STATE OF MICHIGAN

MICHIGAN GAMING CONTROL BOARD

PUBLIC MEETING

Albert Kahn Building

7430 Second Avenue, Suite 300

Detroit, Michigan

TUESDAY, October 9, 2001

6:00 P.M.

MINUTES 

On Tuesday, October 9, 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

Rich Davis

Judge Geraldine Bledsoe Ford

Judge Michael Stacey

Also attending were:

Nelson Westrin

Patty James

Eric Eggan

Dewayne Brantley

Business:      The meeting was called to order at 6:00 p.m., at which time Chairman Denomme stated that all Board members were present and have received copies of the minutes from the last Board meeting and there being no comments, changes or corrections the minutes from the August 14, 2001 meeting were approved.

Nelson Westrin next presented the Executive Director s report.  Mr. Westrin reported certain notable Board-related activities and events relative to caring out the Board s statutory duties and responsibilities, which had occurred since the Board s last public meeting.

Mr. Westrin first reported that after a thorough review of the Board s operation, a new organizational chart and staffing plan had been developed and implemented October 1, 2001.  Mr. Westrin proceeded to explain all changes of the new organizational structure.

Next Mr. Westrin advised the Board that 3 new Regulation Officers, Patrick Devlin, Cheryl Freeman and Tom Novak, had been hired since the last Board meeting, bringing the Board s staffing total to 84.  Mr. Westrin reported that Patrick Devlin, has been assigned to the Indian Gaming Section; and Cheryl Freeman and Tom Novak have been assigned to the new Regulation and Compliance Section.  Mr. Westrin also reported that the Board has been authorized to hire 16 additional staff.

Mr. Westrin advised that the Board s third-quarter s Distinguished Employees Recognition Awards were announced at the September 26th staff meeting and that he would like to recognize the two work groups and one individual honored as distinguished employees at tonight s meeting.  Mr. Westrin first presented the four distinguished Senior Executive Management Assistants; Patty James, Tammy Tubbs, Laurie Lander and Kara Kabia.  The second distinguished employee group presented was the Casino and Services Industry Section, which includes Regulation Officer, Pam Duke and Licensing Technicians Charles Benson, Marica Kibby and Gary Washington.  The individual introduced and recognized as a Distinguished Employee was the Board s accountant, Bob Simon. 

Upon conclusion of the introduction of the award winners, Mr. Westrin next gave an update regarding the Board s budget.  Mr. Westrin reported that the Board has incurred expenditures in the amount of $12,427,690 from October 1, 2000 through September 30, 2001, leaving the unexpended balance of 8 million-plus dollars in appropriated funding for the remainder of the fiscal year, which ends September 30, 2001.  Of that remaining year end balance, $1.3 million has been encumbered to fund the Board s Phase II Management Information System.  Another $3.9 million was appropriated for one-time projects that will not be expended due to changes in the Board s operational and project plans.  Mr. Westrin further stated that although the new fiscal year began on October 1^st, the prior fiscal year 2001 financial activities will continue to occur until the state officially closes its books for the fiscal year in either February or March of 2002.  Mr. Westrin concluded the budget report by advising that for fiscal year 2002, the legislature has appropriated $16,888,700 for Board operations.

Westrin advised the Board that on August 30^th MGM Grand Detroit timely filed its annual report for renewal.  Mr. Westrin further advised the Board that the report has been assigned for investigation and review, and a staff report and recommendation would be presented to the Board upon completion of the investigation.

Mr. Westrin then proceeded to update 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 finally noted that one other significant event occurred on September 26^th when the Wayne County Circuit Court jury found Brent Morris of Bridgeton, New Jersey, guilty on four separate felony counts of cheating in the game of craps at the Greektown Casino.

Having concluded his report, Mr. Westrin responded to questions and comments from Board members.

Next, Chairman Denomme approved three subcommittees of the Gaming Control Board for the fiscal year beginning October 1^st.  Chairman Denomme advised that he and Rich Davis would continue to serve on the Administration and Operations Subcommittee.  The second subcommittee on Licensing and Compliance will consist of himself and Judge Stacey and, the third subcommittee on Legislation and Administrative Rules will consist of Judge Ford and Judge Gribbs.  These subcommittees will help develop, for the Board's consideration and approval, certain policies and procedures for handling various duties and responsibilities. 

The next order of business was to establish the Board s calendar for the coming year as required by the Michigan Open Meetings Act.  Prior to tonight s meeting a proposed meeting schedule was presented to each Board member.  Upon motion and support, the Board approved the meeting schedule for fiscal year 2001-2002.

The Board s next order of business was to consider and decide a request from the Michigan s Future Political Committee for a declaratory ruling by the Board regarding the applicability of Section 7B of the Michigan Gaming Control and Revenue Act as amended regarding contributions made to the committee by persons having interests in casinos or supplier licensees or casino enterprises, Board File No. DR-1999-1.  Upon conclusion of the Board s discussion with Assistant Attorney General Eric Eggan relative to this request a motion was made and seconded to table this item but also have the Board communicate to the state legislature its concern over the exclusion of political committees from the language of the law and asking the legislature to take corrective action in this regard.

A roll call was taken:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The next order of business was to consider and decide a Proposed Consent Judgement as the resolution of disciplinary action against the MotorCity Casino for certain rule and internal control system violations, Casino License Case No. DA-2001-02.

Chairman Denomme introduced Deputy Director Tom Nelson and Assistant Attorney General Jack Cahill as the Board s representatives.  The Chairman then invited the representatives for MotorCity Casino to step forward and introduce themselves.  Representatives in attendance for MotorCity Casino were Bob Stocker with Fraser, Trebilcock, Davis & Foster, P.C.; Peter Simon, Senior Vice President of Mandalay Development; Greg Solomon, Senior Vice President of Operations for Mandalay Resort Group; Yvette Landau, Vice President, General Counsel and Secretary of Mandalay Resort Group; Cheryl Scott Dube, General Counsel for Circus Circus, Michigan, Inc.; Rhonda Cohen, General Manager of MotorCity Casino, and David Belding, Senior Vice President of Mandalay Development.

At this time, Deputy Director Tom Nelson presented a summary of the Proposed Consent Judgement. 

Upon conclusion of Mr. Nelson s presentation, Mr. Belding and Ms. Cohen spoke on behalf of MotorCity Casino.

Upon motion and support, a roll-call vote was taken on the motion that the Board enter a Final Decision and Order in the matter of Detroit Entertainment, L.L.C., doing business as MotorCity Casino, Casino Licensing Case No. DA-2001-02, authorizing and directing the Executive Director to sign the Proposed Consent Judgement in this matter, and further authorizes the Executive Director to monitor and enforce the compliance of Detroit Entertainment, L.L.C., with the terms and conditions of the executed Consent Judgement.

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The next item of business was to consider and decide the Licensing Division s recommendations regarding 30 pending occupational licensing applicants.  Staff recommended issuance of 25 licenses and denial of 5 licenses.

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:Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered the recommendations from the Licensing Division regarding the pending application for approval of a transfer of 100-percent ownership interest in a temporary supplier licensee Anchor Gaming to International Game Technology, Board File No. TR-000008-0001.

It was moved and seconded that the Board approve the transfer of 100-percent ownership interest in Anchor Gaming to International Game Technology with the provisions that the approval of the transfer and merger is accomplished by the Federal Trade Commission and second, that the Board s subsequent approval of the eligibility and suitability of any persons still requiring to qualify as part of the transfer and Anchor Gaming s pending application for a supplier license.   A roll call was taken on the motion:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered the Licensing Division s recommendation regarding the pending application for approval of a transfer of 100-percent ownership interest in temporary supplier licensee Casino Data Systems (CDS) to temporary supplier licensee Aristocrat Technologies, Inc., Board File No. TR-000119-0001.

It was moved and seconded that the Board approve the merger of CDS into Aristocrat Technologies and related transfer of 100-percent ownership interest in CDS from CDS to Aristocrat Technologies, Inc.  A roll call was taken on the motion:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The next item of business was to consider for the Board s approval the Licensing Division s recommendation regarding the pending supplier license application of Aristocrat Technologies, Inc., Board File No. SL-000038.

Upon motion and support, a roll-call vote was taken on the motion that the Board enter an order finding and concluding that Aristocrat Technologies, Inc., is eligible and suitable for licensure under the licensing requirements of the Michigan Gaming Control and Revenue Act as amended and Administrative Rules of the Board.

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

Next the Board considered collectively for approval four separate transfers of less than 1-percent interest in Detroit Entertainment, L.L.C. 

The first transfer of concern was from Lawrence P. Doss to Judith Y. Doss.  The second transfer was from Charles Boyce to O Neil Swanson and the third transfer was from Joseph A. and Ruby Pitts to the Ruby Pitts Trust.  The last proposed transfer was from Yvonne E. Kendrick to the Yvonne E. Kendrick Revocable Trust. 

After Mr. Nelson fielded questions directed by the Board and comments from Vivian Carpenter from the audience, it was moved and seconded the Board approve each of the proposed transfers of less than 1-percent interest in casino licensee Detroit Entertainment, L.L.C. from Lawrence P. Doss to Judith Y. Doss; from Charles Boyce to O Neil Swanson; from Joseph A. and Ruby Pitts to the Ruby Pitts Trust, and from Yvonne E. Kendrick to the Yvonne E. Kendrick Revocable Trust, respectively.  A roll call was taken:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered, individually, 6 Proposal For Decisions.  It was noted by Chairman Denomme that each case would be considered and recorded as part of the contested case hearing record for the case and would be conducted and carried out in accordance with the contested case requirements of the Michigan Administrative Procedures Act.  Mr. Denomme also stated that copies of the hearing officer s Proposal for Decision for the six cases to be considered had been distributed to all appropriate parties and each party had been given an opportunity to file exceptions and objections to the PFDs.  Mr. Denomme further advised that each applicant and the Attorney General were each given a written notice that the Board would consider and decide on these 6 cases at tonight s meeting.

The first case considered was In the Matter of the Denial of Cora Lee Terrell s Occupational License Application, Case No. OLH-2001-15.   The hearing officer s PFD and the parties stipulation recommends reversal of the Board s prior decision to deny Ms. Terrell s level 2 occupational license application and further recommends that she be issued a full level 2 license subject to certain conditions specified in the parties stipulation.  It was noted for the record that Teresa Bingman, Assistant Attorney General, and Dan Fields, Regulation Officer were present on behalf of the Board.  It was further noted that Ms. Terrell was also present.  No request to present oral argument 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 approve the occupational license for Cora Lee Terrell, subject to the conditions specified in the parties stipulated agreement.  A roll call was taken:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered the hearing officer s Proposal for Decision to affirm the Board s prior denial of Gary Payne s application for an occupational license, Case No. OLH-2000-31.  It was noted for the record that neither Mr. Payne nor his counsel 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 hearing officer s proposal to deny the occupational license for Gary Payne:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered the hearing officer s Proposal for Decision to affirm the Board s prior denial of the occupational license application for Margaret Blount-Lee, Case No. HL-2001-01.  It was noted for the record that Ms. Blount-Lee was present at tonight s meeting and neither Ms. Blount-Lee nor the Board staff filed exceptions or objections, or requested to make any oral arguments.

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 Margaret Blount-Lee.  A roll call was taken on the motion:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered the Matter of the Denial of George Anderson s Application for An Occupational License, Case No. OLH-2001-04. The hearing officer recommended that the Board affirm its prior denial of Mr. Anderson s application for an occupational license.  It was noted that neither Mr. Anderson nor his counsel were present.

Upon motion and support, a roll call was taken on the motion that a Final Decision and Order be issued accepting, adopting and incorporating therein the hearing officer s proposal to deny the occupational license for George Anderson:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered the hearing officer s Proposal for Decision to affirm the Board s prior denial of the occupational license application for Leslie O. Moss, Case No. OHL-2001-08.  It was noted for the record that Mr. Moss was present at tonight s meeting.  It was further noted that Mr. Moss had filed a written objection to the Proposal for Decision and that Teresa Bingman, Assistant Attorney General, had filed a written response to that objection.  Neither Mr. Moss nor Ms. Bingman requested to make any oral arguments.

Upon motion and support, a roll call was taken on the motion that a Final Decision and Order be issued accepting, adopting and incorporating therein the hearing officer s proposal to deny the occupational license for Leslie O. Moss:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Board next considered the hearing officer s Proposal for Decision to affirm the Board s prior denial of the occupational license application for Darrell Barber, Case No. HL-2001-09.  It was noted for the record that neither Mr. Barber nor his counsel were present.

Judge Gribbs raised some concerns relative to the application being denied due to a misdemeanor conviction of Mr. Barber which occurred in 1987, and the zero flexibility of the law to grant licenses to individuals convicted of any misdemeanor conviction involving theft.   The Board agreed to have the subcommittee on Legislation and Administrative Rules address this issue and determine if an amendment to the statute is warranted.

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 Darrell Barber.  A roll call was taken on the motion:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      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:

Chairman Denomme:      Aye

Mr. Davis:      Aye

Judge Ford:      Aye

Judge Gribbs:      Aye

Judge Stacey:      Aye

Motion carried.

The Chairman opened the floor for public comment.  Mr. Leslie Moss introduced himself and requested the opportunity to present an oral argument regarding the denial of his occupational license application.

Chairman Denomme advised Mr. Moss that requests for oral arguments were to be made prior to the Board meeting.  Mr. Denomme stated that the Board had already acted on his application and that an oral argument was not possible at this time.  Mr. Denomme further advised Mr. Moss of the proper procedures to request an appeal of the Board s decision.

There being no further public comment, it was moved and seconded that the meeting be adjourned.  Motion carried and the meeting was adjourned at 7:35 p.m.

Patricia S. James

Board Secretary