STATE OF MICHIGAN

MICHIGAN GAMING CONTROL BOARD

PUBLIC MEETING

Albert Kahn Building

7430 Second Avenue, Suite 300

Detroit, Michigan

TUESDAY, August 14, 2001

6:00 P.M.

MINUTES

On Tuesday, August 14, 2001, the Michigan Gaming Control Board held a public meeting at the Board office in the Albert Kahn Building, 7430 Second Avenue, Suite 300, Detroit, Michigan.

Present:                        In attendance were the following Board members:

                                                Thomas Denomme, Chairman

                                                Judge Roman S. Gribbs

                                                Judge Geraldine Bledsoe Ford

                                                Rich Davis

                        Also attending were:

                                                Nelson Westrin

                                                Patty James

                                                Eric Eggan

Business:      The meeting was called to order at 6:00 p.m., at which time Chairman Denomme stated that Board members received copies of the minutes from the last Board meeting and there being no comments, changes or corrections approved the minutes from the June 12, 2001 meeting.

                        Chairman Denomme recognized the absence of Judge Michael Stacey, advising Judge Stacey was excused due to another business commitment.

                        Nelson Westrin presented the Executive Director’s report.  Mr. Westrin reported that Joanne Chamberlain has been hired as a financial analyst in the Audit and Financial Services Division and Doug Zavorski has joined the staff as a regulation officer in the Licensing and Compliance Division. The Board’s staff currently numbers 81.

                        Mr. Westrin advised that the Board’s second quarter’s Distinguished Employees Recognition Awards were announced at the June 27th staff meeting and that he would like to recognize each group at tonight’s meeting.  Mr. Westrin presented the Information Technology staff, which includes Pam Aungst, Greg Campbell, Phil Dulong, Charlie Marengo, Jane Rademacher, Joe Welz and Tom Barker.  The second group presented was the Employee Licensing Technicians, which includes Charlotte Davison, Sharon Henderson and Denise Reece.  The third group recognized as Distinguished Employees was the Gaming Laboratory staff, which includes Tom Bucia, Nader Jadallah, Beverly Kimbrough and Aaron Pongracz. 

                        Upon conclusion of the introduction of the award winners, Mr. Westrin presented the budget report.  Mr. Westrin reported that the Board has incurred expenditures in the amount of $9,541,966 from October 1, 2000 through July 31, 2001, leaving the balance of $10,924,000 in available appropriated funding for the remainder of the fiscal year, which ends September 30, 2001.  Mr. Westrin further advised that the Board’s appropriation for the period of October 1, 2001 through September 30, 2002 is $18.1 million, of which $1.3 million of that amount is allocated to the Department of Agriculture for expenditures by the Office of Racing Commissioner.

                        Mr. Westrin reported that all three casinos are operating on a seven-day, 24-hour basis, and that Board regulatory and audit staff regularly monitor all operations activities, gaming tax returns and related revenue and expense records.  He also reported the second quarter earnings/revenues for MGM Grand Detroit Casino, MotorCity Casino and Greektown Casino.

                        Mr. Westrin updated the Board on the status of the issuance of temporary supplier licenses, full supplier licenses, vendor registrations, and supplier licensing exemptions, as well as the status of the issuance of temporary and permanent occupational licenses for the three casinos.

Mr. Westrin also updated the Board on other significant events that had occurred since the last meeting held on July 1, 2001.  Mr. Westrin reported that the Michigan Supreme Court ruled that a Detroit ordinance to rezone the property for the MGM Grand temporary casino was not subject to a public referendum because it included an appropriation for road and utility improvements in the rezoned property.  Also, the Court’s decision prevents the Community Coalition for Empowerment, Incorporated to continue with its movement for a public referendum vote to repeal this ordinance.

Mr. Westrin also reported that on August 10th, Attorney General Jennifer Granholm issued an opinion regarding the political contribution prohibitions in Section 7(b) of the Gaming Act.  This opinion concluded that Section 7(b) does not prohibit casino or supplier licensees or persons who have an interest in those licensees from engaging in volunteer political activities on behalf of political candidates or committees.  The opinion further concluded that Section 7(b) does prohibit casino and supplier licensees and persons with interest in those licensees from donating materials, phone services, office space, and other non-monetary contributions if the donations would constitute a contribution within the meaning of the Campaign Finance Act.

                        Upon conclusion of Mr. Westrin’s report, and there being no questions or comments from Board members, the Board moved to the presentation by Deputy Director Ben McMakin on the operations and activities of the Board’s Audit and Financial Services Division in the licensed Detroit casinos.

                        Upon completion of Mr. McMakin’s presentation, the Board moved to the consideration of Licensing and Compliance Division’s recommendations on 243 pending occupational licensing applicants.  Staff recommended issuance of 147 licenses and denial of 96 license.

                        Upon motion and support, a roll-call vote was taken on the motion to accept and adopt the staff’s occupational licensing recommendations summarized in Exhibit 1 and to direct the Executive Director to issue occupational licenses and Notices of Denial to the named applicants in accordance with the staff’s recommendation:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

                        Motion carried.

                        The Board’s next order of business was to consider the approval of Robert H. Baldwin, Kyle Lee Edwards, Gary Neil Jacobs, George John Mason, Ronald Martin Popeil, Scott Brent Snow and Melvin Bernard Wolzinger as MGM Grand Detroit, L.L.C. qualifiers. Staff recommended approval of all seven MGM qualifiers based on the background investigation in which no deficiencies were found.    It was noted that the background investigative reports and notice of the Board’s consideration and decision of the cases at tonight’s hearing were sent to MGM and there were no MGM representatives present.

Upon motion and support, a roll-call vote was taken on the motion that the Board enter an order finding Robert H. Baldwin, Kyle Lee Edwards, Gary Neil Jacobs, George John Mason, Ronald Martin Popeil, Scott Brent Snow and Melvin Bernard Wolzinger eligible and suitable for licensure as MGM Grand Detroit, L.L.C. qualifiers:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

                        Motion carried.

The next item of business was to consider for the Board’s approval the transfer of 6 percent ownership interest in temporary supplier licensee, Atlantic City Coin & Slot Service Company, Inc. (aka A.C. Coin) from Max Seelig to his sons Jerald Seelig, Jeffrey Seelig and Jason Seelig, Board File No. TR-000243-001, with each son receiving a separate 2 percent interest.  It was noted that neither Mr. Seelig nor his three sons were present.

It was moved and seconded that the Board approve the transfer of 6 percent ownership interest in A.C. Coin from Max Seelig to his sons, Jerald Seelig, Jeffrey Seelig and Jason Seelig.  A roll call was taken on the motion:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

                        The Board next considered the pending application for approval of a transfer of 100 percent ownership interest in temporary supplier licensee, Casino Data Systems to temporary supplier licensee, Aristocrat Technologies, Inc, Board File No. TR-000119-0001.   It was noted for the record that Aristocrat’s representative, Mr. John McCafferty, was present.

                        Upon motion and support, a roll-call vote was taken on the motion that the transfer of 100 percent ownership interest from Casino Data Systems to Aristocrat Technologies, Inc. and related licensing issues be deferred until the September 2001 Board meeting.

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

                        The Board next considered the hearing officer’s Proposal for Decision (PFD) for final decision on the occupational license for Darryl M. White, Case No. OLH-2001-10.  The Chairman noted that the Board’s deliberations and decision was to be recorded and made a part of the record for this case.   It was noted for the record that Teresa Bingman, Assistant Attorney General was present on behalf of the Board, and Mr. White and Mr. Dennis Mitchell, Mr. White’s attorney were also in attendance.   No request to present oral arguments was made by either party.

                        It was moved and seconded that a Final Decision and Order be issued accepting, adopting and incorporating therein the hearing officer’s proposal to deny the occupational license for Darryl M. White.  A roll call was taken on the motion:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

                        The Board next considered the hearing officer’s Proposal for Decision (PFD) for reversal of denial of an occupational license for Kamal Rabban, Case No. OLH-2001-05.  It was noted that proceedings would be recorded as part of the record in this case.   It was noted that written notices of the Board’s consideration and decision of the case at tonight’s hearing were sent to the Appellant and his attorney, and that neither were present.

Upon motion and support, a roll-call vote was taken on the motion that a Final Decision and Order be issued accepting, adopting and incorporating therein the parties’ Stipulation and the hearing officer’s PFD granting a conditional Level 2 Occupational License to Mr. Rabban.

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

                        The next item of business to be considered was the approval of the Proposed Consent Judgment and Stipulation of WMS Gaming, Inc., Case No. DA-2001-01, which defines the settlement agreement reached resulting from software anomalies and technical software issues relating to gaming devices.  The Chairman advised that all procedures regarding the Proposed Consent Judgement in this matter would be recorded as part of the record in this case.

                        The Chairman requested that any representatives for WMS Gaming, Inc. step forward and introduce themselves to the Board.  It was noted that Donna More, Outside Counsel, Orrin Edidin, General Counsel and Executive Vice President, Brian Gamache, CEO and President, Darek Harmer, Gaming Consult, Lisa DeJesus, Director of Compliance, John Degrasse, Director of Regulatory Affairs and Daurean Sloan, Assistant General Counsel were present on behalf of WMS Gaming, Inc.

                        After comments from Mr. Edidin and Mr. Gamache of WMS Gaming, Inc. it was moved and seconded that a Final Decision and Order be issued (1) authorizing the Executive Director to sign the parties’ Proposed Consent Judgment and Stipulation, (2) approving, adopting and incorporating the parties’ Stipulation and (3) authorizing and directing the Executive Director to monitor and enforce the compliance of WMS Gaming, Inc. as set forth in the Proposed Consent Judgment and Stipulation.  A roll call was taken on the motion:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

                        The next item of business was to consider Licensing and Compliance Division staff’s recommendation to extend the time from 14 days to 30 days for approved Occupational Licensees to submit their license fees.

                        Upon motion and support, a roll-call vote was taken on the motion that the Board adopt the proposed Board Resolution, No. 2001-03, waiving and modifying the 14 day time limit in Rule 338 (2) for payment of the required biannual license fee by Occupational Licensees.

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

                        The Board next considered the recommendation to delegate the Board’s authority to the Executive Director to grant or deny Level 3 Occupational License Applications on behalf of the Board which will increase the Board’s administrative efficiency in processing the relatively high number of Level 3 License Applications.

                        It was moved and seconded that the Board adopt the proposed Board Resolution, No. 2001-04, delegating authority to the Executive Director to grant and deny Level 3 Occupational License Applications.  A roll call was taken on the motion:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

                        The next order of business was to deliberate on staff’s motion to grant a Temporary Occupational License to Cora Lee Terrell, Case No. OLH-2001-15, pending completion of Ms. Terrell’s hearing relative to the Board’s prior denial of her license. 

                        Upon completion of Assistant Attorney General Teresa Bingman’s recounting of facts which lead to this request, the Board moved and seconded that the Board enter an Order approving the motion of Board staff and reinstating the Level 2 Temporary Occupational License previously issued to Cara Lee Terrell pending the Board’s Final Decision on the denial of Ms. Terrell’s application for an occupational license.  A roll call was taken on the motion:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

Motion carried.

        As the final item of business, it was moved and seconded to go into closed session immediately following the conclusion of the public meeting to consider and decide pending confidential applications for placement on the Board’s List of Disassociated Persons.  A roll call was taken on the motion:

                              Mr. Denomme:      Aye

                              Mr. Davis:      Aye

                              Judge Ford:      Aye

                              Judge Gribbs:      Aye

                        Motion carried. 

                        The Chairman opened the floor for public comment.  Mr. Peter Erickson requested the Board’s consideration to provide additional information on the monthly revenue and tax reports that are published by the Board and Mr. McMaster of Taxpayers United commented on the Governor’s authority to issue Indian Gaming Compact Judgments and the Board’s supervisory role to monitor Indian Gaming.

                        Upon completion of Mr. Erickson’s and Mr. McMaster’s comments, it was moved and seconded that the meeting be adjourned.  Motion carried and the meeting was adjourned at 7:48 p.m.

                        ___

                          Patricia S. James

                          Board Secretary