STATE OF MICHIGAN

MICHIGAN GAMING CONTROL BOARD

PUBLIC MEETING

Cadillac Place

3062 W. Grand Blvd., Suite L-700

Detroit, Michigan

Wednesday, July 13, 2005

10:30 A.M.

MINUTES

On Wednesday, July 13, 2005, the Michigan Gaming Control Board held a public meeting at the Board office in the Cadillac Place, 3062 W. Grand Blvd, Suite L-700, Detroit, Michigan.

Present:          In attendance were the following Board members:

                                                 Damian Kassab, Chairman

                                                 Judge Benjamin Friedman

                                                 Donald Robinson

                         Also attending were:

                                                 Daniel Gustafson

                                                 Patty James

                                                 D/F/Lt. Vickie Johnson

                                                 Ben McMakin

                                                 Tom Barker

                                                 John Page

                                                 Jack Cahill

Business:         Board Chairman Damian Kassab called the regular public meeting to order at 11:00 a.m.   Chairman Kassab noted for the record that Barbara Rom was not present at the meeting due to another commitment and Judge Stacey would arrive late for the meeting.

                        Chairman Kassab stated the first order of business was to approve the minutes from the June 14, 2005 meeting.  He requested a motion to approve the minutes from the June 14, 2005 meeting.

                         It was moved and seconded that the minutes of the June 14, 2005 meeting be approved.  Motion carried.

                        Mr. Gustafson next presented the Executive Director’s report.  In regards to staffing, Mr. Gustafson noted that there have not been any new employees hired since the last Board meeting.  However, the agency was currently in the process of interviewing and filling most of the 7 vacant positions. 

                        In regards to the Board’s budget, Mr. Gustafson reported that for the fiscal year 2005, from October 1, 2004 through June 30, 2005, the Board has incurred expenditures of $9,467,658 leaving the unexpended balance of $8,845,492 in appropriated funding for FY 2005, which includes funds for anticipated reimbursement for expenditures by the Attorney General’s Office and Michigan State Police. 

                        Mr. Gustafson next reported that for June 2005, the aggregate revenue and gaming taxes for the three Detroit casinos were down .88 percent compared to the same month last year.  The gaming taxes for June 2005 for all three Detroit casinos were $11,206,000 compared to $7,568,000 for the period last year.  The significant difference is a reflection of the 6% tax increase, which took effect in September 2004.

                        Mr. Gustafson 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.

                        Next, Mr. Gustafson updated the Board on MSP’s Board-related activities.

                        Upon conclusion of Mr. Gustafson’s report, Chairman Kassab requested a motion to accept the recommendations of the Executive Director and the Licensing Division’s staff regarding the 59 Level 1 and 2 occupational license applications. 

                        It was moved by Mr. Robinson and seconded by Judge Friedman to accept the recommendations of the Executive Director and the Licensing Division’s staff for the applications summarized in Exhibit 1.  A voice vote was taken.

                        Motion carried.

                        The Board next considered the proposed Board Resolution No. 2005-02 delegating authority to the Executive Director to determine if the public’s health, safety or welfare requires emergency action against occupational or supplier licensees and to issue summary suspensions.

                        After a brief discussion, it was moved by Judge Friedman and seconded by Mr. Robinson that the Board adopt the proposed Board Resolution No. 2005-02, and further moved that Board Resolution No. 2003-01 be rescinded and vacated.  A voice vote was taken.

                        Motion carried.

                        The next agenda item considered was the Executive Director’s Report and the Licensing Division’s staff recommendation regarding the eligibility and suitability of Marian Ilitch, CCM Merger, Inc. and IH Gaming, Inc. and approve certain debt transactions related to these entities in the acquisition of MotorCity Casino.

                        Chairman Kassab noted for the record that state law requires a quorum of at least four Board members to discuss and act on this matter.  Therefore, Chairman Kassab advised Board members and meeting attendees that this matter would be delayed until the arrival of Judge Stacey or the meeting would be recessed until later that evening, when Judge Stacey was available to attend.

                        Mr. Gustafson advised Chairman Kassab that it was appropriate to discuss and debate this issue with a smaller quorum.  Mr. Gustafson further suggested that the report from Grant Thornton be discussed either at this time or after the last agenda item had been acted on, because Mr. Pete Weipert was not available this evening.

                        Therefore, Chairman Kassab noted for the record Mr. Weipert’s presence at the meeting and invited him to address the Board.

                        After a brief summary of Grant Thornton’s report and a discussion between Board members, Mr. Weipert and Mr. Joe Ehrlich, counsel for Ms. Ilitch, Chairman Kassab moved on to the next agenda item.

                        Chairman Kassab noted for the record that there were no representatives from Henderson Electric, Inc. present at the meeting to discuss the Executive Director’s report and the Licensing Division’s staff recommendation for the Board to issue a Notice of Deficiency to Henderson Electric, Inc.

                        There being no questions from Board members, it was moved by Mr. Robinson and seconded by Judge Friedman that the Board enter an order to issue a Notice of Deficiency to Henderson Electric, Inc., Board File No. SL001663-05-001 to allow Henderson Electric, Inc. 30 days to correct deficiencies and to notify Henderson Electric, Inc. of the potential denial of this application if Henderson Electric, Inc. fails to meet the aforementioned criteria.  A voice vote was taken.

                        Motion carried.

                        The next agenda item considered by the Board was Michelangelo Wood Restoration and Upholstery, Inc.’s request to withdraw its supplier license application.

                        Once again, Chairman Kassab noted for the record that there were no representatives for the applicant present at the meeting.

                        Therefore, it was moved by Judge Friedman and seconded by Mr. Robinson that the Board enter an order approving the request of Michelangelo Wood Restoration and Upholstery, Inc. to withdraw its supplier license application.  A voice vote was taken.

                        Motion carried.

                        The next item considered was the Acknowledgment of Violation of occupational licensee Khary Stanley Justice.

                        Chairman Kassab invited Deputy Director John Page to give a brief overview of the disciplinary action taken against Mr. Justice.  Chairman Kassab further noted for the record that Mr. Justice was not present at the meeting.

                        After questions from Board members, it was moved by Mr. Robinson and seconded by Judge Friedman that the Board accept the proposed Acknowledgment of Violation as agreed to by the MGCB staff and Khary Stanley Justice and issue an order adopting, accepting and incorporating the Acknowledgment of Violation as the Board’s final decision.  A roll call vote was taken:

                                     Chairman Kassab:            Aye

                                     Judge Friedman:               Aye

                                     Mr. Robinson:                   Aye

                        Motion carried.

                        The Board next considered the Proposal for Decision in the matter of the denial of VJT, Restaurants, Inc., d/b/a Cyprus Taverns’ and Olympia Shish-Kebab’s applications for supplier license exemption. 

                        Chairman Kassab noted for the record the presence of Mr. James T. Hogan, counsel for both applicants.  Chairman Kassab also invited Ms. Bethany Scheib, Assistant Attorney General, to give a summary of the case.

                        After a lengthy discussion between Board members, staff, Mr. Hogan and Mr. Avgoustis, owner of VJT, Restaurants, Inc., it was moved by Judge Friedman and seconded by Mr. Robinson that the Board enter a final decision and order in the matter of the denial of VJT Restaurants, Inc.’s and Olympia Shish-Kebab’s applications for supplier license exemption and accepting and adopting and incorporating the Hearing Officer’s Proposal for Decision in the matter in its entirety in denying the applications for the supplier license exemption.  A roll call vote was taken:

                                     Chairman Kassab:            Aye

                                     Judge Friedman:              Aye

                                     Mr. Robinson:                  Aye

                        Motion carried.

                        Next Mr. Hogan made a verbal request that the one-year waiting period for reapplication for VJT Restaurants, Inc. be waived.

                        Therefore, it was moved by Judge Friedman and seconded by Mr. Robinson that the Board enter an order waiving the one-year waiting period for VJT Restaurants, Inc.  A voice vote was taken.

                        Motion carried.

                        Due to the non-appearance of Judge Stacey, Chairman Kassab recessed the meeting until 6:30 p.m., which at that time the Board would consider the Marian Ilitch matter.  The meeting was recessed at 12:09 p.m.

                        At 6:30 p.m. Chairman Kassab reconvened the public meeting.  Chairman Kassab noted for the record that with the presence of himself, Judge Friedman, Mr. Robinson, and Judge Stacey that the Board had a quorum.

                        Next Chairman Kassab requested that the Executive Director, Dan Gustafson, give a brief summary of the matter that the Board would be considering.

                        After Mr. Gustafson’s summary, Mr. Len Wolfe, counsel for Detroit Entertainment, CCM Merger, Inc., IH Gaming, Inc. and related companies affiliated with Detroit Entertainment, addressed the Board. 

                        After Mr. Wolfe’s and Mr. Joe Ehrlich’s comments and presentation, and concerns voiced by Judge Stacey it was decided that the final order be amended. 

                        After further discussion regarding the amended language, it was moved by Chairman Kassab and seconded by Mr. Robinson that the proposed order approving the eligibility, suitability and qualification of Marian Ilitch, CCM Merger, Inc. and IH Gaming, Inc. and the debt transaction be amended.  A roll call vote was taken:

                                     Chairman Kassab:            Aye

                                     Judge Friedman:              Aye

                                     Mr. Robinson:                   Aye

                                     Judge Stacey:                  Aye

                        Motion carried.

                        Next it was moved by Judge Friedman and seconded by Mr. Robinson that the Board enter an order finding Marian Ilitch, CCM Merger, Inc., and IH Gaming, Inc. eligible, suitable and qualified key persons.  It was further moved that the Board find the following key persons or qualifiers of Detroit Entertainment eligible, suitable and qualified:  IH Management, L.L.C., Atwater Casino Group, L.L.C., Atwater Management Corporation, ZRX, L.L.C. and ZLM Corporation.  Additionally, it was moved that the Board approve the debt transaction subject to conditions outlined in Board Order MCC-2005-007, as amended.  A roll call vote was taken:

                                     Chairman Kassab:            Aye

                                     Judge Friedman:               Aye

                                     Mr. Robinson:                   Aye

                                     Judge Stacey:                   Aye

                        Motion carried.

                        There being no comments from the public, Chairman Kassab adjourned the meeting, at 7:58 p.m.

                               ______

                                 Patricia S. James

                                 Board Secretary