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4 MISSOURI GAMING COMMISSION MEETING
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8 MEETING HELD AT
CARUTHERSVILLE PUBLIC LIBRARY
9 BAXTER SOUTHERN AUDITORIUM
701 WEST 13TH
10 CARUTHERSVILLE, MISSOURI
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MAY 27, 2009
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1 I N D E X
2 PAGE
3 Call to Order 5
4 Cpl. Todd Barthelmass Recognition 6
5 Consideration of April 22, 2009 minutes 7
6 Consideration of Re-licensure of Class B
Licensee IOC-Caruthersville, LLC d/b/a Lady Luck
7 Casino Caruthersville:
8 Presentation by Mr. Campbell 8
9 Presentation by Mr. Randolph 9
10 Presentation by Mayor Sayre 22
11 Investigative Summary by Sgt. Leitman 24
12 Consideration of Extension of Licensure
for Paltronics, Incorporated:
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Presentation by Mr. McNary 27
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Consideration of Re-licensure of Certain Supplier
15 Gaming Partners International USA:
16 Presentation by Lt. Scism 29
17 Consideration of Disciplinary Actions Presented by
Mr. Hinckley:
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Herbst Gaming, Inc. 30
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Isle of Capri Casinos, Inc. 39
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Pinnacle Entertainment, Inc. 44
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Pinnacle Entertainment, Inc. 46
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Consideration of Licensure of Certain Level I/Key
23 Applicants:
24 Presentation by Lt. Scism 64
25 Motion to Close Meeting 66
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MISSOURI GAMING COMMISSION MEETING
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6 Missouri Gaming Commission Meeting held
7 on May 27, 2009, between the hours of 9 o'clock
8 in the forenoon and six o'clock in the afternoon of
9 that day, at the Caruthersville Public Library,
10 Baxter Southern Auditorium, 701 West 13th,
11 Caruthersville, Missouri, before Joanna Charlton,
12 Certified Court Reporter.
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A P P E A R A N C E S
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COMMISSIONERS:
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Noel Shull, Chairman
6 Darryl Jones
Larry Plunkett, Sr.
7 Suzanne Bradley
James Mathewson
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FOR THE MISSOURI GAMING COMMISSION:
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Christopher Hinckley, Esq.
11 Angie Franks
PO Box 1847
12 3417 Knipp Drive
Jefferson City, Missouri 65102
13 (573) 526-4062
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15 EXECUTIVE DIRECTOR:
16 Gene McNary
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18 PRESENTERS:
19 Tom Campbell, Esq.
Lyle Randolph
20 Mayor Diane Sayre
Dave Leitman
21 Rex Scism
John Nathan
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1 TRANSCRIPT OF PROCEEDINGS
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3 MR. SHULL: I'd like to call this meeting
4 to order, please. Call roll, please.
5 MS. FRANKS: Chairman Shull.
6 CHAIRMAN SHULL: Present.
7 MS. FRANKS: Commissioner Plunkett.
8 COMMISSIONER PLUNKETT: Present.
9 MS. FRANKS: Commissioner Bradley.
10 COMMISSIONER BRADLEY: Present.
11 MS. FRANKS: Commissioner Jones.
12 COMMISSIONER JONES: Present.
13 MS. FRANKS: Commissioner Mathewson.
14 COMMISSIONER MATHEWSON: Present.
15 CHAIRMAN SHULL: It is my privilege to
16 introduce and welcome Senator Jim Mathewson as a new
17 appointment to the Missouri Gaming Commission. I
18 welcome to the Commission Senator Mathewson, and I'm
19 sure his counsel and judgment will be very valuable
20 to all citizens of Missouri and to this Commission.
21 COMMISSIONER MATHEWSON: Thank you very
22 much.
23 CHAIRMAN SHULL: Would anyone else like to
24 share anything?
25 COMMISSIONER JONES: I look forward to
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1 working with him over the next several years.
2 Welcome aboard.
3 COMMISSIONER BRADLEY: And I've known the
4 Senator for a long, long time. I live in St. Joseph,
5 Missouri. He's visited our fair city. He's done
6 great work for the citizens of Missouri all of these
7 years, for the Senate, and working in the -- in our
8 government. So we're very happy to have you, Jim.
9 COMMISSIONER MATHEWSON: Thank you.
10 COMMISSIONER PLUNKETT: We'd like to
11 welcome you to the commission, Senator, and I've
12 pretty well kept up with your career, although I
13 haven't met you personally. Welcome aboard.
14 COMMISSIONER MATHEWSON: Thank you.
15 CHAIRMAN SHULL: The next item, I'd like to
16 call Todd Barthelmass up to the stage, if he would,
17 please. The Missouri Gaming Commission is fortunate
18 to have an experienced staff of both civilian and
19 highway patrol employees whose main focus is to
20 regulate the state's riverboat gaming casinos.
21 Corporal Todd Barthelmass, gaming agent, is one such
22 employee. It is my privilege to recognize you for
23 your dedication for protecting the citizens of
24 Missouri, not only being at the job but for being on
25 the job, for being alert, interested, and responsibly
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1 carrying out your duties. Todd, thank you very
2 much --
3 CPL. BARTHELMASS: Thank you.
4 CHAIRMAN SHULL: -- for your service.
5 Thank you very much.
6 The next order will be to consider the
7 minutes of the April 22nd meeting.
8 COMMISSIONER BRADLEY: Motion to approve.
9 COMMISSIONER JONES: Second.
10 CHAIRMAN SHULL: Motion made and seconded.
11 Is there any further discussion? Hearing none, call
12 roll, please.
13 MS. FRANKS: Chairman Shull.
14 CHAIRMAN SHULL: Approved.
15 MS. FRANKS: Commissioner Jones.
16 COMMISSIONER JONES: Approved.
17 MS. FRANKS: Commissioner Plunkett.
18 COMMISSIONER PLUNKETT: Approved.
19 MS. FRANKS: Commissioner Bradley.
20 COMMISSIONER BRADLEY: Approved.
21 MS. FRANKS: Commissioner Mathewson.
22 COMMISSIONER MATHEWSON: Chairman, I wonder
23 if I should be voting on something I wasn't even
24 present for.
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1 abstain, if you'd like.
2 COMMISSIONER MATHEWSON: I will abstain.
3 Thank you.
4 MS. FRANKS: By your vote, you've adopted
5 the minutes of the April 22, 2009 meeting.
6 CHAIRMAN SHULL: The next item will be
7 consideration for re-licensure of the Class B license
8 for the Lady Luck Casino in Caruthersville.
9 Mr. McNary.
10 MR. MCNARY: Mr. Chairman, members of the
11 Commission, good morning. The Lady Luck presentation
12 will be introduced by their attorney Tom Campbell and
13 Lyle Randolph, who's the GM.
14 MR. CAMPBELL: Mr. Chairman, Commissioners,
15 Executive Director McNary, and staff, good morning.
16 My name is Tom Campbell with the law firm of Gallop,
17 Johnson, and Neuman, which serves as regulatory
18 counsel in Missouri for the Isle of Capri Casinos and
19 its three operating subsidiaries. We're before you
20 today to make a presentation and respectfully request
21 renewal of the Class B license for IOC, dash,
22 Caruthersville, LLC, which does business as Lady Luck
23 Casino in Caruthersville. Before asking the General
24 Manager Lyle Randolph to make the presentation, I
25 would like to introduce -- I think most of you met
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1 them yesterday during the tour, but Ed Patman is
2 General Counsel and Secretary for the Isle of Capri
3 Casinos, the corporate parent, and Elizabeth Tranchina
4 is Vice President for legal affairs. And they
5 came in from St. Louis for this presentation. At
6 this time I'd like to introduce Lyle Randolph, and
7 he's going to introduce some of the staff members who
8 are here and make the presentation.
9 MR. RANDOLPH: Thank you, Tom. Good
10 morning, Chairman, Commissioners, and staff. We are
11 very proud to have the Commission with us today here
12 in Caruthersville. I hope you enjoyed the tour of
13 our facility yesterday, and I hope you had an
14 opportunity to see some of the sights in town and
15 also visit with some of the fine folks of
16 Caruthersville.
17 As previously mentioned, I'm the general
18 manager of the property here. Having been born and
19 raised in this area, I've been at the casino since
20 1995, having started in the surveillance department.
21 The first job working the grave shift lead to a
22 career that's allowed me to remain in the bootheel to
23 raise my family. You will find that situation is not
24 unique with our staff, as I introduce the members of
25 our property's management team. First, Denny
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1 Callen is the Director of Operations. He's been with
2 the property since 1998 and started as the security
3 manager. Lisa McMahan, the Director of Marketing, a
4 lifelong resident of Pemiscot County. She's been
5 with the casino for 14 years and started in the
6 accounting and then IT departments. Pacey Bowens,
7 she's our financial controller. Pacey's a graduate
8 of Caruthersville High School and has been with the
9 casino since it opened having started in accounts
10 payable. Roger Eledge, he's our casino manager.
11 Roger's also a graduate of Caruthersville High
12 School, and after serving in the Navy, returned to
13 the area and started as a slot technician of the
14 property. And he helped install the first machines
15 that went on the boat back in '95. Wayne Smith, our
16 information technology manager, is also a lifelong
17 resident of Caruthersville. Wayne was self-employed
18 with his own computer-based business here in town
19 before he came to work for the casino full time. We
20 also have Lisa Givens, who is our surveillance
21 manager, and we started together back in '95. She's
22 another graduate of Caruthersville High School.
23 Thank you, everybody.
24 As we walked on the -- as we walked along
25 the tour of the property yesterday, I was reminded of
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1 some of the challenges that we've been through in the
2 past few years and how positive the outlook for the
3 property is today. To provide a little bit of
4 background, the casino was built in 1995 by Aztar
5 Corporation, and they operated the property
6 continuously from 1995 until 2006. In 2006, the same
7 year a devastating tornado destroyed a portion of our
8 community, Columbia Sussex acquired the Aztar
9 properties. It then became clear that the
10 Caruthersville property would either be closed or
11 sold. In late 2006, as the first potential buyer was
12 unable to complete the purchase, the property was
13 within weeks of a potential closure. It was at that
14 time that the Commission made a decision to appoint a
15 supervisor to maintain the riverboat gaming license
16 here in Caruthersville. For nearly six months,
17 Clarence Greeno, who we're eternally grateful for
18 coming down and helping us out, was the supervisor at
19 the property overseeing the management team here, and
20 that's essentially the same management team that
21 still operates the property. In 2007, a purchase --
22 Isle of Capri purchased the property and took control
23 of the operation in June of that year. One of the
24 decisions that Isle made early on was a decision to
25 keep the local management team in place. I might be
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1 a little biased, but I think that was a pretty good
2 decision.
3 Of course, maintaining a strong operation
4 was a focus for our management team, and we have been
5 successful in improving revenue numbers for the last
6 year period. The adjusted gross revenue for the
7 period was 64.7 million, and that represents a 7.6
8 increase over the projected AGR of 60.2 million and
9 an eight percent increase over the prior licensure
10 period. In addition, our admissions also increased
11 the -- over the -- the prior licensure period, and we
12 had 1.9 million admissions, a little under the
13 projected piece but actually over the prior licensure
14 period. It should be noted that each month
15 approximately 70 percent of our customers are
16 from out of state. The majority are from Tennessee
17 and Arkansas with other states, primarily the
18 customers off the interstate, making up the
19 remainder.
20 After acquiring the property, the first
21 step Isle of Capri made in June of 2008 was
22 officially re-branding the property as Lady Luck
23 Casino. The initial base of these items included the
24 cards, dice, chips, and other logoed items. The
25 first major capital expenditure was a major slot
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1 product of 1.2 million dollars to upgrade the
2 machines that were at the property. The majority of
3 this capital was utilized to acquire 259 used
4 machines from other Isle properties and then upgrade
5 them with the essential parts and software to make it
6 pokerless and approved for play in Missouri. The
7 major phase of the re-brand begins in June, 2008 with
8 a remodel of the facility and some of the results you
9 saw yesterday. The re-branding project, which is
10 nearing its final phase, was budgeted at $5.9
11 million. Through April of this year, 4.9 has been
12 spent on the project. Many of the questions we get
13 regarding the project relate to the Lady Luck name
14 and the concepts behind the remodel. At
15 Caruthersville, we are very proud to be leading the
16 re-launch of the Lady Luck brand. Instead of showing
17 a slideshow of photos of capital construction, I
18 would like to show a short video that our corporate
19 office created to document this transformation
20 process.
21 (At this time the video was played.)
22 MR. RANDOLPH: It still makes me very proud
23 to see that and what the transformation has been at
24 the property at Caruthersville. As you can see, it
25 was quite an undertaking. The pavilion phase of the
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1 remodel was completed in March of 2009 and culminated
2 with the grand opening of the restaurant. The casino
3 renovations that you saw were in progress began in
4 February and are scheduled to be complete in July.
5 The -- moving on to some of the employment
6 information, the casino currently employs 343 people.
7 This is a significant increase over the 289 employees
8 that were reported in the last licensure period, and
9 those primarily relate to the expanded food and
10 beverage operations of the casino. Of our total
11 employment, 84 employees have been with the casino
12 for ten years or more. To put those numbers in
13 perspective, in 1994 before the casino opened,
14 unemployment in Pemiscot County was at 16 percent. The
15 largest employer, Brown Shoe Company, had closed its
16 doors. Several of our employees are payroll clerks,
17 wardrobe seamstresses, administrative assistants, and
18 several others were all long-term employees of Brown
19 Shoe Company, and now they've become long-term
20 employees here at the casino. The employment
21 situation in the County has improved dramatically
22 since the casino opened in 2008, and the County
23 unemployment rate for that year was -- or for the
24 year was 7.5. 84 percent of our employees live in
25 Missouri. About 13 percent make that drive across
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1 the bridge out of Tennessee, and three percent are
2 from Arkansas. 59 percent of our employees are
3 female. The female population in the City of
4 Caruthersville is reported at 54 percent. 31 percent
5 of our employees are minority. The minority
6 population in the City of Caruthersville is 34
7 percent. For our salaried employees, our supervisors
8 and managers of the property, 57 percent are female.
9 For our salaried employees, 26 percent are minority.
10 Lady Luck has developed a strong action plan to
11 support equal opportunity in the hiring of
12 contractors. For the calendar years of 2007 and
13 2008, MBE WBE purchases were up -- were 9.5 percent.
14 This is up significantly from 5.7 percent that was
15 during the prior licensure period. As part of our
16 efforts, the purchasing department reached out to
17 nearly all MBE WBE in the Southeast Missouri region.
18 They discussed possible vendor opportunities. The
19 purchasing manager attended the St. Louis Minority
20 Business Council vendor exhibit and is pursuing leads
21 established at the MGA minority vendor fair. We stay
22 in contact with Mr. John Nathan with the MGC and
23 provide quarterly updates on the MBE WBE processes.
24 Mr. Nathan is always helpful in identifying
25 opportunities that the property can pursue in those
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1 efforts. One of the goals we have at the property is
2 to become a resource in helping with the creation and
3 growth of local jobs. When we have a need for a
4 service or a product, we try to explore local
5 resources and try to find a local business or startup
6 willing to provide that need or service. With a
7 focus on minority or women-owned business, we hope to
8 use local bank and economic development resources to
9 help with this type of process.
10 Lady Luck is dedicated to identifying and
11 assisting problem gamblers. Having the
12 1-888-bets-off signs and brochures throughout the
13 casino area, continuing awareness training of all the
14 employees that include appropriate DAP referral
15 figures, participating in responsible gaming week,
16 and attending the annual conference on problem gaming,
17 all help Lady Luck accomplish this goal. The
18 property practices a strict identification policy,
19 provides training to its employees at orientation to
20 assist in the detaining of underage gamblers.
21 The "must be at least 21" message is displayed in
22 areas near the casino entrance and in direct mail on
23 most advertisements. Also, our security, beverage,
24 and casino supervisors are all certified in the Tips
25 program, which involves training regarding alcohol
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1 awareness and underage detecting techniques. Our
2 beverage manager is a certified Tips instructor.
3 Lady Luck participates in a home dock city
4 agreement with the City of Caruthersville. The
5 previous agreement expired in April, 2008, and a new
6 agreement was signed at that time. The current
7 agreement calls for quarterly payments of $25,000
8 during each quarter the casino revenue exceeds 7
9 million. During each of those quarters since the
10 agreement was signed, the threshold was easily met,
11 and the agreement resulted in payments of a hundred
12 thousand dollars during the first year. Our
13 relationship with the City of Caruthersville remains
14 very positive, as we share goals of renewed economic
15 prosperity for the community. Mayor Diane Sayre is a
16 compassionate public servant with whom we have a
17 positive working relationship.
18 Lady Luck made a total of approximately
19 $58,191 in contributions and sponsorships from fiscal
20 year '08 through April of this year. As shown, most
21 of the cash and contributions were made to
22 organizations in Missouri with a large number based
23 in Pemiscot County. With most of the management team
24 from the local area, community involvement is
25 something that means more than just corporate
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1 goodwill. It means in focusing on improving the area
2 in which we live. Recently we provided food and
3 labor and prepared catfish plates for the
4 Caruthersville Fire Department fundraiser for
5 emergency response equipment. Our employees also
6 participate in the annual 5K run/walk for the Humane
7 Society, an event that the casino co-sponsors.
8 Another key area of community involvement that the
9 casino supports is economic development. The
10 property is an active member of the Chamber of
11 Commerce, along with several other chambers in the
12 area. The property has an ongoing commitment that
13 helped provide a portion of the start-up money for
14 the Southeast Missouri Economic Development Alliance,
15 an organization that has become the regional leader
16 in promoting economic growth in the Missouri
17 bootheel. The casino is also proud to play an active
18 role in the downtown revitalization committee. As a
19 D.R.E.A.M. community, the City of Caruthersville has made
20 great strides in improving the downtown area, and we
21 will continue to work with the City to assist in
22 those efforts.
23 Community involvement also means providing
24 assistance when disaster strikes. During the recent
25 ice storm that devastated the area, a majority of our
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1 parking lot became a operation center for emergency
2 utility crews. With some of our employees without
3 power for nearly two weeks, the staff stepped up and
4 helped out their neighbors helping ensure that its
5 simple needs were met. The casino was closed for two
6 days, and with the devastating tornado that struck
7 the community in 2006, this was the second time in
8 three years that the City was placed under a
9 temporary curfew as a result of weather disasters.
10 We hope we don't have to present a similar slide
11 again.
12 Moving on to employee volunteer efforts,
13 Lady Luck employees donate countless hours of
14 community service and thousands of dollars each year
15 to the -- to various charities and organizations. A
16 few of the various civic clubs and organizations
17 include the Caruthersville Lions Club, the Kiwanis
18 Club, the Chamber Board of Directors, the
19 Caruthersville Park and Recreation Board, the
20 Caruthersville Humane Society, and many others.
21 In closing, I would like to say that we are
22 standing before the Commission today talking about a
23 lot of positive changes because of some
24 forward-thinking decisions made by this Commission a
25 few years ago. Had those steps not been taken, the
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1 situation in Caruthersville could've been very
2 different today. On behalf of all of the employees,
3 we are very grateful for those difficult choices that
4 were made, and we are very pleased with the results.
5 I think it is without question that Isle of Capri has
6 given the employees and the City of Caruthersville a
7 property which we can all be proud. If there's any
8 questions, I would like to take those.
9 CHAIRMAN SHULL: Does anyone have any
10 questions?
11 COMMISSIONER JONES: Mr. Randolph.
12 MR. RANDOLPH: Yes.
13 COMMISSIONER JONES: With all of the
14 economic, I guess, reports, the bad reports that are
15 coming out, how do you maintain or how do you keep
16 your staff so upbeat? As we toured yesterday, I
17 mean, the staff was just so upbeat about the property
18 and proud of the property, you know. It's just
19 amazing with all of the bad news that comes out of
20 Washington about the economic situation of the
21 country. I mean, they are just so upbeat and ready
22 to please. I mean, it's amazing, and I applaud you
23 on that and the staff. Commissioner Bradley and I
24 met the singing chef yesterday, and, I mean, he was
25 really upbeat about his job. He loved it, and again,
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1 I'd like to commend you on that.
2 MR. RANDOLPH: Well, thank you. It's one
3 of those things that when we were going through the
4 processes where we were really facing uncertainty a
5 couple of years ago, potentially that the casino
6 would close, one of the things that we focused on
7 with the staff was we have to make sure that we have
8 a good operation, that we're profitable, and that
9 things are running smoothly, because that's what's
10 going to attract a buyer to this property. We
11 focused on that from the beginning, and now that
12 we -- that Isle of Capri has purchased the property
13 and putting in capital investment in the property and
14 they're seeing the benefits of that, then it's
15 actually very easy to get people motivated when you
16 see those things happening. They feel secure in
17 their jobs, and the -- we're seeing revenue increases
18 as related to the renovations. And it's very
19 positive, and it's a great story, you know. It's
20 something that's probably rare in today's economic
21 times.
22 COMMISSIONER JONES: Absolutely.
23 Absolutely.
24 CHAIRMAN SHULL: Thank you.
25 MR. RANDOLPH: Thank you.
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1 MR. MCNARY: Mr. Chairman, we'd like to
2 hear from the mayor, Diane Sayre, who is not only an
3 outstanding mayor but a very gracious hostess, as we
4 found out last night. Mayor.
5 CHAIRMAN SHULL: I would also like to thank
6 the Mayor for the hospitality received last evening
7 and her continuing work on behalf of the
8 Caruthersville community. You have a vision for a
9 better community, and I know that you work daily to
10 achieve it. And people here are very fortunate to
11 have someone that is so interested in the betterment
12 of their community.
13 MAYOR SAYRE: Thank you for those kind
14 remarks. I welcome you to the City of
15 Caruthersville. I think this is maybe about the
16 third time that the Commission has met here
17 officially, and we -- I can only -- I have no
18 prepared remarks today, which is very unusual. I can
19 only echo the comments made by Mr. Randolph. We're
20 very pleased with the progress that's been made with
21 the casino and under its new label. I want to
22 personally commend the Commission for the decision
23 that you all made a couple of years ago when I think
24 the press coined it seized the operation here, which
25 that was kind of a strong word, but we appreciate
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1 that and Clarence being here under a supervisory
2 capacity. We were very concerned about the fate of
3 the property, but you made a good decision, the right
4 decision. And the City has been the benefactor of
5 that decision, and for that, we want to thank you so
6 much for that. Lady Luck has brought a new image for
7 the gaming industry here in Caruthersville. I think
8 a lot of it is because so many of their staff are
9 Caruthersville High School graduates. If you are
10 invested in a community, you want whatever you're
11 doing to be successful, and these folks are
12 homegrown. And they're proud of Caruthersville, and
13 they want to make this a better place, not only for
14 them but for their families to live and to work. But
15 I have no other comments other than to strongly
16 recommend again that the re-licensing be allowed and
17 let these folks get on about their business of
18 running a good, clean gaming operation in the City of
19 Caruthersville. I'll be happy to answer any
20 questions that you may have.
21 CHAIRMAN SHULL: Does any of the Commission
22 members have a question for the Mayor or comment?
23 MR. MCNARY: Pretty eloquent for no notes.
24 MAYOR SAYRE: Thank you all so much.
25 MR. MCNARY: Next would be public comment.
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1 CHAIRMAN SHULL: Next, if there's anyone
2 here that would care to comment from the public.
3 Seeing none.
4 MR. MCNARY: Investigative summary would be
5 presented by Sergeant Dave Leitman.
6 SGT. LEITMAN: Good morning, Mr. Chairman
7 and Commissioners.
8 CHAIRMAN SHULL: Good morning.
9 SGT. LEITMAN: On January 26, 2009 the Isle
10 of Capri Caruthersville, doing business as Lady Luck
11 Casino Caruthersville, submitted a re-licensing
12 application to the Missouri Gaming Commission. The
13 Lady Luck Casino requested a renewal of its Class B
14 riverboat gaming license, which was set to expire on
15 April 25, 2009. You granted a 60-day extension of
16 that license on April the 22nd, the last Commission
17 meeting, allowing for this meeting to occur today.
18 The Lady Luck is one of three wholly owned
19 subsidiaries of the Isle of Capri Corporation of St.
20 Louis.
21 Background investigators for the Missouri
22 State Highway Patrol Gaming Division aided by
23 information provided by the Missouri Gaming
24 Commission staff conducted an investigation into the
25 suitability of the Lady Luck Casino to continue to
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1 operate as a Class B licensee. The investigation
2 included criminal, financial, and general character
3 inquiries into the key and level one personnel, as
4 well as contact with city, county, state, and
5 federal agencies that have legal and regulatory
6 authority over the casino. Martha LeMond, the
7 commissioner, excuse me, Commission's chief financial
8 analyst, conducted an in-depth investigation into
9 both the Lady Luck property and the Isle of Capri
10 Corporation as a Class A licensee that owns the Lady
11 Luck. The findings of the investigation were
12 provided to the Gaming Commission staff, and you
13 should have a copy in your folders. I'll be happy to
14 answer any questions, if you have any at this time.
15 CHAIRMAN SHULL: Does anyone have a
16 question?
17 SGT. LEITMAN: Thank you very much.
18 MR. MCNARY: Mr. Chairman, I would like to
19 call on John Nathan, who is our minority
20 participation compliance officer, to make a few
21 comments about Lady Luck's minority participation. I
22 think it's been a good record, and there had to have
23 been some outreach. I don't know that this is a --
24 so far as African-Americans are concerned that
25 there's a real big population to draw from, and yet I
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1 think they've done a good job.
2 CHAIRMAN SHULL: Okay.
3 MR. NATHAN: Good morning. I'm John
4 Nathan. It's been a pleasure working with Denny
5 Callen and Lyle Randolph. The amazing feat for me is
6 that the increase in the employment and the employee
7 demographics as reported in their report. There are
8 over 30 percent minority employees, and the important
9 thing that I have seen is the progression for the
10 managers, and for the managers and directors, they're
11 at 16 percent. That's a large percentage of their
12 staff that's in the minority category. The employees
13 spend in vendor and suppliers -- one thing was noted
14 early on about a little over a year ago they
15 dedicated one employee to get on the phone at least
16 once a week to drudge up additional vendors to come
17 in to supply their needs, and I thought that was a
18 feat that was worth noting. I'll be meeting with
19 Lyle later on today on compliance, an audit to try to
20 increase yet on a good record, but it's been a good
21 relationship in responding to the needs or the areas
22 where I thought some needs were -- was valid, needed.
23 So it's been a good -- good increase in all of those
24 areas. It has been good working with them.
25 CHAIRMAN SHULL: Thank you. That's an
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1 excellent report.
2 COMMISSIONER JONES: Yes. Thank you, John.
3 MR. MCNARY: Mr. Chairman, staff recommends
4 re-licensure.
5 CHAIRMAN SHULL: Is there a motion?
6 COMMISSIONER PLUNKETT: I make a motion to
7 approve Resolution Number 09, dash, 032.
8 COMMISSIONER JONES: Second.
9 CHAIRMAN SHULL: Motion was made and
10 seconded. Is there further discussion? Hearing
11 none, call roll, please.
12 MS. FRANKS: Chairman Shull.
13 CHAIRMAN SHULL: Approved.
14 MS. FRANKS: Commissioner Jones.
15 COMMISSIONER JONES: Approved.
16 MS. FRANKS: Commissioner Plunkett.
17 COMMISSIONER PLUNKETT: Approved.
18 MS. FRANKS: Commissioner Bradley.
19 COMMISSIONER BRADLEY: Approved.
20 MS. FRANKS: Commissioner Mathewson.
21 COMMISSIONER MATHEWSON: Approved.
22 MS. FRANKS: By your vote, you've adopted
23 Resolution Number 09, dash, 031.
24 MR. MCNARY: Mr. Chairman, item five on the
25 agenda concerns extension of a license for
28
1 Paltronics. The investigation has been completed.
2 Paltronics has submitted their paperwork to the
3 Department of Revenue, but we do not have a clearance
4 from them. And it should be -- we've been told by
5 DOR that they will get to us before the next meeting,
6 so this resolution would extend that license until
7 the June meeting.
8 CHAIRMAN SHULL: Is there a motion to
9 approve?
10 COMMISSIONER BRADLEY: Motion to approve
11 Commission Resolution Number 09-032.
12 COMMISSIONER JONES: Second.
13 CHAIRMAN SHULL: Motion made and seconded.
14 Is there any further discussion? Hearing none, call
15 roll, please.
16 MS. FRANKS: Chairman Shull.
17 CHAIRMAN SHULL: Approved.
18 MS. FRANKS: Commissioner Jones.
19 COMMISSIONER JONES: Approved.
20 MS. FRANKS: Commissioner Plunkett.
21 COMMISSIONER PLUNKETT: Approved.
22 MS. FRANKS: Commissioner Bradley.
23 COMMISSIONER BRADLEY: Approved.
24 MS. FRANKS: Commissioner Mathewson.
25 COMMISSIONER MATHEWSON: Approved.
29
1 MS. FRANKS: By your vote, you've adopted
2 Resolution Number 09, dash, 032.
3 MR. MCNARY: Item six, Mr. Chairman,
4 concerns re-licensure of a supplier Gaming
5 Partnership -- Partners International USA.
6 Lieutenant Rex Scism will make the presentation.
7 LT. SCISM: Good morning, Mr. Chairman,
8 Commissioners. Missouri State Highway Patrol
9 investigators conducted the re-licensing
10 investigation of one supplier company currently
11 licensed in Missouri. This investigation consisted
12 of jurisdictional inquiries, feedback from affected
13 gaming company clients, a review of disciplinary
14 actions, litigation and business credit profiles, as
15 well as a review of key persons associated with the
16 company. The results of the investigation were
17 provided to the MGC staff for their review, and the
18 following supplier company is being presented for
19 your consideration: Gaming Partners International
20 USA, Las Vegas, Nevada.
21 MR. MCNARY: Staff recommends re-licensure.
22 CHAIRMAN SHULL: Is there a motion?
23 COMMISSIONER JONES: Move for the approval
24 of Resolution Number 09, dash, 033.
25 COMMISSIONER BRADLEY: Second.
30
1 CHAIRMAN SHULL: Motion is made and
2 seconded. Is there any further discussion? Hearing
3 none, call roll, please.
4 MS. FRANKS: Chairman Shull.
5 CHAIRMAN SHULL: Approved.
6 MS. FRANKS: Commissioner Jones.
7 COMMISSIONER JONES: Approved.
8 MS. FRANKS: Commissioner Plunkett.
9 COMMISSIONER PLUNKETT: Approved.
10 MS. FRANKS: Commissioner Bradley.
11 COMMISSIONER BRADLEY: Approved.
12 MS. FRANKS: Commissioner Mathewson.
13 COMMISSIONER MATHEWSON: Approved.
14 MS. FRANKS: By your vote, you've adopted
15 Resolution Number 09, dash, 033.
16 MR. MCNARY: Mr. Chairman, item seven
17 concerns disciplinary actions, and General Counsel
18 Chris Hinckley will handle that.
19 MR. HINCKLEY: Good morning, Mr. Chairman,
20 Commissioners. Welcome, Commissioner Mathewson. I
21 direct your attention to Tab E Disciplinary Complaint
22 Number 09, dash, 154 concerning Class A Licensee
23 Herbst Gaming, Incorporated and their Class B
24 Licensee HGI St. Joe doing business as Terribles St.
25 Jo Frontier Casino. The violations alleged fall
31
1 under section 313.812, which states that the licensee
2 may be disciplined for failing to comply with the
3 Commission order and 11 CSR 45, dash, 10.030 which
4 states that a licensee shall take reasonable actions
5 to safeguard gaming assets. In support of these
6 allegations, the Gaming Commission staff believes the
7 following to be true: Commission audit 08, dash, 01
8 found that the licensee's count team members were not
9 clearing their hands during count process. As a
10 result, the Commission ordered the licensee to take
11 the steps necessary to ensure compliance in this
12 area. During the follow-up audits in connection with
13 audit 08, dash, 01, Commission auditors observed
14 several count team members still failing to clear
15 their hands during the count process. As a result of
16 these factual allegations, the staff recommends that
17 the Commission propose a $5,000 fine.
18 COMMISSIONER JONES: Mr. Hinckley, is
19 $5,000 going to make -- it seems like we gave them
20 several opportunities to correct this behavior, and
21 each time they just failed to do it. Is a $5,000
22 fine going to get their attention?
23 MR. HINCKLEY: Well, a $5,000 fine from
24 this point -- it already has gotten their attention.
25 The corrections have been made. I would assume,
32
1 then, Commissioner, you're speaking about for future
2 compliance with future audits? I can only -- you
3 know, I can only say it's gotten their attention
4 enough for the -- you know, proposal of disciplinary
5 action got their attention enough that the
6 corrections have been made.
7 CHAIRMAN SHULL: Has there been any further
8 investigations since September 10th? Were there
9 any inquiries to confirm that they have corrected it?
10 MR. HINCKLEY: All I'm aware of is that it
11 has been corrected and that if there were follow-up
12 audits there was no disciplinary action that was
13 submitted as a result of those follow-up audits.
14 This is -- actually, I think it was one follow-up and
15 one occasion on September 10th where the several
16 violations were observed. So I'm not sure that it
17 was this ongoing problem that occurred for several
18 different dates. It appears, from my reading of the
19 facts and what I wrote up, that there was one
20 occasion where the follow-up -- they went back on a
21 follow-up audit and observed several individuals not
22 complying with the original order.
23 CHAIRMAN SHULL: So they had the initial
24 issue during the audit, and then on August 27th again
25 and on September the 10th again. There were two.
33
1 MR. HINCKLEY: My understanding -- correct.
2 CHAIRMAN SHULL: Or three.
3 MR. HINCKLEY: Well, my understanding is
4 that they were issued the compliance audit on August
5 27th.
6 CHAIRMAN SHULL: Then on July 10th, a
7 compliance directive instructing Jerry Smith to
8 ensure that the casino's counting team members
9 properly cleared their hands during the counts. On
10 August 27th --
11 MR. HINCKLEY: Correct.
12 CHAIRMAN SHULL: -- the Commission issued
13 Nancy whatever --
14 MR. HINCKLEY: Nancy Howland.
15 CHAIRMAN SHULL: -- a compliance directive,
16 and then again on September 10th they observed that
17 there were others that were not clearing their hands,
18 so that's three --
19 MR. HINCKLEY: Yes, that's correct.
20 CHAIRMAN SHULL: I think what Commissioner
21 Jones is asking is, you know, if you have to suggest
22 it and then verify it and it's not being done and you
23 suggest it again and then you verify -- you check
24 again and find out that it still hasn't been
25 followed, we just are concerned, I think he is and I
34
1 am, that they comply with the regulations, and is
2 this sufficient to get their attention?
3 MR. HINCKLEY: I think that the -- I would
4 assume so only because it did ensure compliance or
5 prior to this, but I can't speak to, you know --
6 well, let me just point out that it did not get to a
7 disciplinary -- I'm not sure at what point this
8 became a disciplinary action. The audits -- the
9 follow-up audits -- it may be that the follow-up
10 audits are not turned into disciplinary actions until
11 a compliance directive is issued, and then it's
12 followed up on. And therefore, the third time would
13 be the time in which they see that it's not being
14 complied with or the order is not being complied
15 with. So it may be that this is the actual, you
16 know, progression that leads to discipline. Prior to
17 this, it may not lead to discipline.
18 COMMISSIONER JONES: Now, have we had
19 follow-up since last year? Have we had any follow-up
20 audits to go over and investigate to see if they're
21 complying as of, I mean, I guess, May.
22 MR. HINCKLEY: Well, I don't have the
23 auditor here to answer that question. It may be that
24 Roger Stottlemyre might be able to comment on the
25 actions of the auditors under his supervision.
35
1 MR. STOTTLEMYRE: I can tell you that the
2 auditors have been back. Any time they have a
3 noncompliance issue that hasn't been corrected when
4 they had, you know, they do go back and check again,
5 they will go back at another unannounced visit to
6 check the same thing, just to make sure that they are
7 getting compliance. I have nothing further as far as
8 any reports right now to report on this -- on this
9 incident, but yeah, I'm sure if they find further
10 violations down the road that that'll come before us
11 again as a repeat violation.
12 MR. HINCKLEY: If there's any violations or
13 noncompliance with this directive, it would continue
14 to be documented in the disciplinary report. The
15 reason why this was finalized and sent in was because
16 there was no further violations of this type.
17 COMMISSIONER MATHEWSON: Mr. Chairman, may
18 I inquire the chair, please? Help me out here. If I
19 am looking for this particular corporation on
20 previous disciplinary actions, where am I looking?
21 Is this the document or --
22 MR. HINCKLEY: Under audit.
23 COMMISSIONER MATHEWSON: Huh?
24 MR. HINCKLEY: Yes. You can look for --
25 COMMISSIONER MATHEWSON: This right here?
36
1 But am I understanding this report correctly -- I
2 lost that -- correctly that -- that these are broken
3 down by the particular violations, right, not by --
4 in other words, I'm looking for -- am I saying the
5 gaming company Herbst? Am I saying that correctly,
6 Herbst? Oh, they changed names. Okay. Okay.
7 Thanks, Angie. That's what I was trying -- I
8 couldn't find them, you know, on these sheets. So
9 these -- these -- this document that I have before
10 me, then -- I apologize, Mr. Chairman, for taking a
11 moment here to understand this, but -- but this -- we
12 don't have a breakdown, in other words -- and I don't
13 know that we need one except for dummies like me --
14 but where do I know -- how do I find out how many
15 times the St. Jo facility has been penalized in the
16 past for some disciplinary action? Is there
17 something that tells me that, or do I just not ever
18 know?
19 MR. HINCKLEY: It could be determined --
20 I'm sorry, Mr. Chairman.
21 CHAIRMAN SHULL: No. Go ahead.
22 MR. HINCKLEY: It could be determined from
23 this document that the St. Jo Company would be
24 listed under here if there was an individual fine.
25 These are broken down by individual fines or
37
1 disciplinary cases. So if you count the number of
2 St. Jo -- times St. Jo was named, that would be
3 the -- the number of times that in the past they have
4 been disciplined for various violations.
5 COMMISSIONER MATHEWSON: Okay. Could you
6 help me, then? Have they previously been fined for
7 disciplinary action doing the same thing that we have
8 before us now?
9 MR. HINCKLEY: Not that I'm aware of. Are
10 you talking about audits, Mr. Commissioner, or are
11 you talking about not clearing hands --
12 COMMISSIONER MATHEWSON: Not clearing hands
13 or whatever that is.
14 MR. HINCKLEY: -- as a result of an audit?
15 I'm not aware of any.
16 COMMISSIONER MATHEWSON: So this is the
17 first time on this offense. Can I assume that?
18 MR. HINCKLEY: On -- yeah. Audits of not
19 clearing hands, that's my impression.
20 COMMISSIONER MATHEWSON: Okay. Thank you,
21 Mr. Chairman. I'm sorry, I didn't understand what I
22 was looking at. I'll try to do it better.
23 CHAIRMAN SHULL: I think you're doing fine.
24 COMMISSIONER BRADLEY: No. I'm glad you
25 brought that up. It can be very confusing. You have
38
1 to look down, and you have to look to the right.
2 It's very confusing.
3 COMMISSIONER MATHEWSON: Well, Angie
4 pointed out that they changed names on here. It
5 isn't the same name as what I had before me. That's
6 the corporate name, and their doing business name is
7 something other than the corporate name, which is
8 probably not uncommon, right? Okay.
9 COMMISSIONER BRADLEY: And it could be a
10 predecessor, too.
11 COMMISSIONER MATHEWSON: Yeah. And I
12 wasn't familiar with what names they were going by.
13 Okay. Thank you, Mr. Chairman.
14 CHAIRMAN SHULL: Are there any other
15 questions or comments? Is there a motion to approve?
16 COMMISSIONER PLUNKETT: I'll make a motion
17 to approve DC, dash, 09, dash, 154.
18 COMMISSIONER JONES: Second.
19 CHAIRMAN SHULL: Motion made and seconded.
20 Is there further discussion? Hearing none, call
21 roll, please.
22 MS. FRANKS: Chairman Shull.
23 CHAIRMAN SHULL: Approved.
24 MS. FRANKS: Commissioner Jones.
25 COMMISSIONER JONES: Approved.
39
1 MS. FRANKS: Commissioner Plunkett.
2 COMMISSIONER PLUNKETT: Approved.
3 MS. FRANKS: Commissioner Bradley.
4 COMMISSIONER BRADLEY: Approved.
5 MS. FRANKS: Commissioner Mathewson.
6 COMMISSIONER MATHEWSON: Approved.
7 MS. FRANKS: By your vote, you've adopted
8 DC, dash, 09, dash, 154.
9 MR. HINCKLEY: And I'd direct your
10 attention to Tab E and Disciplinary Complaint Number
11 09, dash, 154 concerning Class A Licensee Herbst
12 Gaming, Incorporated and -- oh, I'm sorry, I
13 apologize. Oh, Tab F, Disciplinary Complaint Number
14 09, dash, 155 concerning Class A Licensee Isle of
15 Capri Casinos, Incorporated, and their Class B
16 Licensee Isle of Capri Boonville. The violations
17 alleged fall under Section 313.812, which states that
18 a licensee may be disciplined for failing to comply
19 with a Commission order and 11 CSR 45, dash, 5.265
20 which states at the end of the gaming day a floor
21 supervisor shall inspect the dice for signs of
22 tampering. In support of these allegations, the
23 Gaming Commission staff believes the following to be
24 true: A Commission audit revealed that the table
25 game supervisors were not inspecting used dice at the
40
1 end of the gaming day. In response to this finding,
2 the Commission -- I'm sorry, the casino assured
3 compliance with the regulation. Several months
4 later, during a follow-up audit, the auditors
5 observed the same violation, not inspecting the dice
6 at the end of the gaming day, that was still
7 occurring. As a result of these factual allegations,
8 the staff recommends the Commission propose a $5,000
9 fine.
10 CHAIRMAN SHULL: Are there any questions
11 for Mr. Hinckley?
12 COMMISSIONER BRADLEY: A follow-up to the
13 other question, do you have any information that this
14 was a violation of the Isle of Capri Boonville
15 before?
16 MR. HINCKLEY: Commissioner Bradley, was
17 that with regard to the disciplinary list?
18 COMMISSIONER BRADLEY: Yes. I'm just
19 trying to look at this quickly, if there's any
20 information.
21 MR. HINCKLEY: I don't see Isle of Capri
22 listed on any of the audit violations. I just see
23 Isle of Capri --
24 COMMISSIONER BRADLEY: I do not, but I
25 wanted to see if you had any other information that I
41
1 don't have.
2 MR. HINCKLEY: I don't have any other
3 information with me, other than what's on the list
4 provided. The prior violations in this, that are on
5 this sheet, the type violation and the fine assessed
6 for that type of violation, as well as the property
7 against which it is assessed is actually information
8 that would be -- that is available to and considered
9 by the disciplinary review board in coming up with
10 the violation, and it comes through commissioners.
11 It's not in this form. It's actually in a different
12 form that's more for us more quickly -- so we can
13 more quickly refer to it in assessing the fine.
14 COMMISSIONER MATHEWSON: Mr. Chairman.
15 CHAIRMAN SHULL: It can also be listed
16 under games protection. Yes, Commissioner Mathewson.
17 COMMISSIONER MATHEWSON: Mr. Chairman, I'm
18 wondering out loud with you, please, that if -- maybe
19 in the future, if we could get the document you have,
20 okay, which breaks down by the casino by the
21 location, okay, and what disciplinary action rather
22 than trying to associate -- and I know I'm new here,
23 so I'm having really problems trying to associate
24 which one is which, okay, which one of these. If we
25 could -- if we could have in the future as it relates
42
1 to disciplinary actions, if we could have another
2 document, Mr. Chairman, that might provide us with
3 that location on what previous disciplinary actions
4 had been taken by this -- by this or some other
5 commission --
6 MR. HINCKLEY: Okay.
7 COMMISSIONER MATHEWSON: -- in that regard,
8 I think it would help us to understand do they have a
9 history, and are they being penalized how many times
10 for the same act, because that's what would be
11 important to me, that they're not learning, which was
12 your question, you know. That, you know, we are
13 there to try to protect the public and to bring, you
14 know, good -- good, clean fun. Okay. I wonder if
15 maybe we could have that in the future.
16 MR. HINCKLEY: It can be provided without a
17 doubt.
18 COMMISSIONER MATHEWSON: Okay.
19 MR. HINCKLEY: It's something that's
20 considered by the review board in making sure that
21 the fines are appropriately assessed in coming to the
22 Commissioners in the past. And it's actually
23 something we've just in the last couple of years
24 started to provide for the direction of the chairman.
25 We've provided various formats to make it more
43
1 readable, and we've tried to make it more
2 comprehensive. But perhaps, at the same time, we
3 could also make it more case relevant.
4 MR. MCNARY: Mr. Chairman, we will.
5 CHAIRMAN SHULL: It's an excellent
6 suggestion.
7 MR. MCNARY: Starting with the next meeting
8 when you get the manuals, there will be a history
9 attached to the discipline.
10 COMMISSIONER MATHEWSON: Okay. Thank you,
11 Mr. Chairman. Thank you.
12 MR. HINCKLEY: Yes, sir.
13 CHAIRMAN SHULL: Is there a motion to
14 approve?
15 COMMISSIONER MATHEWSON: I'll move it.
16 COMMISSIONER JONES: Second.
17 CHAIRMAN SHULL: Motion made and seconded.
18 Is there any further discussion? Hearing none, call
19 roll.
20 MS. FRANKS: Chairman Shull.
21 CHAIRMAN SHULL: Approved.
22 MS. FRANKS: Commissioner Jones.
23 COMMISSIONER JONES: Approved.
24 MS. FRANKS: Commissioner Plunkett.
25 COMMISSIONER PLUNKETT: Approved.
44
1 MS. FRANKS: Commissioner Bradley.
2 COMMISSIONER BRADLEY: Approved.
3 MS. FRANKS: Commissioner Mathewson.
4 COMMISSIONER MATHEWSON: Approved.
5 MS. FRANKS: By your vote, you've adopted
6 DC, dash, 09, dash, 155.
7 MR. HINCKLEY: I direct your attention to
8 Tab G and Disciplinary Complaint Number 09, dash, 156
9 concerning Class A Licensee Pinnacle Entertainment,
10 Incorporated and their Class B Licensee Casino One
11 doing business as Lumiere Place Casino. Violations
12 alleged fall under Section 313.812, which states that
13 a licensee may be disciplined for failing to comply
14 with Commission order, as well as internal controls
15 dictating the verification of table game slips and
16 forms and the procedures for -- procedures for
17 issuing override jackpot slips. In support of these
18 allegations, the Commission staff believes the
19 following to true: A September, 2008 Commission
20 audit report they found that, one, table game slips
21 and forms were not being properly verified during the
22 count and that, two, two of ten override jackpot
23 slips were missing from the patron's -- were missing
24 the patron's signature and one of ten of those
25 jackpot slips was missing the signature of the
45
1 assistant casino shift manager, a signature required.
2 In response, the Commission issued an order, and the
3 licensee assured future compliance with the
4 regulation. In November of 2008, a few months later,
5 the Commission auditors conducted a follow-up audit
6 and discovered that, one, table game slips and forms
7 were still not being examined properly and that six
8 of ten override jackpot slips still lacked the
9 patron's signature and that three of ten override
10 jackpot slips lacked the appropriate signature of the
11 assistant casino shift manager. As a result of these
12 factual allegations, the staff recommends the
13 Commission propose a $15,000 fine.
14 CHAIRMAN SHULL: Is there any questions for
15 Mr. Hinckley? Is there a motion to approve?
16 COMMISSIONER JONES: Motion to approve DC,
17 dash, 09, dash, 156.
18 COMMISSIONER BRADLEY: Second.
19 CHAIRMAN SHULL: Motion is made and
20 seconded. Is there further discussion? Hearing
21 none, call the roll, please.
22 MS. FRANKS: Chairman Shull.
23 CHAIRMAN SHULL: Approved.
24 MS. FRANKS: Commissioner Jones.
25 COMMISSIONER JONES: Approved.
46
1 MS. FRANKS: Commissioner Plunkett.
2 COMMISSIONER PLUNKETT: Approved.
3 MS. FRANKS: Commissioner Bradley.
4 COMMISSIONER BRADLEY: Approved.
5 MS. FRANKS: Commissioner Mathewson.
6 COMMISSIONER MATHEWSON: Approved.
7 MS. FRANKS: By your vote, you've adopted
8 DC, dash, 09, dash, 156.
9 MR. HINCKLEY: And I'll direct your
10 attention to Tab H and Disciplinary Complaint Number
11 09, dash, 157 concerning Class A Licensee Pinnacle
12 Entertainment, Incorporated and their Class B
13 Licensee Casino One doing business as Lumiere Place
14 Casino. The violations alleged fall under 313.817,
15 which states that the person under the age of 21
16 shall not be allowed to wager or enter an excursion
17 gambling boat. In support of these allegations, the
18 Commission staff believe the following to be true:
19 On November 8th of 2008, a Missouri Highway Patrol
20 gaming agent was notified by the casino that an
21 underage patron was discovered on the casino floor.
22 The agent responded and learned that the 20-year-old
23 underage patron had presented false identification to
24 a security officer to gain entry to the casino. Once
25 on the casino floor, the underaged patron played
47
1 blackjack for 30 minutes. His false identification
2 was discovered by cage personnel when he attempted
3 to complete a financial transaction. As a result of
4 these factual allegations, the staff recommends that
5 the Commission propose a $5,000 fine.
6 CHAIRMAN SHULL: Are there any questions
7 for Mr. Hinckley?
8 COMMISSIONER MATHEWSON: I -- I'm
9 sorry, go ahead.
10 COMMISSIONER JONES: Mr. Hinckley, you know
11 I'm going to have heartburn over this one. Now, I'm
12 looking at this form as we would see, and underage
13 patrons violations 250,000; 90,000; 75,000; 50,000;
14 30,000, and 25,000. And here we have a fine of
15 5,000. Help me to understand the difference in the
16 5,000 and the $250,000 fine. Now, evidently they go
17 through training, right?
18 MR. HINCKLEY: That's correct. My
19 understanding is that they do -- are you talking
20 about security officers?
21 COMMISSIONER JONES: Yes. Everyone goes
22 through training to identify underage, you know,
23 false identifications and all the security things.
24 Everyone goes through this intense training to
25 alleviate the problem of having underage patrons on
48
1 the floor.
2 MR. HINCKLEY: Correct.
3 COMMISSIONER JONES: Okay. Now we have
4 one, and I'm pretty sure the security officer Officer
5 Schubert, Mr. Schubert has gone through intensive
6 training to identify false identification and is not
7 being caught, and then we charge Pinnacle $5,000.
8 And it seems like we have a precedence of at least --
9 and I'm just doing an average -- of about $50,000.
10 So can you help me to understand that?
11 MR. HINCKLEY: I looked at the same
12 disciplines. I know that several of the very high
13 disciplines are situations that have aggravating --
14 every one of these situations has aggravating --
15 aggravating, excuse me, and mitigating circumstances.
16 I would never think that the circumstances of this
17 particular one would merit anything in the
18 neighborhood of $250,000, as well as anything in the
19 area of $50,000, based upon the past fines issued by
20 this Commission. However, $5,000 is certainly at the
21 lower end.
22 COMMISSIONER JONES: Wait a minute, we have
23 a 2006 Harrah's Maryland Heights, minor on the casino
24 floor. Now, reading this report, there was a minor
25 on the casino floor, and this was just three years
49
1 ago. And the fine was $50,000.
2 MR. MCNARY: Commissioner Jones, can I have
3 Roger Stottlemyre speak to this point?
4 MR. STOTTLEMEYER: One thing I would say,
5 Commissioner, back in 2006, you did -- you were
6 required to have a card, your own card to get on the
7 casino floor, and it was -- you had to have ID and
8 everything checked at that point to even get on the
9 floor, where today you have the open area where the
10 people walk -- just walk through without having to
11 show a card in some casinos. Some casinos you might
12 have a generic card and a turnstile. As we saw
13 yesterday, they had two turnstiles, and no card at
14 all was used to get the count. So there -- it's a
15 new learning process for these people. There's no
16 doubt in my mind that they're going to have to put a
17 lot of emphasis on detecting underage people entering
18 the floor at the -- at the entrance. They -- it's a
19 new experience for them. They were used to having
20 the card to count on. If they got the card, they've
21 had to show ID and have to be proper. Now, this
22 person had a false ID. It was an ID that had been
23 altered was my understanding. The first time it was
24 checked at the cage, I believe, ID -- anyway, it was
25 a false ID. The first time the ID was checked, it
50
1 was caught by the casino. They just hadn't detected
2 this underage person, in their minds, being underage
3 until they actually checked ID to verify it. We do
4 have -- we've had some issues. This was the first
5 one we've had with the new -- or since we went into
6 the way of without the ID being required to get on.
7 We've worked pretty hard with the casinos on trying
8 to identify underage operators, and we've told them
9 that this is going to get serious. And we've talked
10 about the fines that have occurred previously, and I
11 see those things happen again if this continues to be
12 a trend and they don't get this under control.
13 They're going to have to get these underage people,
14 keep them from getting on the floor. We totally
15 agree with you on that.
16 CHAIRMAN SHULL: This did state in
17 paragraph six Schubert provided the Commission with a
18 written statement that -- which he acknowledged an
19 underage patron and the person's picture as a false
20 identification presented by the underage patron to
21 him that day were not the same person.
22 MR. STOTTLEMEYRE: Were not the same
23 person.
24 CHAIRMAN SHULL: So I -- I'm wondering how
25 he was able to recognize it the second time.
51
1 MR. STOTTLEMYRE: I don't think he did.
2 The cage recognized it. I think this person, who was
3 also let go, fired by the casino after this occurred,
4 but I don't think this security guard did a good job.
5 There's no doubt in any mind that he did a poor job
6 when he was looking at the ID. It was a false ID,
7 and he didn't catch it. And I do know that they are
8 working with the people, and you can talk to each of
9 the general managers and our sergeants at each of our
10 facilities. They're working very hard with their
11 people, but they're having some real problems getting
12 people to properly check IDs. It's a process we're
13 not going to let up on, I'll tell you that.
14 COMMISSIONER JONES: So this is like a slap
15 on the wrist for Pinnacle. So the next time -- I'm
16 just saying Isle of Capri Caruthersville has the same
17 problem, you know, under this new Prop A where we
18 don't have the same identification process of
19 entering the floor, they violate that. It's a slap
20 on the wrist for them, because that's their first
21 offense under the Prop A. So is that what you're
22 telling me? All 12 are going to -- we're going to
23 have to slap them on the wrist one time before we get
24 their attention?
25 MR. STOTTLEMYRE: Well, no, sir, we don't
52
v1 have to do that. That's not necessarily the case.
2 This was the first one that we had.
3 COMMISSIONER JONES: Under the Prop A.
4 MR. STOTTLEMYRE: Correct.
5 MR. HINCKLEY: November 8, 2008, from the
6 facts that I read, you recall and that was right
7 after the enactment.
8 MR. STOTTLEMYRE: And you will see in
9 times down in future meetings that we do have some
10 other cases coming before you. They're going to be a
11 lot stiffer than this. Well, right after we got
12 this, we did send out a letter to each of the general
13 managers and the compliance officers, too. I sent
14 out a letter to each of them telling them that this
15 was a real concern of the Commission and that we were
16 going to be checking this closely, and we're going to
17 expect compliance.
18 MR. HINCKLEY: Commissioner Jones, I was
19 able to quickly reference the cases that you
20 mentioned. The Harrah's case, that was actually
21 three different disciplines rolled in together to
22 make the $50,000 case.
23 COMMISSIONER JONES: Okay.
24 MR. HINCKLEY: That's just something I have
25 that I was speaking to Commissioner Mathewson before
53
1 that we'll provide that information, we'll provide
2 the Commission with in the future to help you
3 understand how we do the other fines and how the past
4 fines were assessed.
5 CHAIRMAN SHULL: There is one stated that
6 has a minor using another ID. That was a $75,000
7 fine, the one right above it.
8 COMMISSIONER JONES: In 2001, yeah.
9 CHAIRMAN SHULL: I think the concern is
10 that the efforts need to be doubled and redoubled so
11 that this does not become a problem. It's -- if you
12 permit it to occur a little bit, the next time it's a
13 little bit more, and it continues and continues until
14 it becomes a big problem. And I don't see that
15 myself as being permitted by this Commission or
16 hopefully the staff.
17 MR. HINCKLEY: I don't -- the staff doesn't
18 permit it, either. It's just a progression, and I
19 think the commissioners don't necessarily see the --
20 I mean, this is the early one, in this case, the
21 first instance, and a fine. The subsequent
22 disciplines relating to this whether they be on
23 property or other will obviously progress and
24 increase to ensure compliance.
25 MR. MCNARY: We've leaned on them,
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1 Mr. Chairman. I think they know how important it is,
2 and you've sent a clear message. They're going to
3 comply and keep minors off these boats, or it's going
4 to be very expensive for them.
5 CHAIRMAN SHULL: Well, I believe I would
6 propose tabling this particular discipline action for
7 one month and gathering some more information about
8 it, because I just -- I don't know that Mr. Schubert
9 had really gotten the message that you check the IDs
10 if he admitted on the same day that it was a false ID
11 and he permitted the individual to enter.
12 MR. HINCKLEY: Well, the only thing I would
13 say about tabling it, Mr. Chairman, would be that at
14 this point -- at the point we assess this fine, the
15 facts we have at hand were what we read to you, what
16 the past disciplines we had. And at a point in the
17 future, the Commission may learn about either this
18 property or other properties -- or, I'm sorry, this
19 property more fines or more issues that could
20 possibly prejudice you in assessing the fine for the
21 event that we're assessing or considering right now.
22 I mean, it's just at this point what you know about
23 this fine it may be appropriate to assess the fine at
24 this point and then consider future actions with --
25 with this action, obviously, in mind but certainly
55
1 not continuing to upgrade it because of what you
2 learn in the future.
3 CHAIRMAN SHULL: Are there any other
4 questions?
5 COMMISSIONER JONES: Mr. Hinckley, I don't
6 think that'll be the case.
7 MR. HINCKLEY: Okay.
8 COMMISSIONER JONES: Personally I don't
9 think that'll be the case. I think, you know,
10 looking at the form in front of me I don't know if
11 the right -- in my mind right now, I don't know if
12 the right assessment has been levied against Pinnacle
13 for this violation.
14 MR. HINCKLEY: Okay. That would be
15 different than what I was attempting to get at,
16 Commissioner. I agree that, yeah, more of an
17 explanation with regard to the fines and the amounts
18 and what went into them would be appropriate for the
19 commissioners to know. I was just concerned about
20 and expressed my concern about learning about other
21 disciplines in the future and how that would affect
22 your assessment of this one may not be appropriate.
23 COMMISSIONER BRADLEY: Well, I think our
24 job is to assess each action as it comes before us,
25 and I think we've all been able to, you know, assess
56
1 it. I don't think that's going to be any kind of a
2 issue at all. We do need information either to
3 affirm or make any change, because this is an
4 important issue that is before us, and I think
5 it's -- I would agree with you. I think maybe we
6 just -- and I can so move to table it for at least
7 until the next meeting so we can get more
8 information, if we need to.
9 CHAIRMAN SHULL: Move to tabling to the
10 next meeting. Is there a second?
11 COMMISSIONER JONES: Second.
12 CHAIRMAN SHULL: Is there any further
13 discussion?
14 COMMISSIONER MATHEWSON: Mr. Chairman.
15 CHAIRMAN SHULL: Yes, sir.
16 COMMISSIONER MATHEWSON: I apologize,
17 again. I'm trying to learn. Mr. Hinckley, help me
18 out to understand the chain of events that happened
19 when -- when whatever the penalty is. Let's use this
20 one, because this one's before us, and there's a
21 motion before us. So -- so the chain of events, as I
22 read this and hear your report, was that a security
23 person for the casino recognized this or the
24 cashier's cage did, and then they reported it to our
25 person, the patrol person that's there for security.
57
1 They reported it, right?
2 MR. HINCKLEY: Correct.
3 COMMISSIONER MATHEWSON: Okay. The casino
4 reported it.
5 MR. HINCKLEY: That's called self-reporting
6 in this.
7 COMMISSIONER MATHEWSON: I mean, that's the
8 process. That's the way things -- whether it's this
9 sort of situation or whatever it is, that's the
10 process that we normally go through. Do I understand
11 that correctly?
12 MR. HINCKLEY: That's an expectation with
13 regard to regulations.
14 COMMISSIONER MATHEWSON: Okay. So we go
15 from their security people to our security people,
16 and then our security people then reports it further.
17 MR. HINCKLEY: You don't actually have to
18 go through their security people. Every one of the
19 employees has the responsibility to directly report
20 any violations to the highway patrol.
21 COMMISSIONER MATHEWSON: Yeah. That's what
22 I'm trying to understand. I'm sorry, you know, I
23 don't -- I'm not familiar with how that works. So --
24 so in this case or any case, then -- then from that
25 point, then, the -- the I'll call them our security,
58
1 okay, state security, then they are then -- then they
2 write a report, and that is presented back to, then,
3 the casino management or their security people? Or
4 what happens?
5 MR. HINCKLEY: At that point if they would
6 write a report, they would issue what are called
7 notices of investigation, and they're essentially not
8 necessarily a charging document but an information
9 provided to the violators at the casino property to
10 show them on this date this occurred. And it gives
11 them an opportunity to make a statement that those
12 notices of violation or notices of investigation are
13 included in the final report and considered in being
14 incorporated into the final report of the highway
15 patrol. The highway patrolman writes the report.
16 COMMISSIONER MATHEWSON: Okay.
17 MR. HINCKLEY: And then that collectively,
18 along with other evidence, the report is transferred
19 to or sent to the Gaming Commission in Jefferson City
20 and through our procedures are ultimately considered
21 by the disciplinary review board.
22 COMMISSIONER MATHEWSON: Okay. So in this
23 case -- help me here. In this case, the casino --
24 the fault lies with the casino's security person who
25 didn't check this person out better. That's the
59
1 fault?
2 MR. HINCKLEY: Correct.
3 COMMISSIONER MATHEWSON: Am I understanding
4 that correctly?
5 MR. HINCKLEY: Correct.
6 COMMISSIONER MATHEWSON: They did -- when
7 they did recognize it at the cashier's cage, then
8 they did comply with what the rules are. They then
9 reported that to our people, who then further
10 investigated it, and we went further from that. Is
11 that -- am I correct there?
12 MR. HINCKLEY: That's my understanding.
13 That's correct.
14 COMMISSIONER MATHEWSON: Okay. So let me
15 take that and go one step further, Mr. Chairman, and
16 I'll quit. Let's assume for a moment that -- that we
17 as a commission -- no. Let me go to the casino. The
18 casino decides, you know, rather than take a chance
19 here of getting fined, then, our security people
20 escorts this person out and says you're done, get
21 out, and escorts them out the door. Okay. Do they
22 just violate a rule?
23 MR. HINCKLEY: Yes.
24 COMMISSIONER MATHEWSON: Okay.
25 MR. HINCKLEY: Failure to report.
60
1 COMMISSIONER MATHEWSON: And where would I
2 find that?
3 MR. HINCKLEY: In the regulations.
4 COMMISSIONER MATHEWSON: I don't mean this
5 minute. I'm ready to vote like everyone else is. So
6 we do have a rule in place that would then cause that
7 to be a violation because they did not report it back
8 to security.
9 MR. HINCKLEY: That's correct.
10 COMMISSIONER MATHEWSON: Right?
11 MR. HINCKLEY: That would be a serious
12 violation.
13 COMMISSIONER MATHEWSON: Okay.
14 MR. HINCKLEY: If caught.
15 COMMISSIONER JONES: Yeah, if they were
16 caught.
17 MR. HINCKLEY: Correct.
18 COMMISSIONER MATHEWSON: Well, see, that --
19 that -- to be honest with you, see, there's my
20 concern, not about the motion that's before us.
21 That's fine, Mr. Chairman, but if we're going -- if
22 we're going to say to them, you know, we appreciate
23 your friendship but we're going to fine you, you
24 know, I mean, doesn't that kind of give them an idea
25 to just escort the person out of there?
61
1 MR. HINCKLEY: Well, compliance with the
2 duty to report is not necessarily considered a
3 mitigator. It's an expectation that we expect
4 casinos to follow through on. We don't treat
5 compliance with the law as a mitigator. We do,
6 however, treat noncompliance with the law as an
7 aggravator. I think that's the simplest way I can
8 say it.
9 COMMISSIONER MATHEWSON: Okay. Okay. I'm
10 sorry, I'm trying to understand so for the future I
11 won't ask so many damn questions.
12 MR. HINCKLEY: That's why the duty to
13 report falls on everyone, to ensure that if one
14 person makes the decision not to report that it's
15 likely that another person will make the decision to
16 report.
17 COMMISSIONER MATHEWSON: Thank you,
18 Mr. Chairman.
19 MR. ELDER: Can I address the Commission
20 for one second?
21 COMMISSIONER BRADLEY: Sure.
22 MR. HINCKLEY: Sure.
23 MR. ELDER: Good morning, Commissioners.
24 Captain Elder, highway patrol. I just want to kind
25 of give a brief overview, because I know Senator
62
1 Mathewson is new to the Commission. We have officers
2 assigned on every casino, and part of that reason is
& 3 because we not only monitor the activities of the
4 casino employees but also the patrons that come on
5 for criminal violations and regulatory violations.
6 We're also equipped with radios where we can monitor
7 the surveillance, security, radio traffic. Often
8 there are times when we overhear something that is
9 going on. We respond without being called. We have
10 caught casinos, you know, various times trying to
11 avoid self-reporting, and those are reported on to a
12 Gaming Incident Report, which goes through the Gaming
13 Commission. Our officers, when we're either called
14 to an event or we discover ourselves, we do one of
15 two things. We can issue a Compliance Directive,
16 which is similar to a warning, you know, saying it's
17 a minor violation, you need to correct this, or we do
18 a Gaming Incident Report, which is similar to an
19 investigation report on the criminal side. And
20 oftentimes our violations are twofold. They're
21 criminal and are regulatory, much like a minor on the
22 casino. That's a violation of state law. There will
23 be a report that goes to the prosecutor for that.
24 There's also a Gaming Incident Report which will go
25 through the Disciplinary Review Board process up to
63
1 the Commissioners, but that is the essential reason
2 why we have officers on board every casino. Every
3 time they're open we have officers on duty so we can
4 monitor and make sure that they are self-reporting,
5 make sure that they're conforming to all the rules
6 the Commission has set before them. Does that help
7 out a little bit?
8 COMMISSIONER MATHEWSON: Thank you. Yes.
9 And I am in no way -- you all are the reason why
10 we've got a successful program in this state, no
v11 question in my mind about that.
12 MR. ELDER: We all work together.
13 COMMISSIONER MATHEWSON: I support you a
14 hundred percent. I'm just trying to get a little
15 knowledge here.
16 MR. ELDER: It works well. No. By all
17 means, I'll be glad to meet you afterwards and give
18 you more.
19 COMMISSIONER MATHEWSON: Thank you very
20 much. Thank you, Mr. Chairman.
21 CHAIRMAN SHULL: Any further discussion,
22 any questions? Hearing none, call roll.
23 MS. FRANKS: Chairman Shull.
24 CHAIRMAN SHULL: Approved.
25 MS. FRANKS: Commissioner Jones.
64
1 COMMISSIONER JONES: Approved.
2 MS. FRANKS: Commissioner Plunkett.
3 COMMISSIONER PLUNKETT: Approved.
4 MS. FRANKS: Commissioner Bradley.
5 COMMISSIONER BRADLEY: I just want to make
6 sure this is the motion to table. Thank you.
7 Approved.
8 MS. FRANKS: Commissioner Mathewson.
9 COMMISSIONER MATHEWSON: Approved.
10 MS. FRANKS: By your vote, you've tabled
11 DC, dash, 09, dash, 157.
12 MR. MCNARY: Mr. Chairman, item eight on
13 the agenda is the licensure of certain level one key
14 applicants, and Lieutenant Scism will handle that.
15 LT. SCISM: Good morning, again. Missouri
16 State Highway Patrol investigators, along with Gaming
17 Commission financial investigators, conducted
18 background investigations on multiple key person and
19 level one applicants. The investigations included,
20 but were not limited to, criminal, financial, and
21 general character inquiries, which were made in the
22 jurisdictions where the applicants lived, worked, and
23 frequented. The following individuals are being
24 presented for your consideration: Danny Ray
25 Carpenter, Owner and Chief Executive Officer of the
65
1 George C. Matteson Company; Jason Allen Fitzhugh,
2 Executive Vice President of Sales and Marketing for
3 the George C. Matteson Company; Paul Desmond Quinlan,
4 Executive Vice President and General Manager for the
5 George C. Matteson Company; Diana Kaye Summers, Owner
6 and President of the George C. Matteson Company;
7 Timothy Joseph Wilmott, President and Chief Operating
8 Officer of Penn National Gaming, Incorporated;
9 finally, Louis John Castle, II, Outside Director for
10 Shuffle Master, Incorporated. The results of all
v11 investigations were provided to the Gaming Commission
12 staff for their review, and you have summary reports
13 before you for all applicants being considered.
14 MR. MCNARY: Mr. Chairman, staff recommends
15 licensure of these applications.
16 CHAIRMAN SHULL: Any questions? Is there a
17 motion to approve?
18 COMMISSIONER BRADLEY: Motion to approve
19 licensure, Commission Resolution Number 09, dash,
20 034.
21 COMMISSIONER PLUNKETT: Second.
22 CHAIRMAN SHULL: Motion is made and
23 seconded. Is there any further discussion? Hearing
24 none, call the roll.
25 MS. FRANKS: Chairman Shull.
66
1 CHAIRMAN SHULL: Approved.
2 MS. FRANKS: Commissioner Jones.
3 COMMISSIONER JONES: Approved.
4 MS. FRANKS: Commissioner Plunkett.
5 COMMISSIONER PLUNKETT: Approved.
6 MS. FRANKS: Commissioner Bradley.
7 COMMISSIONER BRADLEY: Approved.
8 MS. FRANKS: Commissioner Mathewson.
9 COMMISSIONER MATHEWSON: Approved.
10 MS. FRANKS: By your vote, you've adopted
11 Resolution Number 09, dash, 034.
12 CHAIRMAN SHULL: Is there any new business
13 the commission would like to address? Is there any
14 old business, Mr. McNary?
15 MR. MCNARY: No old business, Mr. Chairman.
16 CHAIRMAN SHULL: I think that concludes our
17 meeting, if we could have a motion to close the
18 meeting.
19 COMMISSIONER PLUNKETT: Motion to close.
20 CHAIRMAN SHULL: Is there a second.
21 COMMISSIONER JONES: Second.
22 CHAIRMAN SHULL: I think we have to read
23 motion to go to close. Have we changed that? We no
24 longer have to read what we're discussing.
25 COMMISSIONER BRADLEY: I think we do.
67
1 CHAIRMAN SHULL: 313.847 610.021(1) and
2 (14). Okay. Motion is made and seconded. Further
3 discussion? Call the roll, please.
4 MS. FRANKS: Chairman Shull.
5 CHAIRMAN SHULL: Approved.
6 MS. FRANKS: Commissioner Jones.
7 COMMISSIONER JONES: Approved.
8 MS. FRANKS: Commissioner Plunkett.
9 COMMISSIONER PLUNKETT: Approved.
10 MS. FRANKS: Commissioner Bradley.
11 COMMISSIONER BRADLEY: Approved.
12 MS. FRANKS: Commissioner Mathewson.
13 COMMISSIONER MATHEWSON: Approved.
14 CHAIRMAN SHULL: All right. If we could
15 ask the public to leave the room and have only those
16 individuals that will be attending the closed
17session.
18 (At this time the meeting was closed.)
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1 CERTIFICATE OF REPORTER
2
3 I, JOANNA CHARLTON, Certified Court
4 Reporter, the officer before whom the foregoing
5 hearing was taken, do hereby certify that the
6 statements that appear in the foregoing hearing was
7 taken by me to the best of my ability and thereafter
8 reduced to typewriting under my direction; that I am
9 neither counsel for, related to, nor employed by any
10 of the parties in which this hearing was taken, and
11 further that I am not a relative or employee of any
12 attorney or counsel employed by the parties thereto.
13
14 ________________________
15 JOANNA CHARLTON, CCR
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