STATE OF MICHIGAN

MICHIGAN GAMING CONTROL BOARD

PUBLIC MEETING

Cadillac Place

3062 W. Grand Blvd., Suite L-700

Detroit, Michigan

TUESDAY, February 11, 2003

6:00 P.M.

MINUTES

On Tuesday, February 11, 2003, 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:

                                                         Judge Roman S. Gribbs, Chairman

                                                         Rich Davis

                                                         Judge Michael Stacey

                              Also attending were:

                                                         Daniel Gustafson

                                                         Patty James

                                                         Eric Eggan

                                                         Inspector Ellis Stafford

Business:       The meeting was called to order at 6:01 p.m. by Board Chairman Roman Gribbs. Chairman Gribbs noted for the record that Judge Ford and Larry Garberding were not in attendance.  Chairman Gribbs further advised that copies of tonight’s agenda were available for the public at the receptionist’s desk.

                        Chairman Gribbs stated that the Board members have received copies of the minutes from the last Board meeting and there being no comments, changes or corrections to the minutes, he requested a motion to approve the minutes from the December 10, 2002 meeting.

                        It was moved and seconded that the minutes of the December 10, 2002 meeting be approved.  Motion carried.

                        Dan Gustafson next presented the Executive Director’s report.  With regards to staffing, Mr. Gustafson advised the Board that Teri Miller, Record Technician in the East Lansing office, Robyne McCray, Record Technician in the Detroit Office, Peggy Murphy, Accountant, Michael Sauer and Ronald Warmbier, Financial Analysts have joined the Board’s staff since the Board’s last public meeting.  Mr. Gustafson further advised the Board that the MGCB was in the process of filling its remaining approved vacant positions.

                        Mr. Gustafson proceeded to give an update regarding the Board’s budget.  Mr. Gustafson reported that the Board has incurred expenditures in the amount of $3,847,007 from October 1, 2002 through January 31, 2003, leaving the unexpended balance of $12,783,193 in appropriated funding for the remainder of the fiscal year, which ends September 30, 2003.

                        Mr. Gustafson next reported that all three casinos continue to operate on a seven-day, 24-hour basis, and that Board regulatory and audit staff regularly monitor casino operations and related casino wagering tax returns and revenue and expense records.

                        Mr. Gustafson further advised the Board that through January 2003, the aggregate casino revenues for all three Detroit casinos did not exceed the revenues generated in the same month of 2002.  The aggregate revenue and taxes for all three casinos in January were down by 7.82%, compared to the same month last year.

                        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.

                        Mr. Gustafson also reported that the Licensing Division has completed the required background investigations on 332 pending Level 1 and Level 2 occupational license applications which the Board would be considering during the business portion of the meeting. Mr. Gustafson further reported that the Licensing Division has completed its investigations on 57 Level 3 occupational license applications and 79 occupational license renewal requests, which he has approved pursuant to Board Resolution #2002-02.

                        Next, Mr. Gustafson reported that he and Eric Bush, Public Affairs Director, gave a presentation on the mission and duties of the MGCB to the House Standing Committee on Regulatory Reform.   Mr. Gustafson also advised the Board of the presentation made by himself and Bob Simon, Budget Manager, on the MGCB’s budget outlays for the current and 2003-2004 fiscal year to the House and Senate Appropriations Subcommittees.

                        Upon conclusion of Mr. Gustafson’s report, Judge Gribbs proceeded to the first item on the business agenda.

                        The Board proceeded to consider the Licensing Division’s staff recommendations regarding 332 pending Level 1 and Level 2 occupational license applications. Staff recommended issuance of 330 license applications and denial of 2 license applications for reasons specified in the related background investigative reports and Exhibit 1.

                        Chairman Gribbs advised the Board that Ben McMakin, Deputy Director of Licensing, was present to answer any questions the Board members might have regarding the Licensing Division’s staff recommendations regarding the pending occupational license applications.

The Board having no questions, it was moved by Judge Stacey and seconded by Mr. Davis that the Board enter an order accepting and adopting the Licensing Division’s staff recommendations regarding the 332 Level 1 and Level 2 occupational license applications as summarized in Exhibit 1, and also directing that the Executive Director issue occupational licenses or notices of denial to the named applicants in accordance with the staff’s written recommendations.  The following roll call vote was then taken on the motion:

                           Chairman Gribbs:       Aye

                           Mr. Davis:                    Aye

                           Judge Stacey:             Aye

                        Motion carried.

The next order of business was to consider the Executive Director’s Report and the Licensing Division’s staff recommendation regarding two pending applications for approval of transfers of interest in supplier licensee The Osborne Coinage Company from Thomas Edward Stegman to Jeffrey James Stegman and Todd Robert Stegman, respectively, Board File No. SL000095-03-001.

Judge Gribbs once again acknowledged Mr. McMakin’s presence to answer any questions the Board may have.

                        The Board having no questions, it was moved by Mr. Davis and seconded by Judge Stacey that the Board enter an order approving the proposed transfers of 2.6% ownership interest in The Osborne Coinage Company from Thomas Edward Stegman to Jeffrey James Stegman and Todd Robert Stegman, respectively, based upon the written recommendations and finding of the Board’s Licensing Division staff.  The following roll call vote was taken on the motion:

                           Chairman Gribbs:       Aye

                           Mr. Davis:                    Aye

                           Judge Stacey:             Aye

                        Motion carried.

The Board next considered the Executive Director’s Report and the Licensing Division’s staff recommendation regarding the pending nongaming-related supplier license application of New Millenium Advisors, L.L.C., Board File No. SL000634-03-001.

After recognition of his presence by Chairman Gribbs, Mr. McMakin addressed the Board to advise them of two typographical errors within the report.  Mr. McMakin further advised the Board that the errors did not affect the Licensing Division’s staff recommendation.

Judge Gribbs noted for the record that there were no representatives for New Millenium Advisors, L.L.C. present at the meeting.

Judge Stacey moved and Mr. Davis seconded that the Board enter an order finding and concluding that New Millenium Advisors, L.L.C. and its qualifiers are eligible and suitable for licensure under the licensing standards and requirements of the Michigan Gaming Control and Revenue Act, as amended, and Administrative Rules of the Board, and, accordingly, granting the nongaming-related supplier license application based upon the background investigation report and recommendation of the Executive Director and the Board’s Licensing Division staff.  The following roll call vote was taken on the motion:

                           Chairman Gribbs:       Aye

                           Mr. Davis:                    Aye

                           Judge Stacey:             Aye

                        Motion carried.

The next agenda item to be considered was the Executive Director’s Report and the Licensing Division’s staff recommendation regarding the pending nongaming-related supplier license application of Peash, Inc., d/b/a Flowers & More, Board File No. SL001308-03-001.

Once again, Chairman Gribbs recognized Deputy Director McMakin’s presence and also noted for the record that a written notice was sent to Peash, Inc. advising that the Board would consider this application at the meeting.  It was further noted that there were no representatives for Peash, Inc. present at the meeting.

Mr. Davis moved and Judge Stacey seconded that the Board enter an order finding and concluding that Peash, Inc., d/b/a/ Flowers & More, and its qualifiers are eligible and suitable for licensure under the licensing standards and requirements of the Michigan Gaming Control and Revenue Act, as amended, and Administrative Rules of the Board, and, accordingly, granting the nongaming-related supplier license application based upon the background investigation report and recommendation of the Executive Director and the Board’s Licensing Division staff.  The following roll call vote was taken on the motion:

                           Chairman Gribbs:       Aye

                           Mr. Davis:                    Aye

                           Judge Stacey:             Aye

                        Motion carried.

The Board next considered the Executive Director’s Report and the Licensing Division’s staff recommendation regarding the pending nongaming-related supplier license application of Lavdas Enterprises, Inc., Board File No. SL001575-03-001.

Judge Gribbs acknowledged Mr. McMakin’s and Mr. Len Wolfe’s, attorney for Lavdas Enterprises, Inc., presence at the meeting.

Chairman Gribbs then invited Assistant Attorney General in Charge, Mr. Eric Eggan to give a brief background summary of this investigation to the Board.   Mr. Eggan proceeded to advise the Board of the political contribution issue pertaining to this application and the license application for LaBelle Communications, L.L.C., which would be the next agenda item considered by the Board.

Upon completion of Mr. Eggan’s summary, Mr. Wolfe rose and introduced to the Board Mr. Nick Lavdas, sole owner of Lavdas Enterprises, Inc. and Mr. Jason Hanselman from Dykema Gossett.  Mr. Wolfe then proceeded to address the Board on the applicant’s position relative to the political contribution issue.

After Mr. Wolfe answered questions posed by Judge Stacey, it was moved by Judge Stacey and seconded by Mr. Davis that the Board enter an order denying the license of Lavdas Enterprises, Inc., based on violations of 7B of the Michigan Gaming Control and Revenue Act.  The following roll call vote was taken on the motion:

                           Chairman Gribbs:       Aye

                           Mr. Davis:                    Aye

                           Judge Stacey:             Aye

                        Motion carried.

The next item the Board considered was the Executive Director’s Report and the Licensing Division’s staff recommendation regarding the pending gaming-related supplier license application of LaBelle Communications, L.L.C.

Chairman Gribbs noted for the record that Mr. Eggan had no further comments regarding the political contribution issue pertaining to this application.  He further noted that Mr. Chris LaBelle was present at the meeting.

Upon invitation by Judge Gribbs, Mr. LaBelle proceeded to address the Board.

The Board having no questions for Mr. LaBelle, it was moved by Mr. Davis and seconded by Judge Stacey that the Board enter an order denying the license of LaBelle Communications, L.L.C., based on violations of 7B of the Michigan Gaming Control and Revenue Act.  The following roll call vote was taken on the motion:

                                 Judge Gribbs:              Aye

                                 Mr. Davis:                    Aye

                                 Judge Stacey:             Aye

Motion carried.

The next item for the Board’s consideration was the Proposal For Decision in the matter of denial of Reginald B. Harris’ application for an occupational license, Case No. OLH-2001-21.

For the record Judge Gribbs recognized the presence of Mr. Harris and the Board’s counsel, Assistant Attorney General, Jack Cahill. 

After brief comments from Mr. Harris and Mr. Cahill, it was moved by Judge Stacey and seconded by Mr. Davis that the Board enter a final decision and order in the matter of the denial of Reginald B. Harris’ application for an occupational license, Case Number OLH-2001-21, accepting, adopting, and incorporating the hearing officer’s Proposal For Decision in the matter in its entirety, and denying the occupational license for which Reginald B. Harris made application.  The following roll call vote was taken:

                                 Judge Gribbs:              Aye

                                 Mr. Davis:                    Aye

                                 Judge Stacey:             Aye

Motion carried.

The Board next considered Greektown Casino’s request for Declaratory Rulings, File No. DR-2002-02. 

Before acknowledging Mr. Michael Atkins, the attorney representing Greektown Casino, Judge Stacey moved, and Mr. Davis seconded, that this matter be tabled for a period of 90 days.    After comments from Mr. Atkins, it was decided the matter would be placed on the agenda for the Public Hearing to be held on May 13, 2003.  A voice roll call vote was taken.

Motion carried.

Next, it was moved by Mr. Davis, and seconded by Judge Stacey that the Board go into closed session immediately following the conclusion of the public meeting for the purpose of receiving legal advice and counsel from the Board’s attorney regarding pending Board litigation, and receiving confidential notification from the Executive Director regarding the names of individuals placed on the Board’s Disassociated Persons List since the Board’s last public meeting as required by the Act.  The following roll call vote was taken:

                                 Judge Gribbs:              Aye

                                 Mr. Davis:                    Aye

                                 Judge Stacey:             Aye

Motion carried.

                        Mr. Wolfe, attorney for Lavdas Enterprises, Inc. requested that Mr. Lavdas be allowed to comment on the actions the Board took on his license application.  Mr. Lavdas having concluded his comments and there being no other questions or comments from the public, the meeting was adjourned by Judge Gribbs, at 7:26 p.m.

                                                                                                            _______________________________________

                                Patricia S. James

                                Board Secretary