with waterfall features, saunas, as well as
14 men's and women's lounges. The hotel is designed to
15 surpass AAA Four Diamond-quality standards, and we are
16 confident it will be the premiere hotel in greater
17
18
As in
19 reinvesting in our property through various capital
20 projects during the next period of licensure. We are
21 committed to constantly improving upon our master plan and
22 continue to provide our guests with the quality experience
23 that they expect from Ameristar.
24 Finally, I'd like to talk to you about a project
25 that we are all very anxious to get started on. In front
1 of you, you will see a rendering of the proposed
3 riverfront in
4 In 2005, Ameristar St. Charles established a
5 Transportation Development District and a Community
6 Improvement District as sources of revenue to fund and
7 expedite the redevelopment of
8 project will provide a safer, more convenient form of
9 ingress and egress to
10 multi-million dollar project will initially be funded by
11 bond proceeds and advances by Ameristar St. Charles. It
12 will be repaid through the TTD and CID's 2 percent tax on
13 non-gaming revenue at our property.
14 The new roadway will add two additional lanes for
15 ingress and egress, as well as a center turn lane for a
16
total of five lanes. The current
17 of only two lanes, with a turn lane at each intersection.
18 The additional lanes will relieve stress on the
19 highly-congested roadway during peak operational hours and
20
provide a safer path to and from the
21 riverfront.
22 In addition, the TTD intends to provide enhanced
23
lighting and landscaping along
24 provide more pleasing aesthetics as guests approach
25
Ameristar St. Charles and Historic
1 currently negotiating with the property owners who have
2 property which will be impacted by the road improvements.
3 We are optimistic those negotiations will be finalized very
4 soon and construction can start as soon as possible
5 thereafter.
6 I will now turn the presentation back over to
7
8 MR. STREMMING: I'd be happy to answer any
9 questions you have now about this presentation, or if you'd
10 like the city representatives to testify first and then ask
11 questions, whatever you'd like us to do.
12 DIRECTOR McNARY: Mr. Chairman, I would -- are
13 there questions of Mr. Kanofsky concerning the ownership of
14 the -- of the transfer because of the untimely death of
15 Craig Neilsen?
16 COMMISSIONER HAIS: I have none.
17 DIRECTOR McNARY: No questions from anyone?
18 COMMISSIONER JONES: No.
19 COMMISSIONER PLUNKETT: No.
20 CHAIRMAN SHULL: There are no questions for him
21 regarding that issue.
22 DIRECTOR McNARY: Okay. Do you want to hear
23 from the mayors at this time?
24 CHAIRMAN SHULL: Why don't we go ahead and
25 follow through with the rest of the testimony and then you
1 can come back.
2 MR. STREMMING: Actually, I'll introduce them,
3 if you want.
4 We have Mayor Patti York here from the City of
5
6 have the executive director of
the
7 Port Authority, Vince Gauthier.
8 So I will bring Mayor York up first.
9 CHAIRMAN SHULL: Thank you.
10 MAYOR YORK: Good morning, Gentlemen, ladies.
11 I'm
Mayor Patti York, mayor of the City of
12
13 I thank you for providing the city an opportunity
14 to testify before you in regard to the Commission's
15 consideration of the relicensure of one of our city's best
16 corporate citizens, Ameristar Casino St. Charles. It is a
17 real pleasure to be here and to have the opportunity to
18 share with you all of the exceptional things our city has
19 been able to accomplish for our citizens as a home dock
20 community.
21 Ameristar is an extremely active and
22 participatory corporate citizen. Besides being a member of
23 many business and community groups, Ameristar has recently
24 formed the Ameristar Community Advisory Board, whose
25 purpose is to provide an opportunity for business, civic,
1 and educational leaders to provide valuable feedback on
2 Ameristar strategies and plans and to provide insights and
3 opportunities within the community.
4 The Advisory Board established a Reaching Out to
5 the Region Award. In 2005,
6 Success was selected by the Advisory Board as the $10,000
7 charity recipient, and in
2006, our own
8 Volunteers in Medicine was the $10,000 charity recipient.
9 The Board selects a new charitable recipient annually.
10 Ameristar is a hallmark of responsible corporate
11 citizenship. Ameristar contributed $100,000 to our own
12 city-owned Foundry Art Centre that resulted in a gallery
13 bearing their name. In addition, Ameristar annually raises
14 money for adult and children charities, assists in
15 fund-raising for civic events and community activities.
16 For example, the nationally recognized Lewis and Clark
17
Bi-centennial event, which was held in
18 they were a major sponsor, and they contribute to many
19 worthy causes, as you've seen.
20 Ameristar CARES, a workplace giving program,
21 contributed almost 1 million dollars to five area
22 non-profit organizations. Employees kicked off their third
23 year and raised the money themselves.
24 Ameristar has always stood ready to assist our
25 community. Most recently, they allowed us to use a parking
1 lot for staging purposes during recent storm activities in
2 the community.
3 In terms of the economic impact, the only words
4 to be said about the Ameristar facility is that it is a
5 tremendous economic asset to our city. Ameristar has made
6 over 460 million dollars in investment in our city and is
7 investing an additional 240 million dollars in our city
8 starting again this past 2006, with the construction of a
9 400-room all-suite's hotel, the conference center, and the
10 parking garage, as you've seen. We used to be known in the
11 metropolitan area as having the largest parking garage, and
12 now we've outdone ourselves with even a bigger one. These
13 will all be completed in 2007. And as you saw, it's really
14 changed the face of our riverfront.
15 Ameristar is the largest employer in the city
16 with approximately 1,900 employee team members.
17 The Ameristar facility is the anchor of our South
18 Main Street Riverfront area. It serves as a catalyst for
19 economic development north of the facility to the
20
Trailhead Brewery at Boone's
21 north of the facility includes construction of the Country
22
23 excess of $300,000 per unit. Another development of
24 condominiums and retail establishments have broken ground
25 on
1 impact on the City's Riverfront development is excellent.
2 The gaming tax and admission fee revenue to the
3 City was over 15.7 million dollars in 2006. Since the
4 casino's opening in 1994, the total gaming tax and
5 admission fee revenue to the city has exceeded 134 million
6 dollars. The revenue enabled the city to execute numerous
7 public works projects, from street constructions and
8 repairs, storm water, sanitary sewer, water, and numerous
9 other infrastructure improvements.
10 Now, you have to realize, and I can note, that we
11
have some old infrastructure in the City of
12 We are the third oldest city in the whole state of
13
14
15 award for the oldest clay pipe sewer system still in
16 existence. You can see we have old infrastructure in our
17 community, and what we have done is taken this money and
18 reinvested it back into our infrastructure, building it
19 from the inside out. We did not replace the clay pipe
20 sewer yet. Hopefully, we won't have to.
21 The revenue has enabled the city in conjunction
22 with the St. Charles County Convention and Sports
23 Facilities Authority to construct a 35 million dollar
24 convention center, which opened in April 2005, the
25 development and acquisition of parks, funding to the
1 St. Charles Family Arena, and, which I'm most proud of,
2 funding for our DARE and School Resource Officers for our
3 schools to the tune of $740,000 a year has all been helped
4 by this influx of money in our community. The convention
5 center attracted the 296 all-suite four-star Embassy Suites
6 Hotel's investment of 40 million dollars.
7 The Ameristar facility is an asset to the city.
8 The operation of the Ameristar facility has provided no
9 negative secondary effects in terms of criminal activity in
10 our city. On average, annually, less than 1 percent of the
11 police department's total calls for service involved the
12 Ameristar facility. This is reasonable number for the
13 number of patrons who visit the facility. Ameristar is
14
cited as the largest tourist attraction in the
15 area, bringing in many more tourist to our already
16
award-winning tourism industry in
17 Our Police Department has an excellent working
18 relationship with dedicated highway patrolmen assigned to
19 the facility. We also have an excellent working
20 relationship with the security personnel of Ameristar.
21 In conclusion, we certainly believe that the
22 Ameristar facility, its operation and management and its
23 integration into our community, are exactly what the state
24 anticipated when gaming was approved by the voters and the
25 Commission awarded the licenses. Thank you for this
1 opportunity to testify.
2 On behalf of the City of St. Charles, Missouri,
3 we provide 100 percent support and endorsement for the
4 relicensure of Ameristar Casino St. Charles.
5 Any questions?
6 CHAIRMAN SHULL: No questions. Thank you very
7 much.
8 MR. GAUTHIER: Good morning. My name is
9 Vincent Gauthier. I'm the new Port Authority Director for
10
11 I am here to express the city's firm support for
12
Ameristar's relicensure in
13 letter from Mayor Barnes that focuses on the revenues
14 generated by Ameristar and its designation towards capital
15 improvements and infrastructure work in the city. She
16 overall notes that the city faces no additional costs in
17 the area of law enforcement related to Ameristar Casino's
18 operations, as the company has a strong security operation
19 and has had very few problems that would detract from the
20 city's overall policing of the community. Again,
21 Ameristar's corporate presence is of a positive nature and
22 adds significantly to our tourism industry.
23 Yesterday, the Port Authority officially approved
24 our
development agreement that
25 detail. Very specific to that is the project that was
1 briefly mentioned, and that was a connection on the
2 Riverfront Heritage Trail in
3 significant portion of what the recreation opportunities
4 are along the riverfront, and there was a critical missing
5 link that has been missing for some time, and that is,
6 upgrade access on this trail to where it engages the
7 ASB railroad bridge in
8 With the donation of 2 million dollars by
9 Ameristar, we are able now to undertake, this year, this
10 long-awaited project. It is a 3 million dollar project, so
11 you can see how significant their contribution is. This
12 link is important because of what it connects. The
13
riverfront in
14 approach to development. We're focusing very heavily on
15 sustainable development.
16 In that regard, we are building a new 5.5 acre
17 eco-system restoration project, which is right at the base
18 of this new ASB underpass. We are also working on the
19
archaeological side of the original town of
20 welcome you all to come see in, probably, the next five to
21 ten
years. We also connect to the
22 which is going through significant redesign. We'll
23 incorporate new storm water detention, energy conservation,
24 and other sustainable related items to it.
25 This is the link that connects the river market,
1
2
3 We recognize the need for Ameristar to continue
4 strengthening its realistic MBE and WBE goal attainment.
5 As such, we have stepped up marketing of the
6 Port Authority, Ameristar Isle
of
7 funding for the advancement of MBE and WBE businesses in
8
9 increases based on this fund and our active participation.
10 Something I think that was maybe left out that I
11 think was a very significant portion of the new development
12 agreement was the interest and commitment by Ameristar, as
13 well as the Isle of Capri, to fund a new diversity study
14 for
the casino industry in
15 this should be available by the end of 2007 and will
16 provide us a very strong road map as we go forward.
17 In conclusion, I would just like to say that the
18
city of
19 strongly support relicensure of Ameristar Casino and Hotel
20 in
21 provide you this letter from Mayor Kay Barnes, who wishes
22 she could be here.
23 Thank you.
24 CHAIRMAN SHULL: Thank you very much.
25 DIRECTOR McNARY: Any questions of --
1 CHAIRMAN SHULL: I don't believe so, but we'll
2 go ahead and put this letter in the record.
3 Good morning, again.
4 MR. STREMMING: Good morning, again. It seems
5 like afternoon after that presentation.
6 I'll be more than happy to answer any questions
7 you might have now based on the relicensure.
8 COMMISSIONER HAIS: What's a private treatment
9 room?
10 MR. STREMMING: A private treatment room? Oh,
11 with the spa?
12 COMMISSIONER HAIS: Oh, is that what it is?
13 MR. STREMMING: Yeah. You're asking the wrong
14 guy, though.
15 Jim, you look like the --
16 COMMISSIONER HAIS: Okay. The chairman wanted
17 me to ask.
18 MR. FRANKE: You know, like massage rooms or
19 something, where you wouldn't be doing that out in a public
20 area.
21 CHAIRMAN SHULL: But it was Commissioner Hais'
22 question.
23 COMMISSIONER HAIS: Does Ameristar have any
24 facilities whose hours of alcohol serving exceeds the
25 normal -- what is it, 1:30?
1 MR. STREMMING: You're saying in the state of
2
3 COMMISSIONER HAIS: Yes, sir.
4 MR. STREMMING: No. Well, again, on the casino
5 floor, we can serve alcohol until three a.m. Off the
6 casino floor, we can only serve until 1:30 a.m.
7 COMMISSIONER HAIS: Okay.
8 CHAIRMAN SHULL: I have a question regarding
9 the licenses.
10 MR. STREMMING: Yes, sir.
11 CHAIRMAN SHULL: Has the King and the Queen
12 been merged? Because I just noticed it says specifically
13 the King relicensure.
14 MR. STREMMING: I would guess, but that's not
15 in necessarily our portion but might be in the
16 investigation portion from the Highway Patrol, because they
17 used to be referenced as King and Queen, because you have
18 two barges. But after we did away with the boarding time
19 requirement of 45 minutes, we opened up the wall between
20 those two barges. So now it's just basically one licensed
21 facility. It's actually called the King now as opposed to
22 the King and the Queen. ABS probably still refers to them
23 as King and Queen, because there are two barges that have
24 to be licensed.
25 COMMISSIONER JONES: You know, I'd like to
1 commend you on your program for the minority and women
2 vendors involved. The $100,000 that you have for the
3 diversity study, I think, will put a lot of light on the
4 program itself.
5 Again, there's always room for improvement, but
6 you guys are going in the right direction. Trust me.
7 You're headed in the right direction.
8 MR. STREMMING: Thank you.
9 COMMISSIONER JONES: You know, I'm looking at
10 the income statements in the reading, and I just have a big
11 problem, because I see a lot of negative numbers on the
12 revenue.
13 This is on Page 26 in the reading, and this is
14 the
Ameristar Casino for
15 statement, you have net revenues for September 2006 of a
16 negative 79 million dollars.
17 DIRECTOR McNARY: We can't get into that,
18 Commissioner. That's confidential information.
19 COMMISSIONER JONES: Oh, okay.
20 DIRECTOR McNARY: We can do it in closed
21 session, if you want them to stay.
22 COMMISSIONER JONES: Oh, well, I just need to
23 know --
24 CHAIRMAN SHULL: It's very interesting.
25 COMMISSIONER JONES: Right. It's interesting.
1 DIRECTOR
McNARY: Do you want to stay,
2 MR. STREMMING: Oh, yeah. We'll be more than
3 happy to stay, if you want to go in executive session to
4 answer the questions.
5 DIRECTOR McNARY: That's inappropriate in an
6 open session.
7 COMMISSIONER JONES: Okay. I'm sorry. That
8 was it.
9 CHAIRMAN SHULL: I have a question regarding
10 the turnover that was listed at about 40 percent.
11 Is there some reason that you can explain -- that
12 explains it?
13 MR. STREMMING: Well, I will tell you --
14 although that sounds very high from a casino-industry
15 perspective, I think if you look outside the state of
16
17 have -- unfortunately, because we spend a lot of money and
18 time on training, we don't like to see that number so high
19 and we try to do everything we can to control it. But you
20 also have a very transient-type of employee in this
21 business, and people are willing sometimes to move from one
22 casino to another that are in close proximity for a fairly
23 small increase in wage.
24 CHAIRMAN SHULL: Are there any other questions?
25 (No response.)
1 DIRECTOR
McNARY: Thanks,
2 MR. WRIGHT: Thank you.
3 DIRECTOR McNARY: Mr. Chairman, the
4 investigative summary for
5 Davidson.
6 SERGEANT DAVIDSON: Good morning, Mr. Chairman,
7 and Commission staff, Commissioners.
8 An investigation was conducted by the
9
10 determine suitability of Ameristar Casino Kansas City,
11 Incorporated, in response to their filing of a relicensing
12 application for the Class A River Boat Gaming license.
13 Ameristar of Kansas City Casino, Incorporated, a
14 wholly-owned subsidiary of Ameristar Casinos, Incorporated,
15 was
incorporated in the state of
16 2000. On December 19th, 2000, they were granted a Class A
17 River
Board Gaming License by the
18 Commission for the purpose of operating a river boat gaming
19
operation in
20 Credit and criminal background checks were
21 conducted on Ameristar Kansas City Key and Level 1
22 personnel, along with the financial analysis of the
23 company. The background checks included but were not
24 limited to checks with federal, state, county, and
25 municipal law enforcement agencies where the individuals
1 have lived, worked, or frequented. No discrepancies or
2 concerns were discovered.
3 The city of
4 were contacted regarding concerns with the operation of
5 Ameristar Kansas City. There were no issues, concerns, or
6 negative information discovered. The Missouri Department
7 of Natural Resources, Missouri Department of Health, and
8 the Kansas City Health Department were contacted regarding
9 concerns with Ameristar Kansas City operation. And, again,
10 no concerns were noted.
11 ABS Consulting, Incorporated, conducted the
12 superstructure life-saving systems and multi-barge platform
13 annual survey of Ameristar Kansas City in October of 2006.
14 Several deficiencies were discovered and subsequently
15
reported on ABS's inspection report.
Ameristar
16 has indicated, as ABS has indicated, they were working
17 together to resolve the issues and provide documentation to
18 ABC. However, none of these issues were major life-safety
19 issues with Ameristar.
20 No other discrepancies or concerns were found
21 during the background investigation. The report given to
22 you was prepared for the purpose of assisting you in
23 determining the suitability of Ameristar Kansas City
24 Casino, Incorporated, for relicensure.
25 Thank you.
1 COMMISSIONER HAIS: The minor concerns that you
2 mentioned --
3 SERGEANT DAVIDSON: Yes, sir.
4 COMMISSIONER HAIS: -- do you feel that they're
5 not worthy of mention?
6 SERGEANT DAVIDSON: I -- when I spoke with
7 Jeff Boil (ph.), who is with ABS, my major question to him
8 was, Is this a life-safety issue? And he said, No. This
9 is not a major life-safety issue.
10 COMMISSIONER HAIS: Well, I mean in the context
11 of a relicensure hearing, do you feel they're not important
12 enough to effect our determination one way or the other?
13 SERGEANT DAVIDSON: No, I do not. That was,
14 obviously -- I'm not the professional. I use Jeff Boil,
15 who does the inspections. I used his comments to determine
16 whether or not he felt like it would be necessary. I just
17 got the most recent update from him yesterday and, again,
18 there was no life-safety issue or anything that would be
19 considerable that would need to be mentioned, no.
20 Now, those are in the report, though. They're
21 just not in my presentation.
22 CHAIRMAN SHULL: Are there other questions?
23 (No response.)
24 DIRECTOR McNARY: Thank you, Sergeant. The
25
1 Corporal Jim Bennett.
2 CORPORAL BENNETT: Mr. Chairman, Commissioners,
3 good morning.
4 An investigation was conducted by the
5 Missouri State Highway Patrol and members of the
6 Missouri Gaming Commission to determine the suitability of
7 Ameristar Casino St. Charles, Incorporated -- to determine
8 the suitability of the Ameristar Casino St. Charles, a
9 wholly-owned subsidiary of Ameristar Casinos, Incorporated.
10 The investigation was conducted in response to
11 their filing for relicensure of their Class A River Boat
12 Gaming License on September 20th, 2006.
13 Background checks were conducted by the -- on the
14 Ameristar Casino Key and Level 1 personnel. The background
15 checks included criminal, civil, and credit checks. No
16 discrepancies or concerns were discovered. As for the
17
property, officials from
18
County, and the state of
19 the operation of the Ameristar Casino St. Charles. A
20 financial analyst -- a financial analyst of the casino was
21 also conducted. No issues, concerns, or negative
22 information was discovered.
23 An annual inspection of the Ameristar Casino
24
25 Consulting, Incorporated, at the discretion of this
1 Commission staff. The inspection revealed some
2 deficiencies, but all have been rectified to the
3 satisfaction of the American Bureau of Shipping
4 Consulting's code regulator.
5 In summary, no discrepancies or concerns were
6 found during this relicensure investigation.
7 The report provided to you was prepared for the
8 purpose of assisting you in determining the suitability of
9 the
10 CHAIRMAN SHULL: Any questions?
11 (No response.)
12 CHAIRMAN SHULL: Thank you.
13 Is there anyone here from the public that would
14 like to comment?
15 DIRECTOR McNARY: Mr. Chairman, it was of some
16 concern to us, there had never been a Key Person who had
17 died. The untimely death of Craig Neilsen caused
18 considerable discussion among staff. Mr. Kanofsky is
19 already licensed as a Key Person. There will be a
20 background investigation of Ray Neilsen, to license him as
21 a Key Person. These are the two key people responsible for
22 Ameristar, but we recommend relicensure, Class A License,
23 of Ameristar at this time.
24 CHAIRMAN SHULL: Thank you. Are there any
25 questions?
1 COMMISSIONER HAIS: Are we taking them
2 separately?
3 CHAIRMAN SHULL: Yes.
4 COMMISSIONER HAIS: I would move then,
5 Mr. Chairman, that Commission Resolution No. 7-12 be
6 approved.
7 COMMISSIONER PLUNKETT: Second.
8 CHAIRMAN SHULL: Is there any further
9 discussion?
10 (No response.)
11 CHAIRMAN SHULL: Call the roll.
12 MS. FRANKS: Chairman Shull?
13 CHAIRMAN SHULL: Approved.
14 MS. FRANKS: Commissioner Jones?
15 COMMISSIONER JONES: Approved.
16 MS. FRANKS: Commissioner Hais?
17 COMMISSIONER HAIS: Approved.
18 MS. FRANKS: Commissioner Plunkett?
19 COMMISSIONER PLUNKETT: Approved.
20 MS. FRANKS: By your vote, you've adopted
21 Resolution No. 07-012.
22 COMMISSIONER PLUNKETT: I make a motion for
23 Resolution 07-013.
24 COMMISSIONER JONES: Second.
25 CHAIRMAN SHULL: Is there further discussion?
1 (No response.)
2 CHAIRMAN SHULL: Call the roll.
3 MS. FRANKS: Chairman Shull?
4 CHAIRMAN SHULL: Approved.
5 MS. FRANKS: Commissioner Jones?
6 COMMISSIONER JONES: Approved.
7 MS. FRANKS: Commissioner Hais?
8 COMMISSIONER HAIS: Approved.
9 MS. FRANKS: Commissioner Plunkett?
10 COMMISSIONER PLUNKETT: Approved.
11 MS. FRANKS: By your vote, you've adopted
12 Resolution No. 07-013.
13 DIRECTOR McNARY: Mr. Chairman, Item IV on the
14 Agenda, Consideration of Level I/Key Applicants.
15 Lieutenant Gary War?
16 LIEUTENANT WAR: Good morning.
17 Mr. Chairman and Commissioners, the
18 Highway Patrol and Gaming Commission investigators
19 conducted background investigations on the following
20 Key Person and Level I applicants. The investigations
21 included, but were not limited to criminal, financial, and
22 general character inquiries.
23 Under Level I, we have Thomas J. Halford,
24
Director of Property Management at Isle of
25 Boonville.
1 Under Key Persons, we have James R. Franke,
2 Senior Vice President and General Manager of Ameristar
3
4 Inc.,
5 Member-Board of Directors, Harrah's Entertainment, Inc.,
6
7 The results of the investigations were provided
8 to the Gaming Commission staff for their review and
9 recommendation.
10 Thank you.
11 DIRECTOR McNARY: Mr. Chairman, the staff has
12 no reason not to relicense these Key Person applicants.
13 CHAIRMAN SHULL: Thank you.
14 Are there any questions?
15 (No response.)
16 CHAIRMAN SHULL: Is there a motion?
17 COMMISSIONER HAIS: Yeah. Mr. Chairman, I
18 would move the approval of Commission Resolution 07-014.
19 COMMISSIONER JONES: Second it.
20 CHAIRMAN SHULL: Is there further discussion?
21 (No response.)
22 CHAIRMAN SHULL: Call the roll.
23 MS. FRANKS: Chairman Shull?
24 CHAIRMAN SHULL: Approved.
25 MS. FRANKS: Commissioner Jones?
1 COMMISSIONER JONES: Approved.
2 MS. FRANKS: Commissioner Hais?
3 COMMISSIONER HAIS: Approved.
4 MS. FRANKS: Commissioner Plunkett?
5 COMMISSIONER PLUNKETT: Approved.
6 MS. FRANKS: By your vote, you've adopted
7 Resolution No. 07-014.
8 DIRECTOR McNARY: Mr. Chairman, Item V,
9 Consideration of Disciplinary Action, General Counsel
10
11 MR. HINCKLEY: Mr. Chairman, Commissioners,
12 good morning, still.
13 Can I turn your attention to Tab G? In Tab G,
14 there is the Disciplinary Order -- I'm sorry -- the
15 Preliminary Order for Disciplinary Action Against Harrah's
16
North
17 This disciplinary action has to do with the
18 casino mailing out promotional coupons that did not have a
19 value on their face or anywhere on the coupon. These were
20 mailed out to patrons. Initially, this was caught by the
21
compliance manager of Harrah's
22 June 30th, 2006.
23 These mystery money promotional coupons, it
24 appears cashed in only three times, although thousands were
25 sent out. The amounts varied on them from five to $100.
1 This mailing of coupon -- of promotional coupons without
2 the value on their face is a violation of the regs,
3 specifically 45.5.183 Paragraph 3, Subparagraph C, which
4 states that the promotional coupons shall contain a
5 specific value for any
monetary coupon stated in
6 dollars. That same regulation is reflected in the minimum
7 control standards, as well as the internal control
8 standards, and that was not followed by Harrah's North
9
10 the approval of a $15,000 fine. This fine is consistent
11 with similar situations, similar violations in the amounts
12 given to the casinos that made those violations.
13 CHAIRMAN SHULL: Are there any questions?
14 COMMISSIONER HAIS: I haven't seen that
15 regulation. Do you -- it's not attached here as an
16 exhibit. Do you have the regulation, Counsel?
17 MR. HINCKLEY: I can read into the record the
18 regulation.
19 COMMISSIONER HAIS: Is it short enough to do
20 that?
21 MR. HINCKLEY: I actually think I just read it,
22 Commissioner Hais.
23 COMMISSIONER HAIS: A portion, or the whole
24 thing?
25 MR. HINCKLEY: The pertinent portion. I do not
1 have, with me, the entire paragraph. I read the majority
2 of the subparagraph, which relates exactly to the
3 promotional coupon and the value having to be on the face.
4 COMMISSIONER HAIS: I'm not understanding how
5 they were cashed in, if there's no value denominated.
6 MR. HINCKLEY: From what I understand -- and
7 let me just remind the Commissioners that may or may not be
8 aware, that during the time that this was reviewed in front
9 of the disciplinary review board, I was not hired. I was
10 not on as general counsel. I'm kind of stepping in and
11 taking a third-party position. I gathered as much
12 information as I can. It's not as an excuse, just as an
13 informative matter.
14 The promotional coupons were redeemed -- there's
15 a bar code on the back of them, and the bar code -- it was
16 calculated into the bar code. When redeemed by the patron,
17 it would give them credit -- from my understanding, it
18 would give them credit on the various slot machines from
19 anywhere from five to $100.
20 COMMISSIONER HAIS: So the ones that were
21 redeemed were just -- people got what they got?
22 MR. HINCKLEY: Correct, of the ones that were
23 redeemed. Now, it's my understanding that -- although this
24 was caught early, obviously. Only three of several
25 thousand were redeemed. That was played out, and there was
1 not a way to withdrawal the promotional coupons that had
2 previously been sent out. So it's a one-time fine for the
3 entire mailing.
4 COMMISSIONER HAIS: You mean a recommendation?
5 MR. HINCKLEY: I'm sorry. Yeah. A
6 recommendation.
7 COMMISSIONER HAIS: I see.
8 CHAIRMAN SHULL: Did the company refuse to
9 honor any of them, or were there only three that were
10 presented for payment?
11 MR. HINCKLEY: It's my understanding -- and this
12 will be further -- the next tab is the same situation.
13 It's my understanding from the information
14 garnered from the reports from these two violations that
15 they intended to honor all of the coupons and not do it
16 again. And I'm sure that if anybody from Harrah's knows
17 differently, we can hear from them, if the Commission would
18 like.
19 COMMISSIONER HAIS: I have nothing further.
20 CHAIRMAN SHULL: Mr. McNary?
21 DIRECTOR McNARY: Mr. Chairman, staff supports
22 recommendation of general counsel.
23 CHAIRMAN SHULL: Is there a motion?
24 COMMISSIONER PLUNKETT: I make a motion.
25 COMMISSIONER HAIS: Do we have any further
1 testimony on this from anyone?
2 CHAIRMAN SHULL: No.
3 COMMISSIONER HAIS: Okay.
4 CHAIRMAN SHULL: Did you want to call somebody?
5 COMMISSIONER HAIS: Well, I mean, there are
6 people from Harrah's present.
7 CHAIRMAN SHULL: Is there anyone here from
8 Harrah's that can address this?
9 DIRECTOR McNARY: Harrah's has a right, if they
10 want to challenge the fine, to go before a hearing officer.
11 HARRAH'S REPRESENTATIVE: At this time, we're
12 not going to challenge anything, unless you have questions
13 about the actual promotion itself, because both cases are
14 related to the exact same incident, just on two sides of
15 the state.
16 CHAIRMAN SHULL: Could you answer my question?
17 HARRAH'S REPRESENTATIVE: Sure.
18 CHAIRMAN SHULL: Were there other coupons that
19 were presented that the company declined to recognize or
20 pay?
21 HARRAH'S REPRESENTATIVE: No, sir.
22 CHAIRMAN SHULL: You only had three? You
23 stopped, and then you didn't --
24 HARRAH'S REPRESENTATIVE: No. As presented, it
25 was a one-time promotion, and those items that were
1 redeemed were redeemed. We didn't refuse any redemption.
2 So if a patron brought it in and inserted it, we took it.
3 CHAIRMAN SHULL: Thank you.
4 COMMISSIONER PLUNKETT: I'll make a motion to
5 approve DC-07-001.
6 COMMISSIONER HAIS: Second it.
7 CHAIRMAN SHULL: Is there any further
8 discussion?
9 (No response.)
10 CHAIRMAN SHULL: Call the roll.
11 MS. FRANKS: Chairman Shull?
12 CHAIRMAN SHULL: Approved.
13 MS. FRANKS: Commissioner Jones?
14 COMMISSIONER JONES: Approved.
15 MS. FRANKS: Commissioner Hais?
16 COMMISSIONER HAIS: Approved.
17 MS. FRANKS: Commissioner Plunkett?
18 COMMISSIONER PLUNKETT: Approved.
19 MS. FRANKS: By your vote, you've adopted
20 Disciplinary Complaint DC-07-001.
21 MR. HINCKLEY: Again, Chairman and
22 Commissioners, if I could direct your attention to Tab H.
23 In Tab H, there's the Preliminary Order for
24
Disciplinary Action Against Harrah's
25 that's Disciplinary Cause No. 07-002. I mistakenly left
1 out -- the prior cause number was 07-001. And as the
2 Commissioners and Chairman already know, this has to do
3 with the same incident between the two Harrah's gambling
4 casinos.
5 In this case, the violation actually was
6 discovered earlier, on March 29th of 2006, and there were
7 also -- in this case, it appears to be three promotional
8 coupons redeemed prior to the discovery. And this, as
9 well, is a violation of the same regulation, where
10 promotion coupon shall contain the specific value of any
11 monetary coupon stated in U.S. dollars on the coupon.
12 Further violations at the minimum control
13 standards and the internal control standards, whose
14 language mirrors the regulation.
15 And in this case, like the prior case against
16 Harrah's, the Commission would ask for approval of a
17 $15,000 fine against the casino.
18 CHAIRMAN SHULL: Are there any questions?
19 (No response.)
20 CHAIRMAN SHULL: Is there a motion?
21 COMMISSIONER JONES: I move for the approval of
22 DC-07-002.
23 COMMISSIONER HAIS: Second.
24 CHAIRMAN SHULL: Call the roll
25 MS. FRANKS: Chairman Shull?
1 CHAIRMAN SHULL: Approved.
2 MS. FRANKS: Commissioner Jones?
3 COMMISSIONER JONES: Approved.
4 MS. FRANKS: Commissioner Hais?
5 COMMISSIONER HAIS: Approved.
6 MS. FRANKS: Commissioner Plunkett?
7 COMMISSIONER PLUNKETT: Approved.
8 MS. FRANKS: By your vote, you've adopted
9 Disciplinary Complaint DC-07-002.
10 DIRECTOR McNARY: Mr. Chairman, Item VI on the
11 Agenda is Consideration of Rules and Regulations.
12 David Welch will make a presentation concerning
13 Final Order.
14 MR. WELCH: Mr. Chairman and Members of the
15 Commission, we are recommending the adoption of a
16 Final Order, an Amendment to 11 CSR 45-13.055. A Notice of
17 Hearing was published in the Missouri Registrar on
18 January 22nd, 2007. We received no comments at the
19 hearing; however, we -- which was held on February 8th,
20 2007.
21 However, we did receive a letter from the
22 Missouri Gaming Association opposing the rule. They felt
23 that there were several issues involving notice to the
24 casinos before a closure and definitions of what
25 constitutes an immediate threat to the public welfare as
1 opposed to being disruptive.
2 We recommend that this be adopted for the reasons
3 that the current regulations provide for, such things as
4 the closing of the gaming floor, for the same reasons, and
5 we are only giving the executive director one additional
6 authority, the authority to suspend the serving of
7 alcoholic beverages within the casino or the casino
8 facility. He already has the larger authority to close the
9 gaming floor and suspend directors, general managers,
10 things of that nature. There would be a time for a hearing
11 in a very expedited fashion.
12 I don't know if the Association would like to
13 address this issue further.
14 CHAIRMAN SHULL: Thank you.
15 COMMISSIONER HAIS: He indicated that you sent
16 a letter. Do you want that letter introduced into the
17 record?
18 MR. WELCH: Mike can respond.
19 MR. WINTER: Mike Winter, representing the
20
21 We did submit a letter in opposition to the
22 proposed regulation. At the date of the hearing, none of
23 us could attend, so we did submit a letter for the record.
24 And if you want to put that in this record, that's fine.
25 We raised some concerns about providing due
1 process and some notification requirements. Rather than
2 just suspending a license in an expedited fashion, I think
3 we felt it may be beneficial to at least provide some
4 notice to the operator that there may be concerns that we
5 could address prior to the suspension taking place.
6 I don't have a copy of the letter in front of me,
7 but I think that was the gist of the comments that we
8 submitted.
9 COMMISSIONER HAIS: My question was just
10 prompted by my feeling that it's your right to have that
11 letter in the record, if you wanted. If you don't -- but
12 it's not what we want. It's what you might want.
13 MR. WINTER: We're happy having you include it
14 in the record.
15 COMMISSIONER HAIS: Do you have that letter?
16 MR. WELCH: I do have a copy of it, but I've
17 marked on it.
18 COMMISSIONER HAIS: You can get a clean copy?
19 MR. WELCH: Yes. That is in the record of the
20 hearing that was conducted.
21 CHAIRMAN SHULL: Thank you.
22 Any further discussion or questions?
23 DIRECTOR McNARY: Mr. Chairman, we consider
24 this to be a practical emergency order from the standpoint
25 that currently, if there's a danger to the public welfare,
1 then the executive director has the authority to close down
2 a casino, and that could be -- if it's only related to
3 alcohol, then that would be overkill. This would provide
4 the emergency authority to shut off the alcohol and allow
5 the casino to continue in operation.
6 CHAIRMAN SHULL: You're recommending this?
7 DIRECTOR McNARY: We recommend passage of
8 Final Order.
9 CHAIRMAN SHULL: Is there a motion?
10 COMMISSIONER JONES: I recommend the approval
11 of 11 CSR 45-13.055.
12 COMMISSIONER PLUNKETT: I'll second that.
13 CHAIRMAN SHULL: Is there further discussion?
14 (No response.)
15 CHAIRMAN SHULL: Call the roll.
16 MS. FRANKS: Chairman Shull?
17 CHAIRMAN SHULL: Approved.
18 MS. FRANKS: Commissioner Jones?
19 COMMISSIONER JONES: Approved.
20 MS. FRANKS: Commissioner Hais?
21 COMMISSIONER HAIS: Approved.
22 MS. FRANKS: Commissioner Plunkett?
23 COMMISSIONER PLUNKETT: Approved.
24 MS. FRANKS: By your vote, you've adopted the
25 Final Order of Rulemaking, 11 CSR 45-13.055.
1 DIRECTOR McNARY: Chairman, Item VII on the
2 Agenda is Consideration of Settlement Agreement. General
3 Counsel,
4 MR. HINCKLEY: Mr. Chairman, Commissioners,
5 good afternoon.
6 Let me direct your attention to Tab J, which are
7 is the Proposed Settlement Agreement, Commission and
8 Missouri Gaming Company. This Settlement Agreement stems
9 from the original -- or proposed -- I'm sorry --
10 Preliminary Order of Disciplinary Action, which is on the
11 back of the signature page for the Settlement Agreement and
12 it goes from there.
13 The Preliminary Order for Disciplinary Action,
14 No. 06-179, against The Missouri Gaming Company, had to do
15 with revoked software. In this case, there was a software
16 present on the gaming floor which caused -- undetermined
17 number of display refreshes could lead to a white screen
18 symptom, preventing the game from displaying the pay table.
19 This was discovered by EGD or Electric Gaming Device
20 specialist and remedied.
21 After the Preliminary Order of Disciplinary
22 Action was sent out, the Respondent, The Missouri Gaming
23 Company, basically contacted the Commission and agreed to
24 pay the fine but had issue with the wording of the
25 violation. Specifically -- turn to Preliminary Order of
1 Disciplinary Action -- they made point that Paragraph 17 on
2 that Preliminary Order, which is 11 CSR Division 45,
3 Chapter 5-053, Subparagraph -- I'm sorry -- Paragraph 3.
4 That paragraph provided, in whole, written there,
5 that permitting to remain -- I'm sorry -- shall prohibit --
6 the Class A Licensee shall expressly prohibit from the
7 following -- be prohibited from the following activities,
8 permitting to remain in or upon any licensed premised, any
9 associated gambling equipment, primarily but not limited to
10 cards or dice, which may have in any manner been tampered
11 with or otherwise placed in a condition or operated in a
12 manner which might affect the game and its payouts.
13 The Missouri Gaming Company -- I'm sorry -- as
14 well as Paragraph 18, they have issue with the
15 Subparagraph B, which stated that permitting the slot
16 machines containing revoked chip to remain in operation in
17 a manner which might affect the game and its payouts.
18 That would be the violation which was cited.
19 They had issue with those two and recommended a different
20 violation to be more exact or appropriate with the facts of
21 the case. That recommended replacement was under -- if you
22 would look on the -- which would be the back of the second
23 page in Tab J in Paragraph K. You'll see that the
24 Settlement Agreement proposes to delete the language in
25 Paragraph 17 of the Preliminary Order and replace it with
1 the language from 11 CSR Division 45 -- or 5.190,
2 Paragraph 2, Subparagraph I, which states that the
3 electronic gaming device is clearly and accurately
4 displayed with the rules of play and the award that will be
5 paid to the player when the player obtains a specific win,
6 including mystery rewards. The display shall clearly
7 indicate whether awards are designated in denominational
8 units, currency credits, or some other unit. All
9 payable -- all pay table information -- excuse me -- must
10 be able to be accessed by the player prior to the player
11 committing to a wager.
12 Once again, this was a Settlement Agreement that
13 all -- it all worked out prior to signature when I arrived.
14 CHAIRMAN SHULL: Are you recommending this,
15 that we adopt this?
16 MR. HINCKLEY: Yes. This section is more
17 directly relevant to the violation that I read in the
18 beginning about the display -- the pay table display not
19 being about to be -- but there was no loss to any patron
20 when this was discovered. So the $5,000 fine that they'd
21 like to pay --
22 CHAIRMAN SHULL: And they're willing to pay it?
23 MR. HINCKLEY: Yes.
24 CHAIRMAN SHULL: Thank you.
25 COMMISSIONER PLUNKETT: I'd make a motion to
1 approve the 07-015.
2 COMMISSIONER HAIS: I'll second it.
3 CHAIRMAN SHULL: Is there further discussion?
4 (No response.)
5 CHAIRMAN SHULL: Call the roll.
6 MS. FRANKS: Chairman Shull?
7 CHAIRMAN SHULL: Approved.
8 MS. FRANKS: Commissioner Jones?
9 COMMISSIONER JONES: Approved.
10 MS. FRANKS: Commissioner Hais?
11 COMMISSIONER HAIS: Approved.
12 MS. FRANKS: Commissioner Plunkett?
13 COMMISSIONER PLUNKETT: Approved.
14 MS. FRANKS: By your vote, you've adopted
15 Resolution No. 07-015.
16 DIRECTOR McNARY: Mr. Chairman, Item VIII on
17 the Agenda will be a brief update on the Caruthersville
18 Casino by Supervisor Greeno.
19 MR. GREENO: Mr. Chairman, Commissioners, my
20 comments this afternoon will be very brief. I think we all
21 realize the supervisorship agreement to be a unique
22 situation and not one in which the Commission probably ever
23 imagined that it would find itself. But it has, however,
24 been an endeavor worthwhile to the community, to the
25 employees of the Casino Aztar and, therefore, to the state
1 of
2 I have not met a person in the community who has
3 not expressed their thanks to the Commission for assuming
4 supervisorship in keeping the casino open. That
5 institution means a lot to the people of the community.
6 The state gaming tax, as well as the admission
7 tax generated, has amounted to over a million dollars in
8 tax revenue to the state since the supervisorship took
9 effect in January. It has also benefitted the community,
10 the
city of
11 commission -- admission tax, as well as their portion of
12 the adjusted gross receipts tax.
13 I think the big thing is that the property at
14 Caruthersville has provided over $900,000 in payroll and
15 benefits to its employees since the supervisorship began.
16 So it does mean a lot to the people of the community,
17 particularly to the employees at that facility.
18 And as a side note, the casino revenue was up
19 8 percent in January, since the supervisorship took effect.
20 I'm not taking any credit for that.
21 Then in February, so far the casino revenue is up
22 18 percent and admissions are up 15 percent, and I
23 attribute that entirely to the superb management staff
24 that's on board down there that I'm having the pleasure to
25 work with.
1 CHAIRMAN SHULL: Are there any questions?
2 COMMISSIONER HAIS: You're too modest,
3 Supervisor.
4 MR. GREENO: Not at all. Thank you.
5 CHAIRMAN SHULL: Thank you.
6 DIRECTOR McNARY: Mr. Chairman, that concludes
7 the public portion of the Agenda. There are matters to be
8 considered that are confidential that should be taken up in
9 closed session.
10 CHAIRMAN SHULL: Is there a motion?
11 COMMISSIONER JONES: Mr. Chairman, I move to
12 close this meeting to receive, discuss, and consider the
13 following matters: Personnel matter under State Statute
14 610.021(3) and (4) RSMo; Investigatory, Proprietary, and
15 Application Records, Information and Summaries under State
16 Statute 610.021(14) and 313.847.1; Investigatory Records,
17 Information and Summaries under State Statute 610.021(14);
18 Proprietary Records, Information and Summaries under
19 State Statute 610.021(14) and 313.847.1; Application
20 Records, Information and Summaries under State Statute
21 610.021(14) and 313.847.1; Closed minutes and other closed
22 records under State Statute 610.021(14) and313.847.1.
23 CHAIRMAN SHULL: Call the roll.
24 MS. FRANKS: Chairman Shull?
25 CHAIRMAN SHULL: Approved.
1 MS. FRANKS: Commissioner Jones?
2 COMMISSIONER JONES: Approved.
3 MS. FRANKS: Commissioner Hais?
4 COMMISSIONER HAIS: Approved.
5 MS. FRANKS: Commissioner Plunkett?
6 COMMISSIONER PLUNKETT: Approved.
7
8 (Open session concluded.)
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1 STATE OF
2 )ss.
3
4
5 I, Tracy Patton-Shiver, Court Reporter and
6 Notary Public within and for
the State of
7 hereby certify that I was personally present at the
8 proceedings had, that I then and there took down in
9 Stenotype the proceedings had and produced with
10 computer-aided transcription and that the foregoing is a
11 full, true and correct transcript of such Stenotype notes
12 so made at such time and place.
13 IN WITNESS WHEREOF, I have hereunto set my hand
14 and seal on this 13th day of March 2007.
15
16 My commission expires September 17, 2009.
17
18 ___________________________
19 Tracy Patton-Shiver
20 Notary Public - State
of
21
22
23
24
25