1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 06-02-01 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, February 1, 2006 10 Atlantic City Commission Offices 11 Tennessee and Boardwalk 12 Atlantic City, New Jersey 08401 13 10:30 a.m. to 11:36 a.m. 14 15 16 Certified Shorthand Reporter: Christine Stanco 17 - - - - - - - - - - - - - - - - - - - - - - - - - 18 19 20 CIPOLLONI & ASSOCIATES, INC. 21 CERTIFIED SHORTHAND REPORTERS 22 1125 Atlantic Avenue, Suite 416 23 Atlantic City, New Jersey 08401 24 (609) 348-9190 25 www.cipolloni-associates.com 2 1 B E F O R E : 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 RALPH G. FRULIO, VICE CHAIR WILLIAM T. SOMMELING, COMMISSIONER 4 MICHAEL A. FEDORKO, COMMISSIONER MICHAEL C. EPPS, COMMISSIONER 5 PRESENT FOR THE CASINO CONTROL COMMISSION: 6 DARYL W. NANCE, ADMINISTRATIVE ANALYST DANIEL J. HENEGHAN, 7 PUBLIC INFORMATION OFFICER 8 OFFICE OF THE GENERAL COUNSEL: DIANNA W. FAUNTLEROY, GENERAL COUNSEL/ 9 EXECUTIVE SECRETARY STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 10 CAROLE R. JACOBSON, SENIOR COUNSEL THERESA M. NAGENGAST, SENIOR COUNSEL 11 E. DENNIS KELL, ASSISTANT GENERAL COUNSEL BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 12 SANDRA DELIA, LEGAL SUPPORT SPECIALIST 13 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL: 14 JACK ADAMS BRIAN BISCIEGLIA 15 JAMES FOGARTY BEVERLY TANENHAUS 16 DOROTHY TURI 17 18 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S: 2 ITEM 3 BRIAN BISCIEGLIA, DIVISION STAFF ITEM 4 CAROLE R. JACOBSON, SENIOR COUNSEL 3 DOROTHY TURI, DIVISION STAFF COOPER LEVENSON 4 BY: LLOYD LEVENSON, ESQ. FOR: STEVEN J. RITONDO 5 ITEM 5 BERNADETTE FRIGEN, PROGRAM SUPERVISOR BRIAN BISCEGLIA, DIVISION STAFF 6 ITEM 6 BERNADETTE FRIGEN, PROGRAM SUPERVISOR BEVERLY TANENHAUS, DIVISION STAFF 7 ITEM 7 THERESA M. NAGENGAST, SENIOR COUNSEL JACK ADAMS, DIVISION STAFF 8 FOX ROTHSCHILD, LLP BY: NICHOLAS CASIELLO, JR., ESQ. 9 FOR: CUMMINS-ALLISON CORPORATION ITEM 8 SANDRA DELIA, LEGAL SUPPORT SPECIALIST 10 JAMES FOGARTY, DIVISION STAFF ITEM 9 SANDRA DELIA, LEGAL SUPPORT SPECIALIST 11 JAMES FOGARTY, DIVISION STAFF ITEM 10 SANDRA DELIA, LEGAL SUPPORT SPECIALIST 12 ITEM 11 E. DENNIS KELL, ASSISTANT GENERAL COUNSEL 13 ITEM 12 E. DENNIS KELL, ASSISTANT GENERAL COUNSEL 14 ITEM 13 E. DENNIS KELL, ASSISTANT GENERAL COUNSEL 15 16 17 18 19 20 21 22 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 06-02-01 2 February 1, 2006, 10:30 a.m. ITEM DESCRIPTION PAGE VOTE 3 1 Ratification of the minutes of January 18, 2006 public meeting 9 9 4 2 Applications for employee and casino service industry licenses: 5 Remand for hearings 6 applications for initial and/or renewal of casino 6 key and casino employee licenses 10 10 Remand for hearing CSI license 7 application of Aircraft Source, Inc. 10 10 8 Grant 8 applications for initial and/or renewal of casino key and casino 9 employee licenses 11 11 Grant CSI license renewal 10 applications of Staples Contract & Commercial, Inc. and Daniel J. Keating 11 Construction Company 11 12 Grant plenary qualification to 12 David J. Lucchese in connection with the gaming related CSI license of 13 Bally Gaming, Inc. 12 12 3 Stipulations of settlement and consent 14 agreements: A) Yesenia J. Avila (a/k/a Yesina Avila) 15 (05-0665-EA) 14 14 B) John C. Fiore (Not present) 16 (05-0449-ER) 14 14 C) Kenneth C. Nesbitt (Not present) 17 (05-0777-ER) 14 14 D) Michael E. James (Not present) 18 (05-0145-RC) 14 14 E) Preethi Kapoor (Not present) 19 (05-0782-RC) 14 14 F) Hugo J. Espinal-Zuleta 20 (Not present) (05-0775-EA) 14 14 G) Kenneth E. Lambert, Jr. (Not present) 21 (05-0700-EA) 14 14 H) James J. Bowes (05-0659-ER) 14 14 22 I) Marvin R. Harrell (Not present) (05-0223-ER) 14 14 23 J) Dana B. Nixon (05-0477-ER) 14 14 K) Mark A. Robbins (04-0582-ER) 14 14 24 L) Cary S. Metz (a/k/a Cary S. Metzgroff) (05-0835-EA) 14 14 25 M) Michael A. Babilya (05-0666-EA) 14 14 N) Jose A. Torres (05-0737-EA) 14 14 5 1 ITEM DESCRIPTION PAGE VOTE 4 Stipulation and settlement of casino 2 key employee renewal application and qualification of Steven J. Ritondo 3 (05-0382-ER) 16 16 5 Application for suspension in State 4 v. Luis Reyes (06-0051-RC) 17 17 6 Preliminary Hearing concerning the 5 exclusion of Michael Chau (a/k/a Minh C. Chau) (05-0895-EL) 18 19 6 7 Petition of Cummins-Allison Corporation for waiver of qualification for certain 7 Security Holders (PRN 2890404) 19 33 8 Consideration of the qualification of 8 James Florio as an Outside Director of Trump Entertainment Resorts, Inc. 33 35 9 9 Consideration of the qualification of Morton Handel as an Outside Director of 10 Trump Entertainment Resorts, Inc. 35 36 10 Proposed publication of the readoption of 11 N.J.A.C. 19:47 (Rules of the Game) 37 37 11 Proposed republication and temporary 12 adoption of amendments to N.J.A.C. 19:45-1.8 (Retention of Redeemed Gaming 13 Vouchers, Cashed Pari-Mutuel Tickets and cashed Credit Vouchers) 38 38 14 12 Proposed publication and temporary adoption of amendment to N.J.A.C. 19:46-1.19B 15 (Frequency of Pai Gow Tile Change) 39 40 13 Proposed publication and temporary 16 adoption of amendment to N.J.A.C. 19:45-1.40D (Division Inspection of 17 Slot Machine Jackpots) 40 40 18 19 20 21 22 23 24 25 6 1 E X H I B I T S 2 3 NUMBER DESCRIPTION EVD 4 ITEM 2 5 EL-1 Remand for hearings 6 license 6 applications 9 7 EL-2 Grant 8 license applications 9 8 9 10 (Exhibits retained by Commission.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 7 1 (Public Meeting No. 06-02-01 commenced 2 at 10:30 a.m.) 3 MR. NANCE: Good morning. I'd like to 4 read an opening statement. 5 This is to advise the general public 6 that in Compliance with Chapter 231 of the Public 7 Laws of 1975 entitled the "Open Public Meetings 8 Act", the New Jersey Casino Control Commission on 9 October 13, 2005, filed with the Secretary of 10 State at the State House in Trenton, an Annual 11 Meeting Schedule. On October 14th, copies were 12 mailed to the Press of Atlantic City, the Newark 13 Star Ledger and the Office of the Clerk of 14 Atlantic City. 15 Members of the press will be permitted 16 to take photographs, and we ask that this be done 17 in a manner which is not disruptive or 18 distracting to the Commission. 19 The use of cellular telephones in the 20 Public Meeting Room while the Commission is in 21 session is prohibited. 22 Any members of the public who wish to 23 address the Commission will be given the 24 opportunity to do so before the Commission 25 adjourns for the day. 8 1 Please stand for the Pledge of 2 Allegiance. 3 (Whereupon, the Pledge of Allegiance was 4 executed.) 5 CHAIR KASSEKERT: Good morning. 6 MR. NANCE: Good morning. Matters 7 discussed in closed session were employee and 8 enterprise license matters. The Commissioners 9 approve the January 18th, 2006 closed session 10 minutes; litigation update regarding Warren 11 Lackland and Lewis M. Springer, Jr. versus State 12 of New Jersey and the Casino Control Commission. 13 Personnel matters were discussed as 14 follows: The following personnel matter received 15 requisite approvals subsequent to the last public 16 meeting: The hiring of Jerry Vargas to the 17 position of Accounting/Finance Analyst in the 18 Audit Unit within the Financial Division; the 19 promotion of Peggy Suhr to the position of 20 Program Analyst and Operations Specialist 2 21 within the Division of Compliance; the promotions 22 of Charity Ausborn and Elizabeth Rogale to the 23 positions of Program Analyst and Operations 24 Specialist within the Division of Compliance; the 25 transfer of Donna Snyder from the Casino 9 Item No. 1 1 Operation Unit, Division of Compliance, to the 2 position of Accounting/Finance Analyst 2 within 3 the Division the Financial Evaluation. 4 Item Number 1, ratification of the 5 minutes of January 18th, 2006 public meeting. 6 COMMISSIONER SOMMELING: Move to approve. 7 COMMISSIONER FEDORKO: Second. 8 CHAIR KASSEKERT: The motion has been 9 made and seconded. All in favor? 10 (Aye.) 11 CHAIR KASSEKERT: Opposed? 12 (No response.) 13 CHAIR KASSEKERT: The motion carries. 14 (The Commission members vote unanimously 15 in favor of the motion.) 16 MR. NANCE: Item Number 2, applications 17 for employee and casino service industry 18 licenses. This agenda item will be entered as 19 Exhibit Lists 1 and 2. 20 (Whereupon, Exhibit Lists 1 and 2 were 21 entered into evidence.) 22 MR. NANCE: Exhibit List 1 consists of 23 six applications for initial and/or renewal of 24 casino key and casino employee licenses. The 25 Division has objected to licensure. 10 Item No. 2 1 VICE CHAIR FRULIO: Motion to remand for 2 hearing. 3 COMMISSIONER FEDORKO: Second. 4 CHAIR KASSEKERT: The motion has been 5 made and seconded. All in favor? 6 (Aye.) 7 CHAIR KASSEKERT: Opposed? 8 (No response.) 9 CHAIR KASSEKERT: The motion carries. 10 (The Commission members vote unanimously 11 in favor of the motion.) 12 MR. NANCE: For consideration is the 13 casino service industry license application of 14 Aircraft Source, Inc. The Division has objected 15 to this application. 16 VICE CHAIR FRULIO: Motion to remand for 17 hearing. 18 COMMISSIONER FEDORKO: Second. 19 CHAIR KASSEKERT: The motion has been 20 made and seconded. All in favor? 21 (Aye.) 22 CHAIR KASSEKERT: Opposed? 23 (No response.) 24 CHAIR KASSEKERT: The motion carries. 25 (The Commission members vote unanimously 11 Item No. 2 1 in favor of the motion.) 2 MR. NANCE: Exhibit List two consists of 3 eight applications for initial and/or renewal of 4 casino key and casino employee licenses. Staff 5 and the Division have recommended that these 6 licenses be granted. 7 VICE CHAIR FRULIO: Motion to grant 8 applications. 9 COMMISSIONER FEDORKO: Second. 10 CHAIR KASSEKERT: The motion has been 11 made and seconded. All in favor? 12 (Aye.) 13 CHAIR KASSEKERT: Opposed? 14 (No response.) 15 CHAIR KASSEKERT: The motion carries. 16 (The Commission members vote unanimously 17 in favor of the motion.) 18 MR. NANCE: For consideration are the 19 non-gaming related casino service industry 20 license renewal applications pursuant to N.J.S.A. 21 5:12-92(c) for Staples Contract & Commercial, 22 Inc. and Daniel J. Keating Construction Company. 23 Staff and the Division have recommended that 24 these applications be granted. 25 VICE CHAIR FRULIO: Motion to grant 12 Item No. 2 1 application. 2 COMMISSIONER FEDORKO: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Aye.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: The motion carries. 9 (The Commission members vote unanimously 10 in favor of the motion.) 11 MR. NANCE: For consideration is the 12 qualification of David J. Lucchese in connection 13 with the gaming related casino services industry 14 license of Bally Gaming, Inc. pursuant to 15 N.J.A.C. 19:51-1.14B(h). Staff and the Division 16 have recommended that this license be granted. 17 VICE CHAIR FRULIO: Motion to find David 18 J. Lucchese plenarily qualified in connection 19 with the gaming related casino service industry 20 license of Bally Gaming, Inc. 21 COMMISSIONER FEDORKO: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Aye.) 25 CHAIR KASSEKERT: Opposed? 13 Item No. 3 1 (No response.) 2 CHAIR KASSEKERT: The motion carries. 3 (The Commission members vote unanimously 4 in favor of the motion.) 5 MR. NANCE: Item number 3, stipulations 6 of settlement and consent agreements. When I 7 call your name, please come forward, stand behind 8 this middle table spreading across the room so 9 that you may be seen: Yesenia J. Avila, John 10 Fiore, Kenneth Nesbitt, Michael James, Preethi 11 Kapoor, Hugo Espinal-Zuleta, Kenneth Lambert, 12 Jr., James Bowes, Marvin Harrell, Dana Nixon, 13 Mark Robbins, Cary Metz, Michael Babilya, and 14 Jose Torres. 15 CHAIR KASSEKERT: Is everybody whose name 16 has been called come forward? 17 I'm going to ask that you each state 18 your name for the record starting with you, sir. 19 MR. BABILYA: Michael Babilya. 20 MR. METZ: Cary Metz. 21 MR. TORRES: Jose Torres. 22 MS. AVILA: Yesenia Avila. 23 MR. ROBBINS: Mark Robbins. 24 MR. BOWES: James Bowes. 25 MR. NIXON: Dana Nixon. 14 Item No. 3 1 CHAIR KASSEKERT: In a moment, we're 2 going to vote on the stipulations which you've 3 agreed to with the Division of Gaming 4 Enforcement. I'm going to ask at this point if 5 any of you wish to be heard on your matter. You 6 do not have to say anything if you don't want to. 7 Does anybody wish to be heard? 8 (No response.) 9 CHAIR KASSEKERT: Okay. Mr. Bisceglia? 10 MR. BISCIEGLIA: Good morning, Chair, 11 Vice Chair, Commissioners. The Division has 12 nothing further and simply respectfully asks that 13 the stipulations be approved as submitted. 14 CHAIR KASSEKERT: Thank you. 15 Any questions? 16 COMMISSIONER FEDORKO: Motion to approve 17 stipulations. 18 COMMISSIONER SOMMELING: Second. 19 CHAIR KASSEKERT: The motion has been 20 made and seconded. All in favor? 21 (Aye.) 22 CHAIR KASSEKERT: Opposed? 23 (No response.) 24 CHAIR KASSEKERT: The motion carries. 25 (The Commission members vote unanimously 15 Item No. 4 1 in favor of the motion.) 2 CHAIR KASSEKERT: Thank you very much for 3 coming. Good luck. 4 MR. NANCE: Item Number 4, stipulation of 5 settlement of casino key employee renewal 6 application and qualification of Steven J. 7 Ritondo. 8 Miss Jacobson? 9 MS. JACOBSON: Good morning, Chair, 10 Commissioners. Dot Turi is here on behalf of the 11 Division, Lloyd Levenson is here on behalf of the 12 applicant. 13 Before you is a stipulation which if 14 approved would find Mr. Ritondo disqualified 15 pursuant to Sections 89(b)1, 89(b)2 and 86(b) of 16 the Casino Control Act. It's also denying 17 Mr. Ritondo's application for renewal of his 18 casino key employee license and qualification; 19 and three, allow him to reapply for a casino key 20 employee license and qualification after March 21 1st of 2006. 22 CHAIR KASSEKERT: Thank you. 23 Mr. Levenson, Miss Turi? 24 MR. LEVENSON: I have nothing really to 25 add to that or to the stipulation of settlement 16 Item No. 4 1 other than I believe it's fair for all concerned 2 and urge you to adopt. 3 CHAIR KASSEKERT: Miss Turi? 4 MS. TURI: Good morning, Madam Chair, 5 Commissioners. I at this time have nothing to 6 add and simply request that you approve the 7 stipulation as presented to you. 8 CHAIR KASSEKERT: Thank you. 9 Any questions? 10 COMMISSIONER SOMMELING: Madam Chair, 11 move to approve the stipulation as stated on the 12 record. 13 CHAIR KASSEKERT: Is there a second? 14 COMMISSIONER FEDORKO: Second. 15 CHAIR KASSEKERT: The motion has been 16 made and seconded. All in favor? 17 (Aye.) 18 CHAIR KASSEKERT: Opposed? 19 (No response.) 20 CHAIR KASSEKERT: The motion carries. 21 (The Commission members vote unanimously 22 in favor of the motion.) 23 CHAIR KASSEKERT: Thank you. Good luck, 24 Mr. Ritondo. 25 MR. LEVENSON: Thank you. 17 Item No. 5 1 MR. NANCE: Item Number 5, application 2 for suspension in State versus Luis Reyes. 3 Miss Frigen? 4 MS. FRIGEN: Good morning, Madam Chair 5 and Commissioners. Let me ask before we hear 6 from the Division whether Mr. Reyes is present or 7 represented today? 8 (No response.) 9 MS. FRIGEN: Apparently, he's not here. 10 CHAIR KASSEKERT: Mr. Biscieglia? 11 MR. BISCIELIGA: Thank you, 12 Commissioners. The only thing the Division would 13 add to our complaint at this time that this 14 matter is currently pending a grand jury with no 15 date set at this time. 16 CHAIR KASSEKERT: Thank you. 17 Any questions? 18 COMMISSIONER SOMMELING: No questions. 19 COMMISSIONER EPPS: Madam Chair, move to 20 suspend Mr. Reyes' casino employee license. 21 COMMISSIONER SOMMELING: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Aye.) 25 CHAIR KASSEKERT: Opposed? 18 Item No. 6 1 (No response.) 2 CHAIR KASSEKERT: The motion carries. 3 (The Commission members vote unanimously 4 in favor of the motion.) 5 MR. NANCE: Item Number 6, preliminary 6 hearing concerning the exclusion of Michael Chau. 7 Miss Frigen? 8 MS. FRIGEN: Commissioners, once again, 9 before we hear from Miss Tanenhaus in connection 10 with the Division's request, let me ask whether 11 Mr. Chau is present or represented? 12 (No response.) 13 MS. FRIGEN: I don't believe he is here 14 today. 15 CHAIR KASSEKERT: Miss Tanenhaus, good 16 morning. 17 MS. TANENHAUS: Good morning, Madam 18 Chair, Commissioners. The Division has submitted 19 papers to you for the preliminary exclusion of 20 Michael Chau. We feel that we have gone well 21 beyond our burden, and we stand on those papers 22 and urge you to preliminarily exclude Mr. Michael 23 Chau today. 24 CHAIR KASSEKERT: Thank you. Any 25 questions? 19 Item No. 7 1 COMMISSIONER SOMMELING: No questions, 2 Madam Chair. 3 COMMISSIONER FEDORKO: Motion to grant 4 the Division's request for a preliminary order 5 placing Mr. Chau on the exclusion list pending 6 the final outcome of the related petition for 7 final exclusion. 8 VICE CHAIR FRULIO: Second. 9 CHAIR KASSEKERT: The motion has been 10 made and seconded. All in favor? 11 (Aye.) 12 CHAIR KASSEKERT: Opposed? 13 (No response.) 14 CHAIR KASSEKERT: The motion carries. 15 (The Commission members vote unanimously 16 in favor of the motion.) 17 CHAIR KASSEKERT: Thank you. 18 MR. NANCE: Item Number 7, petition of 19 Cummins-Allison Corporation for waiver of 20 qualification for certain Security Holders. 21 Miss Nagengast? 22 MS. NAGENGAST: Good morning, Chair, 23 Commissioners. For your consideration this 24 morning is a petition seeking a waiver of 25 qualification for a number of Security Holders. 20 Item No. 7 1 Nick Casiello is here on behalf of the 2 Petitioner, and Jack Adams on behalf of the 3 Division. 4 CHAIR KASSEKERT: Thank you. 5 Good morning, Mr. Casiello. I have to 6 warn you that Commissioner Fedorko has a letter 7 before him that I'm sure he's going to use 8 against you. 9 COMMISSIONER FEDORKO: I have worn out 10 the super lawyer, but I was going to dinner last 11 week in Angelos, and somebody handed me, somebody 12 was handing out letters there that Nick Casiello 13 has been named the best lawyer for 2006. I mean, 14 where do we go from here? 15 MR. CASIELLO: At my age, it's all 16 downhill. 17 This matter was before you on October 18 5th; and at that time, I was requested to submit 19 some additional information regarding the 20 relationship among the shareholders for whom 21 you're seeking waiver, and the shareholders for 22 whom you're not seeking waiver. I submitted that 23 information by correspondence dated November 2nd. 24 I have nothing to add to the papers that have 25 been filed other than I'd be please to answer any 21 Item No. 7 1 questions that you have. 2 CHAIR KASSEKERT: Thank you, 3 Mr. Casiello. 4 I have a question. It's my 5 understanding that the stock is being no longer 6 held in the holding company now, but has now been 7 switched to the licensee, is that correct, as of 8 your letter of January 24th? 9 MR. CASIELLO: That is correct. 10 CHAIR KASSEKERT: So that is a difference 11 from where we were back in October. 12 MR. CASIELLO: Yes, yes. 13 CHAIR KASSEKERT: Does anyone have any 14 other questions for Mr. Casiello before we hear 15 from the Division? 16 Mr. Adams? 17 MR. ADAMS: Good morning, Chair and 18 Commissioners. You have I think two letters that 19 I sent with respect to this matter. 20 I would note that with regard to the 21 initial letter that I sent that, and I believe 22 this is still the case, unless someone can 23 correct me, that the individuals who hold five 24 percent or more of the voting common stock have 25 filed for qualification, and those persons 22 Item No. 7 1 control approximately 94.8 percent of the voting 2 common stock; is that correct? 3 MR. CASIELLO: That is correct. 4 MR. ADAMS: So I don't think that's 5 changed, even though it's now directly on behalf 6 of the company. We believe that overall, in 7 light of that, that the waivers that have been 8 requested could be granted by you; and if you 9 have any questions, I'd be happy to answer any of 10 those. 11 CHAIR KASSEKERT: Yes, I have some 12 questions. 13 I guess my major concern, Mr. Adams, in 14 this is that, you know, is the Division not 15 concerned about the commonality of the family 16 interest, you know, because obviously, there are 17 family members, there's relationship there. You 18 know, it's a non-voting stock holding, but there 19 are relationships there. In addition, now it's 20 being hold by the licensee. 21 MR. ADAMS: Yes. I tried to somewhat 22 address that in my first letter by pointing out 23 that the largest combined percentage involving 24 those individuals was 12.7 percent. 25 Now, that included 8.6 percent of 23 Item No. 7 1 preferred stock, and 12.8 percent of non-voting. 2 So if you look at all those, even though there's 3 obviously a familial relationship; and in light 4 of the fact that those that control the voting 5 shares control almost 95 percent. The amount of 6 influence, I would suggest, that the non-votings 7 and the preferreds that they can influence over 8 these people, I think, is somewhat diminuness 9 here. 10 It's different from the other familial 11 cases that we've had, most notably the one that 12 comes to mind with me is Aristocrat, of course, 13 which was kind of a different situation in that 14 the founder of the company gave it all to his 15 siblings and his ex-wife and his wife, and they 16 controlled 51 percent of a publicly traded 17 company. 18 Here, we've got the people that we think 19 we need who are in this position of control. 20 Now, that's not to say that somebody's 21 that's got a beneficial interest because I was a 22 big advocate for that once upon a time, and I 23 still am. I think it's a factor to consider when 24 you look at a familial relationship that they're 25 getting the benefit of it. 24 Item No. 7 1 But in part, because of the way this has 2 been set up, they apparently, at least as best we 3 know right now, and that may change when we 4 actually do the investigation or complete the 5 investigation of those who have the voting 6 interest, that there is something that might 7 surface that I might come back here at a later 8 day and say to you we think that maybe this 12 or 9 13 percent interest should have to qualify, but 10 in all likelihood and, of course, this is your 11 discretion, this is your call. 12 So if you say to us they have to 13 qualify, we'll go investigate them, but I just 14 think that our review of it led us to believe 15 that this is somewhat of a diminuness situation 16 in that they're not in a position, even though 17 they are family members, to really exert that 18 much influence over those that already apparently 19 exert the control. 20 CHAIR KASSEKERT: Okay. Commissioner 21 Epps? 22 COMMISSIONER EPPS: Now, I do have a 23 question. I guess either of you can chime in. 24 Is it in your opinion wrong for us to 25 look at it in the reverse? Meaning, if the 25 Item No. 7 1 people who hold -- we usually look at whether 2 people hold can control, but is it, shouldn't we 3 also look to see whether the people who control 4 are able to benefit the people who hold by having 5 a familial relationship; meaning, if my 6 grandson's trust is going to be impacted by my 7 decision, aren't I likely to do things that favor 8 my grandchild's trust, such that we need to look 9 at everybody, or is that not something we should 10 do? 11 Was that confusing? You're confused. 12 MR. ADAMS: They certainly would try to 13 do something that they believe would benefit that 14 trust because of the beneficial interest that 15 their heirs are going to obtain from it. 16 The regulations, as I understand them, 17 although they talk about beneficial ownership 18 interest, and we should look at anybody that's 19 got five percent or more beneficial interest or 20 ownership, I think it says beneficial or 21 ownership interest, then they carved in an 22 exception this ability to come before you and say 23 if there's -- if I can demonstrate to you that I 24 have a lack of control, then I can qualify 25 potentially for a waiver and yes, you should look 26 Item No. 7 1 at that beneficial interest. There's no doubt in 2 my mind about that. 3 I have always felt that someone that has 4 a significant beneficial interest, ownership 5 interest, for example, is exactly the type of 6 situation you're talking about that they, because 7 they're interested in that beneficial interest, 8 they could potentially exert some influence over 9 those, you know, who either already have some, or 10 because they're interested in what's going to 11 happen with their company, but I'm just 12 suggesting that in this case, the individual 13 interests we're talking about, even though some 14 are obviously over five percent, and in the one 15 case, 12.7 percent collectively, that included 16 preferred stock, and we typically don't 17 necessarily grab those people that have preferred 18 stock on a regular basis, and then combine it 19 with non-voting, I'm just -- I'm just at the 20 point, I guess, where we thought that 21 collectively, it wasn't significant enough in 22 this particular case that you need to have all 23 those other individual people qualified, but it 24 is your call. 25 MR. CASIELLO: With respect to your 27 Item No. 7 1 example, Commissioner, as I understand what 2 you're saying is, a control person may make a 3 decision that is contrary to that person's best 4 interest to benefit a trust that that person has 5 created. So is that what your example was? 6 COMMISSIONER EPPS: I guess what I'm 7 saying is, if a -- I mean, when you look at the 8 ability to control, and that person, you look at 9 those people because they have the ability to 10 control, but then you have a group already who in 11 all appearances doesn't have the ability to 12 control because their interest is not voting or, 13 let's just use, they can't vote, so they can't 14 control, but they have a certain ownership 15 interest, but the people who do have the ability 16 to control have the ability also to better that 17 person's position. So don't we have to just be 18 certain that they're going to conduct themselves 19 accordingly such that nothing untoward would 20 occur? 21 MR. CASIELLO: Well, I guess where I'm 22 coming from is that by your example, the person 23 who's in control is making a decision whether 24 it's for his benefit or the benefit of a trust or 25 grandchildren, or whatever. That person is 28 Item No. 7 1 making that decision, and that's the focus of the 2 regulation, that person's in control, that person 3 should be one that's filing, that person is the 4 person who has filed and will be investigated and 5 found qualified. 6 If that person wants to do something to 7 benefit a non-control person, a non-voting 8 shareholder, whether it's a family member or not, 9 is in a position of control and should be able to 10 do that. 11 I did want to also focus on exactly what 12 we're looking for here. Okay? So let me try and 13 break it down. 14 One waiver we're requesting is with 15 respect to the Mildred Mentzer Trust and its 16 co-trustees, John Mentzer and Mary Ann Mulroy. 17 Okay? 18 That trust currently owns 2.3 percent of 19 the non-voting stock. When the application was 20 originally filed, when the petition was 21 originally filed, that trust held over five 22 percent of the non-voting stock. It's now below 23 five percent; and under normal circumstances, it 24 shouldn't have to qualify at all, okay, whether 25 it's voting or non-voting. 29 Item No. 7 1 We are seeking the waiver of the John 2 and Elizabeth Jones Grandchildren Trust. That 3 trust owns 6.8 percent of the non-voting stock. 4 That trust is for the benefit of the 5 grandchildren of John E. and Elizabeth L. Jones. 6 They -- John E. Jones is director of the company, 7 but that trust had -- and a trustee, Peter 8 Steeker. Okay? 9 And if I haven't already said it, that 10 trust owns 6.8 percent of the non-voting stock. 11 So there's no familial relationship in those two 12 situations, and one involves a less than five 13 percent shareholder. 14 We're seeking the waiver of the 15 qualification requirement for two sisters; 16 Jennifer Tucker and Jane Tucker. They each own 17 6.2 percent of the non-voting stock. They own it 18 directly, not in a trust. Okay? 19 They're cousins of Bill Jones, the 20 chairman and the CEO of the company. They don't 21 -- the one lives in Portland, Oregon; one lives 22 in Santa Barbara, California. They have nothing 23 to do with the business. I can't imagine that 24 the chairman of the company is going to make 25 decisions that are contrary to his own best 30 Item No. 7 1 interest or the best interest of the company to 2 benefit a cousin, cousins who live far away. 3 The other two waivers we are seeking are 4 for the requirement that business entity 5 disclosure forms be filed by the trusts. We are 6 not seeking a waiver that the trustees of those 7 trusts not have to file, just avoid the need to 8 have the trust file business and disclosure 9 forms. Those are the Paul C. Jones Trust, the 10 trustee is John E. Jones, who's a director of the 11 company, and the father of William J. Jones, the 12 chairman of the company; and the Elizabeth L. 13 Jones Trust, the trustee is Elizabeth L. Jones, 14 and she is the wife of John E. Jones, and the 15 mother of William J. Jones. So in those two 16 situations, we're really simply seeking a waiver 17 of the requirement to file forms, and that's it. 18 COMMISSIONEERS EPPS: Do you still need 19 the waiver for the Mentzer Trust if they've now 20 gone under? 21 MR. CASIELLO: I would -- I either need 22 a waiver from you, or something from the staff 23 saying that they no longer have to qualify 24 because they've already filed everything, and the 25 only thing I have on record, so to speak, is a 31 Item No. 7 1 letter from the Commission staff saying that they 2 have to file. Whether it's you or your staff, 3 I'm not sure your staff would feel comfortable 4 sending me such a letter under the circumstances. 5 MR. ADAMS: Well, they probably would 6 after you rule. 7 CHAIR KASSEKERT: Let me ask before we 8 take a recess if there are any questions? 9 COMMISSIONER SOMMELING: Not at this 10 time, Madam Chair. 11 CHAIR KASSEKERT: Okay. We're going to 12 take a brief recess. 13 (Whereupon, the Commissione went into 14 Executive Session at 10:55 a.m. and returned back 15 into Public Session at 11:29 a.m. 16 CHAIR KASSEKERT: We'll go back on the 17 record. 18 I guess there are two things that 19 trouble me about this issue, and hearing the 20 Division's argument, and I think the first is the 21 fact that there is this commonality of interest, 22 and there are family ties involved, but I think 23 more importantly the issue that really turns for 24 me is the fact that the applicant will now have 25 interest in the licensee rather than in a holding 32 Item No. 7 1 company; and I think that because of that, I'm 2 going to make a motion that we deny the petition 3 of Cummins-Allison Corporation, and require the 4 security holders identified therein, with the 5 exception of the Mildred Mentzer Trust, which is 6 under five percent and its co-trustees; is that 7 correct, co-trustees? Who would not normally 8 have to file shall be excluded from this, and 9 that they must file the appropriate qualifier or 10 business entity disclosure forms. 11 If the completed application is not 12 filed on or before March 3rd, 2006, the 13 petitioner would be prohibited from conducting 14 any direct or indirect business with casino 15 licensees or applicants, and must terminate all 16 existing contracts or business by March 17, 2006, 17 and I so move. 18 VICE CHAIR FRULIO: Second. 19 MR. CASIELLO: May I clarify something? 20 CHAIR KASSEKERT: Sure. 21 MR. CASIELLO: All the forms have already 22 been filed. They were filed with the initial 23 application. 24 CHAIR KASSEKERT: Okay, thank you. Thank 25 you for that qualification. I appreciate that. 33 Item No. 8 1 The motion has been made and seconded. 2 All in favor? 3 (Aye.) 4 CHAIR KASSEKERT: Opposed? 5 (No response.) 6 CHAIR KASSEKERT: The motion carries. 7 (The Commission members vote unanimously 8 in favor of the motion.) 9 CHAIR KASSEKERT: Thank you. 10 MR. CASIELLO: Thank you. 11 MR. NANCE: Item Number 8, consideration 12 of the qualification of James Florio as an 13 outside director of Trump Entertainment Resorts, 14 Inc. 15 Miss Delia? 16 MS. DELIA: Good morning, Chair, 17 Commissioners. James Florio was found 18 temporarily qualified by the Commission on May 4, 19 2005. You have a copy of the Division's report 20 dated January 19th, 2006, together with the copy 21 of the draft resolution. Jim Fogarty is here on 22 behalf of the Division. The counsel for 23 petitioners are not present, but were notified of 24 the matter which was scheduled for today. 25 CHAIR KASSEKERT: Thank you. 34 Item No. 8 1 Well, I'm going to beat up on him when I 2 see him. 3 Mr. Fogarty? 4 MR. FOGARTY: Would you kindly do that? 5 James Florio is, of course, our former 6 governor. We did do a report dated January 19, 7 2006 recommending that you qualify him as an 8 outside director of Trump Entertainment Resorts. 9 Just one note, he apparently owns, runs 10 a company called, I think I'm going to say this 11 right, Xspand, X-s-p-a-n-d, which is a property 12 tax lien servicing, which I'm sure you read in 13 the newspaper. I just read that he sold that or 14 that was sold, I forget to whom, I'm only going 15 to tell you half the story, you probably know 16 better than I do, but he did sell it. Doesn't 17 matter, but I thought it might be interesting. 18 CHAIR KASSEKERT: Thank you. 19 Any questions for Mr. Fogarty? 20 COMMISSIONER SOMMELING: No questions. 21 CHAIR KASSEKERT: Motion in order? 22 VICE CHAIR FRULIO: Move we adopt the 23 draft resolution and find James Florio qualified 24 to serve as an Outside Director of Trump 25 Entertainment Resorts, Inc. 35 Item No. 9 1 COMMISSIONER FEDORKO: Second. 2 CHAIR KASSEKERT: The motion has been 3 made and seconded. This is a roll call vote. 4 MR. NANCE: Commissioner Sommeling? 5 COMMISSIONER Sommeling: Yes. 6 MR. NANCE: Commissioner Epps? 7 COMMISSIONER EPPS: Yes. 8 MR. NANCE: Commissioner Fedorko? 9 COMMISSIONER FEDORKO: Yes. 10 MR. NANCE: Vice Chair Frulio? 11 VICE CHAIR FRULIO: Yes. 12 MR. NANCE: Chair Kassekert? 13 CHAIR KASSEKERT: Yes. 14 MR. NANCE: The record will reflect the 15 motion carries unanimously. 16 Item No. 9, consideration of the 17 qualification of Morton Handel as an Outside 18 Director of Trump Entertainment Resorts, Inc. 19 Miss Delia? 20 MS. DELIA: Mr. Handel was found 21 temporarily qualifed by the Commission on May 22 4th, 2005. You have a copy of the Division's 23 report dated January 20th, together with the copy 24 of the draft resolution. 25 Again, Jim Fogarty is here on behalf of 36 Item No. 9 1 the Division, and counsel for the petitioner is 2 not present. 3 MR. FOGARTY: Madam Chair, Commissioners, 4 yes, we recommend that you qualify Mr. Handel as 5 a member, as an outside member of the Board of 6 Directors of Trump Entertainment Resorts. 7 CHAIR KASSEKERT: Thank you. 8 Any questions for Mr. Fogarty? 9 COMMISSIONER SOMMELING: Madam Chair, 10 move to adopt the draft resolution and find 11 Morton Handel qualified to serve as an Outside 12 Director of Trump Entertainment Resorts, Inc. 13 COMMISSIONER FEDORKO: Second. 14 CHAIR KASSEKERT: The motion has been 15 made and seconded. This is a roll call vote. 16 MR. NANCE: Commissioner Sommeling? 17 COMMISSIONER SOMMELING: Yes. 18 MR. NANCE: Commissioner Epps? 19 COMMISSIONER EPPS: Yes. 20 MR. NANCE: Commissioner Fedorko? 21 COMMISSIONER FEDORKO: Yes. 22 MR. NANCE: Vice Chair Frulio? 23 VICE CHAIR FRULIO: Yes. 24 MR. NANCE: Chair Kassekert? 25 CHAIR KASSEKERT: Yes. 37 Item No. 10 1 MR. NANCE: The record will reflect the 2 motion carries unanimously. 3 MR. FOGARTY: Thank you. 4 MR. NANCE: Item Number 10, proposed 5 publication of the readoption of N.J.A.C. 19:47. 6 Miss Delia? 7 MS. DELIA: Chapter 47 Rules of the Game 8 is scheduled to expire on March 9th, 2006; 9 however, if you approve the notice of proposed 10 readoption for publication in the New Jersey 11 Register, the expiration date is extended for a 12 hundred and 80 days to September the 5th, 2006. 13 CHAIR KASSEKERT: Thank you. 14 Any questions for Miss Delia? 15 COMMISSIONER SOMMELING: No questions. 16 VICE CHAIR FRULIO: Move to approve. 17 COMMISSIONER FEDORKO: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. All in favor? 20 (Aye.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: The motion carries. 24 MR. NANCE: Item Number 11, proposed 25 republication and temporary adoption of 38 Item No. 11 1 amendments to N.J.A.C. 19:45-1.8. 2 Mr. Kell? 3 MR. KELL: Good morning, Madam Chair, 4 Commissioners. 5 On September 21st, 2005, the Commission 6 published and temporarily adopted amendments 7 reducing the minimum retention period for gaming 8 vouchers redeemed at slot machines and cashed 9 simulcast tickets and credit vouchers from 30 to 10 seven days. 11 Under this reproposal, these documents 12 can also be destroyed by the casino licensees 13 without notice and unless the Commission or 14 Division prohibits the destruction during the 15 seven day period. Staff recommends that you 16 republish and temporarily adopt the amendments. 17 CHAIR KASSEKERT: Thank you. 18 Any questions? 19 COMMISSIONER FEDORKO: Move for 20 publication and temporary adoption. 21 VICE CHAIR FRULIO: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Aye.) 25 CHAIR KASSEKERT: Opposed? 39 Item No. 12 1 (No response.) 2 CHAIR KASSEKERT: The motion carries. 3 (The Commission members vote unanimously 4 in favor of the motion.) 5 MR. NANCE: Item Number 12, proposed 6 publication and temporary adoption of amendment 7 to N.J.A.C. 19:46-1.19B. 8 Mr. Kell? 9 MR. KELL: Currently Pai Gow Tile is 10 required to be changed at least once every eight 11 hours. This proposal would decrease the 12 frequency to at least once every 12 hours, and 13 the staff recommends that you publish and also 14 temporarily adopt this amendment. 15 CHAIR KASSEKERT: This is another Wish 16 List item, I might add. 17 MR. KELL: Yes. 18 CHAIR KASSEKERT: Any questions? 19 COMMISSIONER SOMMELING: Move to approve 20 -- 21 COMMISSIONER EPPS: -- for publication 22 and temporary adoption. 23 VICE CHAIR FRULIO: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 40 Item No. 13 1 (Aye.) 2 CHAIR KASSEKERT: Opposed? 3 (No response.) 4 CHAIR KASSEKERT: The motion carries. 5 (The Commission members vote unanimously 6 in favor of the motion.) 7 MR. NANCE: Item Number 13, proposed 8 publication and temporary adoption of amendment 9 to N.J.A.C. 19:45-1.40D. 10 Mr. Kell? 11 MR. KELL: Currently, the casino licensee 12 must notify the Division prior to paying any 13 jackpot greater than 45,000, enable the Division 14 to inspect the slot machine. This proposal would 15 increase that threshold requiring such a notice 16 to $75,000, and staff recommends that you publish 17 and temporarily adopt this as well. 18 CHAIR KASSEKERT: Thank you. 19 Any questions? 20 COMMISSIONER FEDORKO: Approve for 21 publication and temporary adoption. 22 COMMISSIONER SOMMELING: Second. 23 CHAIR KASSEKERT: The motion has been 24 made and seconded. All in favor? 25 (Aye.) 41 1 CHAIR KASSEKERT: Opposed? 2 (No response.) 3 CHAIR KASSEKERT: The motion carries. 4 (The Commission members vote unanimously 5 in favor of the motion.) 6 CHAIR KASSEKERT: Thank you. 7 MR. NANCE: In accordance with Resolution 8 No. 05-12-14-19, the next closed session of the 9 Commission shall be held on Wednesday, February 10 15th, 2006 at 9:15 a.m. in the Commission 11 offices. 12 It is now time for the public 13 participation portion of the meeting. 14 CHAIR KASSSKERT: Is there anyone from 15 the public who wishes to be heard? 16 (No response.) 17 CHAIR KASSEKERT: Mr. Previti, you want 18 to -- 19 MR. PREVITI: No, taking notes. 20 CHAIR KASSEKERT: Very good. 21 Seeing none, I will close this portion 22 of the meeting and entertain a motion to adjourn. 23 COMMISSIONER SOMMELING: Motion to 24 adjourn. 25 COMMISSIONER FEDORKO: Second. 42 1 CHAIR KASSEKERT: The motion has been 2 made and seconded. All in favor? 3 (Aye.) 4 CHAIR KASSEKERT: Opposed? 5 (No response.) 6 CHAIR KASSEKERT: The motion carries. 7 (The Commission members vote unanimously 8 in favor of the motion.) 9 CHAIR KASSEKERT: Thank you. 10 (Whereupon, the proceedings are 11 adjourned at 11:36 a.m.) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 43 1 C E R T I F I C A T E 2 3 4 I, CHRISTINE STANCO, a Certified 5 Shorthand Reporter and Notary Public of the State 6 of New Jersey, do hereby certify that the 7 foregoing is a true and accurate transcript of 8 the stenographic notes as taken by and before me, 9 on the date and place hereinbefore set forth. 10 11 12 13 14 15 16 17 CHRISTINE STANCO, C.S.R. 18 LICENSE NO. XI00789 19 20 21 22 23 24 25