1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 07-02-07 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, February 7, 2007 10 Atlantic City Commission Offices 11 Joseph P. Lordi Public Meeting Room - First Floor 12 Tennessee Avenue and Boardwalk 13 Atlantic City, New Jersey 08401 14 10:32 a.m. to 12:03 p.m. 15 16 17 Certified Shorthand Reporter: Darlene Sillitoe 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 MICHAEL A. FEDORKO, VICE CHAIR MICHAEL C. EPPS, COMMISSIONER 4 RALPH G. FRULIO, COMMISSIONER WILLIAM T. SOMMELING, COMMISSIONER 5 PRESENT FOR THE CASINO CONTROL COMMISSION: 6 DARYL W. NANCE, ADMINISTRATIVE ANALYST DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 7 OFFICE OF THE GENERAL COUNSEL: 8 DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE SECRETARY 9 STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL DENIS CORBETT, SENIOR COUNSEL 10 TERESA M. NAGENGAST, SENIOR COUNSEL E. DENNIS KELL, ASSISTANT GENERAL COUNSEL 11 SETH H. BRILIANT, SENIOR COUNSEL BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 12 CLAIRE FRANK, PROGRAM SUPERVISOR/SENIOR EEO COORDINATOR 13 14 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 15 TIMOTHY FICCHI, DEPUTY ATTORNEY GENERAL JAMES FOGARTY, DEPUTY ATTORNEY GENERAL 16 CHARLES F. KIMMEL, DEPUTY ATTORNEY GENERAL RICK McDONOUGH, DEPUTY ATTORNEY GENERAL 17 RICHARD MORRISSEY, DEPUTY ATTORNEY GENERAL NORMA STANCIL, DEPUTY ATTORNEY GENERAL 18 R. LANE STEBBINS, DEPUTY ATTORNEY GENERAL 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 ITEM NO. 4 STEVEN M. INGIS, SENIOR COUNSEL PATRICIA M. WILD, ESQ. 3 FOR: RESORTS INTERNATIONAL HOTEL, INC., AND RIH ACQUISITIONS, NJ LLC 4 ITEM NO. 6 STEVEN M. INGIS, SENIOR COUNSEL 5 R. LANE STEBBINS, DEPUTY ATTORNEY GENERAL PATRICIAL M. WILD, ESQ. 6 FOR: RIH ACQUISITIONS, NJ, LLC 7 ITEM NO. 7 DENIS CORBETT, SENIOR COUNSEL R. LANE STEBBINS, DEPUTY ATTORNEY GENERAL 8 LYNNE N. HUGHES, ESQ. FOR: RESORTS INTERNATIONAL HOTEL, INC. 9 ITEM NO. 11 TERESA M. NAGENGAST, SENIOR COUNSEL 10 RICK McDONOUGH, DEPUTY ATTORNEY GENERAL DENNIS DALY, ESQ. 11 FOR: IKON OFFICE SOLUTIONS, INC. 12 ITEM NO. 12 TERESA M. NAGENGAST, SENIOR COUNSEL RICK McDONOUGH, DEPUTY ATTORNEY GENERAL 13 MARIE JIACOPELLO JONES, ESQ. FOR: SAPIENT CORPORATION 14 ITEM NO. 13 TERESA M. NAGENGAST, SENIOR COUNSEL 15 RICK McDONOUGH, DEPUTY ATTORNEY GENERAL DENNIS DALY, ESQ. 16 FOR: LGC WIRELESS, INC. 17 ITEM NO. 14 CLAIRE FRANK, PROGRAM MANAGER JAMES FOGARTY, DEPUTY ATTORNEY GENERAL 18 LYNNE N. HUGHES, ESQ. FOR: HARRAH'S OPERATING COMPANY, INC., 19 MARINA ASSOCIATES, ATLANTIC CITY, SHOWBOAT, INC., BALLY'S PARK PLACE, INC., 20 AND BOARDWALK REGENCY CORPORATION 21 ITEM NO. 15 SETH BRILIANT, SENIOR COUNSEL TIMOTHY FICCHI, DEPUTY ATTORNEY GENERAL 22 LYNNE N. HUGHES, ESQ. FOR: BOARDWALK REGENCY CORPORATION 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 07-02-07 2 FEBRUARY 7, 2007, 10:32 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of 10 10 January 17, 2007 4 2 Applications for employee and casino service industry licenses 5 12 applications for initial and/or 11 11 renewal of casino key and casino 6 employee liceses Junket related casino service industry 11 11 7 license application of Joe Treavis Horton, Jr. 12 applications for initial and/or 11 11 8 renewal of casino key and casino employee licenses 9 Non-gaming related casino service 12 12 industry license renewal application 10 for Top Rank, Inc. Qualification in connection with gaming 11 related casino service industy licenses pursuant to NJAC 19:51.14B(h) 12 Louis J. Castle, Shuffle Master, Inc. 13 13 Kimihiko Higashio, Konami Gaming, Inc. 13 13 13 Application of Patricia M. Wild for 13 14 a casino key employee license and for 14 qualification as Vice President of Regulatory and Legal Affairs for Resorts 15 International Hotel, Inc. 3 Petition No. 0050705 of Trump Taj Mahal 14 15 16 Associates, LLC, Trump Plaza Associates, LLC, and Trump Marina Associates, LLC, 17 for the issuance of a temporary casino key employee license to Ravneet Bhandari 18 pursuant to NJSA 5:12-89(e) and to permit him pursuant to NJAC 19:43-2.6 to assume 19 the duties and exercise the powers of Senior Vice President of Revenue Management without 20 first having been found qualified (PRN 0050705) 4 Joint petition of Resorts International 16 18 21 Hotel, Inc., and RIH Acquisitions NJ, LLC, for the issuance of a temporary casino key 22 employee license to Mary R. Kramer pursuant to NJSA 5:12-89(e) and to permit her 23 pursuant to NJAC 19:43-2.6 to assume the duties and exercise the powers of Vice 24 President of Design and Construction without first having been found qualified (PRN 0260701) 25 5 1 PUBLIC MEETING NO. 07-02-07 2 FEBRUARY 7, 2007, 10:32 a.m. ITEM PAGE VOTE 3 5 Sipulations of settlement and consent agreements: a) Robert B. Hill (03-0789-ER) 18 20 4 b) Ricardo Rubio-Hernandez (06-0345-RC) 20 21 c) John Chambers (07-0054-EA) 18 20 5 d) Arthur Levinson (06-0576-EA) 18 20 e) Mack D. Ragsdale, III (06-0540-EA) 18 20 6 f) Dorothia O. Dorsey (06-0558-RC) 18 20 g) Donna L. Levin (a/k/a Donna K. 18 20 7 Lichtenberger) (06-0297-EA) 6 Stipulation of settlement in State v. 21 23 8 RIH Acquisitions, NJ, LLC (d/b/a Resorts Atlantic City Hilton (06-0538-VC) 9 7 Stipulation of settlement in State v. 23 25 Resorts International Hotel, Inc., 10 (d/b/a Resorts Atlantic City), Heather Allen and Richard Cook (06-0069-VC) 11 8 Petition for early reapplication: a) Adriana D. Quirindongo (06-0509-RA) 25 26 12 b) Dorothy M. Sheppard (06-0599-RA) 27 28 c) Movita C. Terrell (06-0473-RA) 28 29 13 9 Applications for suspension: a) Cindy Arroyave (07-0022-RC) 30 30 14 b) Diola V. Perez (07-0024-RC) 30 30 10 Consideration of forfeiture orders in State v: 15 a) Bally's Park Place, Inc., (d/b/a 31 33 Bally's Atlantic City Hotel and 16 Casino), et al (06-0341-VC) b) Bally's Park Place, Inc., (d/b/a 31 33 17 Bally's Atlantic City Hotel and Casino), et al (06-0497-VC) 18 c) Adamar of New Jersey, Inc., (d/b/a 31 33 Tropicana Casino & Resort), et (06-0483-VC) 19 d) Marina District Development Company 31 33 (d/b/a Borgata Casino Hotel & Spa), 20 et al (06-0590-VC) 11 Petition of Ikon Office Solutions, Inc.,69 69 21 for waiver of qualification of Steel Partners, II, LP (PRN 2120601) 22 12 Petition of Sapient Corporation for 33 35 waiver of qualification of Wellington 23 Management Company, LLP (PRN 3190608) 24 25 6 1 CONTINUED AGENDA UBLIC MEETING NO. 07-02-07 2 FEBRUARY 7, 2007, 10:32 a.m. ITEM PAGE VOTE 3 13 Petitions of LGC Wireless, Inc., for waiver of qualifications for: 4 a) Mayfield Fund (PRN 2220601) 35 68 b) Crystal Ventures (PRN 2210601) 35 68 5 c) Intel Capital Corporation (2020606) 35 68 d) Omers Administration Corporation 35 68 6 (2020607) 14 Petition of Harrah's Operating Company, 70 72 7 Inc. Marina Associates, Atlantic City Showboat, Inc., Bally's Park Place, Inc., 8 and Boardwalk Regency Corporations requesting permission for Dennis Gallagher 9 to perform the duties and exercise the powers of Vice President, Chief Regulatory 10 and Compliance Officer for Harrah's Operating Company, Inc., pending plenary 11 qualification (PRN 0240704) 15 Petition of Boardwalk Regency 72 74 12 Corporation (d/b/a Caesars Atlantic City) for an amendment to its certificate of 13 operation and casino hotel alcoholic beverage license to permit a temporary 14 expansion fo its casino floor (PRN 0240707) 16 Petition of RIH Acquisitions, NJ, LLC 74 80 15 (d/b/a Atlantic City Hilton) for an amendment to NJAC 19:45-1.34 (PRN 2700604) 16 17 18 19 20 21 22 23 24 25 7 1 E X H I B I T S : 2 ITEM NO. 2 DESCRIPTION EVD 3 4 EL-1 Remand for hearings 12 license X applications 5 EL-2 Grant 12 licenses X 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (Exhibits retained by Commission.) 25 8 1 (Public Meeting 07-02-07 was commenced 2 at 10:32 a.m.) 3 MR. NANCE: I'd like to read an opening 4 statement: 5 This is to advise the general public 6 that in compliance with Chapter 231 of the 7 Public Laws of 1975 entitled the "Open Public 8 Meetings Act," the New Jersey Casino Control 9 Commission on October 16th, 2006, filed with 10 the Secretary of State at the State House in 11 Trenton an annual meeting schedule. On October 12 16th, copies were mailed to the Press of 13 Atlantic City, the Newark Star Ledger. 14 Members of the press will be permitted 15 to take photographs, and we would ask that this 16 be done in a manner which is not disruptive or 17 distracting to the Commission. 18 The use of cellular telephones in the 19 public meeting room while the Commission is in 20 session is prohibited. 21 Any members of the public who wish to 22 address the Commission will be given the 23 opportunity to do so before the Commission 24 adjourns for the day. 25 Please stand for the Pledge of 9 1 Allegiance. 2 (The flag salute was recited.) 3 CHAIR KASSEKERT: Let me just begin, 4 before we start the agenda, by welcoming 5 Commissioner Michael Epps back to the 6 Commission. 7 It was a long haul, and we're very 8 grateful to have you back and have you back as 9 quickly as we could get you here. 10 COMMISSIONER EPPS: Thank you. 11 CHAIR KASSEKERT: So congratulations. 12 Daryl? 13 MR. NANCE: Good morning. 14 The matters discussed in closed session 15 were: Employee and enterprise license matters. 16 The Commissioners approved the January 17 17th, 2007, closed session minutes. 18 Litigation updates regarding: Warren 19 Lackland and Lewis M. Springer, Jr., versus the 20 Casino Control Commission. 21 Gloria Ford versus State of New Jersey, 22 New Jersey Casino Control Commission, et al. 23 Tyron J. Floyd versus the Casino Control 24 Commission, et al, and Sands Hotel Casino. 25 Husain versus the Casino Control 10 ITEM NO. 1-2 1 Commission, et al. 2 Item No. 1, the ratification of the 3 minutes of January 17, 2007, public meeting. 4 COMMISSIONER SOMMELING: Move to 5 approve. 6 VICE CHAIR FEDORKO: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 COMMISSIONER EPPS: Abstain. 13 CHAIR KASSEKERT: One abstention. 14 Motion carries. 15 MR. NANCE: Item No. 2, applications for 16 employee and casino service industry licenses. 17 This agenda item will be entered as Exhibit 18 List 1 and 2. 19 Exhibit List 1 consists of 12 20 applications for initial and/or renewal of 21 casino key and casino employee licenses. 22 The Division has objected to licensure. 23 COMMISSIONER FRULIO: Motion to remand 24 for hearings. 25 VICE CHAIR FEDORKO: Second. 11 ITEM NO. 2 1 CHAIR KASSEKERT: The motion has been 2 made and seconded. All in favor? 3 (Ayes.) 4 CHAIR KASSEKERT: Opposed? 5 (No response.) 6 CHAIR KASSEKERT: The motion carries. 7 MR. NANCE: For consideration is the 8 junket related casino service industry license 9 application of Joe Travis Horton, Jr., pursuant 10 to NJSA 5:12-102. 11 The Division has recommended that this 12 application be granted. 13 COMMISSIONER FRULIO: Motion to remand 14 for hearing. 15 VICE CHAIR FEDORKO: Second. 16 CHAIR KASSEKERT: The motion has been 17 made and seconded. All in favor? 18 (Ayes.) 19 CHAIR KASSEKERT: Opposed? 20 (No response.) 21 CHAIR KASSEKERT: The motion carries. 22 MR. NANCE: This agenda item will be 23 entered as Exhibit List 2. 24 Exhibit List 2 consists of 12 25 applications for initial and/or renewal of 12 ITEM NO. 2 1 casino key and casino employee licenses. 2 Staff and Division have recommended that 3 these licenses be granted. 4 COMMISSIONER FRULIO: Motion to grant 5 applications. 6 VICE CHAIR FEDORKO: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: The motion carries. 13 MR. NANCE: For consideration is the 14 nongaming related service industry license 15 renewal application pursuant to NJSA 5:12-92(c) 16 for Top Rank, Inc. 17 Staff and the Division have recommended 18 that this motion be granted. 19 COMMISSIONER FRULIO: Motion to grant 20 applications. 21 VICE CHAIR FEDORKO: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Ayes.) 25 CHAIR KASSEKERT: Opposed? 13 ITEM NO. 2 1 (No response.) 2 CHAIR KASSEKERT: The motion carries. 3 MR. NANCE: For consideration are the 4 following for qualification in connection with 5 their gaming related casino service industry 6 licenses pursuant to NJAC 19:51.1.4B(h): 7 Louis J. Castle, Shuffle Master, Inc., 8 and Kimihiko Higashio, Konami Gaming Inc. 9 Staff and the Division have recommended 10 qualification. 11 COMMISSIONER FRULIO: Motion to find 12 Messrs. Castle and Higashio plenary qualified 13 in connection with their respective gaming 14 related CSI licenses pursuant to NJAC 15 19:51-1.14B(h). 16 VICE CHAIR FEDORKO: Second. 17 CHAIR KASSEKERT: The motion has been 18 made and seconded. All in favor? 19 (Ayes.) 20 CHAIR KASSEKERT: Opposed? 21 (No response.) 22 CHAIR KASSEKERT: The motion carries. 23 MR. NANCE: For consideration is the 24 application of Patricia M. Wild for a casino 25 key employee license and for qualification as 14 ITEM NO. 3 1 Vice President of Regulatory and Legal Affairs 2 for Resorts Hotel International, Inc. 3 Staff and Division have recommended that 4 this application be granted. 5 COMMISSIONER FRULIO: Motion to grant 6 initial key license and for qualification. 7 COMMISSIONER SOMMELING: Second. 8 CHAIR KASSEKERT: Motion has been made 9 and seconded. This is a roll call vote. 10 MR. NANCE: Commissioner Sommeling? 11 COMMISSIONER SOMMELING: Yes. 12 MR. NANCE: Commissioner Epps? 13 COMMISSIONER EPPS: Yes. 14 MR. NANCE: Commissioner Frulio? 15 COMMISSIONER FRULIO: Yes 16 MR. NANCE: Vice Chair Fedorko? 17 VICE CHAIR FEDORKO: Yes. 18 MR. NANCE: Chair Kassekert? 19 CHAIR KASSEKERT: Yes. 20 MR. NANCE: The record will reflect that 21 the motion is unanimous. 22 CHAIR KASSEKERT: Congratulations. 23 MS. WILD: Thank you. 24 MR. NANCE: Item No. 3, Petition No. 25 0050705 of Trump Taj Mahal Associates, LLC, 15 ITEM NO. 3 1 Trump Plaza Associates, LLC, and Trump Marina 2 Associates, LLC, is requesting the issuance of 3 a temporary casino key employee license to 4 Ravneet Bhandari pursuant no NJSA 5:12-89(e) 5 and to permit him pursuant to NJAC 19:4-2.6 to 6 assume the duties and exercise the powers of 7 Senior Vice President of Revenue Management 8 without first having been found qualified. 9 Staff and the Division have recommended 10 that this petition be granted. 11 COMMISSIONER FRULIO: Motion to grant 12 temporary key license and qualification. 13 VICE CHAIR FEDORKO: Second. 14 CHAIR KASSEKERT: Motion has been made 15 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 Frulio? 21 COMMISSIONER FRULIO: Yes. 22 MR. NANCE: Vice Chair Fedorko? 23 VICE CHAIR FEDORKO: Yes. 24 MR. NANCE: Chair Kassekert? 25 CHAIR KASSEKERT: Yes. 16 ITEM NO. 4 1 MR. NANCE: The record will reflect that 2 the motion is unanimous. 3 Item No. 4, Petition No. 0260701 of 4 Resorts International Hotel, Inc., and RIH 5 Acquisitions, New Jersey, LLC, is requesting 6 the issuance of a temporary casino key employee 7 license to Mary R. Kramer pursuant to NJSA 8 5:12-89(e) and to permit her pursuant to NJAC 9 19:43-2.6 to assume the duties and exercise the 10 powers of Vice President of Design and 11 Construction without first having been found 12 qualified. 13 CHAIR KASSEKERT: Good morning, Miss 14 Wild. 15 MS. WILD: Good morning. 16 CHAIR KASSEKERT: Mr. Ingis, good 17 morning. 18 MR. INGIS: The staff has nothing to 19 add. 20 CHAIR KASSEKERT: Miss Wild? 21 MS. WILD: Good morning. 22 Thank you very much for your prior vote. 23 Miss Kramer -- Mary was really sweating that 24 for a few minutes. 25 CHAIR KASSEKERT: She wouldn't have an 17 ITEM NO. 4 1 attorney to represent her. 2 MS. WILD: Absolutely. 3 She really does not need anybody to 4 represent her. We're here this morning. 5 I would just like to introduce her to 6 the Commission. Mary Kramer is being promoted 7 to the position of Vice President of Design and 8 Construction of the Atlantic City Hilton and 9 Resorts, Atlantic City. 10 Mary's been around the business since 11 the late '70s, working in various capacities 12 for Arthur Ponzio and for Yate Silverman. She 13 came into the casino industry in early '90s, 14 working for the Caesar's organization. And we 15 are very lucky to have her on staff at both 16 properties here in Atlantic City. And it's a 17 great day for us. She's a tireless worker and 18 is very much behind the scenes, but is 19 responsible for a lot of the amenities and for 20 the upkeep of the properties and just for 21 making our lives a little bit better at the 22 property. 23 So I present to you and ask you to grant 24 her temporary license. 25 CHAIR KASSEKERT: Thank you. 18 ITEM NO. 5 1 Any questions? 2 COMMISSIONER SOMMELING: No questions, 3 Madame Chair. 4 COMMISSIONER FRULIO: Motion to grant 5 temporary key license and qualification. 6 VICE CHAIR FEDORKO: Second. 7 CHAIR KASSEKERT: Motion is made and 8 seconded. This is a roll call vote. 9 MR. NANCE: Commissioner Sommeling? 10 COMMISSIONER SOMMELING: Yes. 11 MR. NANCE: Commissioner Epps? 12 COMMISSIONER EPPS: Yes. 13 MR. NANCE: Commissioner Frulio? 14 COMMISSIONER FRULIO: Yes. 15 MR. NANCE: Vice Chair Fedorko? 16 VICE CHAIR FEDORKO: Yes. 17 MR. NANCE: Chair Kassekert? 18 CHAIR KASSEKERT: Yes. 19 MR. NANCE: The record will reflect that 20 the motion is unanimous. 21 MS. WILD: Thank you. 22 CHAIR KASSEKERT: Congratulations. 23 MS. WILD: Thank you. 24 MR. NANCE: Item No. 5, stipulation of 25 settlement and consent agreement. 19 ITEM NO. 5 1 When I call your name, please come 2 forward, stand behind this middle table, 3 spreading across the room so that you may be 4 seen: Robert Hill, John Chambers, Arthur 5 Levinson, Mack Ragsdale, III, Dorothia Dorsey, 6 Donna Levin. 7 Mr. Ingis? 8 MR. INGIS: The staff has nothing to 9 add, Madame Chair. 10 CHAIR KASSEKERT: Thank you. 11 Let me just ask that you first each 12 state your name for the record. Starting, I 13 guess, with you, sir, to the right there. 14 MR. RAGSDALE: Mack Ragsdale, III. 15 MR. HILL: Robert Hill. 16 MR. CHAMBERS: John Chambers. 17 MS. LEVIN: Donna Levin. 18 MR.LEVINSON: Arthur Levinson. 19 CHAIR KASSEKERT: Okay. In a moment we 20 are going to vote on the stipulations which 21 you've agreed to with the Division of Gaming 22 Enforcement. I'm going to ask if any of you at 23 this point wish to be heard on your matter. 24 You do not have to say anything if you don't 25 want to. 20 ITEM NO. 5 1 Does anyone wish to be heard? 2 Okay. Miss Stancil? 3 MS. STANCIL: We ask that you approve 4 the stipulations. 5 CHAIR KASSEKERT: Thank you. 6 Any questions? 7 VICE CHAIR FEDORKO: Motion to approve 8 stipulations. 9 COMMISSIONER EPPS: Second. 10 CHAIR KASSEKERT: The motion has been 11 made and seconded. All those in favor? 12 (Ayes.) 13 CHAIR KASSEKERT: Opposed? 14 (No response.) 15 CHAIR KASSEKERT: The motion carries. 16 Thank you very much for coming. Good 17 luck to you. 18 FROM THE FLOOR: Thank you. 19 MR. NANCE: I'd now like to call Ricardo 20 Hernandez. 21 MR. INGIS: Madame Chair, Commissioners. 22 Apparently, Mr. Rubio-Hernandez is not present 23 in the meeting room today. I know he was 24 represented by counsel. I would ask if Mr. 25 Crane or anyone else is here on behalf of Mr. 21 ITEM NO. 6 1 Hernaneez come forward. 2 Apparently not. 3 The reason this matter is being called 4 separately is there is a settlement with an 5 imposition of a $250 civil penalty. 6 CHAIR KASSEKERT: Thank you. 7 MR. INGIS: Miss Stancil? 8 CHAIR KASSEKERT: Thank you. 9 Let me ask if there are any questions 10 for the Division? 11 COMMISSIONER SOMMELING: No questions, 12 Madame Chair. 13 CHAIR KASSEKERT: Okay. There being 14 none, I'll entertain a motion to approve. 15 COMMISSIONER SOMMELING: Motion to 16 approve the stipulation as stated. 17 VICE CHAIR FEDORKO: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. All in favor? 20 (Ayes.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: The motion carries. 24 Thank you for coming up again. 25 MR. NANCE: Item No. 6, stipulation of 22 ITEM NO. 6 1 settlement in State versus RIH Acquisitions, 2 New Jersey, LLC. 3 Mr. Ingis? 4 MR. INGIS: Good morning, again, Madame 5 Chair, Commissioners. 6 Patricia Wild is here on behalf of 7 Respondent, and Lane Stebbins is for the 8 Division of Gaming Enforcement. 9 This is an underage gambling complaint, 10 stipulation of settlement with a civil penalty 11 in the amount of $20,000. 12 CHAIR KASSEKERT: Thank you. 13 Let me ask the Division to proceed. 14 MR. STEBBINS: Thank you, Madame Chair, 15 members of the Commission. 16 As Mr. Ingis introduced, this is an 17 underage gambling matter. It was face-to-face 18 with the dealers at the table. Therefore, it 19 carries a $20,000 fine. As you can read in the 20 paperwork, Ms. Wild has undertaken remedial 21 steps to do her very best to make sure that 22 things like this don't reoccur, so I would ask 23 you to adopt the stipulation. 24 CHAIR KASSEKERT: Thank you. 25 MR. STEBBINS: Thank you. 23 ITEM NO. 7 1 CHAIR KASSEKERT: Thank you. 2 Miss Wild? 3 MS. WILD: Yes, I would also ask you 4 adopt the stipulation and impose the fine 5 requested in this matter. 6 CHAIR KASSEKERT: Thank you. 7 Any questions? 8 VICE CHAIR FEDORKO: Motion to approve 9 the stipulation of settlement and impose a 10 civil penalty of $20,000 against RIH 11 Acquisitions, NJ, LLC, for violation of 12 commission violations regarding underage 13 gambling. 14 COMMISSIONER FRULIO: Second. 15 CHAIR KASSEKERT: The motion has been 16 made and seconded. All in favor? 17 (Ayes.) 18 CHAIR KASSEKERT: Opposed? 19 (No response.) 20 CHAIR KASSEKERT: The motion carries. 21 MS. WILD: Thank you. 22 MR. STEBBINS: Thank you. 23 MR. NANCE: Item No. 7, stipulation of 24 settlement in State versus Resorts 25 International Hotel, Inc., Heather Allen and 24 ITEM NO. 7 1 Richard Cook. 2 Mr. Corbett? 3 MR. CORBETT: Chair, Commissioners, the 4 stipulation in this case calls for a three-day 5 license suspension and issuance of a letter of 6 reprimand for failure to report violations of 7 surveillance regulations to the Commission. 8 CHAIR KASSEKERT: Thank you. 9 Mr. Stebbins, again? 10 MR. STEBBINS: Thank you. Yes. 11 As Mr. Corbett introduced, this is a 12 stipulation of settlement against one of the 13 supervisory personnel in the surveillance room. 14 It relates to the staffing levels in the 15 casino. And, as you can see from the 16 paperwork, we believe that this is an 17 appropriate sanction for the violations. And I 18 would urge you to adopt the stipulation. 19 CHAIR KASSEKERT: Thank you. 20 Miss Kaufman? Good morning. 21 MS. HUGHES: Good morning. Yes. We 22 also urge that you adopt the stipulation of 23 settlement. 24 CHAIR KASSEKERT: Thank you. 25 Any questions? 25 ITEM NO. 8 1 VICE CHAIR FEDORKO: Make a motion to 2 approve stipulation and suspend Richard Cook's 3 casino key employee license for a period of 4 three working days and direct that a letter of 5 reprimand be made a permanent part of his 6 employment file in violation of Commission 7 regulations NJAC 19:45-1.10d and 1.11A. 8 COMMISSIONER FRULIO: Second. 9 CHAIR KASSEKERT: The motion has been 10 made and seconded. All in favor? 11 (Ayes.) 12 CHAIR KASSEKERT: Opposed? 13 (No response.) 14 CHAIR KASSEKERT: The motion carries. 15 Thank you. 16 MS. KAUFMAN: Thank you. 17 MR. STEBBINS: Thank you. 18 MR. NANCE: Item No. 8, petition for 19 early reapplication for Andriana Quirindongo, 20 Dorothy Sheppard, and Movita Terrell. 21 Miss Frigen? 22 MS. FRIGEN: Good morning, Madame Chair, 23 Commissioners. 24 Let me ask, the first is Andriana 25 Quirindongo. Is she present or represented 26 ITEM NO. 8 1 here today? 2 Apparently not. 3 For your consideration is her petition 4 in which she seeks permission to reapply early 5 for a registration or noncredential hotel 6 employment. By letter dated January 3rd, the 7 Division interposed an objection to this 8 petition in its entirety. 9 CHAIR KASSEKERT: Thank you. 10 Miss Stancil? 11 MS. STANCIL: I'd ask that you deny the 12 petition. 13 CHAIR KASSEKERT: Thank you. 14 Any questions for the Division? 15 COMMISSIONER SOMMELING: No questions, 16 Madame Chair. 17 VICE CHAIR FEDORKO: Motion to deny Miss 18 Quirindongo's petition to reapply early for a 19 casino service employee registration or to 20 obtain employment early as a noncredential 21 hotel employee. 22 COMMISSIONER FRULIO: Second. 23 CHAIR KASSEKERT: The motion has been 24 made and seconded. All in favor? 25 (Ayes.) 27 ITEM NO. 8 1 CHAIR KASSEKERT: Opposed? 2 (No response.) 3 CHAIR KASSEKERT: The motion carries. 4 MS. FRIGEN: Okay. The next case we 5 have an is Dorothy Sheppard. Miss Sheppard is 6 present. I would ask her to have a seat at the 7 table. 8 Pursuant to a previously approved 9 stipulation of settlement, the Commission has 10 already granted Miss Sheppard permission to 11 obtain noncredential hotel employment early, 12 and she has a pending license application. She 13 has filed this petition regarding the 14 restriction in the settlement with respect to 15 granting her permission to reapply early for 16 registration. 17 By letter dated December 27th, the 18 Division interposed no objection to this 19 petition. 20 CHAIR KASSEKERT: Thank you. 21 Miss Sheppard, is there anything you'd 22 like to say today? 23 MS. SHEPPARD: No, thank you. I'm okay. 24 CHAIR KASSEKERT: Okay. 25 Miss Stancil, do you have anything to 28 ITEM NO. 8 1 add? 2 MS. STANCIL: I have nothing to add. 3 CHAIR KASSEKERT: Okay. Any questions? 4 COMMISSSIONER SOMMELING: Chair, I move 5 to grant Miss Sheppard's permission to reapply 6 early for a casino service employee 7 registration. 8 COMMISSIONER EPPS: Second. 9 CHAIR KASSEKERT: The motion has been 10 made and seconded. All in favor? 11 (Ayes.) 12 CHAIR KASSEKERT: Opposed? 13 (No response.) 14 CHAIR KASSEKERT: The motion carries. 15 Thank you for coming. Good luck. 16 MS. SHEPPARD: Thank you so much. Thank 17 you. 18 MS. FRIGEN: You're welcome. 19 The next case we have is Movita Terrell. 20 Miss Terrell is present as well. I guess, you 21 can have a seat at the table. 22 For your consideration is Miss Terrell's 23 petition in which she seeks permission to 24 reapply early for license, registration and/or 25 noncredential hotel employment. 29 ITEM NO. 8 1 By letter dated January 8th, the 2 Division interposed no objection to this 3 petition. 4 CHAIR KASSEKERT: Thank you. 5 Miss Terrell, is there anything you'd 6 like to say today? 7 MS. TERRELL: No. 8 CHAIR KASSEKERT: Okay. Miss Stancil? 9 MS. STANCIL: No. No, thank you. 10 CHAIR KASSEKERT: Okay. 11 Any questions? 12 COMMISSIONER SOMMELING: No questions, 13 Madame Chair. 14 COMMISSIONER EPPS: Madame Chair, I move 15 that we grant Miss Terrell permission to 16 reapply early for a casino employee license, a 17 casino service employee registration, and/or to 18 work as a noncredential hotel employee. 19 COMMISSIONER SOMMELING: Second. 20 VICE CHAIR FEDORKO: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 30 ITEM NO. 9 1 CHAIR KASSEKERT: The motion carries. 2 Thank you very much for coming. Good 3 luck. 4 MS. TERRELL: Thank you. 5 MR. NANCE: Item No. 9, application for 6 suspension for Cindy Arroyave and Diola Perez. 7 Miss Frigen? 8 MS. FRIGEN: Before we hear from the 9 Division, let me just confirm whether either of 10 these individuals is present or represented 11 here today. 12 Apparently not. 13 CHAIR KASSEKERT: Miss Stancil? 14 MS. STANCIL: I believe in the documents 15 filed in the complaints that there is 16 sufficient basis to grant the applications, and 17 I ask that you do so. 18 CHAIR KASSEKERT: Thank you. 19 Any questions? 20 COMMISSIONER SOMMELING: No questions, 21 Madame Chair. 22 VICE CHAIR FEDORKO: Motion to suspend 23 credentials. 24 COMMISSIONER FRULIO: Second. 25 CHAIR KASSEKERT: The motion has been 31 ITEM NO. 10 1 made and seconded. All in favor? 2 (Ayes.) 3 CHAIR KASSEKERT: Opposed? 4 (No response.) 5 CHAIR KASSEKERT: The motion carries. 6 Thank you. 7 MR. NANCE: Item No. 10, consideration 8 of forfeiture orders in the State versus: 9 Bally's Park Place, Inc., et al; Bally's Park 10 Place, Inc., et al; Adamar, New Jersey, Inc., 11 et al; and Marina District Development Company, 12 et al. 13 Miss Frigen? 14 MS. FRIGEN: Madame Chair, 15 Commissioners, as indicated, these four matters 16 involve complaints filed by the Division 17 seeking forfeiture of money that were -- that 18 was siezed by the casinos due to the patrons at 19 the time of their gaming and winning either 20 being underaged or on the self-exclusion list. 21 We have received letters from the 22 respective casino attorneys, Lynne Hughes, Tama 23 Hughes, and Joseph Corbo indicating that the 24 casinos have no objection to the forfeiture. 25 We've also sent notice to the individual 32 ITEM NO. 10 1 patrons that were concerned. Let me just ask 2 whether any of them are here today? 3 Apparently not. 4 So for your consideration is final 5 action on these complaints. 6 I would note that with respect to the 7 first complaint, at this time we only need to 8 take action on count four because the earlier 9 counts were resolved at a prior meeting. 10 CHAIR KASSEKERT: Okay. Very good. 11 Thank you. 12 Mr. Stebbins? 13 MR. STEBBINS: I have nothing to add, 14 except I prefer to think of it as the money 15 being secured pending an opportunity to proceed 16 to a forfeiture hearing. And if nobody did 17 that, we can enter the appropriate orders. 18 CHAIR KASSEKERT: Thank you. 19 Any questions? 20 COMMISSIONER SOMMELING: No questions, 21 Madame Chair. 22 COMMISSIONER EPPS: Madame Chair, due to 23 their being underaged on the date of winnings 24 or on the self-exclusion list, the money that 25 theoretically won by the named individuals in 33 ITEM NO. 12 1 the four violations complaint is forfeited, and 2 the three casinos are required to remit 3 respective forfeited money to the Commission in 4 accordance with NJSA 5:12-71.3(c), and I move 5 that. 6 COMMISSIONER SOMMELING: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: The motion carries. 13 Thank you. 14 MR. STEBBINS: Thank you. 15 MR. NANCE: For your consideration, Item 16 No. 12, petition of Sapient Corporation for 17 waiver of qualification of Wellington 18 Management Company, LLP. 19 Miss Nagengast? 20 MS. NAGENGAST: Good morning, Chair and 21 Commissioners. 22 Ms. Jones is here on behalf of the 23 Petitioner and Mr. McDonough on behalf of the 24 Division. 25 CHAIR KASSEKERT: Thank you. 34 ITEM NO. 12 1 Miss Jones? 2 MS. JONES: Good morning, Chair, 3 Commissioners. 4 You have before you a petition of 5 Sapient for waiver of Wellington Management and 6 also have Wellington's certification in support 7 of same. 8 I'd be happy to address any questions 9 you have. 10 CHAIR KASSEKERT: Thank you. 11 Mr. McDonough? Good morning. 12 MR. McDONOUGH: Yes. Good morning. 13 We recommend that this petition be 14 granted. 15 Any questions I'd be happy to try to 16 answer. 17 Thank you. 18 CHAIR KASSEKERT: Thank you. 19 Any questions? 20 COMMISSIONER SOMMELING: No questions, 21 Madame Chair. 22 COMMISSIONER FRULIO: Move to grant the 23 petition of Sapient Corporation and waive the 24 qualification of Wellington, Management 25 Company, LLP, pursuant to NJAC 19:51-1.14(b)(3) 35 ITEM NO. 11 1 and NJSA 5:12-85(f) based on the status as an 2 institutional investor as defined by NJSA 3 5:12-27.1. 4 VICE CHAIR FEDORKO: Second. 5 CHAIR KASSEKERT: The motion has been 6 made and seconded. All in favor? 7 (Ayes.) 8 CHAIR KASSEKERT: Opposed? 9 (No response.) 10 CHAIR KASSEKERT: The motion carries. 11 Thank you. 12 MS. JONES: Thank you. 13 MR. NANCE: Item No. 11, petition of 14 Ikon Office Solutions, Inc., for waiver of 15 qualification of Steel Partners, II, Limited 16 Partner. 17 MS. NAGENGAST: I believe, actually, 18 we're going to look at 13 first. 19 CHAIR KASSEKERT: Thirteen. 20 MR. NANCE: Thirteen first? Okay. I'd 21 like to recall 13. 22 The petition of LGC Wireless, Inc., for 23 waiver of qualification for: Mayfield Fund, 24 Crystal Ventures, Intel Capital Corporation, 25 and Omers Administration Corporation. 36 ITEM NO. 11 1 MS. NAGENGAST: Chair and Commissioners, 2 these are four petitions filed on behalf of LGC 3 Wireless seeking waiver qualification for four 4 separate investors. 5 Mr. Daly is here on behalf of 6 Petitioners, and Mr. McDonough on behalf of the 7 Division. 8 CHAIR KASSEKERT: Thank you. 9 Mr. Daly? 10 MR. DALY: Good morning, Commissioners , 11 Madame Chair. 12 A special congraduations to Commissioner 13 Epps and very gratifying to see your 14 reappointment. 15 Appearing on behalf of LGC Wireless and 16 the four Petitioners. As was mentioned, LGC is 17 an advocate for a nongaming casino service 18 industry license. The people that we're here 19 seeking waivers are -- are investors in that 20 nongaming company. 21 The -- I hope you have before you the 22 supplemental submission that I had provided to 23 the staff. I won't go through all the 24 arguments laid out there, but I would like to 25 underscore a couple of the points. 37 ITEM NO. 11 1 Number one, this is a nongaming related 2 company. That doesn't mean it shouldn't be 3 subject to licensure. Of course it should. I 4 would not be here to argue otherwise. I do 5 think, however, that it is a factor that you 6 need to keep into consideration when you are 7 considering whether or not to exercise the 8 authority of the Act and the regulations 9 clearly give you to waive certain owners' 10 qualification requirements. 11 I think it's imperative that do you that 12 in this circumstance, because if you do not, 13 you will be effectively cutting off a very 14 valid and increasingly popular source of 15 funding for not only casino service industries 16 but casinos as well. 17 You've already seen it in the casino 18 arena, and you've worked out a means by which 19 the investors could be waived. I'm, of course, 20 referring to the Colony case. You're going to 21 see it again very shortly in the Harrah's 22 matter. 23 I find it somewhat ironic that we have a 24 very flexible approach to the highest level 25 licensees, that is casino licensees, in which 38 ITEM NO. 11 1 we have found ways and you have found ways to 2 waive the qualifications of individuals who, 3 while technically owners, do not effectively 4 have control over the licensee. But that same 5 kind of flexibility does not seem to apply, at 6 least not on a routine basis, to casino service 7 industries such as LGC Wireless. And I believe 8 that's unfortunate because, as I mentioned, 9 this is a wave of financing that's coming. And 10 to cut that source of financing off to 11 companies such as LGC Wireless is a disservice, 12 I think, to the industry. It places New Jersey 13 at a competitive disadvantage with regards to 14 the other jurisdictions that are competing for 15 this limited almighty gaming dollar. 16 Those are practical considerations and 17 business conversations that I know are not 18 paramount here. You have a statute and a 19 regulatory apparatus to enforce. But I think 20 you need to enforce that apparatus with some 21 sense of what the business realities are out 22 there today. And there is no question but that 23 you have the authority to grant the waivers 24 that are requested. As I outlined in the 25 papers submitted, you can consider these -- 39 ITEM NO. 11 1 all-- each of these four entities as 2 institutional investors. Certainly Omers, the 3 institutional investor that represents 4 pensioners from Canada, meets that definition 5 almost literally. And there's no reason other 6 than the fact that's not an American company to 7 consider the institutional investor as eligible 8 for the institutional investor waiver 9 provisions that the Act gives you. 10 Secondly, you have that regulation which 11 it allows you to waive any owner who, in fact, 12 does not exercise control over the licensed 13 entity. And that truly is the situation that 14 you have here. You have submissions from each 15 of the owner investors that they would -- they 16 have no intent to control this company. They 17 are professional investors. Quite frankly, 18 they're in it for the money. They don't care 19 exactly what it is that the individual 20 companies do, but they invest broadly and 21 widely, and extensively in various businesses. 22 And they keep their eyes on their investment 23 portfolio. They expect to have losses, and 24 they expect to have gains. And, of course, 25 they ultimately expect that the gains outweigh 40 ITEM NO. 11 1 the losses. But they're not concerned with the 2 day-to-day operations of entities such as LGC 3 Wireless. 4 So I fail to see what -- what is gained 5 by requiring companies such as this to file. 6 Typically investment companies such as these 7 are reluctant to file. That in and of itself 8 doesn't carry a great deal of weight for you, 9 and it shouldn't. 10 But, again, I think you need to keep in 11 mind that the competitive nature of both casino 12 gaming and these nongaming companies bring to 13 the fore today and require that you utilize the 14 full powers that you have. And, again, you 15 have the power to waive these companies from 16 the qualification requirement. 17 I am very gratified to see that the 18 Division of Gaming Enforcement fully agrees 19 with that and has urged that you may exercise 20 the authority and grant the waivers requested 21 under either of the two theories that I've 22 proffered here; the one being the institutional 23 investor and the other being the regulation 24 regarding the lack of control. 25 With that, I rest. Thank you. 41 ITEM NO. 11 1 CHAIR KASSEKERT: Let me ask if there 2 are any questions for Mr. Daly before we -- 3 COMMISSIONER SOMMELING: No questions, 4 Madame Chair. 5 COMMISSIONER EPPS: I'll wait until 6 after. 7 CHAIR KASSEKERT: Sure. 8 Let me just ask you one question, Mr. 9 Daly. You know, I am concerned that when you 10 look at the combined holdings -- and this comes 11 to I think about 30 percent of the outstanding 12 shares -- and that these four entities are the 13 four largest shareholders, how do you -- tell 14 me how you reconcile the fact that with the 15 argument that they lack to the ability to 16 control. But it does seem that, you know, 17 given the numbers involved, that there would be 18 an ability to control. 19 MR. DALY: Well, first of all, they 20 don't act in unison. If anything, they are in 21 competition one with the other as far as their 22 professional investment strategies going. They 23 happen to have invested in the same company 24 here. 25 I think it's more realistic to look at 42 ITEM NO. 11 1 the individual holdings, all of which are 2 within five and ten percent. 3 More importantly, you have the affidavit 4 or the certifications submitted by these 5 companies telling you -- promising you -- that 6 they do not intend to exercise any measure of 7 control. And you also have the licensee 8 itself, LGC Wireless, which has no more control 9 over those investment companies than they do 10 over it, as far as guiding their actions. 11 If, in the event you were not satisfied 12 that the promise made to you essentially by the 13 officers of these individual investment 14 companies, that they will not exercise control, 15 if that's not good enough, you have the 16 licensee itself who is obligated under the Act 17 to report any violation. 18 What it really comes down to, a 19 situation of -- I'm reminded of President 20 Reagan who always said -- and former 21 commissioner, former chairman of this 22 commission who, despite his own political vent, 23 picked up that slogan of trust to verify. I 24 think it's your obligation here -- not an 25 obligation, exactly. But I think you should 43 ITEM NO. 11 1 trust these individuals who have sworn these 2 affidavits, certifications indicating the lack 3 of trust -- that a lack of intent to control 4 these companies. And you leave it to the 5 Division of Gaming Enforcement to verify that, 6 in fact, they don't exercise any control all 7 those companies. 8 Theoretically is it possible? Yes. But 9 is it going to happen? No. Not without them 10 providing you 30-day notice of change of 11 intent. So what do you gain by requiring them 12 to file? 13 CHAIR KASSEKERT: You want to -- 14 COMMISSIONER EPPS: I have a question 15 to -- 16 CHAIR KASSEKERT: Thank you. 17 COMMISSIONER EPPS: As a follow-up to 18 that question. 19 But if each of the companies decide to 20 vote -- or let me go to my second question 21 first. 22 What is the voting strength of these 23 companies? What is their ability to put 24 members of the board and take actions of that 25 sort? 44 ITEM NO. 11 1 MR. DALY: Well, that is precisely the 2 kind of exercise of control that they're 3 indicating that they will not do, and they do 4 not intend to do. They don't put anybody on 5 the board. They don't have anybody -- 6 COMMISSIONER EPPS: What is their 7 ability to do? 8 MR. DALY: That depends on their -- 9 they'd have to get a larger block. Obviously, 10 nobody with just five percent or even up to ten 11 percent alone would be able to vote somebody on 12 the board. They would have to get someone to 13 go along with them to nominate a candidate for 14 the board. 15 COMMISSIONER EPPS: Well, but what 16 you're saying? What we seem to be saying here, 17 trust them that they're not going to find 18 some -- at some point in the future where it's 19 in their best interest as combined companies 20 which could generate whatever they're looking 21 for in their share of mutual interest to go 22 ahead and do something where they weren't 23 collectively as opposed to working individually 24 or against each other, as you seem to indicate 25 previously. How do we trust that they won't 45 ITEM NO. 11 1 later decide that they want to do that? 2 MR. DALY: Well, first of all, they 3 promise to give you 30 days notice of that. So 4 I'm not quite sure why you would approach that 5 with a dis -- an inherent distrust that that 6 representation is not valid. They would give 7 you the intention. They would give you notice 8 of their changed investment intent that -- that 9 certification is on record. Regardless of 10 which theory, you go ahead and hopefully waive 11 their qualification, that representation 12 applies. And if they don't, you have the 13 Division of Gaming Enforcement. And, again, I 14 mention the licensee has the obligation to 15 report to you and to the Division any attempt 16 on the part of these entities to control them 17 under Section 80(d) of the Casino Control Act 18 which requires them to so notify you. So 19 you've got several measures, levels of control 20 here? 21 The fundamental point is, these guys 22 don't control the licensed entity. And that's 23 who you need to be concerned about, those 24 entities that do, in fact, control the 25 licensee. 46 ITEM NO. 11 1 COMMISSIONER EPPS: So are you saying 2 that none of the individuals have voting 3 strength individually? 4 MR. DALY: Correct. 5 CHAIR KASSEKERT: And they -- 6 MR. DALY: Well, they have represented 7 to you that even if they do have that, they 8 will not exercise that without providoing you 9 30-days notice of doing so. Which gives you 10 plenty of time to say, well, if you're going to 11 do that, you must come back in and qualify. 12 CHAIR KASSEKERT: But three of the four 13 are qualifying percent. 14 MR. DALY: Five percent, below ten. 15 That five percent is a rebuttable presumption. 16 It is not, as it's often be treated -- again, I 17 see this more on the CSI side than the casino 18 side. You regularly waive the qualification 19 requirement for people that hold over five 20 percent and are not institutional investors on 21 the casino side. You rarely heretofore have 22 done it on the CSI side. And that presents to 23 be somewhat of an anomaly that the higher 24 licensee is favored with more flexible 25 regulation than the nongaming casino service 47 ITEM NO. 11 1 industry. 2 And, again, I think you have the power 3 to apply that regulatory philosophy a little 4 bit more flexibly, and I would appreciate you 5 doing so in this case. 6 COMMISSIONER EPPS: I'll go to my second 7 point now. 8 CHAIR KASSEKERT: Okay. 9 COMMISSIONER EPPS: Which was -- is just 10 probably a more of an editorial comment -- 11 editorial comment than an argument or question. 12 But one of my difficulties is, and it 13 almost sounds -- comes across in your 14 presentation -- and I'm not casting apersions 15 on you -- but it's almost like these companies 16 are saying, we don't want to play by your 17 rules, so either change them, or we're going to 18 take our toys and go play in another sand box. 19 And that shouldn't be the standard. I mean, 20 our regulations are there for a reason. And 21 our obligation is to uphold them unless we're 22 convinced at some maximum standard that there's 23 a reason that we should deviate from them. 24 But that doesn't seem to be the approach 25 here. That seems -- it almost seems to be the 48 ITEM NO. 11 1 other way. Like the people coming before us, 2 holding the hammer, and say if you don't 3 deviate, we're going to slam you over the head 4 with our -- just go away, and your industry is 5 going to suffer. 6 MR. DALY: Well, let me expand on that a 7 little bit then, because that is not what I 8 mean to convey. On the contrary. 9 It may be a reality that some entities, 10 some investors -- because they're just 11 investors. They're not in the wireless 12 business. They don't provide cell phone 13 service. They don't provide anything of value 14 to the casinos. They are purely just in it for 15 the money for sure. They don't care, frankly, 16 whether the company that they are invested in 17 is engaged in nongaming business and, 18 therefore, subject to the regulatory 19 requirements the Casino Control Act or not. 20 They are only interested in the money. So, 21 yeah, there is a very real possibility that 22 they will gather up their marbles and go home. 23 Because there is, in this professional 24 investment community -- again, you're going to 25 see this again and again in casino licensees 49 ITEM NO. 11 1 coming up as private equity takes hold. 2 If I can veer off for a moment. I think 3 the real fundamental problem is the regulatory 4 apparatus does not take into consideration the 5 business realities out there of private equity 6 today. I think at some point you probably 7 will. And what I'm asking is in the interim, 8 you use those powers that you already have that 9 provide you with enough protection of the 10 industry and waive the qualification of people 11 who have no desire to exercise any measure of 12 control over the licensees that come before 13 you. 14 And the unfairness that comes from it -- 15 is it is not the arrogance of the investors 16 that I'm particularly concerned about. I don't 17 represent the investors. I represent LGC 18 Wireless, and in the next case coming up, Ikon. 19 But there are small companies that do business 20 with casinos and cannot control any investors 21 any more than the investors can control them, 22 and yet, it's those entities that -- on which 23 all this will be fall. It's not a matter of 24 the arrogance of the investors. It's what 25 happens to the companies that are providing the 50 ITEM NO. 11 1 jobs and all the business opportunities here in 2 Atlantic City as casino service industries. 3 It's those entities -- and I think, although I 4 don't want to make it too broad a case, that 5 the casinos who ultimately will pay the price. 6 Because, again, you're cutting off a source of 7 funding that is becoming more and more popular 8 out there in the business world. 9 CHAIR KASSEKERT: I guess the argument 10 becomes, though, do you do this through the 11 waiver function? Or do you really go back and 12 look at the regulations? And isn't that the 13 better way to do it than on a piecemeal basis, 14 setting precedent through waiver rather than a 15 clear and in-depth look at the regulations. 16 MR. DALY: I wouldn't disagree with 17 that, Chair. But I think in the interim, you 18 can and should take advantage of the waiver 19 provisions and the flexibility that it gives 20 you and condition -- you can impose a condition 21 subsequent as well as do you any other kind of 22 condition on a licensee that when, if it is 23 indeed the sense of the Commission that you are 24 going to adopt regulations that would cover 25 this ground, and when those regulations are in 51 ITEM NO. 11 1 effect, these companies must comport with them. 2 But in the meantime, recognize that 3 there's no real danger here, unless you 4 completely distrust the certifications that are 5 provided to you and you say to these business 6 people who are -- again, just in it for the 7 money, really do want to control the licensee, 8 something which they completely disavow -- then 9 there's no reason that -- because this is going 10 to take a while for this regulatory change to 11 occur that these companies should suffer in the 12 meantime. The natural consequence of denying 13 these -- and, again, I don't mean this as a 14 threat, Commissioners Epps, by any means. But 15 the harm is going to befall LGC, not the 16 investors. They've got money in thousands -- 17 that's the whole point. They got money in so 18 many companies, they don't care about the 19 particular little LGC, or Ikon to come. They 20 care about their overall portfolio. 21 CHAIR KASSEKERT: I think we're ready -- 22 COMMISSIONER EPPS: I'll wait. 23 CHAIR KASSEKERT: -- to hear from the 24 Division. 25 Mr. McDonough? 52 ITEM NO. 11 1 COMMISSIONER EPPS: Go ahead. 2 MR. McDONOUGH: Yeah. I filed September 3 26th responses to each of these Petitioners. 4 And I'll rest on those responses. 5 If you have any questions, please ask. 6 CHAIR KASSEKERT: I guess I have a lot 7 of questions. You know, I am concerned what 8 the regulations say. They say what they say. 9 And, obviously, we have the act to do that to 10 waive these regulations. But I'm concerned 11 about the precedent that we're beginning to 12 set. And maybe Mr. Daly would make the 13 argument, well, you've already done that with 14 casino licensees. But, you know, I think each 15 case presents its own set of facts, 16 understanding that. 17 But I guess my concern is, you know, 18 why-- I'd like to have a better understanding 19 of the Division's rationale and argument. 20 MR. McDONOUGH: I think Mr. Daly has 21 made a persuasive argument. I think that, if 22 one looks at the big picture, as Mr. Daly has 23 suggested, you can see how financing is 24 changing, not only to the casino license level 25 but on the casino service industry level. And 53 ITEM NO. 11 1 so I think he makes a very cogent point there 2 that that changing scenario needs to be 3 recognized. And I think that you are 4 permitted, and Dennis would encourage you, to 5 use your flexibility with the regulations to 6 grant that waiver here. 7 I also think that if one is inherently 8 skeptical, one could take the position -- and 9 I'm not advocating it -- but one could take the 10 position that if any company comes before us 11 and asks that we not look at them, they must 12 have something to hide. And I think that 13 becomes a self-fulfilling prophecy. And 14 indeed, if one were to adopt that approach, one 15 might reach the conclusion that the Commission 16 should never issue a waiver or should never 17 grant an exemption to CSI licensure, and yet 18 you do that all the time and properly so, in 19 the Division's view. 20 So merely because someone comes before 21 us as regulators and says, we don't think that 22 we should have to file as qualifiers, we think 23 we're entitled to a waiver, doesn't necessarily 24 raise my suspension. I'm going to look at 25 everything on a case-by-case basis. 54 ITEM NO. 11 1 Another point to consider is that to a 2 great extent our regulatory system depends upon 3 self regulation by the entities that we 4 regulate. In varying degrees. That's 5 certainly true with the casinos. And I believe 6 it's also true with the casino service 7 industries. We have to depend upon their good 8 faith and their willingness to adhere to our 9 regulatory system. And I think we've been 10 pretty successful with that over the past 30 11 years. 12 And so I join with join with Mr. Daly's 13 point that when these representations are made 14 by these four investors in their affidavits, I 15 think they're entitled to the benefit of the 16 doubt unless and until my agency might come 17 across a fact that would indicate that they're 18 not entitled to the benefit of the doubt any 19 longer. 20 That would be my response. 21 CHAIR KASSEKERT: Commissioner Epps? 22 COMMISSIONER EPPS: The one issue, I'll 23 tell you quite frankly, that I'm wrestling with 24 here is that I don't -- I agree with you that 25 there may be issues, I understand there may 55 ITEM NO. 11 1 come a point or you could look at it, maybe we 2 should never grant a waiver. However, I have 3 less difficulty with waivers for specifically 4 enumerated criteria, which we have. If you 5 meet something over here, then we can waive you 6 over here because we're reasonably comfortable 7 that there's some similar circumstance in which 8 you're being looked at or reviewed that fits 9 our -- that gives us a comfort level. The 10 difficulty always is our catchall which is 11 where this one squarely sits. Because the 12 catch all is more amorphous I mean, it takes 13 no shape, really. It could be anything. And 14 if you craft the right set of arguments or 15 circumstances, you say, okay. If it fits in 16 the catchall, and then we let that go. That's 17 where it becomes particularly difficult and 18 troubling, at least in my consideration of this 19 thing is, what is the standard if we have one 20 for -- for the catchall provision? Or, 21 otherwise, everything would be a catchall. 22 What makes this a catchall where something else 23 is not? That's where I have quarrels with this 24 in my mind. What makes this uniquely a 25 catchall. I'm sure you're going to tell me 56 ITEM NO. 11 1 that it makes it a catchall because these guys 2 have promised that they're going to send you a 3 notice saying, you know what? I think I'm 4 going to control this company. Come look at 5 me. Are they likely to say that, or are they 6 likely to just get rid of that because they 7 don't want to be looked at? You know. That's 8 part of where I'm turning this issue over in my 9 mind. 10 MR. DALY: Commissioner, if I might 11 speak to that. I mean, I think there's two 12 sides of that coin, by the way. If you take 13 the opposite approach that you need some 14 concrete guidelines in order to exercise this 15 control -- or excuse me -- exercise this 16 authority to waive -- this discretionary 17 authority that the legislatures clearly give 18 you, if you take that view, then you are, in 19 fact, interlying that out on the statute. You 20 are saying that we -- since they didn't give us 21 any guidelines, then we can't. 22 That misses the whole point of the 23 delegation. The control lies with you and your 24 judgment. That's why you have five commission 25 members sitting there who look at individual 57 ITEM NO. 11 1 cases and decides on the merits of those 2 individual cases. This is a situation in which 3 we can fairly minister this act and waive the 4 disqualification requirement in these 5 particular instances. 6 COMMISSIONER EPPS: Okay. I'm not 7 asking for a specific delineation in the 8 catchall provision, because then it wouldn't be 9 a catchall. But what I'm saying is even when 10 we do it on a case-by-case basis, we have to 11 have some standard that we determine this is or 12 this isn't. Otherwise, everything would be in. 13 So even if there's not specific language that 14 tells you what it is, there's still some 15 determination as to what is and what isn't. Am 16 I -- 17 MR. DALY: I hear you. And -- 18 COMMISSIONER EPPS: Do you know what I'm 19 saying? 20 MR. DALY: I think that's your job to 21 come up with -- 22 COMMISSIONER EPPS: Exactly. And I'm 23 just being clear to you that that's where I 24 struggle with this issue. Is it enough that 25 these guys say, you know what? We're not going 58 ITEM NO. 11 1 to do it. And if we do do it, we'll let you 2 know. But we really just -- we don't care what 3 this company does. We just invest in it, and 4 leave us alone. 5 MR. DALY: And I think you have to add 6 you cannot leave out of the equation the fact 7 that you have the license hammer over the 8 licensee, and that that licensee also has an 9 obligation to report to you. So it's not just 10 trusting the investor in and of itself and the 11 Division of Gaming Enforcement to ferret it out 12 if they are doing anything nefarious. You're, 13 also, justifiable relying on a licensee, an 14 individual or company that you have found meets 15 the exacting requirements for licensure under 16 the Casino Control Act and the regulations. 17 You will have found once this LGC company gets 18 through the licensure, if it gets that far, 19 will have the requisite, good charter, honesty, 20 and integrity and all the other, you know, 21 qualifications under the Act and regulations. 22 And, again, I come back to that trust 23 and verifying notion. You've got several 24 levels in which you can rest your trust in, and 25 you just need to satisfy yourself that those 59 ITEM NO. 11 1 levels are all there in a particular case in 2 order to exercise the discretion -- the 3 discretionary authority that the legislature 4 has given you to waive them. Either through 5 the institutional investor provision or through 6 the regulations which speak more to lack of 7 control. 8 CHAIR KASSEKERT: Thank you. 9 Are there any other questions? 10 Miss Nagengast, do you have anything 11 you'd like to add? 12 I want to specifically ask you because I 13 know you had pointed out to me the fact that 14 LGC acknowledged, I believe in their papers, 15 correct me if I'm wrong, that -- that the three 16 companies, Crystal, Mayfield and Intel are 17 generally not passive in their investment 18 intent. Was that in the -- remind me where 19 that was in the papers. 20 MS. NAGENGAST: I believe that was in 21 the supplemental certification that counsel 22 submitted on behalf of LGC when he addressed 23 the inability to control of each of the 24 investors. And there was some statements in 25 there where he was talking about the inability 60 ITEM NO. 11 1 to control each of the investors. And I 2 believe it discussed that, at times, these 3 investors have not remained passive. 4 CHAIR KASSEKERT: Throughout their 5 history. 6 MS. NAGENGAST: Saying in this case, you 7 know, it is their intent to remain passive, but 8 that's not always the case. 9 CHAIR KASSEKERT: Uh-huh. 10 MR. DALY: I don't remember exactly what 11 I wrote there. I don't remember what I had for 12 lunch yesterday, so that doesn't -- 13 CHAIR KASSEKERT: You were referring to 14 passive, I think, probably. 15 MR. DALY: But I'm sure what I was 16 referring to was that these types of 17 companies -- 18 CHAIR KASSEKERT: Uh-huh. 19 MR. DALY: -- venture capitalists, in 20 particular, which one of them is. Or maybe two 21 of them -- Mayfield and one of the others. 22 Venture capitalists are often more proactive in 23 their approach. But these companies are not 24 particularly interested in that here, and that 25 is -- that is what they are representing to 61 ITEM NO. 11 1 you. And for all the other reasons that I've 2 already outlined. I'm not going to, you know, 3 go back through it again. I don't see any 4 reason in this circumstance to inherently 5 distrust the representations they made when you 6 have the other levels of comfort available to 7 you as well. 8 CHAIR KASSEKERT: Okay. Any other 9 qustions? 10 COMMISSIONER EPPS: Could we recess? 11 CHAIR KASSEKERT: Sure. 12 Commissioner Epps would like a recess. 13 Why don't we take a five-minute recess. 14 (A recess was taken from 11:20 a.m. to 15 11:45 a.m.) 16 CHAIR KASSEKERT: We'll go back on the 17 record. 18 Commission Epps, I think you had some 19 follow-up questions? 20 COMMISSIONER EPPS: Or statement. And 21 I'm sure there will be a response and follow 22 up. 23 But it's been argued that there's no 24 intent to control. However, the standard is 25 expressly articulated in the statute 62 ITEM NO. 11 1 regulations ask whether the investor has the 2 ability to control. The -- and the licensing 3 Applicant. And I've not heard any arguments 4 concerning a rebuttable -- a rebutable 5 presumption of the ability to control. 6 And it's not an issue here of 7 distrusting the investors. On the contrary, we 8 accept the representations that they've made in 9 their certifications. However, the 10 representations speak to their intent to 11 control and not to their ability, through 12 whatever documents or agreements that they 13 have, that establish the ability to control. 14 So what we've missed here and needs to be shown 15 by a preponderance is their ability to control. 16 So it doesn't go all the way to what they 17 intend to do. It stops at what they're able to 18 do is what, I believe, we're required to look 19 at. 20 And if you want to speak to that first, 21 I'll give you that. 22 MR. DALY: Well, just briefly. I mean, 23 we've paralled the certifications to those 24 required of institutional investors, which is 25 pretty much a form certification that's been 63 ITEM NO. 11 1 submitted in any number of circumstances in the 2 past. If it's simply a matter of language or 3 perhaps a matter that can be clarified by some 4 documentation that runs between the investor 5 owners and the licensee, I'd ask for the 6 opportunity to go ahead and explore that 7 possibility and sufficient time to come up with 8 something that would speak to that issue. 9 COMMISSIONER EPPS: Yeah. Because I 10 don't know that it is language alone that will 11 do it. I think that we need to -- you would 12 need establish to us their inability to 13 control. 14 MR. DALY: Yeah. And what I'm 15 suggesting is, perhaps there are some 16 contractual arrangements that I could work out 17 with LGC and its four investor companies that 18 would indeed restrict their ability to exercise 19 any measure of control. 20 COMMISSIONER EPPS: Okay. 21 CHAIR KASSEKERT: But I guess there's 22 a-- let me just interject here for a second. 23 I guess there's a second prong, and one 24 of the things I asked counsel when we were back 25 there is, you know, how we have handled similar 64 ITEM NO. 11 1 circumstances. And the one thing that counsel 2 pointed out to me, which was helpful, is the 3 fact that normally when we do these type of 4 waivers, it is becuase some other government 5 entity also regulates them. Whether be be the 6 SEC, whether it be the State Department of 7 Banking and Insurance. Is in any circumstances 8 here, is there any governmental entities that 9 regulate these entities? 10 MR. DALY: Not directly. At least not 11 all of them. I ask you to go beyond that. I 12 recognize that that's been the case in the 13 past. I ask you to go beyond those for all the 14 reasons I've gone on to reiterate. But there 15 are some connections with a few of the 16 entities, in particular the Intel investment 17 company is -- because it's simply a branch of 18 Intel Corp. itself is regulated by the SEC. A 19 Fortune 500 company subject to any number of 20 regulations by the SEC. But that's not true of 21 all of the entities. 22 CHAIR KASSEKERT: Uh-huh. 23 MR. DALY: So it doesn't cover their 24 ground. And what I'm truly asking for is a 25 broad-based approach that would result in -- in 65 ITEM NO. 11 1 companies like LGC and Ikon, which we didn't 2 particular talk about, but -- 3 CHAIR KASSEKERT: We'll get to. 4 MR. DALY: Is not too dissimilar. Of 5 those companies having the ability to 6 participate in this industry when, in my 7 judgment at least, they -- the requirement that 8 they -- the investment owners file is -- serves 9 no valid regulatory purpose but -- 10 CHAIR KASSEKERT: Again, I guess if 11 we're going to make that argument -- I'm not 12 sure what you're asking for, then. I think if 13 you are asking for us to look at this and waive 14 this on its face, I think that I'm going to say 15 no because I don't think it meets the 16 requirements under the regulation. I think 17 that if you're asking for an adjournment to 18 supplement your record, to perhaps point out if 19 there are governmental entities, then maybe I'm 20 more inclined to think about that. But I think 21 what you're asking us here today is to -- is to 22 do a call-forward system without sitting down 23 and passing the regulations, and going through 24 that process. And I just -- I don't know about 25 the other Commissioners, I don't feel 66 ITEM NO. 11 1 comfortable with that. 2 MR. DALY: Well, again, I can't give you 3 a more specific response with regard to other 4 governmental regulation. 5 CHAIR KASSEKERT: Uh-huh. 6 MR. DALY: For the most part, it is true 7 that there is little or none. 8 CHAIR KASSEKERT: Okay. 9 MR. DALY: But going back to 10 Commissioner Epps' point, I do believe it might 11 be worthwhile to explore contractual 12 arrangements between the investment company, 13 the investment owners, and the license 14 applicant that can demonstrate an absolute 15 inability to control those companies. I think 16 if we can speak to that issue, then regardless 17 of whether you waive them as institutional 18 investors, which necessarily implies that 19 there's some other regulatory body looking at 20 them, we're still left with the discretionary 21 waiver due to the lack of control that we 22 sufficiently demonstrated as to overwhelmed the 23 presumption of control that comes with the mere 24 in excess of five percent ownership. 25 So in that regard, I would ask for an 67 ITEM NO. 11 1 adjournment and an opportunity to explore that 2 issue. I can offer you no guarantees that I 3 can work that out, but I would certainly like 4 the opportunity to try. 5 MR. McDONOUGH: I think that would be 6 helpful. 7 COMMISSIONER EPPS: Let's ask counsel if 8 there are any detriment to granting the 9 adjournment? 10 MS. NAGENGAST: No. I guess not. 11 CHAIR KASSEKERT: Okay. Do we want to 12 set a time limit? Do you want to give us -- 13 MR. DALY: I'll tell you -- and I've 14 had-- staff is certainly aware of this. I've 15 had considerable difficulty contacting directly 16 with the investors. No problem with the 17 Applicant. 18 CHAIR KASSEKERT: Right. Which is a 19 little concerning as well, I will admit. 20 MR. DALY: Which is disconcerting, but 21 which underscores the point. Why do I want to 22 be bothered with this? They're saying we're an 23 investment company. We don't do gaming. We 24 don't do anything like that. That's their 25 attitude. 68 ITEM NO. 11 1 CHAIR KASSEKERT: Uh-huh. 2 MR. DALY: Eventually I get through to 3 them. But it takes a while. So with that in 4 mind, I'd ask for 45 days. I don't want to go 5 all the way to 60 because that's a big -- it 6 may take that. I'll ask for 45 in the first 7 instance, and if I have particular 8 difficulties, I'll certainly get back to you. 9 I think that's -- I don't know that that's 10 sufficient, but I think it would be. 11 CHAIR KASSEKERT: Okay. Let me -- I 12 guess what we have to do is table this. Would 13 that be a correct solution? For a period of 45 14 days. Okay. 15 VICE CHAIR FEDORKO: I'll make that 16 motion. 17 COMMISSIONER SOMMELING: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. All in favor? 20 (Ayes.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: The motion carries. 24 MR. DALY: Thank you very much. 25 And could we then short-cut the next 69 ITEM NO. 11 1 item and ask for the same -- I would ask with 2 the same relief with regard to Ikon? 3 CHAIR KASSEKERT: Absolutely. 4 MR. NANCE: Item No. 11. 5 CHAIR KASSEKERT: Item No. 11. Do you 6 want to read it into the record? 7 MR. NANCE: Yes. Petition of Ikon 8 Office Solutions, Inc., for waiver of 9 qualification of Steel Partners, II, Limited 10 Partner. 11 COMMISSIONER FRULIO: Motion to table. 12 VICE CHAIR FEDORKO: Second. 13 COMMISSIONER FRULIO: For 45 days. 14 CHAIR KASSEKERT: For 45 days. 15 The motion has been made and seconded. 16 All in favor? 17 (Ayes.) 18 CHAIR KASSEKERT: Opposed? 19 (No response.) 20 CHAIR KASSEKERT: The motion carries. 21 Thank you. 22 MR. DALY: Thank you very much. 23 MR. McDONOUGH: Thank you. 24 MR. DALY: And I guess, Commissioner 25 Epps, I won't take back my congratulations. 70 ITEM NO. 14 1 COMMISSIONER EPPS: Thank you. 2 It was all that time off. 3 CHAIR KASSEKERT: Gave him a lot of time 4 to think, you know. 5 MR. NANCE: Item No. 14, petition of 6 Harrah's Operating Company, Inc., Marina 7 Associates, Atlantic City Showboat, Inc., 8 Bally's Park Place, Inc., and Regency Boardwalk 9 Regency Corporation requesting permission for 10 Dennis Gallapher to perform the duties and 11 exercise the duties of Vice President, Chief 12 Regulatory and Compliance Officer, for Harrah's 13 Operating Company, Inc., pending plenary 14 qualification. 15 Miss Frank? 16 MS. FRANK: Good morning, Chair and 17 Commissioners. 18 Draft resolution of Mr. Gallagher's 19 preliminary qualification has been shared with 20 the parties. 21 Miss Hughes is here for Harrah's and Mr. 22 Fogarty for the Division. 23 CHAIR KASSEKERT: Thank you. 24 Good morning, Miss Hughes. 25 MS. HUGHES: Good morning, Chair. 71 ITEM NO. 14 1 Congratulations, Commissioner Epps. 2 I have read over the draft resolution. 3 Unfortunately, Mr. Gallagher is not here today. 4 I suspect with his new duties, he will be in 5 Atlantic City and will take the opportunity at 6 that time to introduce you to him. But again I 7 would ask -- I have no objection to the 8 resolution, and I would ask for your approval. 9 CHAIR KASSEKERT: Mr. Fogarty? 10 MR. FOGARTY: Hello. I'm pinch-hitting 11 for DAG Turi. 12 She sent you all a letter dated February 13 1, and she reviewed the draft resolution, and 14 we have no objection to its entry. 15 CHAIR KASSEKERT: Thank you. 16 Any questions? 17 COMMISSIONER FRULIO: Madame Chair, move 18 to adopt the draft resolution and find Dennis 19 Gallagher temporarily qualified and authorize 20 him to assume the duties and exercise the 21 powers of Vice President, Chief Regulatory 22 Compliance Officer for Harrah's Operating 23 Company, Inc., subject to the conditions 24 contained in NJAC 19:43-2.7 which, among other 25 things, require that he file a personal history 72 ITEM NO. 15 1 disclosure form NJ and NJ supplemental by 2 February 22nd, 2007. 3 VICE CHAIR FEDORKO: Second. 4 COMMISSIONER SOMMELING: Second. 5 CHAIR KASSEKERT: Motion has been made 6 and seconded. This is a roll call vote. 7 MR. NANCE: Commissioner Sommeling? 8 COMMISSIONER SOMMELING: Yes. 9 MR. NANCE: Commissioner Epps? 10 COMMISSIONER EPPS: Yes. 11 MR. NANCE: Commissioner Frulio? 12 COMMISSIONER FRULIO: Yes. 13 MR. NANCE: Vice Chair Fedorko? 14 VICE CHAIR FEDORKO: Yes. 15 MR. NANCE: Chair Kassekert? 16 CHAIR KASSEKERT: Yes. 17 MR. NANCE: The record will reflect that 18 the motion is unanimous. 19 MS. FRANK: Thank you. 20 CHAIR KASSEKERT: Thank you. 21 MR. NANCE: Item No. 15, petition of 22 Boardwalk Regency Corporation for an amendment 23 to its certificate of operation and casino 24 hotel alcoholic beverage license to permit a 25 temporary expansion of its casino floor. 73 ITEM NO. 15 1 Mr. Briliant? 2 MR. BRILIANT: Good morning, Madame 3 Chair and Commissioners. 4 Miss Hughes is here on behalf of the 5 Petitioner, and Mr. Ficchi is here on behalf of 6 the Division. 7 I did prepare and circulate a proposed 8 resolution, and all of the Commissioners have 9 copies of that, as well. 10 Thank you. 11 CHAIR KASSEKERT: Thank you. 12 Miss Hughes? 13 MS. HUHES: Thank you. 14 I have read over the draft resolution, 15 and I have no objections. 16 I also have with me today in case there 17 are any questions Paul Natella, who is the 18 casino manager for Caesar's. 19 CHAIR KASSEKERT: Thank you. 20 Mr. Ficchi? 21 MR. FICCHI: Good morning, Chair and 22 Commissioners. 23 The Division has reviewed the draft 24 resolution, and we have no objection to the 25 adoption of the draft resolution. 74 ITEM NO. 16 1 CHAIR KASSEKERT: Thank you. 2 Any questions? 3 COMMISSIONER SOMMELING: Madame Chair, 4 move to adopt the draft resolution and approve 5 the petition of Boardwalk Regency Corporation 6 for an amendment to its certificate of 7 operation and casino hotel alcoholic beverage 8 license and to permit the reconfiguration and 9 expansion of its gaming floor subject to the 10 conditions in the resolution. 11 VICE CHAIR FEDORKO: Second. 12 CHAIR KASSEKERT: The motion has been 13 made and seconded. All in favor? 14 (Ayes.) 15 CHAIR KASSEKERT: Opposed? 16 (No response.) 17 CHAIR KASSEKERT: The motion carries. 18 Thank you. 19 MR. FICCHI: Thank you. 20 MR. BRILIANT: Thank you. 21 MR. NANCE: Item No. 16, petition of RIH 22 Acquisitions, New Jersey, LLC, for amendment to 23 NJAC 19:45-1.34. 24 Mr. Kell? 25 MR. KELL: Good morning, Madame Chair, 75 ITEM NO. 16 1 Commissioners. 2 You have before you the rulemaking 3 petition for an amendment that would permit the 4 sale of chips from a slot booth. 5 Patricia Wild is here on behalf of the 6 petition and Deputy Atttorney Kimmel for the 7 Division. 8 CHAIR KASSEKERT: Ms. Wild? 9 MS. WILD: Good morning, again. Thank 10 you. Actually, close to afternoon. 11 I'll just state for the record that what 12 we are asking for is an amendment to NJAC 13 19:45-1.34a. What this amendment will permit 14 us to do is to basically sell chips from a slot 15 booth from an impressioned inventory in a slot 16 booth which does not have a man trap. Right 17 now the regulations permit the redemption of 18 chips at a slot booth, and what we're asking is 19 to be able to sell the chips from the slot 20 booth without the man trap from an impressed 21 inventory. 22 Specifically, although I know you don't 23 make regulations to fit particular situations, 24 I'll just let you know how this affects the 25 Atlantic City Hilton, my client there. We have 76 ITEM NO. 16 1 a slot booth on the second floor of our gaming 2 area. You may remember the gaming area there, 3 which is an Asian room. Asian gaming room, and 4 a poker room was opened about a year ago or so. 5 And there is what constitutes a slot booth up 6 there. And this is the area in particular that 7 we would like to be able to service those 8 particular gaming rooms with this ability to 9 sell chips from this particular location. 10 This will become important to us because 11 with the possible advent of having only a 12 limited area in which we can have smoking, one 13 area that the Hilton is looking at is this 14 particular area. So we anticipate that this 15 particular area will become a little bit more 16 active, although it is very active right now. 17 Our Asian gaming room up there is very active. 18 It has slots in that area. It also has table 19 games in that area. Of course, the poker 20 tables are there as well. 21 But I also want to stress we will have 22 proper control setup for impressment and proper 23 internal control setup for the reconciliation 24 of this impressment if this particular change 25 is permitted to the regulation. 77 ITEM NO. 16 1 So thank you. 2 If you have any questions, I'll be glad 3 to answer any of those. 4 CHAIR KASSEKERT: Any questions? 5 COMMISSIONER SOMMELING: No questions, 6 Madame Chair. 7 CHAIR KASSEKERT: I guess my concern, 8 before I hear from Mr. Kimmel, is that we would 9 really be basically doing this almost as a 10 single purpose regulation to accommodate you 11 and perhaps that's not the best way to proceed. 12 Maybe the idea is that we look at the issue as 13 a whole and, you know, rather than look for a 14 regulation that's really going to accommodate 15 one -- one licensee. 16 MS. WILD: Well, I would say that I 17 don't think we are the only licensee that would 18 take advantage of this, particularly with the 19 possibility that there may be other casinos as 20 well who will be structuring their floors to 21 meet the limitations of the smoking ban. 22 CHAIR KASSEKERT: Uh-huh. 23 MS. WILD: And would happen to have a 24 slot booth there. So this may actually benefit 25 more than one casino. 78 ITEM NO. 16 1 However, I do intellectually understand 2 your concern. 3 CHAIR KASSEKERT: Uh-huh. 4 MS. WILD: And if you're not inclined to 5 grant this relief today, I would just ask that 6 we quickly have staff consider the entire issue 7 of what is a slot booth. It's actually become 8 almost -- 9 CHAIR KASSEKERT: Really. 10 MS. WILD: -- an anachronism right now. 11 CHIAR KASSEKERT: Yeah. 12 MS. WILD: Or an anomaly rather. So I 13 would just ask that if we do that, if we could 14 move quickly on that. Because I do think there 15 will be other casinos in town that may way want 16 to take advantage of the possibility -- 17 CHAIR KASSEKERT: Uh-huh. 18 MS. WILD: Of having a limited area from 19 which we do not have a man trap from which we 20 can sell chips. 21 CHAIR KASSEKERT: Chips. Okay. 22 Mr. Kimmel? 23 MR. KIMMEL: From the Division 24 standpoint, we don't have any objection to this 25 particular funcionality, but we think this 79 ITEM NO. 16 1 peitition does point out the need to reexamine 2 these regulations in general. As it pointed 3 out, a slot booth is really an anomaly. We do 4 have to take a look at how much money we have 5 available in these facilities that do not have 6 man traps. So what we don't object to is 7 funcionality, per se. We really do think we 8 need to take another look at these regulations. 9 CHAIR KASSEKERT: Thank you. I 10 appreciate their comments. 11 Any other comments? 12 COMMISSIONER SOMMELING: No questions, 13 Madame Chair. 14 COMMISSIONER EPPS: Just a comment. I 15 think I agree that looking at the reg is the 16 way to go as opposed to a single item fix. 17 CHAIR KASSEKERT: Thank you. Okay. 18 Would you like to make a motion then? 19 COMMISSIONER EPPS: Well, I move we deny 20 the petition to an amendment to NJAC 21 19:45-1.34. 22 COMMISSIONER FRULIO: Second. 23 COMMISSIONER SOMMELING: Second. 24 CHAIR KASSEKERT: Motion is made and 25 seconded. 80 1 I will add to that we will ask for staff 2 to look at this as quickly as we can it 3 confident to make a man trap requirement with 4 the industry and the Division. 5 All in favor? 6 (Ayes.) 7 CHAIR KASSEKERT: Opposed? 8 (No response.) 9 CHAIR KASSEKERT: The motion carries. 10 MS. WILD: People don't usually thank 11 for a denial, but thank you. 12 CHAIR KASSEKERT: You're welcome. 13 MR. NANCE: In accordance with 14 Resolution No. 06-12-13-20, the next closed 15 session of the Commission shall be held on 16 Wednesday, February 21st, 2007, at 9:15 a.m. in 17 the Commission offices. 18 It is now time for the public 19 participation portion of the meeting. 20 CHAIR KASSEKERT: Before we do that, let 21 me recognize the world's biggest secret here in 22 Atlantic City, that we today took a vote and 23 agreed to vote Jim Fehon into the Director of 24 Compliance position, although I know that some 25 others spread the rumor out there, Mike Pollack 81 1 and everyone else has already publicized this. 2 So I'm not telling you anything new. But we 3 made it official today. Congratulations, Jim, 4 and we wish you every success as you enter this 5 endevor. And, hopefully, you won't change your 6 mind about a month from now. 7 (Applause.) 8 MR. FEHON: Thank you. 9 CHAIR KASSEKERT: Is there anyone from 10 the public who wishes to be heard? 11 Seeing no one, I'll declare this portion 12 of the meeting closed and entertain a motion to 13 adjourn. 14 COMMISSIONER SOMMELING: Motion to 15 adjourn. 16 VICE CHAIR FEDORKO: Second. 17 CHAIR KASSEKERT: Okay. I'm sorry. 18 COMMISSIONER SOMMELING: Motion to 19 adjourn. 20 COMMISSIONER EPPS: You'd like to make 21 an announcement? 22 MR. NANCE: I stated already. 23 CHAIR KASSEKERT: He said it already. 24 COMMISSIONER EPPS: I missed it. 25 CHAIR KASSEKERT: You haven't been here 82 1 for a while. 2 The motion has been made and seconded. 3 All in favor? 4 (Ayes.) 5 CHAIR KASSEKERT: Opposed? 6 (No response.) 7 CHAIR KASSEKERT: The motion carries. 8 (Meeting 07-02-07 was adjourned at 12:03 9 p.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 83 1 2 C E R T I F I C A T E 3 4 5 I, DARLENE SILLITOE, a Certified 6 Shorthand Reporter and Notary Public of the 7 State of New Jersey, certify that the foregoing 8 is a true and accurate transcript of the 9 proceedings. 10 11 12 I further certify that I am neither 13 attorney, of counsel for, nor related to or 14 employed by any of the parties to the action; 15 further that I am not a relative or employee of 16 any attorney or counsel employed in this case; 17 nor am I financially interested in the action. 18 19 20 DARLENE SILLITOE CSR 21 License No XI01023 22 23 Dated: February 12, 2007 24 My Commission Expires on July 10, 2009 25 ID No 2062871