1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 07-06-20 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, June 20, 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 10:36 a.m. to 1:44 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 LEONARD J. DIGIACOMO, ASSISTANT GENERAL COUNSEL MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 10 STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL DENIS CORBETT, SENIOR COUNSEL 11 TERESA M. NAGENGAST, SENIOR COUNSEL E. DENNIS KELL, ASSISTANT GENERAL COUNSEL 12 BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 13 DIVISION OF FINANCIAL EVALUATION: 14 CHRISTOPHER GLAUM, MANAGER 15 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 16 JAMES ARMSTRONG, DEPUTY ATTORNEY GENERAL TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL 17 JAMES FOGARTY, DEPUTY ATTORNEY GENERAL FREDERICK J. McDONOUGH, DEPUTY ATTORNEY GENERAL 18 DOROTHY TURI, DEPUTY ATTORNEY GENERAL WENDY WAY, 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. 3 BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR KAREN WOSNACK, ESQ. 3 FOR: HARRAH'S OPERATING COMPANY, INC. 4 ITEM NO. 5 BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR WENDY WAY, DEPUTY ATTORNEY GENERAL 5 MICHAEL D. CARROLL, ESQ. FOR: JACK J. D'INNOCENZIO 6 ITEM NO. 8 DENIS CORBETT, SENIOR COUNSEL 7 TIMOTHY FICCHI, DEPUTY ATTORNEY GENERAL COOPER LEVENSON 8 BY: LLOYD D. LEVENSON, ESQ. FOR: ADAMAR OF NEW JERSEY, INC. 9 ITEM NO. 9 DENIS CORBETT, SENIOR COUNSEL 10 TIMOTHY FICCHI, DEPUTY ATTORNEY GENERAL TAMA HUGHES, ESQ. 11 FOR: ADAMAR OF NEW JERSEY, INC. 12 ITEM NO. 11 TERESA M. NAGENGAST, SENIOR COUNSEL FREDERICK J. McDONOUGH, 13 DEPUTY ATTORNEY GENERAL COOPER LEVENSON 14 LLOYD D. LEVENSON, ESQ. FOR: AON LIMITED 15 ITEM NO. 12 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 16 DOROTHY TURI, DEPUTY ATTORNEY GENERAL PAUL O'GARA, ESQ. 17 FOR: HARRAH'S ENTERTAINMENT, INC. AND HARRAH'S OPERATING COMPANY, INC. 18 ITEM NO. 13 LEONARD J. DiGIACOMO, 19 ASSISTANT GENERAL COUNSEL DOROTHY TURI, DEPUTY ATTORNEY GENERAL 20 LYNNE KAUFMAN, ESQ. FOR: TROPICANA CASINOS AND RESORTS, INC. 21 ADAMAR OF NEW JERSEY, INC. 22 ITEM NO. 14 LEONARD J. DiGIACOMO, ASSISTANT GENERAL COUNSEL 23 DOROTHY TURI, DEPUTY ATTORNEY GENERAL GUY S. MICHAEL, ESQ. 24 FOR: ADAMAR OF NEW JERSEY, INC. 25 4 1 A P P E A R A N C E S : (Continued) 2 ITEM NO. 17 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL JAMES FOGARTY, DEPUTY ATTORNEY GENERAL 3 ROBERT PICKUS, ESQ. JOSEPH FUSCO, ESQ. 4 FOR: TRUMP PLAZA ASSOCIATES, LLC, TRUMP MARINA ASSOCIATES, LLC, 5 AND TRUMP TAJ MAHAL ASSOCIATES, LLC AND MORGAN STANLEY & CO. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5 1 AGENDA PUBLIC MEETING NO. 07-06-20 2 JUNE 20, 2007, 10:36 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of 10 10 4 June 6, 2007 2 Applications for employee and casino 5 service industry licenses: 17 applications remanded for hearings 11 11 6 15 applications granted 12 13 Renewal application of Vincent Lombardo 11 11 7 Casino service industry license application: Ted Lischin, LLC 12 12 8 Essenell Corporation 12 12 E S Associates 12 12 9 Casino key employee licenses and for qualification: Ronald S. Barber, Senior Vice President 13 14 10 and General Manager for Marina Associates Teresa M. Davila, Vice President of Hotel 13 14 11 Operations for Trump Marina Associates, LLC Alexis L. Figueras, Vice President of 13 14 12 Finance for Bally's Park Place, Inc. Travis G. Lamb, Vice President of Finance 13 14 13 for Marina Associates, Atlantic City Showboat, Inc., Bally's Park Place, Inc., and Boardwalk 14 Regency Corp. Michael S. Lyons, Security Director for 13 14 15 Adamar of New Jersey, Inc. Michael J. Walsh, Vice President of 13 14 16 Development Atlantic City for Marina Associates Daniel G. Wright, Security Director for 13 14 17 Bally's Park Place, Inc. 3 Petition of Harrah's Operating Company, 14 16 18 Inc., Marina Associates (d/b/a Harrah's Casino Hotel Atlantic City), Atlantic City 19 Showboat, Inc., Bally's Park Place, Inc. (d/b/a Bally's Atlantic City) and Boardwalk 20 Regency Corp., (d/b/a Caesars Atlantic City) for the issuance of a temporary casino key 21 employee license to Samuel Dillard pursuant to NJSA 5:12-89(e) and to permit him 22 pursuant to NJAC 19;43-2.6 to assume the duties and exercise the powers of Vice 23 President IT Operations for Atlantic City Operations without first having been found 24 qualified (PRN 1450712) 25 6 1 CONTINUED AGENDA PUBLIC MEETING NO. 07-06-20 2 JUNE 20, 2007, 10:36 a.m. ITEM PAGE VOTE 3 4 Stipulations of settlement and consent 4 Agreements: a) Robert S. White (05-0374-EA) 16 18 5 b) Taikim R. Waters (06-0461-ER) 16 18 c) Garry S. Dieudonne (07-0279-EA) 16 18 6 d) Antoine F. Holt (07-0275-EA) 16 18 e) Steven A. Wood (07-0184-EA) 16 18 7 f) Michael D. Hitchens 16 18 (02-0529-ER, 04-0208-ER) 8 g) Juliet M. Silva (a/k/a Juliet M. 16 18 Balonso) (06-0582-EA) 9 h) Shirley J. Price (06-0567-ER) 16 18 5 Petition of Jack J. D'Innocenzio for 57 60 10 relief from Commission Order No. 05-04-13-04 6 Petitions for early reapplication: 11 a) Bano Khalid (07-0225-RA) 18 19 b) Tracy T. Nunnally (07-0208-RA) 20 21 12 7 Applications for suspension: a) Thomas Froelich (07-0295-RC) 21 27 13 Sworn 23 b) Andrew McGarrigel (07-0294-RC) 27 32 14 Sworn 29 c) Melanie L. Testa (07-0301-RC) 33 34 15 8 Stipulation of settlement of State v. 34 35 Adamar of New Jersey, Inc., (d/b/a 16 Tropicana Casino and Resort) (06-0539-VC) 9 Stipulation of settlement of State v. 36 37 17 Adamar of New Jersey, Inc., (d/b/a Tropicana Casino and Resort) (07-0018-VC, 06-0537-VC) 18 10 Stipulation of settlement of State v. 37 39 Resorts International Hotel, Inc., (d/b/a 19 Resorts Atlantic City) (06-0597-VC) 11 Petition of Aon Limited for exemption 39 41 20 from licensure (PRN 0790705) 12 Petition of Harrah's Entertainment, Inc., 41 44 21 and Harrah's Operating Company, Inc., to consolidate proceedings with respect to 22 renewal of casino and CHAB licenses (PRN 1210701) 13 Petition of Tropicana Casinos and 44 48 23 Resorts, Inc., and Adamar of New Jersey, Inc., for declaratory relief with respect 24 to NJAC 19:45-1.11c(2) and other related Audit Committee Issues (PRN 1520709) 25 7 1 CONTINUED AGENDA PUBLIC MEETING NO. 07-06-20 2 JUNE 20, 2007, 10:36 a.m. ITEM PAGE VOTE 3 14 Petitions of Adamar of New Jersey, Inc., 4 for permission for the following two individuals to perform qualifying duties 5 for Tropicana and Resorts, Inc., before their plenary qualification, and other relief: 6 a) Jeffrey A. Silver (PRN 07090702) 48 50 b) Karin J. Brugler (PRN 1280708) 51 52 7 15 Proposed adoption of amendments to NJAC 53 54 19:40-1.2, 19:45-1.36, 1.37, and 1.40 and 8 19:46-1.26 (Jackpot-to-Credit-Meter Switch) 16 Proposed publication and temporary 54 55 9 adoption of amendments to NJAC 19:45-1.1, 19:45-1.8 and 19:45.1.54 (suspicious, 10 unscanned, and unverified gaming vouchers) 17 Petition of Trump Plaza Associates, LLC, 61 169 11 Trump Marina Associates, LLC, and Trump Taj Mahal Associates, LLC, for renewal of 12 their casino licenses and casino hotel alcoholic beverage licenses and related 13 matters (PRN 0510702); Amended petition of Trump Plaza Associates, LLC, Trump Marina 14 Associates, LLC, and Trump Taj Mahal Associates, LLC, for approval of material debt transactions 15 (PRN 0670703); and petition of Morgan Stanley & Co., requesting a waiver of qualification 16 for an Institutional investor pursuant to NJSA 5:12-85(f) (PRN 1290709) 17 18 Reorganization and approval of the New 55 56 Jersey Casino Control Commission Audit Committee 18 19 20 21 22 23 24 25 8 1 E X H I B I T S : 2 ITEM NO. 2 DESCRIPTION ID EVD 3 EL-1 Remand for hearings 17 license X 4 applications EL-2 Grant 15 licenses X 5 6 ITEM NO. 17 7 C-1 Entities and qualifier report for X Trump Plaza Associates, LLC, Trump Marina 8 Associates, LLC, and Trump Taj Mahal Associates, LLC, dated May 24, 2007 9 C-2 CHAB report for Trump Plaza Associates X LLC, Trump Marina Associates, LLC, and 10 Trump Taj Mahal Associates, LLC, dated June 20th, 2007. 11 C-3 Draft resolution regarding Trump Marina X Associates, LP 12 C-4 Draft resolution regarding Trump Plaza X Associates. 13 C-5 Draft resolution regarding Trump Taj X Mahal Associates 14 C-6 Draft conditions, 5a, 5b, 5c, regarding X the renewal resolutions 15 16 D-1 Report dated May 18th, 2007, on the X Petition of Trump Plaza Associates, LLC, 17 Trump Marina Associates, LLC, and Trump Taj Mahal Associates, LLC, for renewal of 18 their casino and CHAB licenses and waiver of certain security holders and related relief 19 D-2 Report dated May 23rd, 2007, on the X Petition of Trump Plaza Associates, LLC, 20 Trump Marina Associates, LLC, and Trump Taj Mahal, LLC, for renewal of their CHAB 21 licenses P-1 Trump Plaza Associates LLC, EEBOP dated X 22 June 1st, 2007 P-2 Trump Marina EEBOP dated June 1st, 2007 X 23 P-3 Trump Taj Mahal Associates, LLC, EEBOP X Dated June 1st, 2007 24 25 (Exhibits retained by Commission.) 9 1 (Public Meeting 07-06-20 was commenced 2 at 10:36 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 10 ITEM NO. 1 - 2 1 Allegiance. 2 (The flag salute was recited.) 3 CHAIR KASSEKERT: Good morning. 4 MR. NANCE: Good morning. 5 The matters discussed in closed session 6 were: Employee enterprise license matters. 7 The Commission approved the June 6th, 8 2007, closed session minutes. 9 Litigation update regarding Gloria Ford 10 versus State of New Jersey, Casino Control 11 Commission, at all. 12 Item No. 1, ratification of the minutes 13 of June 6, 2007, public meeting. 14 COMMISSIONER SOMMELING: Move to 15 approve. 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: Motion carries. 23 MR. NANCE: Item No. 2, applications for 24 employee and casino service industry licenses. 25 This agenda item will be entered as Exhibit 11 ITEM NO. 2 1 List 1 and 2. 2 Exhibit List 1 consists of 17 3 applications for initial and/or renewal of 4 casino key and/or casino employee licenses. 5 The Division has objected to licensure. 6 COMMISSIONER FRULIO: Motion to remand 7 for hearings. 8 VICE CHAIR FEDORKO: 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: Motion carries. 15 MR. NANCE: For consideration is the 16 renewal application of Vincent Lombardo for a 17 casino employee license. 18 The Division took no position to this 19 application. 20 COMMISSIONER FRULIO: Motion to remand 21 for a hearing. 22 VICE CHAIR FEDORKO: Second. 23 CHAIR KASSEKERT: The motion has been 24 made and seconded. All in favor? 25 (Ayes.) 12 ITEM NO. 2 1 CHAIR KASSEKERT: Opposed? 2 (No response.) 3 CHAIR KASSEKERT: Motion carries. 4 MR. NANCE: For consideration is the 5 casino service industry license application of 6 Ted Lischin, LLC, Essenell Corporation, and ES 7 Associates. 8 The Division has objected to these 9 applications. 10 COMMISSIONER FRULIO: Motion to remand 11 for hearings. 12 VICE CHAIR FEDORKO: Second. 13 COMMISSIONER EPPS: Second. 14 CHAIR KASSEKERT: The motion has been 15 made and seconded. All in favor? 16 (Ayes.) 17 CHAIR KASSEKERT: Opposed? 18 (No response.) 19 CHAIR KASSEKERT: Motion carries. 20 MR. NANCE: Exhibit List 2 consists of 21 15 applications for initial and/or renewal of 22 casino key and casino employee licenses. 23 Staff and the Divsion have recommended 24 that these licenses be granted. 25 COMMISSIONER FRULIO: Motion to grant 13 ITEM NO. 2 1 applications. 2 VICE CHAIR FEDORKO: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 MR. NANCE: For consideration -- for the 10 consideration are the following applications 11 for initial and/or renewal of casino key 12 employee licenses and for qualification: 13 Ronald S. Barber, Senior Vice President and 14 General Manager for Marina Associates; Teresa 15 M. Davila, Vice President of Hotel Operations 16 for Trump Marina Associates, LLC; Alexis L. 17 Figueras, Vice President of Finance for Bally's 18 Park Place, Inc.; Travis G. Lamb, Vice 19 President of the Finance-Eastern Division for 20 Marina Associates, Atlantic City Showboat, 21 Inc., Bally's Park Place, Inc., and Boardwalk 22 Regency Corp.; Michael S. Lyons, Security 23 Director for Adamar of New Jersey, Inc.; 24 Michael J. Walsh, Vice President of Development 25 Atlantic City for Marina Associates, Inc.; and 14 ITEM NO. 3 1 Daniel G. Wright, Security Director for Bally's 2 Park Place, Inc. 3 Staff and the Division have recommended 4 that these applications be granted. 5 COMMISSIONER FRULIO: Motion to grant 6 initial and key license and for qualification. 7 VICE CHAIR FEDORKO: Second. 8 CHAIR KASSEKERT: Motion has been made 9 and seconded. This 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 Item No. 3, Petition No. 1450712 of 23 Harrah's Operating Company, Inc., Marina 24 Associates, Atlantic City Showboat, Inc., 25 Bally's Park Place, Inc., and Boardwalk Regency 15 ITEM NO. 3 1 Corp. is requesting the issuance of a temporary 2 casino key employee license for Samuel Dillard, 3 pursuant to NJSA 5:12-89(e) and to permit him 4 pursuant to NJAC 19:43-2.6 to assume the duties 5 and exercise the powers of the Vice President 6 of IT Operations for Atlantic City operations, 7 without first having been found qualified. 8 CHAIR KASSEKERT: Miss Woznack, good 9 morning. 10 MS. WOZNACK: Good morning, I have 11 nothing to add to the petition, other than to 12 let you know I have Mr. Dillard with me if you 13 have any questions and ask that you grant the 14 relief requested. 15 Thank you. 16 CHAIR KASSEKERT: Thank you. 17 Any questions? 18 COMMISSIONER SOMMELING: Move to 19 approve, Madame Chair. 20 VICE CHAIR FEDORKO: Second. 21 CHAIR KASSEKERT: We're going to be 22 moving to grant the temporary key license and 23 qualification. 24 Motion is made and seconded. This is a 25 roll call vote. 16 ITEM NO. 4 1 MR. NANCE: Commissioner Sommeling? 2 COMMISSIONER SOMMELING: Yes. 3 MR. NANCE: Commissioner Epps? 4 COMMISSIONER EPPS: Yes. 5 MR. NANCE: Commissioner Frulio? 6 COMMISSIONER FRULIO: Yes. 7 MR. NANCE: Vice Chair Fedorko? 8 VICE CHAIR FEDORKO: Yes. 9 MR. NANCE: Chair Kassekert? 10 CHAIR KASSEKERT: Yes. 11 MR. NANCE: The record will reflect that 12 the motion is unanimous. 13 MS. WOSNACK: Thank you very much. 14 CHAIR KASSEKERT: Thank you. 15 MR. NANCE: Item No. 4, stipulation of 16 settlement and consent agreements. When I call 17 your name, please come forward, stand behind 18 this middle table, spreading across the room so 19 that you may be seen. 20 Robert S. White, Taikim Waters, Garry S. 21 Dieudonne, Antoine Holt, Steven Wood, Michael 22 Hitchens, Juliet Silva, and Shirley Price. 23 Mr. Ingis? 24 MR. INGIS: Good morning, Madame Chair, 25 Commissioners. 17 ITEM NO. 4 1 The staff has nothing to add at this 2 time. 3 CHAIR KASSEKERT: Okay. Good morning. 4 I'm going to ask that you siege state 5 your name for the record, starting with you. 6 MS. SILVA: Juliet Silva. 7 MR. WOOD: Steven Wood. 8 MR. WHITE: Robert White. 9 MR. WATERS: Taikim Waters. 10 MR. HOLT: Antoine Holt. 11 MR. DIEUDONNE: Garry Dieudonne. 12 CHAIR KASSEKERT: Thank you. 13 In a moment we're going to vote on the 14 stipulations which you've agreed to with the 15 Division of Gaming Enforcement. I'm going to 16 ask at this point if any of you wish to be 17 heard on your matter. You do not have to say 18 anything if you don't want to. 19 Does anyone wish to be heard? 20 Mr. Armstrong? 21 MR. ARMSTRONG: I ask, Chair, that these 22 stipulations of settlement be approved. 23 CHAIR KASSEKERT: Thank you. 24 Any questions? 25 COMMISSIONER SOMMELING: Move to approve 18 ITEM NO. 6 1 the stipulations, Madame Chair. 2 VICE CHAIR FEDORKO: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All those in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 Thank you very much for coming. Good 10 luck. 11 MR. NANCE: For your consideration, Item 12 No. 6, petition for early reapplication for 13 Bano Khalid and Tracy Nunnally. 14 Miss Frigen? 15 MS. FRIGEN: Good morning, Madame Chair, 16 Commissioners. 17 For your consideration is Miss Khalid's 18 petition seeking permission to obtain 19 employment early as a noncredential hotel 20 employee. 21 By letter dated May 8th, the Division 22 has interposed no objection to this petition. 23 Miss Khalid is present as well as Jim 24 Armstrong here for the Division of Gaming 25 Enforcement. 19 ITEM NO. 6 1 CHAIR KASSEKERT: Miss Khalid, is there 2 anything you'd like to tell us this morning? 3 MS. KHALID: No. 4 CHAIR KASSEKERT: No? 5 Mr. Armstrong? 6 MR. ARMSTRONG: Chair, Commissioners, 7 you have our letter of May 8th. We have no 8 objection to the limited relief requested under 9 this petition at this time. 10 CHAIR KASSEKERT: Thank you. 11 Any questions? 12 COMMISSIONER SOMMELING: No questions, 13 Madame Chair. 14 VICE CHAIR FEDORKO: Motion to grant 15 Miss Khalid permission to reapply early as a 16 noncredential employee. 17 COMMISSIONER FRULIO: 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: Motion carries. 24 Thank you for coming. Good luck. 25 MS. FRIGEN: Okay. Miss Nunnally. You 20 ITEM NO. 6 1 can have a seat. 2 We also have here Tracy Nunnally, who is 3 seeking permission to reapply early for a 4 registration and for a noncredential hotel 5 employment. 6 Again, the Division of Gaming 7 Enforcement has interposed no objection to this 8 petition. 9 CHAIR KASSEKERT: Thank you. 10 Ms. Nunnally, is there anything you'd 11 like to say to us this morning? 12 MS. NUNNALLY: No, there isn't. 13 CHAIR KASSEKERT: Okay. Mr. Armstrong? 14 MR. ARMSTRONG: Again, Chair, you have 15 our letter of May 8th with reagrd to Miss 16 Nunnally. We have reviewed the petition, and 17 we have no objections to it at this time. 18 CHAIR KASSEKERT: Thank you. 19 Any questions? 20 COMMISSIONER SOMMELING: No questions, 21 Madame Chair. 22 COMMISSIONER EPPS: Chair, I move that 23 we grant Miss Nunnally's permission to reapply 24 early for a casino service employee 25 registration and/or to obtain employment early 21 ITEM NO. 7 1 as a noncredential hotel employee. 2 VICE CHAIR FEDORKO: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 Thank you for coming. Good luck. 10 MS. NUNNALLY: Thank you. 11 CHAIR KASSEKERT: You're welcome. 12 MR. NANCE: Item No. 7, application for 13 suspension of Thomas Froehlich, Andrew 14 McGarrigel, and Melanie Testa. 15 MS. FRIGEN: Okay. I'm aware that Mr. 16 Froehlich, 7a is present, as well as Andrew 17 McGarrigel, 7b. Let me ask whether Melanie 18 Testa is here or represented? Apparently she 19 is not. 20 I would ask Mr. Froehlich if you could 21 have a seat at the center table, please. 22 In this case the Division of Gaming 23 Enforcement is seeking suspension of Mr. 24 Frohlich's casino service employee 25 registration. 22 ITEM NO. 7 1 I would ask that the Division to go 2 forward and to provide the basis for which it's 3 seeking suspension. 4 CHAIR KASSEKERT: Thank you. 5 Mr. Armstrong? 6 MR. ARMSTRONG: Chair, Commissioners. 7 On May 25th we filed a complaint seeking 8 revocation of Mr. Froehlich's registration. He 9 was arrested by the state police on March 17th. 10 He was charged with possession of untaxed 11 cigarettes. The accusation was he was selling 12 untaxed cigarettes to patrons of Bally's in 13 Atlantic City. 14 On March 20th he pled guilty in 15 municipal court. The City assessed a fine of 16 $158. It's our position that this conduct and 17 now conviction is in violation of section 18 86c(2) of the Casino Control Act, and we ask 19 that you suspend his credential while his 20 revocation is pending before you. 21 CHAIR KASSEKERT: Okay. Thank you. 22 Mr. Froehlich? Is there anything you'd 23 like to say? 24 You need to be sworn in if you do. 25 MR. FROEHLICH: I guess. 23 ITEM NO. 7 1 CHAIR KASSEKERT: You guess. Would you 2 stand and be sworn in. 3 4 THOMAS FROEHLICH, was duly sworn to 5 testify in this matter. 6 7 MR. FROEHLICH: My name is Thomas 8 Froehlich. 9 MR. NANCE: Please state your name for 10 the record. 11 MR. FROEHLICH: Thomas Froelich. 12 MR. NANCE: Thank you. You may be 13 seated. 14 CHAIR KASSEKERT: What would you like to 15 tell us, Mr. Froehlich? 16 MR. FROEHLICH: The charge against me 17 was cigarettes. People ask me to give -- 18 people ask me to buy cigarettes for 'em as a 19 favor, and they gave me money, and I bought 20 them like that. Now, this -- the guy 21 approached me from the state police, I guess a 22 detective, and I sold one pack of cigarettes to 23 him for $4. 24 CHAIR KASSEKERT: Did you understand 25 that that's a crime to do that? 24 ITEM NO. 7 1 MR. FROEHLICH: I understand. I mean, 2 yeah. I mean, I under -- to take money for 3 them, I understand. I mean, I probably 4 shouldn't have done it. I mean, I've never 5 been in trouble before, and I'm sorry that I 6 made the -- I mean, that things happened that 7 way. 8 CHAIR KASSEKERT: I understand that. 9 But let me just see if the Commissioners 10 have any questions? 11 Mr. Fedorko? 12 VICE CHAIR FEDORKO: Well, not only is 13 it a crime to sell them, but it's a crime to 14 bring them back into the state. Did you know 15 that? 16 MR. FROEHLICH: Well, I understand that. 17 How many -- how many cartons can you 18 legally bring into the state? Is there any 19 amount? Because I know that other people -- 20 other people bring cartons in, I mean. And 21 then, too, on the internet, they buy cigarettes 22 through the internet and stuff like that. 23 Now, is $50 a -- is $50 a standard fine 24 for the untaxed cigarettes or not? Tell me. 25 VICE CHAIR FEDORKO: It's up on the 25 ITEM NO. 7 1 court. 2 MR. FROEHLICH: It's up to the court. 3 Because I don't believe the -- the cigarettes 4 got confiscated off me. And, of course, I've 5 lost other people's money by them being taken 6 from me, you know. 7 VICE CHAIR FEDORKO: How many cartons 8 did you buy? 9 MR. FROEHLICH: Huh? 10 VICE CHAIR FEDORKO: How many cartons 11 did you buy? 12 MR. FROEHLICH: Well, they -- what was 13 taken from me was 54 cartons. 14 VICE CHAIR FEDORKO: Yeah. But how many 15 cartons did you buy? 16 MR. FROEHLICH: Huh? 17 VICE CHAIR FEDORKO: How many cartons 18 did you buy? 19 MR. FROEHLICH: Did I actually buy? 20 Actually, probably a few more than that. I 21 mean, very few more. 22 VICE CHAIR FEDORKO: Okay. 23 CHAIR KASSEKERT: You know, we're going 24 to have to make a motion, but you have to 25 understand that this has bearing on your 26 ITEM NO. 7 1 registration and your license as a casino 2 employee. Because we have to look at those 3 kinds of things in terms of whether or not 4 you're fit to do your job. So this is tied 5 for -- 6 MR. FROEHLICH: Yeah. I mean, the job I 7 have is not -- is not a money job. I mean, 8 it's just a regular EVS job. I mean -- 9 CHAIR KASSEKERT: Okay. 10 MR. FROEHLICH: And I've been employed 11 for up here for, like, going on -- I think 19-- 12 since '89, I've been employed. 13 CHAIR KASSEKERT: Okay. 14 MR. FROEHLICH: I used to work in a coal 15 mine. 16 CHAIR KASSEKERT: Well, depending on 17 what we do, you will have an opportunity for a 18 hearing, and I would encourage you to take part 19 in that process. 20 Let me ask if there are any other 21 questions? 22 COMMISSIONER SOMMELING: No questions, 23 Madame Chair. 24 CHAIR KASSEKERT: Okay. How do you feel 25 on this matter? 27 ITEM NO. 7 1 VICE CHAIR FEDORKO: Motion to suspend 2 credentials. 3 COMMISSIONER FRULIO: Second. 4 CHAIR KASSEKERT: The motion has been 5 made and seconded. All in favor? 6 (Ayes.) 7 CHAIR KASSEKERT: Opposed? 8 (No response.) 9 CHAIR KASSEKERT: Motion carries. 10 Miss Frigen will explain everything to 11 you, what happens next, but I encourage you to 12 take part in the hearing process. Okay? 13 MR. FROEHLICH: Okay. 14 MS. FRIGEN: Next we have would be 15 Andrew McGarrigel. Mr. McGarrigel? 16 Similar to the last agenda item -- 17 You can have a seat, Mr. McGarrigel. 18 -- the Division has filed an application 19 seeking suspension, and I would ask the 20 Division first to go forward and provide the 21 basis for that. 22 CHAIR KASSEKERT: Mr. Armstrong? 23 MR. ARMSTRONG: Chair, Commissioners, on 24 May 25th we filed a complaint seeking 25 revocation of Mr. McGarrigel's casino employee 28 ITEM NO. 7 1 license. He was arrested on September 18th of 2 last year charged with tempted theft. And, 3 allegedly, he tried to steal a $100 gaming chip 4 while playing craps at Resorts. The third 5 patron intervened and stopped him. We filed 6 the complaint to see what was going to happen 7 in regard to the particular circumstances of 8 this arrest. 9 On May 17th, he was found guilty of the 10 amended charge of disorder conduct in municipal 11 court. But of more interest than that, the 12 fine imposed of $58, the municipal court judge 13 also barred him from entering Resorts or 14 Atlantic City Hilton. 15 It's our position that his conduct and 16 now his conviction for disorderly conduct in 17 violation of section 86c(2) that his continued 18 licensure would be inimical, and it's a serious 19 matter. At this time we would ask that you 20 suspend his credential while this complaint is 21 pending. 22 CHAIR KASSEKERT: Thank you. 23 Mr. McGarrigel, is there anything you'd 24 like to say. 25 MR. McGARRIGEL: Yes. 29 ITEM NO. 7 1 CHAIR KASSEKERT: You need to be sworn 2 in. 3 4 ANDREW McGARRIGEL, was duly sworn to 5 testify in this matter. 6 7 MR. NANCE: Please state your name for 8 the record. 9 MR. McGARRIGEL: Andrew McGarrigel. 10 MR. NANCE: Thank you. 11 CHAIR KASSEKERT: You may proceed. 12 MR. McGARRIGEL: Good morning. First, 13 I'd just like to say that I'm a lifelong 14 resident of Atlantic City. I've been working 15 in the casino industry since 1986. And nothing 16 like this has ever happened to me. I have no-- 17 nothing on my record whatsoever like this. 18 I'm nervous, so excuse me. 19 CHAIR KASSEKERT: Sure. 20 MR. McGARRIGEL: I'm trying to remember 21 where I want to start. I'll start with as far 22 as -- with the court hearing itself. When I 23 went to court the first time with my lawyer, 24 there is a witness there, and they said they 25 had a tape. My lawyer looked at the tape. I 30 ITEM NO. 7 1 never saw any tape. And the witness could not 2 identify me, and my lawyer said the tape shows 3 nothing. So she went for them to drop the 4 charges. The prosecution did not want to drop 5 the charges. So she made a phone call to the 6 lawyer from Resorts so that he was going to go 7 back and ask them to see about dropping the 8 charges and postpone until May. 9 They came and now two security guards 10 showed up from that night. And they -- they -- 11 they, you know, of course, remembered 12 everything. And they had -- they had given the 13 lawyer a letter saying that they did not want 14 to drop the charges. That I did, in fact, 15 threaten the security of the casino by stoppage 16 of the game and by security having to be 17 called. 18 So with -- after talking over with my 19 lawyer, I decided, well, that is true. That -- 20 that did happen, that the stoppage of the game 21 happened and security was called. So I pled 22 guilty to a disorder persons. Okay? There was 23 no -- there was no attempt of theft. There was 24 nothing -- nothing of the sort. 25 Since this I have lost two other jobs. 31 ITEM NO. 7 1 I was a security officer at the Tropicana, and 2 I was a security officer at the Boardwalk Hall 3 with the strike force where we worked the 4 concerts and shows that they have. I am now 5 presently working in a part-time position -- 6 on-call position as an usher at the Borgata 7 Casino. 8 And as you have to decide what to do 9 with my future, I -- I implore you, I beg you 10 to please allow me just to keep working as the 11 usher at the Borgata Casino. I understand 12 there's another hearing that I'll attend. And 13 until -- until everything -- maybe we can be 14 resolved with everything, I just beg of you to 15 please just let me keep working as an usher at 16 the Borgata. 17 CHAIR KASSEKERT: Okay. 18 MR. McGARRIGEL: And it's my -- I 19 also -- I brought the papers that I need, just 20 to let you know that the fine is paid and you 21 all, you know, that it was reduced. 22 And I think that that's all I have to 23 say. 24 CHAIR KASSEKERT: Okay. Let me ask if 25 there are any questions from the Commissioners. 32 ITEM NO. 7 1 Commissioner Fedorko? Question? 2 VICE CHAIR FEDORKO: I'm not really 3 clear. What did you plead guilty to? 4 MR. McGARRIGEL: To disorder persons. 5 VICE CHAIR FEDORKO: But doing what, 6 MR. McGARRIGEL: Because they said the 7 security of the casino was threatened by the 8 stoppage of the game, by security having to be 9 called. 10 VICE CHAIR FEDORKO: All right. 11 CHAIR KASSEKERT: Any other questions? 12 COMMISSIONER SOMMELING: No questions, 13 Madame Chair. 14 CHAIR KASSEKERT: Okay. Before we 15 entertain a motion, obviously, you know, a 16 disorder person's offense, when it happens in a 17 casino, is something we have to take into 18 consideration because it did occur in a casino. 19 Let me ask if there's a motion. 20 COMMISSIONER SOMMELING: Motion to 21 suspend the credentials. 22 VICE CHAIR FEDORKO: Second. 23 CHAIR KASSEKERT: The motion has been 24 made and seconded. All in favor? 25 (Ayes.) 33 ITEM NO. 7 1 CHAIR KASSEKERT: Opposed? 2 I'm going to abstain on this issue. 3 Miss Frigen will explain to you what 4 happens next. As we explained to the other 5 individual, there will be a hearing where we'll 6 have an opportunity to look at all this 7 evidence. But because of this occurrence in a 8 casino, that raises a heightened level of 9 concern for us, so I think you could understand 10 that. 11 MR. McGARRIGEL: Okay. Thank you. 12 CHAIR KASSEKERT: All right? 13 MS. FRIGEN: And just for the record, I 14 would note for the Commission that we've 15 arranged for conferences to be held next week 16 so we can expedite it. 17 CHAIR KASSEKERT: Very good. So we can 18 do it as quickly as possible. Thank you. 19 MS. FRIGEN: Yeah. 20 MR. McGARRIGEL: Thank you. 21 CHAIR KASSEKERT: Yup. 22 MS. FRIGEN: Finally, we have Melanie 23 Testa who, I will ask again whether she's 24 present or represented here today? 25 Apparently she is not. Apparently the 34 ITEM NO. 8 1 matter is not contested for this application. 2 CHAIR KASSEKERT: Mr. Armstrong? 3 MR. ARMSTRONG: We'll rely on our 4 pleadings, Madame Chair, and ask that the 5 suspensions be grant. 6 CHAIR KASSEKERT: Okay. Any questions? 7 VICE CHAIR FEDORKO: Motion to suspend. 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: Motion carries. 15 Thank you. 16 MR. NANCE: Item No. 8, stipulation of 17 settlement of State versus Adamar of New 18 Jersey, Inc. 19 Mr. Corbett? 20 MR. CORBETT: Good morning, Chair, 21 Commissioners. 22 In this case the casino licensee admits 23 the regulatory violation and agrees to a 24 penalty of $30,000. 25 Mr. Levenson represents the casino 35 ITEM NO. 8 1 licensee and Mr. Ficchi for the Division. 2 CHAIR KASSEKERT: Mr. Levenson? 3 MR. LEVENSON: I have nothing to add to 4 the stipulation of settlement, Madame Chair, 5 members of the Commission. Just I would urge 6 to you approve it. 7 CHAIR KASSEKERT: Mr. Ficchi? 8 MR. FICCHI: Good mortgage, Chair. 9 Likewise the Division would request that 10 this Commission accept the stipulations as 11 drafted. 12 CHAIR KASSEKERT: Any questions? 13 COMMISSIONER SOMMELING: No questions, 14 Madame Chair. 15 VICE CHAIR FEDORKO: Madame Chair, I 16 move to approve the stipulation of settlement 17 and impose a civil penalty of $30,000 against 18 Adamar of New Jersey, Inc., for violation of 19 Commission regulations requiring prior 20 approvals of surveillance equipment. 21 COMMISSIONER FRULIO: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Ayes.) 25 CHAIR KASSEKERT: Opposed? 36 ITEM NO. 9 1 (No response.) 2 CHAIR KASSEKERT: Motion carries. 3 MR. LEVENSON: Thank you. 4 MR. NANCE: Item No. 9 is also 5 stipulation of settlement of the State versus 6 Adamar of New Jersey, Inc. 7 Mr. Corbett? 8 MR. CORBETT: Chair, Commissioners, in 9 this case the casino licensee admits the 10 regulatory violation and agrees to a penalty of 11 $40,000. 12 Miss Hughes is here for the casino 13 licensee and Mr. Ficchi for the Division. 14 CHAIR KASSEKERT: Good morning, Miss 15 Hughes. 16 MS. HUGHES: Good morning. We would 17 ask-- good morning ladies and gentlemen. We 18 would ask that you approve the settlement 19 agreement. 20 At this time if you have any questions, 21 I'm here if you need to ask. 22 CHAIR KASSEKERT: Thank you. 23 Mr. Ficchi? 24 MR. FICCHI: Thank you, Chair, 25 Commissioners. 37 ITEM NO. 10 1 The Division would ask -- request that 2 the Commission accept the stipulation of 3 settlement as drafted. 4 Thank you. 5 CHAIR KASSEKERT: Thank you. 6 Any questions? 7 COMMISSIONER SOMMELING: No questions, 8 Madame Chair. 9 COMMISSIONER FRULIO: Move to approve 10 the stipulation of settlement and impose a 11 civil penalty of $40,000 against Adamar of New 12 Jersey, Inc., for a self-exclusion process 13 violation. 14 VICE CHAIR FEDORKO: 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: Motion carries. 21 Thank you. 22 MS. HUGHES: Thank you. 23 MR. NANCE: Item No. 10, stipulation of 24 settlement in State versus Resorts 25 International Hotel, Inc. 38 ITEM NO. 10 1 MR. CORBETT: Chair, Commissioners, in 2 this case the casino licensee admits to 3 regulatory violation and agrees to a penalty of 4 $35,000. 5 Mr. Ficchi is here for the Division. 6 Miss Wild is not here today. She's on 7 vacation. She called last week to ask for an 8 adjournment of this matter because of her 9 scheduled vacation. We advised her that the 10 matter would go forward today unless the 11 Commission felt some need to have Miss Wild 12 present. 13 CHAIR KASSEKERT: But she -- Resorts has 14 agreed to the stipulation? 15 MR. CORBETT: Yes. 16 CHAIR KASSEKERT: Thank you. 17 Mr. Ficchi? 18 MR. FICCHI: Yes. Commissioners, Madame 19 Chair. 20 For the last time, we request that the 21 Commission accept the stipulation as drafted. 22 CHAIR KASSEKERT: Thank you. 23 Any questions? 24 COMMISSIONER SOMMELING: Madame Chair, 25 move to approve the stipulation of settlement 39 ITEM NO. 11 1 and impose a civil penalty of $35,000 against 2 Resorts International Hotel, Incorporated, for 3 violation of Commission regulations regarding 4 internal controls. 5 COMMISSIONER EPPS: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: Motion carries. 12 Thank you. 13 MR. NANCE: Item No. 11, petition of Aon 14 Limited for exemption from licensure. 15 Miss Nagengast? 16 MS. NAGENGAST: Good morning, Chair, 17 Commissioners. 18 CHAIR KASSEKERT: Good morning. 19 MS. NAGENGAST: For your consideration 20 this morning is the petition of Aon Limited 21 seeking exemption from nongaming related casino 22 service licensure. 23 Mr. Levenson is here on behalf of 24 petitioner and Mr. McDonough on behalf of the 25 Division. 40 ITEM NO. 11 1 CHAIR KASSEKERT: Thank you. 2 MR. LEVENSON: Madame Chair, members of 3 the Commission, we filed this petition seeking 4 exemption. There was a similar matter that was 5 on some time ago, Aon Bermuda, where you 6 granted a similar petition. If anything, this 7 is even a much stronger case because the United 8 Kingdom governs these types of insurance 9 producers to a very, very -- a very severe way. 10 At least equal to the nongaming related casino 11 industry service standards. So we urge that 12 you grant the petition. 13 CHAIR KASSEKERT: Thank you. 14 Mr. McDonough? 15 MR. McDONOUGH: Thank you. Good 16 morning. 17 I filed a response dated April 26th in 18 which I recommended that this petition be 19 granted. If you have any questions, I'll be 20 happy to respond. 21 CHAIR KASSEKERT: Thank you. 22 Any questions? 23 COMMISSIONER SOMMELING: No questions, 24 Madame Chair. 25 COMMISSIONER EPPS: Madame Chair, I move 41 ITEM NO. 12 1 that we grant Aon Limited's request for an 2 exemption from nongaming related casino service 3 licensure, as permitted by NJSA 5:12-92(c) and 4 NJAC 19:51-1.13. 5 VICE CHAIR FEDORKO: Second. 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: Motion carries. 13 MR. LEVENSON: Thank you. 14 MR. McDONOUGH: Thank you. 15 MR. NANCE: Item No. 12, petition of 16 Harrah's Entertainment, Inc., and Harrah's 17 Operating Company, Inc., to consolidate 18 proceedings with respect to renewal of casino 19 and CHAB licenses. 20 Miss Wozniak? 21 MS. WOZNIAK: Good morning, 22 Commissioners. 23 I've distributed a draft resolution. 24 This is a request to consolidate the license 25 renewal hearing for four Harrah's licensees. 42 ITEM NO. 12 1 Mr. O'Gara is here for the Petitioners and Miss 2 Turi for the Commission. 3 CHAIR KASSEKERT: Good morning, Mr. 4 O'Gara. 5 MR. O'GARA: Good morning, Chair. 6 Very simply extends the casino licenses 7 of Showboat and HAC so that they'll be 8 coterminous with the other two. It will allow 9 us to work off of the filings that we have for 10 the new structure for Hamlet over Harrah's, 11 rather than having filings made and different 12 filings two weeks later. 13 The filings with respect to Hamlet and 14 the new individual qualifiers have been made 15 with respect to the qualifiers of AGT and HOC. 16 They'll be filed by December 30th with no 17 problem with the Commission. 18 CHAIR KASSEKERT: Thank you. 19 Ms. Turi? 20 MS. TURI: Good morning, Madame Chair, 21 Commissioners. 22 We have worked with the Petitioners in 23 this matter, trying to at least ascertain those 24 items that we needed in order to proceed with 25 the renewal and to proceed with the renewal 43 ITEM NO. 12 1 should the renewal be consolidated so that we 2 have our four casino licensees being heard in 3 June. 4 And based on the representations of the 5 Petitioners, as well as the filings that we 6 have at this point and under the circumstances, 7 we agree to the consolidation and that the 8 consolidation be in June. 9 I've also looked at the draft resolution 10 and have no objections to that. 11 CHAIR KASSEKERT: Thank you. 12 Any questions? 13 COMMISSIONER SOMMELING: No questions, 14 Madame Chair. 15 COMMISSIONER FRULIO: Madame Chair, I 16 move to adopt the draft resolution and: A, 17 grant the request for a consolidated license 18 renewal hearing; and, B, extend the license 19 terms of Marina Associates and Atlantic City 20 Showboat, Inc., until the earlier of such 21 hearing date or June 30th, 2008, subject to the 22 conditions stated in the draft resolution. 23 VICE CHAIR FEDORKO: Second. 24 CHAIR KASSEKERT: Motion is made and 25 seconded. This is a roll call vote. 44 ITEM NO. 13 1 MR. NANCE: Commissioner Sommeling? 2 COMMISSIONER SOMMELING: Yes. 3 MR. NANCE: Commissioner Epps? 4 COMMISSIONER EPPS: Yes. 5 MR. NANCE: Commissioner Frulio? 6 COMMISSIONER FRULIO: Yes. 7 MR. NANCE: Vice Chair Fedorko? 8 VICE CHAIR FEDORKO: Yes. 9 MR. NANCE: Chair Kassekert? 10 CHAIR KASSEKERT: Yes. 11 MR. NANCE: The record will reflect that 12 the record is unanimous. 13 MS. TURI: Thank you. 14 MR. O'GARA: Thank you. 15 MR. NANCE: Item No. 13, petition of 16 Tropicana Casinos and Resorts, Inc., and Adamar 17 of New Jersey, Inc., for declaratory relief 18 with respect to NJAC 19:45-1.11c(2) and other 19 relief -- and other related audit committee 20 issues. 21 Mr. DiGiacomo? 22 MR. DiGIACOMO: Chair and Commissioners, 23 good morning. Miss Lynne Kaufman for the 24 Petitioners. Miss Dorothy Turi for the 25 Division of Gaming Enforcement. 45 ITEM NO. 13 1 I've shared with Counsel for the parties 2 a copy of the draft resolution. 3 I would note, Madame Chair, that just 4 this morning the Commission staff, I believe, 5 have circulated to the Commissioners -- have 6 received a June 20th, 2007, draft of the 7 charter for the audit committee involved. That 8 draft and the language referring to it would 9 need to be reflected in the draft resolution. 10 With that one modification, which would 11 be in the second whereas clause on page 2, 12 there would be no other change to the draft 13 resolution at this time, Madame Chair. And I'd 14 ask the parties if they will consent to its 15 form of entry. 16 CHAIR KASSEKERT: Thank you. 17 Miss Kaufman? 18 MS. KAUFMAN: Good morning. 19 I can consent to the form of entry. I 20 also wanted to take this opportunity to speak a 21 little about Jeff Silver, who will be our 22 independent sole audit committee member. We're 23 very pleased to have him. He has a great 24 background. He started as a prosecutor. He 25 was a member of the Nevada Gaming Control 46 ITEM NO. 13 1 Board. He served as a casino executive. He's 2 been on the Nevada Convention and Visitor 3 Authority Board. He's currently one of the 4 founders of the law firm of Gordon & Silver in 5 Las Vegas, and he's even a CPA, although 6 inactive. So we think he has a lot to bring, 7 both financially, gaming experiencewise, from 8 all angles. And we look forward to having him. 9 Thank you. 10 CHAIR KASSEKERT: Miss Turi? 11 MS. TURI: Good morning, Madame Chair. 12 I received the copy of the draft 13 resolution, and as recently revised, and I only 14 note that according to the condition that's 15 going to be imposed, Condition No. 2, that the 16 Division and the Commission will receive 17 promptly after it is actually adopted the final 18 copy. And should there be any major changes or 19 any other changes, of course, we reserve the 20 right to take whatever action we deem 21 appropriate. 22 I would also like to comment very 23 briefly on Condition No. 6 that I see is a 24 newly imposed or to be imposed condition. And 25 just note for the record the Division takes 47 ITEM NO. 13 1 very seriously its obligations under the Casino 2 Control Act to provide to the Commission any 3 and all information that is needed for the 4 Division to make any determination. We take 5 this obligation seriously regarding all 6 licensees, including the licensee that is 7 before you in this matter. 8 We will, therefore, provide to the 9 Commission any and all information that we deem 10 appropriate at an appropriate time and feel 11 that there's no need in this case for this 12 condition to be imposed on us. None the less, 13 we will do that, and we will not object to the 14 form of the order at this time. 15 CHAIR KASSEKERT: Thank you. 16 Any questions? 17 COMMISSIONER SOMMELING: No questions, 18 Madame Chair. 19 VICE CHAIR FEDORKO: Motion to adopt the 20 draft resolution and grant the relief requested 21 in the amended petition to the extent set forth 22 and subject to the conditions in the 23 resolution. 24 COMMISSIONER FRULIO: Second. 25 COMMISSIONER SOMMELING: Second. 48 ITEM NO. 14 1 CHAIR KASSEKERT: Motion is made and 2 seconded this is a role call vote. 3 MR. NANCE: Commissioner Sommeling? 4 COMMISSIONER SOMMELING: Yes. 5 MR. NANCE: Commissioner Epps? 6 COMMISSIONER EPPS: Yes. 7 MR. NANCE: Commissioner Frulio? 8 COMMISSIONER FRULIO: Yes. 9 MR. NANCE: Vice Chair Fedorko? 10 VICE CHAIR FEDORKO: Yes. 11 MR. NANCE: Chair Kassekert? 12 CHAIR KASSEKERT: Yes. 13 MR. NANCE: The record will reflect that 14 the motion is unanimous. 15 Item No. 14, petition of Adamar of New 16 Jersey, Inc., for permission for the following 17 two individuals to perform qualifying duties 18 for Tropicana Casinos and Resort, Inc., before 19 their plenary qualification and other relief: 20 Jeffrey A. Silver and Karin J. Brugler. 21 Mr. DiGiacomo? 22 MR. DiGIACOMO: Chair and Commissioners, 23 Mr. Guy Michael for the Petitioners, and, 24 again, Miss Dorothy Turi for the Division of 25 Gaming Enforcement. 49 ITEM NO. 14 1 I've shared with counsel for the parties 2 a copy of the draft resolution in each 3 instance, and I believe they are prepared to 4 agree to its consent and entry. 5 CHAIR KASSEKERT: Thank you. 6 Mr. Michael, good morning. 7 MR. MICHAEL: Good morning, Madame Chair 8 and the Commission. 9 Mr. DiGiacomo is, as usual, correct. He 10 has circulated the resolutions, and we've 11 reviewed them and have no objection to them. 12 And, in particular, there are provisions in Mr. 13 Silver's resolution regarding representations 14 of independence, and we make those 15 representations on the record today. 16 CHAIR KASSEKERT: Thank you. 17 Miss Turi? 18 MS. TURI: Again, based on the 19 representations on the record, those I've 20 already received from Mr. DiGiacomo and the 21 Petitioners and having reviewed the draft 22 resolutions, we do not have any objections 23 thereto. We note solely -- only for this 24 matter that this temporary qualification will 25 only last until the time of the plenary 50 ITEM NO. 14 1 qualification hearing, which is now scheduled 2 for November. 3 Thank you. 4 CHAIR KASSEKERT: Very good. 5 Any question? 6 COMMISSIONER SOMMELING: No questions, 7 Madame Chair. 8 VICE CHAIR FEDORKO: Motion to adopt the 9 draft resolution and grant temporary 10 qualification to Jeffrey A. Silver as a 11 proposed independent member of the Audit 12 Committee of Tropicana Entertainment, LLC, 13 subject to the conditions in the draft 14 resolution. 15 COMMISSIONER EPPS: Second. 16 CHAIR KASSEKERT: Motion is made and 17 seconded. This is a roll call vote. 18 MR. NANCE: Commissioner Sommeling? 19 COMMISSIONER SOMMELING: Yes. 20 MR. NANCE: Commissioner Epps? 21 COMMISSIONER EPPS: Yes. 22 MR. NANCE: Commissioner Frulio? 23 COMMISSIONER FRULIO: Yes. 24 MR. NANCE: Vice Chair Fedorko? 25 VICE CHAIR FEDORKO: Yes. 51 ITEM NO. 14 1 MR. NANCE: Chair Kassekert? 2 CHAIR KASSEKERT: Yes. 3 MR. NANCE: The record will reflect that 4 the motion is unanimous. 5 MS. TURI: Thank you. 6 MR. DiGIACOMO: We need a separate -- 7 CHAIR KASSEKERT: Yeah. We need a 8 separate resolution. 9 MR. DiGIACOMO: Please. 10 CHAIR KASSEKERT: Mr. Michael, any 11 representation with respect to Miss Brugler -- 12 Brugler, sorry. 13 MR. MICHAEL: That the resolution is 14 adequate and fair and that we consent to its 15 form of entry. 16 CHAIR KASSEKERT: Thank you. 17 Miss Turi? 18 MS. TURI: Once again, we consent to its 19 form of entry. 20 CHAIR KASSEKERT: Thank you. 21 Any questions? 22 COMMISSIONER SOMMELING: No questions, 23 Madame Chair. 24 COMMISSIONER EPPS: Move to adopt the 25 draft resolution and grant temporary 52 ITEM NO. 14 1 qualification of Karin J. Brugler, a proposed 2 officer of Tropicana Casinos and Resorts, 3 Incoprrated, and Tropicana Entertainment, LLC, 4 subject to the conditions in the resolution. 5 COMMISSIONER SOMMELING: Second. 6 CHAIR KASSEKERT: Motion is made and 7 seconded. This is a roll call vote. 8 MR. NANCE: Commissioner Sommeling? 9 COMMISSIONER SOMMELING: Yes. 10 MR. NANCE: Commissioner Epps? 11 COMMISSIONER EPPS: Yes. 12 MR. NANCE: Commissioner Frulio? 13 COMMISSIONER FRULIO: Yes. 14 MR. NANCE: Vice Chair Fedorko? 15 VICE CHAIR FEDORKO: Yes. 16 MR. NANCE: Chair Kassekert? 17 CHAIR KASSEKERT: Yes. 18 MR. NANCE: The record will reflect that 19 the motion is unanimous. 20 CHAIR KASSEKERT: Thank you. 21 MR. DiGIACOMO: Thank you. 22 MR. MICHAEL: Thank you very much. 23 MR. NANCE: Item No. 16, proposed 24 adoption of amendments concerning 25 jackpot-to-credit-meter switch. 53 ITEM NO. 15 1 CHAIR KASSEKERT: This is Item 15. 2 MR. NANCE: 15. 3 CHAIR KASSEKERT: Yeah. You said 16. 4 MR. KELL: Good morning, Madame Chair 5 and Commissioners. 6 Mr. Kell? 7 MR. KELL: On December 13th, 2006, the 8 Commission voted to publish and temporarily 9 adopt amendments authorizing the use of the 10 jackpot-to-credit meter switch to transfer to 11 the credit meter of the slot machine a jackpot 12 that would normally be hand paid. 13 During the comment period, the only 14 comments received were from IGT. For the 15 reasons set forth in the proposed notice of 16 adoption, the staff recommends that you reject 17 those comments at this point as beyond the 18 scope of the current proposal. 19 Accordingly, we recommend that you adopt 20 the amendments as published. 21 CHAIR KASSEKERT: Thank you. 22 Any questions? 23 COMMISSIONER SOMMELING: No questions, 24 Madame Chair. 25 COMMISSIONER FRULIO: Move to adopt as 54 ITEM NO. 16 1 published. 2 VICE CHAIR FEDORKO: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 MR. NANCE: Item No. 16, proposed 10 publication and temporary adoption of 11 amendments to concerning suspicious, unscanned, 12 and unverified gaming vouchers. 13 Mr. Kell? 14 MR. KELL: For your consideration in 15 this matter are amendments defining the terms 16 "suspicious," "unscanned" and "unverified" 17 gaming vouchers and establishing a procedures 18 for casinos licensees to follow with respect to 19 such vouchers. 20 The staff recommends that you publish 21 and also a temporarily adopt the amendments at 22 this point in time. 23 CHAIR KASSEKERT: Any questions? 24 COMMISSIONER SOMMELING: No questions, 25 Madame Chair. 55 ITEM NO. 18 1 COMMISSIONER FRULIO: Approve for 2 publication and temporary adoption. 3 VICE CHAIR FEDORKO: Second. 4 CHAIR KASSEKERT: The motion has been 5 made and seconded. All in favor? 6 (Ayes.) 7 CHAIR KASSEKERT: Opposed? 8 (No response.) 9 CHAIR KASSEKERT: Motion carries. 10 MR. KELL: Thank you. 11 CHAIR KASSEKERT: Thank you. 12 MR. NANCE: For your consideration, Item 13 No. 18, reorganization and approval of the New 14 Jersey Casino Control Commission Audit 15 Committee. 16 Miss Faultleroy? 17 MS. FAUNTLEROY: Rare occasion. Good 18 morning. 19 For your consideration is a resolution I 20 circulated this morning during the Executive 21 Session putting forward for your consideration 22 the reorganization of the Audit Committee 23 consistent with Governor McGreevey's Executive 24 Order 122. 25 As proposed, the members of the Audit 56 ITEM NO. 18 1 Committee going forward until such time as 2 their terms would be designated would be 3 Commissioners Ralph Frulio, Commissioner 4 Michael C. Epps, and the Independent Auditor 5 Steven Petrecca. He was provided to the 6 Commission by the Office of Management and 7 Budget. He is presently the assistant manager 8 of that office, and he is here with us this 9 afternoon. 10 CHAIR KASSEKERT: Mr. Petrecca. 11 Any questions for Ms. Fauntleroy? 12 COMMISSIONER SOMMELING: Move to 13 approve, Madame Chair. 14 VICE CHAIR FEDORKO: Second. 15 CHAIR KASSEKERT: Okay. Actually, the 16 motion should be that we reorganize and approve 17 the Casino Control Commission's 2007 Audit 18 Committee pursuant to Governor McGreevey's 19 Executive Order 122. 20 COMMISSIONER FRULIO: Second. 21 CHAIR KASSEKERT: And there's a second. 22 Motion is made and seconded. All in 23 favor? 24 (Ayes.) 25 CHAIR KASSEKERT: Opposed? 57 ITEM NO. 5 1 (No response.) 2 CHAIR KASSEKERT: Thank you. 3 MS. FAUNTLEROY: Thank you. 4 CHAIR KASSEKERT: We'll take a brief 5 recess so we can prepare for Item 17. 6 (A recess was taken from 11:10 to 11:26 7 a.m.) 8 CHAIR KASSEKERT: We're going to go back 9 on the record and deal with Item 5, because I 10 understand the attorney -- 11 Mr. Carroll, are you here? So we don't 12 hold Ms. Way up all day. 13 MS. WAY: Thank you. 14 MR. NANCE: Item No. 5, petition of Jack 15 J. D'Innocenzio for relief from Commission 16 Order No. 05-04-13-04. 17 Miss Frigen? 18 MS. FRIGEN: Hi. Madame Chair, 19 Commissioners, for the record, James Carroll is 20 here for the petitioner, Wendy Way for the 21 Division. 22 For your consideration is Mr. Carroll's 23 petition seeking on behalf of his client 24 permission to vacate that section of a 25 Commission order that was entered in April 58 ITEM NO. 5 1 13th, 2005, which is presently restricting him 2 from working with Dee Casino Tours. 3 I would have him go forward with his 4 petition and then turn it over to Miss Way for 5 her position. 6 CHAIR KASSEKERT: Thank you. 7 Mr. Carroll? 8 MR. CARROLL: Good afternoon, Miss Chair 9 and Commissioners. James Carroll on behalf of 10 Mr. D'Innocenzio. 11 Mr. D'Innocenzio has basically been out 12 of the industry for a period of time by prior 13 agreement with the Commission. He was not 14 allowed to apply for a position until this 15 February. He advised me in January that when 16 that period was up, he wished to help his wife 17 in the business. At this time he's not seeking 18 licensure. His wife has a fairly active 19 business, particularly with the merger -- with 20 the Harrah's merger. She's involved with four 21 properties in the junket business. Mr. 22 D'Innocenzio merely wants to be able to help 23 her in a clerical capacity. 24 I do also state that when tours will be 25 arriving to the area, he will greeting those 59 ITEM NO. 5 1 tours. And they have tours from other 2 jurisdictions that he would be going as an 3 escort. The Division was concerned that he 4 would be performing certain duties that might 5 require licensure. As a result of discussions 6 with the Commission and comments from the 7 Division, my client has agreed to file a junket 8 enterprise qualifier disclosure form as a 9 condition if the petition is approved today. 10 And I think that satisfied the concerns of the 11 Division, hopefully so. And I can belabor the 12 point, but it's all on the record. 13 The petition is before the Commission. 14 If you want to discuss it further, I would be 15 happy to. 16 CHAIR KASSEKERT: Miss Way? 17 MS. WAY: Madame Chair, Commissioners, I 18 believe you have our letter dated June 7th, 19 2007, wherein those concerns were expressed in 20 terms of answering the petition. Consequently 21 we were advised in subsequent discussions with 22 Ms. Frigen that the petitioner was willing to 23 file for licensure. 24 Based on that -- and essentially that's 25 what we wanted all along. Based on that, we 60 ITEM NO. 5 1 have no objection for the Commission granting 2 the relief requested in the petition subject to 3 the condition that he does apply for 4 qualification status. 5 CHAIR KASSEKERT: Thank you. 6 Any questions? 7 COMMISSIONER SOMMELING: No questions, 8 Madame Chair. 9 COMMISSIONER FRULIO: Madame Chair, move 10 to grant Mr. D'Innocenzio's petition for relief 11 and vacate that portion of the Commission's 12 Order dated April 13th, 2005, and allow him to 13 resume working for Dee Casino Tours, Inc., 14 subject to the condition that he file a 15 completed junket enterprise disclosure form. 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: Motion carries. 23 Thank you. 24 MR. CARROLL: Thank you. 25 MS. WAY: Thank you. 61 ITEM NO. 17 1 MR. NANCE: Item No. 17, petition of 2 Trump Plaza Associates, LLC, Trump Marina 3 Associates, LLC, and Trump Taj Mahal 4 Associates, LLC, for renewal of their casino 5 licenses and casino hotel alcoholic beverage 6 licenses and related matters; 7 Amended petition of Trump Plaza 8 Associates, LLC, and Marina Associates LLC, and 9 Trump Taj Mahal Associates, LLC, for approval 10 of material debt transactions; 11 And petition of Morgan Stanley & Company 12 requesting a waiver of qualification for an 13 Institutional Investor pursuant to NJSA 14 5:12-85(f). 15 Miss Wozniak? 16 MS. WOZNIAK: Good morning, Chair, 17 Commissioners. Counsel are here, and I assume 18 you want them to enter their appearances. 19 CHAIR KASSEKERT: Yes. Mr. Fusco? 20 MR. FUSCO: Joseph Fusco for the Trump 21 Entertainment properties as the petitioner 22 here. 23 MS. PICKUS: Yes. Robert Pickus, 24 assistant. 25 (Laughter.) 62 ITEM NO. 17 1 MR. FUSCO: He's surprising me already, 2 Chair. 3 VICE CHAIR FEDORKO: You will be 4 reminded of that. 5 (Laughter.) 6 MR. FOGARTY: Good morning, James C. 7 Fogarty, Deputy Attorney General, for the 8 Division of Gaming Enforcement and Yvonne G. 9 Maher, Acting Director. 10 CHAIR KASSEKERT: Thank you. 11 I understand there are a number of 12 exhibits that have been premarked. Mr. Nance, 13 can you read them in the record, please? 14 MR. NANCE: The Commission has the 15 following premarked exhibits. The Casino 16 Control Commission has six exhibits. They are 17 marked C-1 to C-6. 18 C-1 is the entities and qualifier report 19 for Trump Plaza Associates, LLC, Trump Marina 20 Associates, LLC, and Trump Taj Mahal 21 Associates, LLC, dated May 24, 2007. 22 C-2 is the CHAB report for Trump Plaza 23 Associates LLC, Trump Marina Associates, LLC, 24 and Trump Taj Mahal Associates, LLC, dated June 25 20th, 2007. 63 ITEM NO. 17 1 Exhibits C-3 to C-6 are marked for 2 identification only. 3 C-3 is a draft resolution regarding 4 Trump Marina Associates, LLC. 5 C-4 is a draft resolution regarding 6 Trump Plaza Associates, LLC. 7 C-5 is a draft resolution regarding 8 Trump Taj Mahal Associates, LLC. 9 C-6 are draft conditions, 5a, 5b, 5c, 10 regarding the renewal resolutions. 11 The Division of Gaming Enforcement has 12 two exhibits, D-1 and D-2. 13 D-1 is a report dated May 18th, 2007, on 14 the application of Trump Plaza Associates, LLC, 15 Trump Marina Associates, LLC, and Trump Taj 16 Mahal Associates, LLC, for renewal of their 17 casino and CHAB licenses and waiver of certain 18 security holders and related relief. 19 And D-2 is a report dated May 23rd, 20 2007, on the petition of Trump Plaza 21 Associates, LLC, Trump Marina Associates, LLC, 22 and Trump Taj Mahal, LLC, for renewal of their 23 CHAB licenses. 24 The Petitioners have three exhibits. 25 They are marked P-1 to P-3. 64 ITEM NO. 17 1 P-1 is Trump Plaza Associates LLC, EEBOP 2 dated June 1st, 2007. 3 P-2 is Trump Marina Associates, LLC, 4 EEBOP dated June 1st, 2007. 5 And P-3 is Trump Taj Mahal Associates, 6 LLC, EEBOP dated June 7, 2007. 7 CHAIR KASSEKERT: Thank you. 8 Are there any objections to any of these 9 exhibits? 10 Mr. Fusco? 11 MR. FUSCO: From Petitioner, no 12 objection. 13 CHAIR KASSEKERT: Thank you. 14 MR. FOGARTY: And no objection from the 15 Division. We have no objection to it being 16 admitted into evidence. 17 CHAIR KASSEKERT: Thank you. 18 Are there any sealing requests? 19 MR. FUSCO: There is a sealing request 20 that has been articulated in a written request 21 that we submitted shortly after the Division's 22 report was filed, and we'd ask that those be 23 considered by the Commission. 24 CHAIR KASSEKERT: Thank you. 25 Mr. Fogarty? Do you consent? 65 ITEM NO. 17 1 MR. FOGARTY: We have received that 2 sealing request on behalf of Trump properties. 3 And, as usual, we will leave to the 4 Commission's good discretion as to what should 5 be sealed, what shouldn't be sealed. But we 6 specifically reserve the right to question 7 during cross-examination or any examination any 8 matters that may or may not be redacted and/or 9 sealed. 10 CHAIR KASSEKERT: Thank you. 11 Seeing no objection, I will move these 12 items into evidence. 13 Let me ask if the parties care to make 14 an opening statement. 15 MR. FUSCO: A brief opening statement. 16 CHAIR KASSEKERT: Mr. Fusco, you may 17 proceed. 18 MR. FUSCO: The process for the license 19 renewal began a little while back, maybe six 20 months ago. We had filed a large number of 21 business entity disclosure forms and personal 22 history disclosure forms. In our petition we 23 filed forecasts for the three-year program, for 24 2007, 2008, and 2009 financial forecasts with 25 regard to each of our three casino licensed 66 ITEM NO. 17 1 properties. 2 We've also filed a petition which 3 requests that you approve three intercompany 4 notes between a holding company -- our holding 5 company and the three licensees. 6 We also note that there have been 7 applications by two institutional investors for 8 waivers, and that we had a prehearing 9 conference in April under the guidance of Vice 10 Chair Fedorko. 11 So that information forms the basis for 12 our request that these licenses be renewed, 13 that that approval be granted for the 14 intercompany notes, and that the relief set 15 forth in the resolution, the draft resolutions, 16 is the relief that we ask of you now. 17 And that's really all we have to say. 18 CHAIR KASSEKERT: Thank you, Mr. Pickus? 19 Would you like to -- 20 MS. PICKUS: Yes. Not right now. 21 CHAIR KASSEKERT: Okay. Very good. 22 Mr. Fogarty? 23 MR. FOGARTY: Good morning, again, 24 Chair, Commissioners, Mr. Fusco, Assistant 25 Pickus, and Ms. Wozniak. 67 ITEM NO. 17 1 Four years ago almost on this same date 2 at the previous renewal proceedings for the 3 Trump properties, a representative of my 4 agency, the Division of Gaming Enforcement, 5 whose identify need not be dwelled on, stood 6 before most of you in the same room and 7 probably on the same spot and commented at some 8 length about what the company was not doing. 9 Some would say that that Division 10 representative might have stated a case too 11 vigorously. 12 Be that as it may, a lot has transpired 13 with the Trump Company since that time. 14 Notably the company sought protection under the 15 federal bankruptcy laws within a year of those 16 last proceedings. The company that emerged, 17 the reorganized company has been in operation 18 in earnest since the fall of 2005, with 2006 19 being the first full year of their restructured 20 operations. 21 Many new high-level executives were 22 brought in. New members of the board were 23 added, and ownership of the company became more 24 diverse, such that it can fairly be said that 25 the present company is not the same company as 68 ITEM NO. 17 1 then. 2 Perhaps the most tangible and visible 3 sign of all this is the presence of a large 4 construction crane at the Taj Mahal. Like 5 spring, promise and progress are in the air. 6 To paraphrase Robert Duvall's character in the 7 movie "Apocalypse Now," there's nothing like 8 the sight of a construction crane in the 9 morning. 10 It could be said that the presence of 11 the Taj construction crane is due to that 12 nameless Division representative who made much 13 ado about the company's lack of progress four 14 years ago and its failure to reinvest and 15 reinvigorate its properties. But I'll not say 16 that. It wouldn't be true, anyway. 17 Management knew then and knows now 18 better than the regulators how to conduct a 19 successful casino enterprise. They are the 20 businessmen. They are schooled in and 21 experienced in this line of work and how to 22 make it work. That's their job. It's their 23 reputations on the line. They have to answer 24 to the owners, the shareholders, and to all the 25 others with interest in their properties, not 69 ITEM NO. 17 1 the least of which are the 70,000 employees and 2 their families who depend on their decision as 3 well as the people of this state and this city 4 who receive their significant tax support and 5 investment contributions. If they do well, we 6 all benefit. The better they do, the better we 7 all do. 8 The real good news here, the real change 9 is that Trump Entertainment has a plan. It is 10 no longer adrift or meandering without purpose, 11 without goals. Their goals are, as 12 characterized by Donald Trump and James Perry, 13 Board Chairman and Chief Executive Officer 14 respectively, in the company's 2006 annual 15 report, aggressive. And indeed they seem to be 16 that. But however characterized, it needs to 17 be emphasized that there is a plan. And that 18 in and of itself is positive and encouraging 19 and worthy of note. 20 As we all know our law, the Casino 21 Control Act mandates that renewal casino 22 license applicants such as these three Trump 23 properties before you now must clearly and 24 convincingly demonstrate certain key criteria 25 in order to gain license renewals for whatever 70 ITEM NO. 17 1 period sought up to the five years the Act 2 allows. And here the full five years are 3 sought. And one of those criteria is whether 4 the licensee will be financially stable and 5 responsible going forward for that renewal 6 period of time. This is, at best, an imprecise 7 assessment since it involves events and results 8 in the future, but it is an assessment that 9 nevertheless must be made in order to address 10 the legal requirement for license renewal. In 11 this regard a company's forecast are the 12 critical pieces of information that must be 13 assessed and examined despite the inherent 14 imprecision in financial forecasting. 15 We can all readily agree that 16 pie-in-the-sky forecasts, ones divorced from 17 reality and essentially made up, would not and 18 could not pass muster and satisfy the legal 19 requirement under the Act. And we can all 20 readily agree that a careful review of forecast 21 is a necessary, expected, and not unusual 22 exercise during license renewal proceedings. 23 Forecasts that are seriously and earnestly 24 prepared and developed give due regard to 25 factors that may affect the marketplace in 71 ITEM NO. 17 1 general and the individual properties in 2 particular and that present a fair and 3 reasonable picture of what is to come should 4 not be likely disregarded. 5 And so, in our report, which is now 6 before you as D-1 in evidence, we spent much 7 time and effort analyzing the forecast we were 8 presented with, analyzing that which the 9 licensees say they can do. Especially for the 10 next two and a half years, through 2009. And 11 we have highlighted them as needing attention 12 during these proceedings. 13 To be candid, if these very same 14 aggressive forecasts were submitted by an 15 applicant not in the throes of a turnaround or 16 had more substantial resources upon which to 17 rely if those expectations are not achieved, or 18 had a better record of recent performance, they 19 would not be highlighted. Nonetheless, though 20 highlighted, that should be viewed as nothing 21 more than an opportunity for the Applicants to 22 come forward today and demonstrate and persuade 23 that the forecasts they asked us to rely on are 24 just that; reliable. Not just aggressive but 25 realistic and reasonably achievable. 72 ITEM NO. 17 1 We don't say we know better. We don't. 2 We don't have a better way. We are not, as I 3 have said, the businessmen. We are regulators. 4 And our roles as regulators are quite simple, 5 to ensure that the laws requirement are met as 6 laid out in the Act before the five-year 7 license renewal requested are granted. To this 8 end, it is our jobs to probe, question, and 9 examine the financial expectations given and 10 the bases and the reasons for those 11 expectations. Are they reliable? Are they 12 reasonable? Do they permit the conclusion that 13 they indicate financial stability going forward 14 so as to allow a ruling that license renewal 15 should be granted? Are they way beyond 16 aggressive? More dream than reality? Do they 17 need to be monitored going forward? Do they 18 adequately account for factors such as the 19 smoking ban, competition from Pennsylvania and 20 New York racinos which are already operational, 21 other Pennsylvania gaming facilities soon to 22 come on board, and the scheduled openings in 23 2008 of the significant improvements at Borgata 24 and Harrah's? And if not, what are the reasons 25 for that? And what is the backup plan for that 73 ITEM NO. 17 1 point in time, which we've identified as late 2 2008, if the expectations of those forecasts 3 are significantly off? Will the company cut 4 back on planned capital expenditures? How will 5 the licensees maintain their financial 6 stability then? I reiterate that we hope that 7 the licensees will take this as an opportunity 8 to explain their expectations going forward and 9 convince you that their forecasts are reliable 10 and worthy of supporting grants of licensed 11 renewal. 12 We have also highlighted in our report 13 Trump Marina's recent record regarding 14 impermissible under-aged activities on their 15 premises. We hope to hear an acknowledgment 16 that that record is not acceptable and that the 17 matter will be addressed, a vigorous commitment 18 to do better in this sensitive area is very 19 important. 20 And so, in conclusion, we specifically 21 direct your attentions to Trump Marina with 22 regard to the problem concerning under-aged 23 drinking and gambling and to the forecast and 24 related flexibility which are being asked to 25 judge and upon which you are being asked to 74 ITEM NO. 17 1 decide if the requests for five-year license 2 renewals should be granted. 3 Thank you. 4 CHAIR KASSEKERT: Thank you. 5 Now I'll move to the testimony. 6 Mr. Fusco? 7 MR. FUSCO: Madame Chair, yes. 8 But before I do that, I neglected to and 9 would like who introduce and honor our 10 executives who are present here. 11 CHAIR KASSEKERT: Sure. 12 MR. FUSCO: Mark Juliano is our Chief 13 Operating Officer, and he is present. Rosalind 14 Krause, General Manager of the Trump Taj Mahal 15 is in the audience. Jim Rigot, General 16 Manager, Trump Plaza, is in the audience. 17 Cathy Walker, General Manager of Trump Marina, 18 is here today. Dale Black, our Chief Financial 19 Officer, is present and will testify. John 20 Burke, our Executive VP and Corporate 21 Treasurer, is present also. Ravneet Bhandari, 22 our Senior Vice Presdient for Revenue 23 Management, is here. Eric Hausler, our Senior 24 Vice President for Development is present. 25 Loretta Pickus, our Vice President of Legal 75 ITEM NO. 17 1 Affairs, is here. Richard Weber, our Vice 2 President, Corporate Controller and Tom Hickey, 3 our Director of Corporate Communications. 4 That's our corporate staff. 5 CHAIR KASSEKERT: Thank you. 6 MR. FUSCO: Mr. O'Gara is here and 7 watching in the room to make sure that Bob and 8 I do not mess up. 9 (Laughter.) 10 MR. FUSCO: But with that, if you would, 11 I would like to call Dale Black to the stand. 12 CHAIR KASSEKERT: Sure. Mr. Black, you 13 may come forward. You can sit right over 14 there, but please remain standing so we can 15 swear you in. 16 17 DALE BLACK, was duly sworn to testify in 18 this matter. 19 20 MR. NANCE: Please state your name for 21 the record. 22 THE WITNESS: Dale Black. 23 MR. NANCE: Thank you. You may be 24 seated. 25 CHAIR KASSEKERT: You may proceed. 76 BLACK - FUSCO 1 DIRECT EXAMINATION BY MR. FUSCO: 2 Q. Mr. Black, you are presently the Trump 3 Entertainment Resorts, Executive Vice President and 4 Chief Financial Officer; that's correct? 5 A. That's correct. 6 Q. How long have you been in that position? 7 A. Nineteen months. Since November of 8 2005. 9 Q. Could you in -- explain to the 10 Commission your background and experience before you 11 came to Trump? 12 A. Sure. Before I came to Trump, most 13 recently I had spent 12 years with RDC Gaming Company. 14 We owned six casinos throughout the Midwest and 15 southern part of the United States. I had joined that 16 company right after they went public in 1993 and was 17 there until we were sold in 2005. 18 Prior to RDC, I spent the majority of my 19 business career, about seven years with Arthur 20 Anderson in public accounting. 21 Q. And you are a CPA? 22 A. Yes. 23 Q. This proceeding concerns the three 24 casino licenses and the three casino hotels. With 25 respect to the casino hotel facilities, Mr. Black, 77 BLACK - FUSCO 1 could you describe to the Commission how they've 2 changed during 2006 and how they will continue to 3 change during the license period? 4 A. Sure. We have been on an aggressive 5 capital program since the company's reorganization in 6 2005. We have invested over $200 million since 2005 7 in our properties, have approximately another 125 8 planned through next year in renovation and 9 maintenance projects. Mark will elaborate further on 10 the exact pieces of the program, but suffice it to say 11 it's touched all areas of our properties, from hotel 12 rooms, restaurants, to casino floor, other public 13 areas, as well as back-of-the-house areas such as our 14 employee dining rooms and a large investment, 15 approximately $20 million, in technology. This is on 16 top of the money, the $250 million that we have -- for 17 the Taj tower expansion. 18 Q. Now, so that the casino hotel facilities 19 are being transformed and improved; is that correct? 20 A. That is correct. 21 Q. Now, with regard to our operations, the 22 same basic question. Our operations, how have they 23 been changing in the year 2006, and how will they 24 continue to change this year and as the years go 25 forward? 78 BLACK - FUSCO 1 A. Since, you know, we -- since 2005, we 2 have put in a variety of different programs to change 3 the operations of our company, improve the operations 4 of our company over time. Many of these, again, Mark 5 will elaborate specifically on. But we have become 6 much more targeted in the way that we market to our 7 customers, focusing on those -- the quality of 8 customers as opposed to necessarily the quantity of 9 the customers. 10 We have -- as I mentioned earlier, we 11 have invested heavily in new technology from a 12 customer data warehouse to a new revenue management 13 system that will allow us to better yield our hotel 14 rooms and maximize the profitability of the customers 15 that we put in those rooms. We put a new emphasis on 16 hotel sales mid-week, particularly to cater to the 17 convention and travel parts of the business. 18 We've taken a lot of steps to optimize 19 our workforce, work smarter, combine operations or 20 functions when necessary. And, as of yesterday, we 21 now have one player's card so that customers that are 22 in our slot club and our player's clubs can use their 23 points in -- at any of the three Trump properties. 24 They don't have to have three cards. Puts on a much 25 more level playing field with some of the other 79 BLACK - FUSCO 1 companies in town. 2 Q. And these programs have taken some time 3 to develop and implement; is that correct? 4 A. That is correct. We have worked, all of 5 us, steadfastly on bringing these things on over time. 6 A lot of these technology changes are very much like 7 capital proj -- they are capital projects, and they're 8 building. Only you're building computer programs 9 instead of bricks and mortar. 10 Q. And are the programs beginning to take 11 effect? 12 A. Yes. We have seen progress all along. 13 In fact, over the last three quarters, through the 14 first quarter of this year, our properties had led the 15 industry in year-over-year improvement in EBITDA since 16 the middle of last year. 17 Q. Moving on, you're familiar, Mr. Black, 18 with the fact that we have through a petition have 19 asked the Commission to approve certain intercompany 20 notes between Trump Entertainment Resorts holdings and 21 each of the three properties. You're aware of that? 22 A. Yes, sir. 23 Q. Could you describe to the Commission 24 what those notes represent and whether they represent 25 any increase in debt? 80 BLACK - FUSCO 1 A. Well, first all, they do not represent 2 any increase in debt or outside debt of the company. 3 Basically what these do are just formalize or 4 crystalize an internal accounting policy that we have 5 put in place on how we account for transfers of cash 6 between our three properties and the parent company or 7 among the three properties. 8 Q. We have mentioned to the Commission, and 9 we've submitted forecasts of the performance of each 10 of the three casino licensees. We submitted them on 11 March 1, but they relate to the period for the year 12 2007, 2008, 2009; is that right? 13 A. That is correct. 14 Q. Could you describe for the Commission 15 how those forecasts were recreated? Describe the 16 process, who was involved. 17 A. Sure. The outshoot of the forecast 18 comes from our normal yearly planning process that we 19 go through, which is a very disciplined collaborative 20 process between Mark, myself, other members of the 21 corporate management team, if you will, and the 22 executive committees, the general manager, and their 23 key staff at each of our properties that we go through 24 every year. 25 During that process we try to take into 81 BLACK - FUSCO 1 consideration what we know about factors that are 2 going on in the market, our place in the market, the 3 things that we're doing internally to take advantage 4 of our situation or combat competitive situations, 5 whatever it may be. We look at our plan to capital 6 expenditures and the impact or improvements that we 7 think we may get out of them as well as other 8 operating initiatives. 9 Q. The forecasts, do the forecasts provide 10 for an element of flexibility? 11 A. Sure. I mean, they do provide for 12 flexibility. We continually monitor our operating 13 performance as we go along. Like most companies we 14 look at daily, weekly, monthly, quarterly performance 15 and make changes as needed to reflect the needs of our 16 business. These adjustments or changes that we make 17 could include changes to operating programs, marketing 18 philosophy or capital programs. For instance, of the 19 $250 million in renovation capital, only 140 million 20 of that has actually been committed to date as far as 21 contracts, or work under way, or already completed. 22 If necessary, we can adjust our plans along those 23 lines. And, in fact, we prioritized the projects 24 before we started this process, so that those projects 25 that we thought would have the biggest impact in our 82 BLACK - FUSCO 1 business were done first. And many of those have come 2 on line within the last six months or so, and are 3 really just starting to take effect. If any of you 4 have been over to see our properties recently, they 5 look significantly different than the day I walked in 6 here 19 months ago. 7 Q. The forecasts, as we've noted, are a 8 30-- three-year period, 36 months. We've now finished 9 the first five. We're into the sixth month of that 10 forecast. Mr. Black, what have you learned from the 11 first six months or five and a half months of the 12 forecast period? 13 A. I think the biggest thing that we've 14 seen, primarily, is that I think we, along with others 15 in the industry, Wall Street prognosticators and about 16 most of the other analysis that I had seen going into 17 this, probably underestimated the initial impact of 18 the Philadelphia casinos on the Atlantic City market. 19 Probably the biggest thing that I've seen. 20 Q. You are familiar with the legal concept 21 of financial stability as its set forth in the Casino 22 Control Act and the Commission regulations? 23 A. That's correct. 24 Q. In your opinion, will Trump 25 Entertainment Resorts and each of the three casino 83 BLACK - FOGARTY 1 properties be financially stable during the three-year 2 forecast period and the five-year license period? 3 A. I believe so. Yes. 4 MR. FUSCO: Okay. Madame Chair, that's 5 our direct of Mr. Black. 6 CHAIR KASSEKERT: Thank you. 7 Cross-examination, Mr. Fogarty? 8 9 CROSS-EXAMINATION BY MR. FOGARTY: 10 Q. Hello, Mr. Black, again. How are you? 11 A. Great. 12 Q. In doing these forecasts, you all made 13 certain assumptions; is that correct? 14 A. That's correct. 15 Q. Now, one assumption did you not make in 16 preparing these forecasts with was with regard to the 17 Atlantic City smoking ban. 18 A. We did not. 19 Q. Correct? 20 A. Correct. 21 Q. Okay. Now how come? 22 A. Well, particularly at the time that we 23 were preparing the forecast, there was so much new 24 information about what the ban was going to entail, 25 how it was going to be enforced. We also did not have 84 BLACK - FOGARTY 1 any inclination at that time really on what our 2 competitors might do with respect to the smoking ban. 3 We did look at the -- broadly consider it and the 4 impact that it might have on our business in general 5 as we've made our market assessments, but how -- we 6 did not even have our plans on how we were going to 7 specifically address it at that time. 8 Q. You say that you submitted the forecasts 9 to us on about March 1 if I heard your correctly? 10 A. That's right. 11 Q. And the smoking ban went into effect 12 April 15th? 13 A. That's correct. 14 Q. Some of the financial press that I've 15 been reading attributes some of the problems that the 16 industry as a whole has in the first five months of 17 this year in part to that smoking ban. Have you -- 18 are you aware of those? 19 A. Yes. I've seen those reports. 20 Q. And what's your reaction to that? Do 21 you think the smoking ban has effected performance 22 here in Atlantic City? 23 A. I think you can draw that conclusion. I 24 think that it -- there's so much happening in the 25 industry right now with the Philadelphia impact, some 85 BLACK - FOGARTY 1 of the marketing conditions that exist in the market 2 right now along with the smoking. I think that it's a 3 little noisy to try to pinpoint exactly which piece of 4 that is having how much impact. I do think it's a 5 little early to draw any definite conclusions in that, 6 essentially, we've had six or eight weeks of the 7 smoking ban. And to this point there's not a physical 8 separation of the casino floor. 9 Q. Is that likely to come? 10 A. Well, by statute or by -- you know, in 11 the ordinance, we have to submit plans by later this 12 year as to what we will -- we and others, everybody in 13 the market -- plans to do to address the ban. 14 Q. And that's by September 15th, as I 15 understand it? 16 A. That is correct. 17 Q. And that's been out there for a while. 18 That is to say, since you prepared the forecasts that 19 there might be some physical altercation having to 20 occur? 21 A. That is correct. 22 Q. Now, your forecast assumptions did 23 include, as I understand it, an impact from 24 Pennsylvania gaming? 25 A. That's correct. 86 BLACK - FOGARTY 1 Q. Is that the present racinos? 2 A. It's both the present racinos and an 3 anticipated impact later on when the new competition 4 comes on -- whenever that may be. Seems to be getting 5 longer. 6 Q. Now, just so we're clear, that other 7 Pennsylvania initiative, if you will, if you don't 8 mind, can we call that stand-alone slot parlors? 9 A. Sure. 10 Q. To distinguish it from racino? 11 A. Right. 12 Q. They're supposed to come on line 13 somewhere in 2008? 14 A. That's correct. 15 Q. But you are right. I think there's been 16 some delay along that -- some sort of zoning thing or 17 whatever? 18 A. There's a lot of stuff, you know, a lot 19 of pressure points that have been out there. That's 20 the extent of my knowledge. Obviously, when any 21 jurisdiction is just starting up, there's certain time 22 periods they operate or certain amount of uncertainty 23 as to when those places will open. 24 Q. But your forecasts did account for those 25 stand-alones? 87 BLACK - FOGARTY 1 A. We did take that into effect, yes. 2 Q. But you say overall -- and, again, this 3 is in retrospect, as I heard on direct -- that the 4 impact of this Philadelphia, Pennsylvania, gaming has 5 been more than everybody thought. 6 A. I think the impact of the initial 7 casinos, with the little bit of analysis that we've 8 done lately in trying to address this and looking back 9 and reexamining, if you will, what has happened in 10 other markets -- I think one of the things that we 11 might be experiencing or that we might have misjudged 12 a little bit is that we initially had probably 13 expected the second wave of the -- because -- 14 Pennsylvania casinos need to come in before, wouldn't 15 have as much impact on the market. What we've done 16 lately, looking back at other markets, we might have 17 had it backwards in that the initial wave has the 18 bigger impact. And then when other casinos come into 19 that market, generally they start to eat into the 20 market share of the two places that are already there 21 and have more of an impact on that maybe then they'll 22 have on this market. 23 Q. There are some Atlantic City properties 24 that seem to do a little bit better than others during 25 this three, four, five-month period where these 88 BLACK - FOGARTY 1 Pennsylvania -- where we can measure what the 2 Pennsylvania gaming has hit; isn't that correct? 3 A. I -- I'd say that's correct. If you 4 look at gross gaming revenues. 5 Q. Borgata, Harrah's, and Resorts seem to 6 have positive numbers? 7 A. Well, I -- one of those companies I know 8 spent $15 million in the first quarter to get $9 9 million of revenue so. 10 Q. But where I was kind of going here, they 11 upped the promotional -- 12 A. That is correct. 13 Q. But that's kind of a conundrum, isn't 14 it, a giveaway thing? 15 A. We believe so. 16 Q. Talk to us about that. In what sense? 17 A. Well, we have made the conscious 18 decision, as I stated earlier, not to chase revenue 19 for revenue's sake. We've really been focusing on 20 trying to find the right mix of profitable customers 21 and to market to the customers based on -- our 22 customers based on their level of play and change that 23 mix, which is something relatively new for this 24 company, I believe, in the last couple of years. And 25 we have tried to focus more on the profitability of 89 BLACK - FOGARTY 1 our business rather than necessary -- chasing market 2 share, whenever it doesn't add anything to the bottom 3 line. 4 Q. Well, ultimately, the more the giveaway, 5 the more the margins are impacted? 6 A. To a certain extent. It's a fine line. 7 You have to decide what's right for your company in 8 that you -- you got to have the right amount of 9 promotion to entice the people to come to your 10 property. But in the flip side, if you make the 11 enticement too much, it's not profitable. 12 Q. Present you with a difficult choice, 13 though? I mean, if other places or your competitors 14 here in town are upping the giveaways, you're kind of 15 damned if you do and damned if you don't. 16 A. Maybe. To a certain extent. Like I 17 said, we monitor our business on a daily basis and try 18 to make those decisions and adjust our business plan 19 as we see fit. Not only on a overall basis but within 20 different customer segment groups. 21 Q. Have you given any thought to a point in 22 time or a point where you might more seriously 23 consider promotional allowances? 24 A. Like I said, we -- we, we adjust our 25 business plan on a daily, weekly, monthly basis. And 90 BLACK - FOGARTY 1 are always making modifications as we need to. If we 2 believe that there is a marketing program or series of 3 programs that we should adopt, it would help our 4 profitability, by all means we would go after it. 5 Q. You just don't see that at present? 6 A. To this -- we have made some adjustments 7 recently, but to this point in time, we feel that the 8 path that we've been on has been the best path for our 9 properties, particularly when you take into 10 consideration that we've had a large amount of 11 construction going on, and to a certain extent our -- 12 you know, our properties have been sort of half 13 finished with some of that. And you want to make sure 14 when you reach out to those customers and bring them 15 back that you're prepared for them physically as well 16 as operationally. 17 Q. Hindsight is 20/20, of course, as we all 18 know. But do you wish you had -- at this point, 19 anyway -- adjusted your forecasts to reflect a higher 20 impact on the Philadelphia gaming? 21 A. Well, like you said -- 22 Q. 20/20. 23 A. Yeah. A forecast is looking into a 24 crystal ball. You know? And there's reasons and 25 there is a lot of judgment and educated disciplined 91 BLACK - FOGARTY 1 decisions that go in trying to perform a forecast. 2 But, as I mentioned earlier, I think that the one 3 thing, the initial impact of Philadelphia and the 4 casinos in Pennsylvania and to some extent Upstate New 5 York, has probably been a little greater than what we 6 anticipated. Yes. 7 Q. In hindsight, wish you had made some 8 adjustments to reflect the smoking ban? 9 A. I think it's too early to tell that at 10 this point based on what -- based on what -- I -- to 11 be honest with you, I can't -- like I said, there's so 12 much going on in the market, I can't necessarily today 13 pinpoint how much of the market revenue activities 14 that's been going on is -- could be attributed to a 15 variety of things. 16 Q. Did your assumptions include the 17 scheduled opening of Borgata's major improvement in -- 18 well, before the summer of 2008? 19 A. Yes. Both Borgata and Harrah's are 20 doing significant projects in the Marina District. We 21 did consider those openings and their impact on the 22 market when we prepared our forecast. 23 Q. You're sure of that? 24 A. Yes. It -- 25 Q. We didn't see any evidence of that in 92 BLACK - FOGARTY 1 the documents you gave us. 2 A. Well, they're not specifically 3 identified as assumptions in the forecast. 4 Q. The smoking ban was. 5 A. However -- 6 Q. You specifically said in the assumptions 7 for the forecast that you weren't considering the 8 smoking ban. 9 A. That's correct. 10 Q. Okay. It's just we didn't see any 11 evidence that you had taken into account the Borgata-- 12 had not taken into account? 13 A. As I mentioned, we kind of start the -- 14 this process overall with a general assessment of what 15 we think the market -- the Atlantic City market -- may 16 look like. And then adjust our particular estimates 17 of our fore -- of our financial performance based on 18 what's going on around us. While there was not a 19 specific reference in the forecast to some impact from 20 those casinos -- from those openings, it was very much 21 a part of our forecast for the market. In fact, I 22 think if you look at, you know, the Marina in 23 particular during the forecast period that we did not 24 forecast any growth really at that property, at least 25 in the initial 12 months when we anticipated those 93 BLACK - FOGARTY 1 properties opening. 2 Q. And That was specifically because of 3 those properties opening? 4 A. To a large part, yes. 5 Q. Because that would be a significant 6 omission, wouldn't it? If you hadn't? 7 A. Yeah. I mean, the -- any time there's 8 new competition in the market, you need to take, you 9 know -- take care of that. I mean, if we knew that 10 some of these other projects that have been rumored to 11 be around town were going to open in the next -- 12 throughout the next forecast period, we would try to 13 take those into consideration, too. But, you know, it 14 appears that that's not going to be the case, so we 15 didn't address those. 16 Q. And they're going to be -- what would 17 you characterize, both the Borgata improvement and the 18 Harrah's Marina improvement as significant additions 19 to the town? 20 A. Based on what I know, yes. 21 Q. And they're scheduled to open before the 22 summer of 2008; is that correct? 23 A. As far as I understand. 24 Q. And the Taj tower is scheduled to open 25 after the summer? 94 BLACK - FOGARTY 1 A. In the third quarter of 2008. 2 Q. I'm going to show you D-1. 3 MR. FOGARTY: Who has that? You do, 4 Daryl. 5 Q. I'm going to show you what's been marked 6 as D-1 in evidence in this proceeding, Mr. Black. You 7 might know it better if -- this is your report. 8 A. Okay. 9 Q. You've read that, I assume. 10 A. Yes. Particularly the financial pieces 11 of it. 12 Q. Cover to cover? I'm only kidding. 13 (Laughter.) 14 Q. I think I need you to turn to page 49, 15 if you don't mind. 16 In this section we're talking about the 17 Plaza, as you see? 18 A. Yes. 19 Q. Are you on 49? 20 A. Yes. 21 Q. Good. 22 Now, you're targeting the net revenues 23 in 2007 of $292 million. Do you see that there, sir? 24 A. Yes. 25 Q. In that middle column. Is that what 95 BLACK - FOGARTY 1 that is, 292? Now, did you achieve the forecasted net 2 revenues for the first quarter of this year at the 3 Plaza? 4 A. No. 5 Q. Our information is that forecast was for 6 some 66.9 million, and you got 61.5. so you were off. 7 A. Yes. 8 Q. Now, to achieve the net revenues for all 9 of 2007, as you had forecasted there, you got some 10 ground to make up, I guess, do you not? 11 A. As I mentioned earlier, the -- you know, 12 I think that the Pennsylvania impact on this market 13 has been a little bit greater than we anticipated, and 14 that's going to play itself out throughout this year. 15 Q. In that same table there, look at the 16 GOP row, if you will. You didn't expect -- you didn't 17 hit your GOP mark the first quarter of '07, either, 18 did you? 19 A. Not at Trump Plaza. 20 Excuse me. 21 Q. Or the GOP margin? 22 A. No. 23 Q. Now, for 2008 and 2009 in that same 24 table, I see that the revenue for '8 and '9, for '08 25 and '09, is roughly the same, 291.9, 289.9. And yet 96 BLACK - FOGARTY 1 the cost and expenses seem to be going down, certainly 2 relative to 2007, and hence the GOP and the margin is 3 improving. At least as forecasted. 4 A. In the forecast. That's correct. 5 Q. Okay. Where will those reductions and 6 those expenses come from in 2008 and 2009? 7 A. As I've mentioned earlier, we have 8 started a variety of programs, operationally, 9 promotionally that we feel will have an impact on our 10 company. 11 From the way that we do business, I 12 think that our new data warehouse and revenue 13 management systems will allow us to much more 14 efficiently yield our rooms. We are continuing to 15 look at ways to optimize our workforce. We're looking 16 at ways to -- and plan now that we have one card to be 17 able to combine some of our marketing efforts among 18 the three properties. To a certain extent, although 19 we've been trying to change it for a while, our 20 properties almost competed against one another because 21 we didn't have the commonality in the database. And 22 so there were some duplicative efforts there. There 23 were a variety of operational enhancements that have 24 taken place and we expect to continue to improve. 25 Q. But even with the expenses moderations 97 BLACK - FOGARTY 1 that you've implemented so far, you didn't really get 2 your targets, did you? 3 A. Not in the first quarter. 4 Q. Still too early? Is that the idea? 5 A. Well, I just mentioned, it is early. A 6 lot of these programs just started to take effect. 7 And One Card came out yesterday and is a major 8 program, a major undertaking for this company. Our 9 revenue management system has just been introduced in 10 the early part of this year, and we're starting to see 11 some of the benefits of that. But these things -- you 12 grow into them over time. It's not like you can 13 introduce new software and turn it on and everybody's 14 an expert on it the first day. It takes a while to 15 learn how to use these systems. 16 Q. The GOP margin that's listed in that 17 table goes, according to the forecast, according to 18 what you gave us, from 16.8 percent in 2006 up to 25.2 19 percent in 2009. By our estimation that's a jump of 20 about 50 percent in the GOP margin. That's a pretty 21 healthy jump, is it not? 22 A. It's a -- yeah. It's six percentage 23 points. Five and a half. 24 Q. You still think that's realistic? 25 A. I believe so at this time. As I 98 BLACK - FOGARTY 1 mentioned earlier, several times now, so far this 2 year, things have been a little slower than what we 3 anticipated. We still believe very strongly that 4 we're doing the things that we need to do to manage 5 our business so that by the end of the forecast period 6 or within the forecast period that we will be at the 7 run rate or run rates that we've put in -- put in the 8 forecasts here. 9 Q. Sir, if you would, please, turn to page 10 53 of D-1, and this would involve the Marina. And I'm 11 not going to go through more numbers again. I don't 12 think I have to. 13 But what the sense is here, that you 14 expect still healthy improvement, healthy increases at 15 Marina. Perhaps not as healthy as you all think is 16 going to happen at the Plaza, but nevertheless still 17 healthy. And I ask you, do you still think that 18 that's realistic that you will achieve those GOP 19 margin marks, those measures, especially as depicted 20 there on table 3 on page 53? 21 A. Yeah. Again, within the forecast 22 period, by the end of 2009, it's still our belief and 23 our goal that we get to -- you know, to -- these run 24 rates, they're in here. Absent any unforseen 25 circumstances. This is an art. It's not a science. 99 BLACK - FOGARTY 1 I mean, we try to take a scientific approach to it, 2 but it is -- it is a bit of making your best guess at 3 what may occur, some date in the future. And nobody's 4 perfect at that. And, you know, we -- these may be a 5 little aggressive. They may be a little -- we may 6 surprise ourselves and do better than this. 7 Q. Page 58, if you don't mind, sir. The 8 section of the report in D-1 refers to the Taj. And I 9 guess more properly, I should direct your attention to 10 the page before, page 57, that's where the table, the 11 chart, is. 12 There you've got the GOP margin at the 13 Taj which, of course, is the larger facility of your 14 three, going up to 33.3 percent; is that correct? 15 A. Yes. That's what's in the forecast. 16 Q. Robust? 17 A. I -- particularly with the Taj Mahal, I 18 think with the expansion and the 800 room -- there is 19 no doubt that hotel rooms drive margins in this 20 market. And with adding 800 rooms and getting that 21 hotel up to 2,000 rooms that if you look at the other 22 properties in this town that have that room base, we 23 do not believe that our projections here are out of 24 line with what others are performing. 25 Q. And that's even considering the fact 100 BLACK - FOGARTY 1 that Borgata and Harrah's go on line before you in 2 '08? 3 A. They do go on line before us. You know, 4 our analysis of this has been that this city needs 5 more hotel rooms. And I think there's a lot of people 6 that feel that way. One study that I've read seems to 7 indicate that the critical mass, if you will, for the 8 city is somewhere around 25,000 rooms, and we're at 9 15,000 now. With those two additions and on top of 10 ours, we're still not close to 25,000 rooms. 11 Q. On direct, sir, you said you spent 12 over -- the company spent over 200 million invested in 13 the properties since about 2005? 14 A. Yes. 15 Q. Have you gotten a bang for that buck? 16 A. Yes. I think that -- to the extent that 17 the projects have been finished and a lot of this -- a 18 lot of these projects have just started to come on 19 line, particularly at the Taj Mahal, within the last 20 several months. To a certain extent, you don't start 21 to see the full impact of those projects individually 22 until everything you're doing at that one particular 23 property is complete because you still have a bit of 24 construction disruption going on and things like that. 25 We -- the most recent expansion at the 101 BLACK - FOGARTY 1 Taj, what we call Spice Road, introduced several new 2 food venues to the property that are really put in 3 place for now, but you may not see the full impact of 4 until we get the additional 800 rooms on line. 5 But I -- we are pleased with what we've 6 seen so far and expect that we will get, you know, a 7 requisite return out of those projects. 8 Q. But have you seen measurable impact -- 9 A. Absolutely. 10 Q. -- favorably from the expenditure of 11 over $200 million? 12 A. Yes. 13 Q. In what regard? What was the measurable 14 impact? 15 A. Well, if you look at the -- particularly 16 at Trump Plaza where we had the -- a lot of the 17 capital was done early on, the casino floor was 18 completely renovated there earlier on. Our -- the 19 last half of last year, in particular, our incremental 20 flow-through on the casino -- increased casino 21 revenues we got was well north of 50 percent. And on 22 a normalized basis, it's that -- a lot of times that's 23 a 30 to 35 to 40 percent kind of expansion. I can 24 look. I know that if you look at the noodle bar and 25 the new Asian games area that we put in at the Taj 102 BLACK - FOGARTY 1 Mahal along with the Eagle lounge, we did an analysis 2 on those projects specifically for our board of 3 directors. And then through the first roughly nine 4 months that they were in operation, they provided 5 about an almost a 20 percent return to us. 6 Q. But for April, Trump Plaza -- since 7 that's the one you mentioned -- for April, the casino 8 revenues were down 12.6 percent compared to the year 9 before. 10 A. That's correct. 11 Q. How does that tell me that what you've 12 done so far has paid off? 13 A. The question is what would it have been 14 if we hadn't had done those -- hadn't have done those 15 improvements? 16 Q. So it would have done worse, you say? 17 A. I don't know that. I, you know, 18 hindsight is 20/20, but we believe that -- we believe 19 that the changes that we've made at these properties 20 have and will continue to show improvement in our 21 operations over time, notwithstanding the fact that 22 as, you know, the market in general is -- a little 23 turbulent right now. 24 Q. Sir, in our report somewhere, but you 25 say you've read it, so I'll just refresh your 103 BLACK - FOGARTY 1 recollection. I won't take you to the page. We 2 identify that somewhere around December of 2008 you 3 all hit -- I don't want to call it a critical point, 4 but it's a -- it's the point at which your borrowing, 5 your available borrowing, will be at its lowest. Do 6 you recall that? 7 A. That's probably correct. 8 Q. About $28.8 million? 9 A. I don't remember the number 10 specifically, but if it's in the report, yeah. 11 Thanks. 12 Q. Well, we got it from you. Well -- I 13 guess you just thanked yourself. 14 In any event, what are you going to do 15 at that point if these forecasts aren't achieved? 16 A. I'm not going to wait to that point. As 17 I mentioned earlier, we're -- we aggressively manage 18 our business every day and are looking for -- always 19 looking for ways to improve our business. If we see 20 that things don't turn out the way that we anticipate 21 it, as I mentioned earlier, there's over $100 million 22 less -- of planned capital expenditures that we want 23 to do that we think will have an impact on our 24 property but that have not been committed yet. And 25 those are -- our plans there can very easily be 104 BLACK - FOGARTY 1 adjusted if need be. 2 As I mentioned earlier, we did 3 prioritize the projects that we thought would have the 4 biggest impact and then completed them first. 5 Q. So you take money from where you have it 6 presently planned in a cap-ex? 7 A. Exactly. 8 Q. Might not that cause some sort of a 9 vicious cycle? Because, as I understood where the 10 company is going here, it's by these kinds of 11 improvements that you use the cap-ex for, that you are 12 trying to identify that new customer, that your 13 quality customer and -- and improve performance in 14 that manner. 15 A. That's why we prioritize the areas that 16 we did to get in place of -- the technology needed to 17 identify those people, the casino floor renovations, 18 particularly at the Plaza and the Taj Mahal, the room 19 renovations at all three of our casinos. We have 20 our -- suites at the Taj Mahal have been out of 21 service since early this year. They're getting ready 22 to come back on line. The restaurant improvements 23 that we have made to date and are including, you know, 24 Finestra at the Marina and the steak house is 25 undergoing an renovation right now as well as the 105 BLACK - FOGARTY 1 casual dining restaurants at all three of our 2 properties were the items that we put the capital into 3 first, and they are now just starting to come on line 4 and have an impact for us. 5 Q. But do you see my question? I mean if 6 you take from cap-ex, you might very well impact the 7 kinds of -- the kinds of performance you wanted to get 8 worse? 9 A. To a certain extent, but there's also a 10 lot of operating focus that drive margins and tend to 11 drive margins particularly, as much or more so than 12 capital. 13 Q. You mean cutting expenses? 14 A. Cutting expenses or increasing revenues. 15 MR. FOGARTY: I'm almost done, Madame 16 Chair. 17 CHAIR KASSEKERT: That's okay, Mr. 18 Fogarty. 19 Q. The Taj construction. On schedule? 20 A. We still expect to open in the third 21 quarter of next year. 22 Q. Has it slowed recently, construction 23 there? 24 A. No. I don't think it has slowed. 25 There's people out there every day. 106 BLACK - FOGARTY 1 Q. So, I mean, at this point, as of today, 2 you're on whatever the schedule was that you were on? 3 A. On a relative basis, yes. We have 4 anticipated that that project would open in the third 5 quarter of next year. Sometime -- any time you're in 6 a construction process that is more than two years, 7 there's a margin of error on one side or another, but 8 that's still our expectation. 9 Q. But, I mean, that's all I'm asking you 10 here. Has anything happened recently where you're 11 off, you know, you're off schedule. You're -- you're 12 not where you thought you would be at this point in 13 time? 14 A. Not on a large scale. I mean, in a 15 construction project of that size, you have issues 16 that come up every now and then that you have to deal 17 with. And things that may set you back a day or a few 18 days that, hopefully, you have contingency plans built 19 into your schedule that allow you to make those up. 20 MR. FUSCO: Thank you, Mr. Black. 21 That's all I have, Chair. 22 CHAIR KASSEKERT: I have some questions, 23 and then we'll allow the other Commissioners to 24 have some questions. 25 One of the things that we're going to be 107 BLACK 1 doing today is also approving your material 2 debt transaction, the so-called grid notes. 3 And I know, Mr. Fusco, asked you some questions 4 on direct about that. I'd like to get just a 5 little more information about the grid notes -- 6 I know that it's all contained in the report, 7 but I'd like to get it on the record in terms 8 of the interest and in terms of your 9 flexibility once -- I know they're going to 10 capital improvements, and maybe you can 11 articulate a little bit about that. 12 THE WITNESS: Okay. Basically, what -- 13 the situation is in our company now that's a 14 little different than it was in the last time 15 they were here in front of you for this process 16 is that we're one company under one umbrella. 17 We have one set of debt agreements that govern 18 our borrowing for all three of our 19 subsidiaries. We don't have -- we're in the 20 bifurcated with certain subsidiaries being 21 governed by one debt agreement and certain 22 subsidiaries being governed by another. 23 These grid notes basically are the way 24 that we allocate the corporate borrowings down 25 to the properties that are using the -- that 108 BLACK 1 are using the line. You know, I -- for 2 instance, if we need to fund a capital 3 expenditure or an operating need at one of the 4 properties, we will go borrow that money at the 5 parent company level and internally allocate it 6 down or fund the cash down to the operating 7 entry -- entity through a -- through an 8 intercompany loan at the rate that we borrow 9 at. I think the rate in these notes is eight 10 and a half percent, which is the rate on our 11 bond. 12 CHAIR KASSEKERT: Uh-huh. And how have 13 you allocated the use of those grid notes among 14 the three -- the three casinos? 15 THE WITNESS: Well, it generally has 16 been based -- the time that -- of the 17 reorganization, there was an allocation that 18 preceded my time. There was an allocation of 19 that that the company went through with the 20 valuation experts and their accountants. And 21 the accountants to allocate primarily based on 22 the size of the properties and the assets 23 involved. Since that time we have added to or 24 subtracted from the ones in each individual 25 property based on the cash flow back and forth 109 BLACK 1 between the parent companies and the properties 2 themselves. 3 CHAIR KASSEKERT: And say you spend all 4 the money on cap-ex's, will you have any 5 flexibility if you've done all the capital 6 improvements that you see need to be done, 7 what's your cushion there? We have a cushion? 8 THE WITNESS: Yes. In the -- as I 9 mentioned, in the forecast period at the peak, 10 there's around $28 million of cushion or 11 available cash to be borrowed assuming we do 12 our -- you know, we meet the forecast, and we 13 do all of the capital expenditures. We monitor 14 that all the time and adjust our plans 15 accordingly. 16 CHAIR KASSEKERT: Okay. With respect 17 to -- Mr. Fogarty questioned you pretty 18 extensively on the forecast. And this goes 19 well beyond the 36 months that we're talking 20 about here, but we're going to see not only 21 competition in Pennsylvania with the new 22 stand-alone slot parlors that will be built but 23 also more competition in Atlantic City with 24 respect to Pinnacle, with respect to the Revel 25 Entertainment. Any thoughts yet about how 110 BLACK 1 those forthcoming projects will impact upon 2 you, especially the ones in Atlantic City? 3 THE WITNESS: Obviously, I think we're 4 going to be much better prepared to face those 5 today or in the future than we would have been, 6 you know, when I got here or Mark got here, you 7 know, since the company was reorganized. 8 I think that the market, in general, is 9 going through a change, and the type of 10 customers that we are trying to attract -- 11 there's been no question that Pennsylvania has 12 shown that there is a segment of the customer 13 base out there that is driven by convenience. 14 And as an industry, and particularly this 15 company, we're putting a lot of efforts into 16 changes that customer mix over time so that -- 17 rely less on the day-trip customer and more on 18 the those customers that are driven by the 19 amenities that we all are adding that are not 20 necessarily casino related, you know, rooms, 21 food and beverage, spas, to some extent. You 22 know, if you look around town, there's a lot of 23 activity going on to attract more than that 24 two- and three-day convention tour and travel 25 business, particularly mid-week when we have 111 BLACK 1 the availability. 2 CHAIR KASSEKERT: Okay. Just one other 3 question, which I don't think you're going to 4 be able to answer at this point. I'd like to 5 ask you about the results of Merrill Lynch's 6 recommendations and what's coming next. But I 7 have a feeling you're not going to tell us 8 that. Maybe I'll ask Mr. Juliano and see if 9 he's going to say anything when it's his turn 10 to testify. 11 With that, I'll ask if Commissioners 12 have any other questions. 13 COMMISSIONER FRULIO: Yes. 14 CHAIR KASSEKERT: Commissioner Frulio? 15 COMMISSIONER FRULIO: Just curious. 16 You're talking about capital improvements, and 17 I just want to know if the company formally has 18 any kind of surveying being done by the 19 customer? Do you get any feedback from 20 customers on that sort of thing? 21 THE WITNESS: Yes. We have -- update 22 that, you know -- the last one was done before 23 a significant part of -- particularly at the 24 Taj, you know, the improvements have been. But 25 we survey our customers a couple times of years 112 BLACK 1 just in general. And then informally survey 2 them all the time as we walk around the 3 buildings or the reports that we get from the 4 general managers. The cust -- the feedback 5 we're getting from our customers has been very 6 positive to the improvements that we've been 7 making to the -- you know, to the floor, to the 8 variety of the games that we offer. 9 I mean, when I got here a couple years 10 ago, I don't think that we had the most 11 competitive slot product, and we've made a 12 lot -- that's one thing I failed to mention. 13 We made a lot of changes to make sure that 14 we're offering the most popular games out there 15 right now, and the customers have responded 16 positively. 17 COMMISSIONER FRULIO: I know you've just 18 recently implemented the integrated rewards 19 program -- which is a good idea, by the way. 20 I'm glad you did that. Have you gotten any 21 feedback on that? Too soon? 22 THE WITNESS: Yeah, I mean, the 23 customers couldn't wait for it once we 24 announced it was coming, you know? And to them 25 it wasn't soon enough, probably. But, yeah. I 113 BLACK 1 mean, literally we flipped the switch yesterday 2 morning. 3 COMMISSIONER FRULIO: Yeah. I can't 4 believe you took that long to do it, by the 5 way. Thank you. 6 CHAIR KASSEKERT: Commissioner Fedorko? 7 VICE CHAIR FEDORKO: I just have one 8 question. 9 You mentioned that you saw a report 10 somewhere that the critical mass for hotel 11 rooms in Atlantic City is 25,000. Where did 12 you -- I've never heard a number mentioned 13 before. 14 THE WITNESS: That -- I'm trying to 15 remember off the top of my head where it was. 16 I think it was a report maybe that the 17 Commission of Visitors Bureau or somebody had 18 done, and it's been two or three years ago. 19 But as we were doing -- going through a lot of 20 our strategic planning process a year ago and 21 trying to explain to our board of directors 22 what we thought might happen when the tower at 23 the Taj Mahal opens up, I can't remember 24 exactly where it was, but I read that. And it 25 was a recent report. 114 BLACK 1 VICE CHAIR FEDORKO: Okay. 2 CHAIR KASSEKERT: Commissioner Epps? 3 COMMISSIONER EPPS: Go ahead. 4 COMMISSIONER SOMMELING: All right. 5 Just following up on Commissioner Frulio's 6 comments. In reference to the intended 7 improvements for the three properties and, in 8 particular, the Taj Mahal, how aggressive is 9 the company now going to become in marketing 10 what is going to become new in terms of the 11 Trump properties to offer to the public, and 12 will that be done in one big effort, or are you 13 going to do it in stages as it goes? 14 THE WITNESS: That's a better question 15 for Mark, but I'll give it to shot. 16 We have -- we have -- as things have 17 come on line, we have stepped up our 18 advertising to a certain extent. There is a 19 major campaign going on right now with the 20 introduction of One Card. We've done some -- 21 we've introduced some advertising up in the 22 Philadelphia market within the last few months 23 to advertise these changes and try to 24 differentiate some of the things that we feel 25 we can offer in Atlantic City that they can't 115 BLACK 1 offer in Philadelphia. As well as, I think 2 just locally, if you look, driving in as you 3 drive down the Expressway here, several of our 4 billboards right now emphasize the new product 5 offerings that we've put in place. And we're 6 doing for the first time in a while, this 7 company is doing some TV advertising in some 8 major markets. 9 COMMISSIONER SOMMELING: What is your 10 overall projection for the complete completion 11 date of the capital expansion improvements for 12 the three properties? 13 THE WITNESS: The major renovation 14 capital right now is anticipated to run through 15 the first quarter of next year. You know, we 16 still have a lot of things, for instance, the 17 casino floor at the Taj Mahal, we're roughly a 18 third of the way through or close to half. We 19 did those areas that, you know, the more 20 popular areas in the front part of the casino 21 we've done. Phased in so that we would have 22 them ready for the summer season. We're going 23 to continue that throughout the year. But, you 24 know, that will be ongoing through this year, 25 and it will be some of the stuff, just because 116 BLACK 1 of physical limitations of getting, you know -- 2 being able to get it constructed fast enough, 3 some of the things will be into next year 4 before they're finished. 5 COMMISSIONER SOMMELING: Thank you. 6 That's all, Madame Chair. 7 CHAIR KASSEKERT: Commissioner Epps? 8 COMMISSIONER EPPS: I just have a few 9 questions from all over the place. I'll start 10 with continuing Commissioner Sommeling's line. 11 I know from other appearances here about 12 the significant work at Trump Plaza with the 13 rooms, you did extensive work with the rooms 14 and changes, the floor at Trump Plaza. I also 15 know that you've changed the floor, you've 16 added Spice Road, and your regular tower at 17 Trump Taj Mahal. We rarely hear much about the 18 capital expenses and the projects for 19 development of the Marina. Can you touch on 20 the Marina's development and changes and a 21 little bit about why they are less grand on 22 scale? Or they appear to be less grand on 23 scale? 24 THE WITNESS: I think it's more to the 25 fact that we haven't gotten -- we're not -- on 117 BLACK 1 a percentage of completion basis, we're not as 2 far along at the Marina. We -- the, you 3 know -- when we started this process, they 4 start -- my understanding is they started with 5 Trump Plaza first because it was in the most 6 dire need of refurbishment. At the same time 7 or concurrently we next put the emphasis on Taj 8 Mahal because it is our biggest property. 9 At the Marina, we have done a lot of, 10 you know -- just like at the other two 11 properties, all the rooms have been renovated 12 at the Marina. We earlier this year opened -- 13 redid one of our restaurants, renamed it 14 Finestra. It's a new concept, an Italian 15 dining there. Very fresh project. 16 We are in the process right now of 17 renovating both the casual restaurant, or the 18 coffee shop, there as well as the steak house. 19 There has been some renovation of the casino 20 floor, and there's some ongoing right now in 21 the casino floor. There has been some 22 renovation done to the meeting space and 23 convention area at the Marina. And we have 24 more things planned that just aren't completed 25 yet. 118 BLACK 1 COMMISSIONER EPPS: Okay. Back to the 2 forecast questions or the line of questioning 3 that Mr. Fogarty took you down. It seems that, 4 if I'm not mistaken, looking at the overall 5 forecast, the Trump properties are going to 6 need to get back to preBorgata numbers in the 7 next year or so. Is that fair to say? 8 THE WITNESS: Well, I think -- yeah. In 9 general, I think -- I'm a little fuzzy on, 10 frankly, on where the company was preBorgata 11 because it predated me, so I don't remember it 12 exactly. But in general, yes, our goal as a 13 management team that we've set since we've been 14 here is to get our properties to industry 15 average margins. As our first goal. Now, 16 whether that happens at each individual 17 property or not -- but on -- if you add our 18 three properties together, because we're really 19 are managing the business as one business with 20 three -- with three outlets as opposed to three 21 separate casinos now. 22 COMMISSIONER EPPS: Okay. And now, 23 assuming that fact, I guess the question then 24 becomes, if you haven't been able to get over 25 that hump in that time, in what will we'll call 119 BLACK 1 the postBorgata era, what is the plan to get 2 there now? 3 Now, I heard you say your new marketing 4 plan and increasing hotel rooms. Are there 5 other things that we haven't heard yet that are 6 going to factor into that equation that will 7 get you there? 8 THE WITNESS: Well, I think it's -- like 9 you said, it's the continual monitoring of our 10 business. Operationally, marketingwise, 11 capitalizewise, to improve our business. We -- 12 this plan that we've put in front of you has 13 been done based on what we think and based on 14 what we have approved from our board of 15 directors right now. If we're successful at 16 doing this, there's a lot of things we would 17 like to do as a management team, you know, 18 going forward to continue to grow this company. 19 This forecast is based only on the capital, if 20 you will, and the operating plan that's been 21 outlined in the forecast. It doesn't -- you 22 know, we're not anticipating needing more 23 capital to achieve this plan at this point. 24 COMMISSIONER EPPS: Okay. And other 25 than, I guess, the Spice Road kind of approach, 120 BLACK 1 it doesn't seem that you -- your company is 2 moving as aggressively down the nongaming 3 amenities road as some of the other -- other 4 companies in the market. Or, if not, you can 5 correct me where you're not. But is that a 6 plan? Was that by design? 7 THE WITNESS: Well, like I said, we 8 focused so far on those areas where we thought 9 we would have the highest impact. There are in 10 our plans more -- particularly in the food and 11 beverage area -- more things that we've been 12 discussing as far as maybe introducing some 13 outside restaurateurs to our properties and 14 other things like that. We have in our plans, 15 or on our wish list at least, maybe some 16 renovations to some of the spa areas maybe or 17 something like that. But we've prioritized, 18 like I said, in the areas. I've actually -- 19 you know, half of the capital that we have 20 spent or will spend more so has been on rooms. 21 And we -- like I said, we really believe that 22 that is what -- room product and the addition 23 of those rooms is what's going to help drive, 24 you know, the profitability for the city. 25 COMMISSIONER EPPS: Okay. And as to the 121 BLACK 1 grid notes. I mean, for a clarification, each 2 company, there's a targeted number that they 3 would take down. 4 THE WITNESS: Right. 5 COMMISSIONER EPPS: Is there a 6 corresponding responsibility to improve 7 performance in order to make those payments 8 back? 9 THE WITNESS: Well, like I said -- 10 COMMISSIONER EPPS: Or could one company 11 help the other? 12 THE WITNESS: The one company could help 13 the other. Or between the parent -- generally, 14 it's between the parent company and that 15 particular subsidiary. Obviously, we put any 16 capital project or -- you know, if we're going 17 to fund a major capital project or improvement 18 at one of the properties, there's a -- we go 19 through an exhaustive process of trying to 20 figure out what, you know -- if that project is 21 worth it, if you will. And before Mark will 22 agree and myself to fund that project we, you 23 know -- we go through a pretty thorough process 24 with each of the property and make sure that 25 we're comfortable that there's going to be a 122 BLACK 1 return there. That obligation, though, if you 2 will, is really a paper obligation between that 3 subsidiary and the parent company. It really 4 doesn't have anything to do with outside 5 lenders. 6 COMMISSIONER EPPS: Okay. I lost my 7 train of thought. 8 Oh, with respect to flexibility. When 9 you get to that critical point in late '08, and 10 you said that you would make an analysis of 11 what you have in place and maybe pull back from 12 some things. So does that suggest that there's 13 going to be slow going with respect to your 14 capital expenditures projects until you get 15 through that critical period and then move 16 forward? Because if you go down the line and 17 you pull the trigger on a project and you start 18 moving it, it will be difficult to scale it 19 back. 20 THE WITNESS: Right. 21 COMMISSIONER EPPS: So -- 22 THE WITNESS: We do phase projects 23 specifically, you know -- part of our phasing 24 of our projects, one, is based on physically 25 when we can get them done, and, two, is based 123 BLACK 1 on whether or not our outlook is changing. And 2 I -- like I said, a big part of what I do is 3 monitor that on at least monthly basis if not 4 more -- far more frequently than that. Looking 5 at the recent trends in our business, what we 6 anticipate trends to be, particularly for the 7 next. We do very specific planning for 90 days 8 out. And then, you know, once you get beyond 9 that, it gets a little bit less exact. But I 10 won't wait until 2008 to start monitoring, you 11 know, that flexibility. We monitor it on a 12 daily basis. 13 COMMISSIONER EPPS: I mean, I guess my 14 question is. If you look at it in a three-year 15 window, that 2008 is almost squarely in the 16 middle or a little bit toward the end. And if 17 you go -- if you wait that long to decide to 18 pull a trigger on a project, you've got a year 19 where you haven't really experienced -- 20 THE WITNESS: The reason for that, 21 primarily, is because that is near the end of 22 the completion of the Taj tower. 23 COMMISSIONER EPPS: Right. 24 THE WITNESS: Okay? That project is 25 getting done. Okay? It's moving forward. 124 BLACK 1 It's the other things that we will look at as 2 ongoing. We've got the flexibility to do that 3 project. And it's going to happen. It's -- 4 you know, if we have to -- if we have to, you 5 know, we would look at the other projects that 6 individually aren't that significant but in the 7 aggregate add up to quite a bit. 8 COMMISSIONER EPPS: I think that was all 9 I had. 10 CHAIR KASSEKERT: Commissioner 11 Sommeling? 12 COMMISSIONER SOMMELING: Yes. In regard 13 to all the expansion that's going on in the 14 three properties -- and I'm sure you've 15 considered, but is there a number that you're 16 thinking about in terms of increase in staff 17 and employees? And what will the wages and 18 salaries encompass in terms of your budgetary 19 concerns in that regard? 20 THE WITNESS: Well, it has gone -- to 21 give you a specific number to say that, you 22 know -- I can't. I mean, we've looked at this 23 based on the amount of incremental revenue and 24 the amount of people that we think would serve 25 it -- would take to serve it. Suffice to say 125 BLACK 1 that at the Taj Mahal, you know, when you're 2 adding 800 rooms, there's a lot of people that 3 go into servicing the customers, servicing the 4 rooms, and the incremental casino business that 5 you get from there. It's really the people you 6 need on what are now off-peak times. Our 7 casinos are packed on Friday and Saturday 8 night, just like everybody in town. It's the 9 amount of staff that you're going to need, you 10 know, Tuesday, Wednesday, Thursday. And we 11 continue to monitor that and probably have a 12 far more specific number as we go along based 13 on what else is going into the -- going on in 14 the business. 15 But suffice it to say that we are going 16 to need, you know, our -- if these projects are 17 successful, we are going to need more people to 18 help service the customers and the wages will 19 be commensurate with, you know, the -- whatever 20 those positions need be. Whether it's line 21 level, you know, customer service help or 22 management positions. 23 COMMISSIONER SOMMELING: Thank you. 24 CHAIR KASSEKERT: Any other questions? 25 Anything on redirect, Mr. Fusco? 126 BLACK - FUSCO 1 MR. FUSCO: Yeah. I just have a short 2 question. 3 CHAIR KASSEKERT: Sure. 4 5 REDIRECT EXAMINATION BY MR. FUSCO: 6 Q. Mr. Black, there's been a lot of 7 questions asked of you over the last hour about the 8 forecast and the flexibility, but do you still have an 9 opinion with regard to whether or not the forecasts 10 are achievable over the forecast period and that the 11 companies have financial stability through the 12 licensing period? 13 A. As I said before, I -- I -- we believe 14 as a company, I believe that at this point in time 15 that within the forecast period that the forecasts are 16 reasonable. You know, I mentioned earlier that, 17 acknowledge that things have been a little slower 18 early on than what we had anticipated when we went 19 into this, but it hasn't changed our long-term view of 20 where we're going to be. And within the context of 21 the statute, yes, I believe we have the financial 22 flexibility or financial stability throughout the 23 license period. 24 MR. FUSCO: That's all I have, Madame 25 Chair. 127 1 CHAIR KASSEKERT: Thank you. 2 Mr. Fogarty, anything on redirect? 3 MR. FOGARTY: No, Madame Chair. 4 CHAIR KASSEKERT: Okay. 5 MR. FOGARTY: We're done. 6 CHAIR KASSEKERT: Any other questions? 7 You may step down, Mr. Black. Mr. 8 Fusco, your next witness? 9 MR. FUSCO: We will call Mark Juliano. 10 And Mr. Pickus will handle the -- 11 MR. FOGARTY: The assistant. 12 CHAIR KASSEKERT: Mr. Juliano, you can 13 come forward. 14 Mr. Nance will swear you in. 15 16 MARK JULIANO, was duly sworn to testify 17 in this matter. 18 19 MR. NANCE: Please state your name for 20 the record. 21 THE WITNESS: Mark Juliano. 22 MR. NANCE: Thank you. You may be 23 seated. 24 CHAIR KASSEKERT: You may proceed, Mr. 25 Pickus. 128 JULIANO - PICKUS 1 DIRECT EXAMINATION BY MR. PICKUS: 2 Q. Thank you. Mr. Juliano will you would 3 you please state your position and position with Trump 4 Entertainment Resorts? 5 A. My -- my responsibilities -- my 6 position. Okay, let's start from the beginning. 7 You can understand why it might be a 8 confusing question. 9 (Laughter.) 10 A. But, Mr. Assistant, my title is Chief 11 Operating Officer of Trump Entertainment Resorts, and 12 my responsibilities are to oversee the daily 13 operations of the three hotel casinos here in Atlantic 14 City. 15 Q. And just a follow-up on that for half a 16 moment, has there been a recent announcement after 17 change with respect to your title and change of 18 responsibilities going forward? 19 A. Yes. I was recently named interim CEO 20 this week in light of the resignation of Jim Perry. 21 Q. Okay. 22 A. Which the company announced on Tuesday. 23 Or I believe Monday, rather. 24 Q. Monday. 25 A. Monday. Yes. 129 JULIANO - PICKUS 1 Q. Thank you. 2 Can you also provide for the Commission 3 your background before joining Trump Entertainment? 4 A. I have been here in Atlantic City since 5 1978. I am happy to say that I joined Resorts 6 International that summer, spent a good bit of my 7 career there, starting in the showroom and then into 8 some marketing positions. Left there in 1986 to go to 9 Caesars here in Atlantic City. 10 I have also had two periods of my career 11 where I have worked in Las Vegas in the early 19 -- 12 late 1989, 1991 -- through 1991 and beginning of 1992 13 at Caesars Palace in Las Vegas, being the President of 14 their Marketing Corporation. I returned to Caesars 15 Atlantic City to be the Executive Vice President, and 16 then eventually the Chief Operating Officer of Caesars 17 Atlantic City. I returned back to Caesars Palace 18 recently in 2003 and then back to Trump Entertainment 19 in 2005. 20 Q. Great. Thank you. 21 Mr. Black in his testimony, and/or 22 during his cross, generally referred to some of the 23 facility improvements that have occurred at the three 24 Trump properties. Could you provide some further 25 detail for the Commission with respect to those 130 JULIANO - PICKUS 1 facility improvements that have occurred since you've 2 joined the company? 3 A. Actually, some of the improvements were 4 occurring and actually did occur before I joined the 5 company, primarily the guests rooms. But through this 6 period up to today what has been improved or 7 refurbished at our properties are all of our guest 8 rooms with the exception, as Mr. Black mentioned, the 9 penthouse floor of suites at the Taj Mahal, which we 10 are going to bring back into service at the end of 11 this month. Those penthouse suites have been done by 12 a company in Los Angeles called Wilson & Associates 13 that really will be the premiere suites in Atlantic 14 City. And I think that Mr. Black had mentioned also, 15 it's important to note that they have been out of 16 service for the entire year so far. 17 Also, as part of our refurbishment, we 18 have renovated the entire casino floor at the Trump 19 Plaza. We have renovated our coffee shop there, which 20 was the old New Yorker, which many people will 21 remember. Same location but a completely different 22 look and feel and menu. We have touched quite a few 23 of our restaurants at the Plaza and at the Marina and 24 at the Trump Taj Mahal. I think that we are about a 25 third of the way through a renovation of the casino 131 JULIANO - PICKUS 1 floor at the Taj Mahal. 2 And, as Dale had mentioned, we have also 3 spent a considerable amount of time on some of the 4 back-of-the-house facilities. We have improved our 5 employee cafeterias for the first time since the 6 buildings have been opened. We have new cafeterias. 7 We have also had a very big emphasis on capital 8 expenditures throughout the buildings that are of the 9 maintenance nature, so we have caught up on a lot of 10 those issues. 11 And we are in the process now of doing a 12 lot of work at the Marina. We are refurbishing -- we 13 have already opened and refurbished the Italian 14 restaurant named "Finestra" there, and we are 15 currently redoing our steak house, which we'll get to 16 reopen very shortly. We very recently, I believe a 17 week and a half ago, opened a new VIP check-in area at 18 the Marina. The Marina also has had all of their 19 guest rooms refurbished. 20 And the other thing that we have spent 21 quite a bit of time and capital on is the replacement 22 of slot floor. So all of those things are ongoing and 23 we are, you know, very pleased so far with the results 24 of them. 25 We have focused a lot of our efforts on 132 JULIANO - PICKUS 1 taking the hotels and taking what was a fairly dated 2 look and tried to bring it into a period that is more 3 in keeping with some of the standards that have been 4 set with the newer hotels in town and the newer 5 product that has come on line in Las Vegas. So if you 6 come into the hotels, you'll see a much lighter, a 7 much more elegant, a much more timeless, a much softer 8 color palate and feel. And ambiance. We think that 9 that helps create a feeling of comfort for our guests. 10 And it is something that we think will be a little bit 11 more timeless than some of the very iconic and very 12 thematic environments that we had before. So, safe to 13 say, the purple and the lavender at the Taj Mahal is 14 banished forever. 15 (Laughter.) 16 A. Along with the pink pit stands, so. 17 Q. All right. Just a follow-up to that 18 those changes in color -- and I'm winking at you, 19 here -- were on our own initiative, not with any 20 direction at the Casino Control Commission? 21 (Laughter.) 22 CHAIR KASSEKERT: We had nothing to do 23 with that. Can I reiterate that one more time? 24 No color schemes here. 25 A. Well, when Madame Chair and I took a 133 JULIANO - PICKUS 1 walk, she just commented on how much she liked the new 2 colors. 3 (Laughter.) 4 A. And Mr. Trump is also very happy with 5 the new colors. 6 Q. Mr. Black spoke generally with respect 7 to the Taj Mahal hotel tower currently under 8 construction. Can you provide for the Commission some 9 more information on the status of that project? 10 A. As Mr. Black had indicated, we expect 11 the Taj Mahal hotel tower to come on board in the 12 third quarter of 2008. It will have a big emphasis on 13 standard rooms. The rooms -- which there are 712 14 standard rooms, and the balance of 76, I believe, 15 suites. But the emphasis on the standard room is to 16 really get our room mix to be able to really 17 concentrate on that mid-week business that is so 18 important to us. 19 The new revenue management system that 20 we have bought will help us go out and identify a 21 retail customer that will pay that price point of the 22 standard room that we were developing and help us to 23 facilitate that baseline of mid-week business that we 24 can build upon. So we think that that 2,000 room 25 inventory number is a good one for us to really market 134 JULIANO - PICKUS 1 and facilitate ourselves to convention business and 2 small regional group business, which really helps with 3 the peaks and valleys of occupancy. 4 I think that one thing that is important 5 to note, just so that I don't forget. People 6 sometimes don't realize that the beauty of the new 7 hotel tower at the Taj is that the infrastructure of 8 the Taj Mahal exists. There is no additional front 9 desk space. There's no additional parking needed. 10 There is no additional back-of-the-house facilities 11 needed. The original Taj Mahal was built to have the 12 potential to service 4 to 5,000 rooms. So this new 13 room tower is really going to take the ability of us 14 to work off of a fixed cost. So the -- Dale talked a 15 little bit about in reference to a question that was 16 asked about staffing, certainly the incremental 17 staffing to service those rooms is going to be 18 necessary. But we will not have to add a lot of new 19 food and beverage facilities or kitchen facilities, 20 catering facilities, even meeting facilities to some 21 degree. We have some plans for some small meeting 22 space. But the beauty of the Taj is the fixed cost 23 that exists which we can leverage at this new tower. 24 Q. Beyond those projects that we've just 25 discussed with the Commission, does Trump 135 JULIANO - PICKUS 1 Entertainment have any current plans for further 2 expansion or development in Atlantic City? 3 A. No. No. Not right now. 4 Q. Is there an opportunity, however, given 5 the so much of the land holdings of the companies, 6 three properties, for that to be examined and to 7 potentially occur in the future? 8 A. Yes, there is. Obviously, one of the 9 most appealing things about the company is the real 10 estate that the company controls. Mr. Trump is a real 11 estate developer, and his expertise in identifying the 12 real estate early on in his adventure or his venture 13 into Atlantic City have proven to be fortuitous for 14 us. 15 We have do have real estate to add a 16 tower at Trump Plaza or at the Marina if we would 17 choose to do so, and we will continue to monitor the 18 growth of Atlantic City in general and our own success 19 and absorbing the new capacity at the Taj Mahal and 20 make those decisions when appropriate. 21 Q. Okay. As the person responsible for the 22 overall operations of the three Trump casinos, what is 23 your general operating philosophy? 24 A. I think that, you know, obviously, the 25 differential in Atlantic City or in any hotel casino 136 JULIANO - PICKUS 1 is service. And it is the quality of the service that 2 you provide which enables you to increase the quality 3 of the customer that you attract. So we have really 4 tried to make the operating philosophy be one that we 5 need to measure the quality of the people who are 6 visiting our facilities and not the quantity. 7 I think that in many times -- and not 8 really in prior management of Trump Entertainment, but 9 in the cycles that have existed in Atlantic City in my 10 experience running Caesars, the metric on Monday 11 morning would be, how many cars did we park? How many 12 rooms were occupied? How many people arrived by bus? 13 Now we are trying to really focus on what -- how many 14 rooms were occupied, but what was the rate? Or how 15 many rooms were occupied, but what the gaming 16 contribution from each of the rooms? How many cars 17 were parked, but did they join your players' club, and 18 did they play while they were here? So the metrics 19 have gone from quantity to quality. And some of the 20 things that Dale has already spoken about have enabled 21 us to do that because you can't make that 22 philosophical or operating shift to quality unless you 23 can measure it. And, quite frankly, we didn't have 24 the technology until recently -- to do that. 25 So that is really the operating 137 JULIANO - PICKUS 1 philosophy that we have tried to set at the highest 2 level of the management. And over the period of time 3 that we have been there, I think that it's starting to 4 really, you know, settle into the mid and lower levels 5 and also to the frontline employees. 6 Q. To that last point, has the company 7 implemented a specific training and service programs 8 for its line employees so that they are acting 9 consistent with that philosophy? 10 A. We have made a fairly recent investment 11 in a training department that we have -- hired some 12 people that have worked at some of our competitors to 13 refine our training programs, to put in a system where 14 we can measure our training and our levels of customer 15 service. 16 We also rely on a company that -- an 17 outside company that comes in and checks our level of 18 service and reports to us on a monthly basis. We 19 share the results of those customer service scores 20 with the three general managers, and it has become 21 quite a race each month to find out which one of them 22 has scored the best and in which departments. 23 So, yes, we have really focused on -- on 24 customer service in a way where we are trying to get 25 people to understand that good customer service is now 138 JULIANO - PICKUS 1 expected, and it is not something that people will pay 2 a higher price point for. It's that anticipated 3 customer service. It is the idea that we can 4 anticipate a customer's needs and have your employees 5 understand how to anticipate that and meet them before 6 even asked. That becomes what we really consider to 7 be superior customer service. And in today's 8 environment, good customer service is not going to be 9 enough. It needs to become superior. So that is an 10 ongoing program that will continue for as long, 11 certainly, as anybody I know would run the company, 12 including myself. 13 Q. Now, Mr. Black in his testimony 14 discussed the impact of new competition. What lessons 15 would you say have been learned from the recent 16 introduction of slot machines in the Pennsylvania and 17 New York markets? 18 A. I think what we have learned is that the 19 convenience factor of gaming in our primary theater 20 markets is very impactful. I think that, you know, 21 we-- we are very careful to look each week at where 22 our business comes from. And we know by segment. And 23 we go from A to D -- or E, I believe. A to E. Which 24 customers arrive in our buildings and what portion of 25 our revenue they might generate. So we have seen that 139 JULIANO - PICKUS 1 the convenience of Pennsylvania has greatly impacted 2 our lower level customers, the ones that do not have 3 either any incentive or a bigger incentive to come to 4 Atlantic City. And the convenience of being able to 5 go very close to their homes have been quite appealing 6 to them. So I would say that the impact of gaming on 7 one of our primary theater markets has been in most 8 impactful on those lower segments of our database. 9 Or, more importantly, the unrated portion of it. The 10 customer that would drive down only because they 11 wanted to game, not because they were able to qualify 12 for complimentary. They didn't play that level. Now 13 they have chosen to go to Pennsylvania, which is 14 closer. 15 Q. And related to that, could you comment 16 on your thoughts with respect to the potential impact 17 of a similar introduction of convenience gaming in 18 other significant theater markets to Atlantic City? 19 A. You know, obviously we pay great 20 attention, as I had said earlier, to where our 21 business comes from. And even a more important market 22 than Philadelphia is our New York and North Jersey 23 market. And I would have to say the introduction -- 24 obviously, we cannot control what other jurisdictions 25 do. But I think it's important to note that within 140 JULIANO - PICKUS 1 the State of New Jersey, we have an incredible 2 investment here that we need to protect. And the 3 introduction of VLTs, which we have all heard about, 4 in the Meadowlands would be very impactful to Atlantic 5 City. And it would be an even more significant 6 impact, I believe, in Philadelphia because more of our 7 customers come from that area. So that I would say it 8 would be -- it would be a very discouraging sign for 9 Atlantic City. And I would -- I can say on behalf of 10 our company that any major capital investment after 11 the introduction or the approval of VLTs at the 12 Meadowlands would have to be seriously considered. 13 Q. Thank you. 14 Last question. In its report, in fact 15 in Mr. Fogarty's opening, the Division has referenced 16 certain matters involving under-aged drinking and 17 gambling at Trump Marina. Could you please address 18 those matters for the Commission? 19 A. Yes. Obviously, we take our 20 responsibility -- and we understand that our gaming 21 license comes with a responsibility to enforce both 22 the moral duty that we have to make sure that people 23 under-aged are not gambling or drinking. And this 24 report by the Division has given us the opportunity to 25 review policies and procedures and to implement some 141 JULIANO - PICKUS 1 new ones and to supplement what we already do. 2 Obviously, we try to -- or we make a 3 requirement for all of our employees to go through 4 training to be able to identify under-aged gaming and 5 under-aged drinking. The particular instances that we 6 are talking about in this report, we have disciplined 7 the employees involved up to terminations. 8 We have also introduced a new on-line 9 training program that deals not only with under-aged 10 gaming but with all different kinds of employee 11 matters that affect our work environment. We are 12 through the first two modules of that employee 13 training, the first one being an ethics training, and 14 the second one being a harassment training, both 15 sexual and racial harassment, that we have found that 16 to be a very effective way to communicate to a great 17 number of our employees. 18 Coincidentally, the third module coming 19 up that employees are available to train on on-line 20 will be a training program for under-aged gaming and 21 drinking. So we definitely as a company, of course, 22 embrace the idea that, you know, we need to enforce 23 those policies and procedures. There isn't any 24 company, I believe, that would see any advantage to 25 not do that. So we appreciate the Division's 142 JULIANO - FOGARTY 1 persistence in enforcing that. And we are, you know, 2 of course, very mindful of our requirements to comply. 3 MS. PICKUS: Nothing further. 4 CHAIR KASSEKERT: Thank you. 5 Cross-examination, Mr. Fogarty. 6 MR. FOGARTY: Thank you. Just two 7 areas. 8 9 CROSS-EXAMINATION BY MR. FOGARTY: 10 Q. I listened with interest about your 11 comments regarding the convenience factor, I think you 12 called it, or convenience reason. Do you all -- you 13 all still want to compete for that customer, though, 14 don't you? 15 A. Well, we will compete for that customer 16 on the basis that would make sense, you know, to us. 17 So that I think Dale had talked quite a bit about the 18 fact that at some point we can only incentivise 19 customers in a way that would make sense, in a way 20 that that revenue somehow translates into -- into 21 profit. So for that convenience customer, we would be 22 willing to compete on the basis of awareness. 23 Dale talked quite a bit about some of 24 the advertising dollars that we are spending. That 25 does create awareness with that lower-end customer or 143 JULIANO - FOGARTY 1 that retail customer to talk to them about the fact 2 that there is a new Trump organization, that all of 3 our hotels are new, and that we have things that they 4 now can come down to enjoy and see that they were not 5 able to do before. And if a customer at the -- in the 6 lower end of our database or in the unrated end of our 7 database will respond to things like that, then, yes, 8 we will compete for it in that regard. If we are 9 going to have to incentivise that customer to the 10 degree that it doesn't make sense for us, then we will 11 not compete with it. I think that, as Dale had 12 mentioned, we have shown that posture throughout the 13 last nine months of our operating costs where the 14 results, we have very carefully decided when to 15 participate in this promotional environment and when 16 not to. 17 Q. So I take it you wouldn't necessarily 18 jump right to incentives and/or promotions or 19 giveaways? 20 A. No. No, we would not. 21 Q. One other question, sir, concerns Mr. 22 Perry. I've read your company's press release. It 23 says he retired. 24 A. Yes. 25 Q. I got a letter from your General 144 JULIANO - FOGARTY 1 Counsel, Assistant, said he resigned. And I read at 2 least one or more newspaper articles that says, and 3 they used the words "You're fired." Which one was it? 4 A. The company released an issue on Monday 5 that Mr. Perry has resigned to spend more time with 6 his family and to enter a period of retirement. So as 7 he resigned, he retired. 8 Q. I get that picture. I was more focused 9 on the other one. Thank you, though, for that. 10 A. And that is the company's -- that is our 11 understanding of what happened. 12 Q. Thank you, sir. 13 CHAIR KASSEKERT: Questions from the 14 Commissioners? 15 COMMISSIONER EPPS: I do. 16 CHAIR KASSEKERT: Commissioner Epps? 17 COMMISSIONER EPPS: This is an area that 18 we haven't really talked to previously, but 19 I'll be very interested to see where you're 20 coming from with this. Going forward, what is 21 your company's position with respect to sports 22 and entertainment? Because there was a time 23 when that was key part or key component of what 24 was offered at the Trump properties. Where do 25 you see that going forward? And I know that 145 JULIANO 1 there's always a cost/benefit analysis that 2 goes into that, and that's kind of like the 3 marketing aspect. You have to do it, but only 4 to the point that it makes sense to you 5 financially. 6 THE WITNESS: Right. 7 COMMISSIONER EPPS: Where do you see 8 that going in the next few years with respect 9 to your -- 10 THE WITNESS: Well, coincidentally, we 11 are sponsoring a fight on Saturday night at 12 Boardwalk Hall. So in anticipation of your 13 question we -- 14 (Laughter. 15 COMMISSIONER EPPS: It was a good idea. 16 THE WITNESS: And we have also announced 17 that we will be sponsoring the Police concert 18 in November. And very recently we have 19 introduced some of the big-name Entertainment 20 to our company again through the event that we 21 did with Andre Bocelli about a year ago from 22 now. Our posture with Entertainment and with 23 sporting events is that they are a necessary 24 requirement to stimulate interest from all 25 levels of customers that we are looking to 146 JULIANO 1 attract to our facilities. 2 And I think that the more important 3 thing, that the convenience aspect of gaming in 4 Pennsylvania and the fact that there is not 5 that nongaming experience for customers to 6 enjoy in Pennsylvania to the degree that we can 7 here in Atlantic City, it becomes even more 8 important. 9 Having said that, we do constantly watch 10 what we need to pay entertainers. And before 11 we would go into an Entertainment or sporting 12 event, we do a careful analysis of what we 13 think we can generate in cash revenue and what 14 we think we can invite into our hotels from the 15 gaming customer and what we would expect as a 16 return. 17 So, I guess, the short answer to that 18 question would be we think Entertainment is 19 enormously important. We will do it when it 20 makes sense for us. We will do bigger -- we'll 21 continue to do the bigger events at Boardwalk 22 Hall and smaller events at our different 23 hotels. We do have the advantage at the Taj 24 Mahal of having the Mark Etess Arena right in 25 the facility. Which, again was, you know, the 147 JULIANO 1 planning of that building many years ago when 2 the -- Etess Arena was planned, it was to be 3 flexible for both meeting space and 4 Entertainment. So we will definitely take 5 advantage of that as well as our location at 6 the the Trump Plaza right next to Boardwalk 7 Hall. 8 COMMISSIONER EPPS: Okay. And also, I 9 spoke to Mr. Black, and I'll ask you to expound 10 on it. With respect to the movement in town 11 toward nongaming amenities, and it seems that 12 the Taj with Spice Road, you're kind of going 13 down that road, excuse me. 14 (Laughter.) 15 COMMISSIONER EPPS: How would that 16 translate into Trump Plaza and Trump Marina? 17 Or are there plans to continue that progress or 18 along that route? 19 THE WITNESS: Mr. Black had mentioned 20 that, you know, that one of the things that 21 many of our competitors have done and, quite 22 frankly, in Las Vegas it is enormously popular, 23 is to have outside restauranteurs come into 24 your hotels and develop, you know, a product 25 that you are quite not able to develop 148 JULIANO 1 yourself. And I can tell you that the east 2 casino at the Plaza has been somewhat vacated 3 in anticipation of an announcement shortly for 4 a restauranteur there. We have two very 5 high-level names that we are working with now 6 at the Taj Mahal and some prospects, also, for 7 the Marina. 8 In addition to that, our continued focus 9 on rooms and trying to not necessary fill your 10 rooms all the time with the gaming customer but 11 with a customer that will come down to 12 participate in some of the nongaming amenities 13 that you're referring to is where we are -- is 14 the direction that the company is headed. 15 Quite frankly, I can tell you that when 16 we first came to the company on a 17 forward-looking basis, the rooms were allocated 18 for 700 rooms for slots at the Taj Mahal, 500 19 rooms for table games. Get there as quick as 20 you can. Now, we are really looking at that to 21 saying, if you have 1200 rooms, let's take a 22 look at the 1200 best customers that are 23 available to you, regardless of whether they 24 are cash-paying customer or slot customer or 25 table game customer. And that nongaming 149 JULIANO 1 amenity that we need to add becomes critical to 2 managing that process in a way that's most 3 beneficial to us. 4 COMMISSIONER EPPS: Okay. I think I'm 5 all right. 6 CHAIR KASSEKERT: Commissioner 7 Sommeling? 8 COMMISSIONER SOMMELING: Yes. You've 9 taken my first two questions. 10 (Laughter.) 11 COMMISSIONER SOMMELING: Thanks. 12 In all seriousness, I just wanted to ask 13 you, Mark, what value do you put on mass 14 transportation to help the casinos increase 15 their revenues in Atlantic City? 16 THE WITNESS: Well, I mean, I think 17 that -- you know, I can't tell you how many 18 times we have been asked, you know, why can't 19 Atlantic City be like Las Vegas? If I get 20 asked that question once a day, I'd be 21 underestimating it. And I don't think that, 22 you know, Atlantic City was ever meant to be 23 exactly what Las Vegas is. But Atlantic City, 24 if given some of the advantages that mass 25 transportation would provide and actual 150 JULIANO 1 management of the traffic within the city, it 2 will become an enormously successful resort 3 destination in a regional sense. So I think 4 that more important than real air traffic into 5 Atlantic City is the continued development of 6 our room product. So that we can reach out to 7 our mid-range convention business and meeting 8 business. And -- but the availability, more 9 importantly, I think, of them to get in and out 10 of Atlantic City quickly and safely and in a 11 more efficient manner. So I think that air 12 traffic is important, and I think that it will 13 complement the building of the rooms in a way 14 that you can package them nicely together. But 15 just as importantly is the road access in and 16 out of Atlantic City. 17 COMMISSIONER SOMMELING: Thank you much. 18 That's all I have. 19 CHAIR KASSEKERT: Commissioners Fedorko? 20 VICE CHAIR FEDORKO: Mr. Juliano, how 21 concerned are you about the industry's 22 performance so far in 2007? 23 THE WITNESS: I am concerned about the 24 impact of Pennsylvania, and I am concerned -- 25 however, although I am concerned, I think that 151 JULIANO 1 it does reinforce our strategic plan. 2 Unfortunately, we wish our strategic plan had 3 started, you know, before we were able to 4 because of financial constraints. But our 5 strategic plans have always been that rooms are 6 going to drive revenue. And rooms and -- 7 increasing the length of stay from six hours to 8 six days is critical. Now, six days might be 9 an exaggeration, but certainly three days is 10 not. And I think that when you see what 11 happens when the gaming product is available 12 within 50 miles of Atlantic City, and that is a 13 big portion of the business that you're relying 14 on, that critical path that we've taken to 15 develop rooms becomes more important. 16 So I think that, although I am concerned 17 about the first half of 2007, I'm encouraged 18 that the company is taking the right path, and 19 I'm very encouraged that we have the real 20 estate available to us to build additional 21 towers. I think, as you look at all of the 22 projects that have been done in Atlantic City, 23 you will find some that have been successful 24 and some that have not. You will not find one 25 room tower that has not provided the return 152 JULIANO 1 that we need, so. 2 VICE CHAIR FEDORKO: When I hear some of 3 the CEOs talk at events before groups, you all 4 mention VLTs. You're all concerned about VLTs. 5 Yet some of the Atlantic City casinos have 6 properties in Philly. Why are they not 7 concerned about that? Why are they more 8 concerned about the VLTs? 9 THE WITNESS: Well, I mean, obviously, 10 our company also applied for and are applying 11 for one of the gaming licenses in Philadelphia, 12 and I think those companies -- and I know that 13 ourselves, we were more interested in 14 protecting the investment that we had in 15 Atlantic City by perhaps participating in a 16 competitive jurisdiction. So I think that the 17 ability for all of the companies to participate 18 in one VLT license at the Meadowlands is 19 somewhat unrealistic, so that ability to 20 protect your investment in Atlantic City by 21 participating in Philadelphia, I do not 22 believe, is going to be available to us in 23 North Jersey or the Meadowlands. So that would 24 be the primary concern. I think other CEOs 25 would have, and that I would have, also. 153 JULIANO 1 VICE CHAIR FEDORKO: What's the status 2 with the Pier? 3 THE WITNESS: We own it. 4 (Laughter.) 5 THE WITNESS: And we are enjoying family 6 entertainment again this year. 7 VICE CHAIR FEDORKO: I can see that out 8 of my window. 9 THE WITNESS: And I think that -- I 10 think one of the things that we talked about a 11 little earlier is very true with the Pier. The 12 real estate company controls, particularly that 13 pier, gives you the ability to be totally 14 unique. And taking a look at the retail that 15 has been developed in town, we are very 16 encouraged by the results both from the Pier in 17 Ocean One -- or excuse -- the new Pier. The 18 Shops at Caesars. And the Walk. But we think 19 that the combination of retail and -- some kind 20 of residential component at the Steel Pier 21 would be enormously successful. 22 Now we certainly understand that we 23 have, you know, a lot of environmental and 24 regulatory hurdles to clear before that could 25 ever happen. But the fact remains that it's an 154 JULIANO 1 asset that we own, and it's an asset that we 2 look to for future development. And if it -- 3 if it could include some kind of residential 4 component, whether it be hotels or all suites 5 or condominiums, it would be an absolute home 6 run. So the status of it is that we're excited 7 that we own it. We continue to look at plans 8 that we would have to develop it. But that is 9 really what we think would be the best use of 10 that facility. 11 VICE CHAIR FEDORKO: Thank you. 12 CHAIR KASSEKERT: Commissioner Frulio? 13 COMMISSIONER FRULIO: Yes. I have one 14 question, Mr. Juliano. But before that I'm 15 going to say something that Commissioner 16 Fedorko always hates me saying, but I'm always 17 glad to see somebody else who has started in 18 Atlantic City in 1978. 19 You mentioned before that you monitored 20 growth. 21 (Laughter.) 22 THE WITNESS: Let me comment on that. 23 There are quite a few people here -- 24 COMMISSIONER FRULIO: Yes. 25 THE WITNESS: That have started in 155 JULIANO 1 Atlantic City. 2 COMMISSIONER FRULIO: Absolutely. I see 3 them out there. 4 THE WITNESS: Both. Some on the 5 regulatory side. 6 (Laughter.) 7 THE WITNESS: And so there is success 8 for anyone that comes and works hard. Trust 9 me. 10 COMMISSIONER FRULIO: Everybody is 11 successful. 12 VICE CHAIR FEDORKO: Just for the 13 record, I was here when they signed the bill. 14 COMMISSIONER FRULIO: And he wasn't 15 successful. 16 VICE CHAIR FEDORKO: And I have a 17 picture to prove it. 18 COMMISSIONER EPPS: I was 12. 19 (Laughter.) 20 COMMISSIONER FRULIO: Geez. I hate 21 that. 22 Anyway, you did say something about 23 monitoring both, and I wanted your gut feeling 24 about this, be that as it may. You believe 25 that the construction of three to four 156 JULIANO 1 additional casinos, including Pinnacle and 2 Morgan Stanley in Atlantic City will canibalize 3 the market or grow it. 4 THE WITNESS: I mean, I have to think 5 that it will grow it. I have to think that, 6 you know, obviously the marketplace -- the 7 competitors in the marketplace will have to 8 struggle with the initial opening of them 9 because there is a curiosity factor that 10 everyone will have to experience so that people 11 just like the Borgata needed to go there. But, 12 as the Borgata has shown, it has the ability to 13 grow the marketplace. And I think that if we 14 focus on what the problems that we face in 15 Atlantic City are, and we had talked briefly 16 about the infrastructure and about the 17 transportation and road improvements, that if 18 those things happen, that new hotel rooms and 19 new exciting facilities like that eventually 20 grow the marketplace. 21 COMMISSIONER FRULIO: Thank you. 22 THE WITNESS: And, you know, I -- I 23 really do believe that. 24 COMMISSIONER FRULIO: Thank you. 25 THE WITNESS: I think that no matter 157 JULIANO 1 what anyone would say about Atlantic City, 2 there are 80 million people in a six -- four 3 and a half to six-hour drive. And that is so 4 incredibly powerful that I think, you know, we 5 lose sight of that sometimes. 6 COMMISSIONER FRULIO: Thank you. 7 CHAIR KASSEKERT: I'll have to ask you 8 the question I asked Mr. Black, knowing full 9 well you're not going to answer it. 10 Anything you want to tell us as a result 11 of Merrill Lynch? 12 (Laughter.) 13 THE WITNESS: Well, we have retained 14 Merrill Lynch. 15 CHAIR KASSEKERT: Rumors are out there. 16 THE WITNESS: We have, obviously, 17 retained Merrill Lynch, and the only 18 involvement management has had here in Atlantic 19 City is to facilitate information to a special 20 committee of our board. 21 CHAIR KASSEKERT: Uh-huh. 22 THE WITNESS: And they are reviewing all 23 of the information that we send and sharing it 24 with certain people, I would imagine. And, no, 25 there is no update that I am aware of. 158 JULIANO 1 CHAIR KASSEKERT: All right. And, 2 finally, the smoking ban, we had some 3 discussion about the impact. And I know that 4 the next state goal is towards the September 5 15th deadline and the ordinance with respect to 6 construction and a formal plan. Any plans yet 7 on the table to do anything separate? 8 THE WITNESS: Well, obviously, the 9 options available to us would be 25 percent of 10 our gaming floor totally segregated to allow 11 smoking or the introduction of smoking lounges 12 throughout the hotel that would be convenient 13 for gamers to smoke at. Quite frankly, we are 14 pricing all of that because, as you know, the 15 ordinance requires that it have separate 16 ventilation. And we need to determine, you 17 know, where the returns would be. 18 So we, you know, our concern -- our 19 long-term view of smoking is that eventually 20 smoking in public places, in general, will not 21 happen. We have a very big concern, however, 22 though, because smoking will always be a 23 problem when allowed in our competitors in 24 Connecticut. And we do have a large Asian 25 population who games and smokes. And the 159 JULIANO 1 ability to go to Connecticut will remain. So 2 we are -- for the Asian customers that live in 3 the New York area. So we are taking all those 4 things into consideration. And whatever we do, 5 we will be monitoring what our competitors do 6 and be -- have the amenity available if we deem 7 it appropriate. 8 CHAIR KASSEKERT: It would be 9 interesting to see what Pennsylvania does. I 10 know it's under discussion in their legislature 11 right now. 12 THE WITNESS: It is. 13 CHAIR KASSEKERT: Yeah. 14 THE WITNESS: It is. 15 CHAIR KASSEKERT: Mr. Pickus, anything 16 on redirect? 17 MS. PICKUS: No. 18 CHAIR KASSEKERT: Mr. Fogarty? 19 MR. FOGARTY: Nothing further from the 20 Division. 21 CHAIR KASSEKERT: Okay. Check with 22 the -- any questions? 23 COMMISSIONER SOMMELING: No questions, 24 Madame Chair. 25 CHAIR KASSEKERT: All right. We will 160 ITEM NO. 17 1 move to closing statements. 2 Mr. Fogarty, do you care to make a 3 closing statement? 4 MR. FOGARTY: Yes. I'll be very brief. 5 THE WITNESS: Thank you. 6 CHAIR KASSEKERT: I'm sorry. You can 7 step down. 8 THE WITNESS: Thank you. 9 MR. FOGARTY: Thank you, Madame Chair. 10 We're not as confident as the Applicant 11 in their expectations, their forecasts will be 12 substantially achieved as the Applicants are 13 about their own forecasts. Among our reasons 14 are the disappointing results of the first five 15 months of this year, which may not augur well 16 for the direction chosen by the company. That 17 is yet to be seen, at least. Put a crimp in 18 the forecasted margins for the full year 2007 19 and thus thereafter. We are concerned, too, 20 about the magnitude of the impact of the 21 Pennsylvania gaming competition. 22 So based on the record as presented, we 23 believe that effective monitoring license 24 conditions are indicated and should be required 25 for license renewal. They are: 161 ITEM NO. 17 1 That by no later than the 20th day of 2 each month a report which compares the 3 financial forecasts for the preceding month for 4 the casino licensee and the consolidated 5 entities as submitted in these renewal 6 proceedings be compared to the actual results 7 therefore; 8 B, concurrent with the filing with the 9 lenders the credit facility lenders a copy of 10 the quarterly covenant compliance 11 certifications furnished to those lenders 12 pursuant to the federal agreements; 13 Three, prompt written notice of the 14 commencement of any negotiations regarding the 15 refinancing of the existing debt. And what 16 amounts to the old standby the mid-term 17 assessment condition, that by December 31st, 18 2009, that all the entities -- these three 19 licensees and their holding companies provide 20 us and you with financial forecasts for the 21 remainder of the licensed term, which forecast 22 shall address, among other things, the $500 23 million credit facility and specifically the 24 maturing of the revolving line of credit in 25 2010 and the term loans in 2012. 162 ITEM NO. 17 1 That being said, we do not object to the 2 granting of the request for approval of the 3 material debt transactions and for the granting 4 of five-year license renewals for Trump Taj 5 Mahal, Trump Plaza, and Trump Marina. 6 Thank you. 7 CHAIR KASSEKERT: Thank you. Mr. Fusco? 8 Mr. Pickus? 9 MS. PICKUS: I think it's my assist. 10 Thank you Madame Chair, members of the 11 Commission. 12 All of the evidence before you clearly 13 shows that this company has achieved many 14 accomplishments, during the past two years in 15 particular. And while there's still work to be 16 done, there's no doubt that the three casino 17 licensees before you today have significantly 18 improved from the last time that they appeared 19 before this commission. 20 These three licensees, Trump Marina, 21 Trump Plaza, and Trump Taj Mahal now have 22 resources that they have lacked for many years 23 that will enable them to compete effectively in 24 an everlt increasing marketplace. Better 25 capitalization has allowed for those facility 163 ITEM NO. 17 1 improvements that you have heard about today. 2 And management has a new focus on attracting 3 better customers and improving the operating 4 margins and the bottom line. 5 The standards for the renewal of casino 6 licenses are, of course, well-known to this 7 commission. And we respectfully submit that 8 through the testimony you heard today, as well 9 as the written evidence that we have provided 10 that those standards have been satisfied. 11 And, accordingly, on behalf, again, on 12 Trump Marina, Trump Plaza, and Trump Taj Mahal, 13 we request that the Commission grant those 14 five-year license renewals as well as on the 15 other requested relief. 16 I'd just like to take a moment to thank 17 particularly Miss Wozniak and Mr. Glaum and of 18 the rest of the Commission staff for their 19 assistance. And we would also like to thank 20 Mr. Fogarty, Mr. Latimer, and Miss Scott in 21 particular, together with the rest of the 22 Division for their guidance in this matter as 23 well. 24 With that, Madame Chair, thank you. And 25 we rest. 164 ITEM NO. 17 1 CHAIR KASSEKERT: Thank you. 2 Are there any other matters at this time 3 that need to be brought to our attention? 4 MR. FOGARTY: Not that I'm aware, ma'am. 5 MR. FUSCO: I think they are all 6 included in resolution, Madame Chair. 7 CHAIR KASSEKERT: Very good. 8 Let me just ask the Commissioners? Any 9 need for a recess? Good. 10 All righty. Then we'll continue. 11 The three Trump properties are before us 12 today seeking renewal of their casino and 13 casino hotel alcoholic beverages licenses and 14 other related rulings. 15 It's the Applicant's burden to 16 demonstrate to the Division by clear and 17 convincing evidence that they meet each of the 18 standards for qualification enumerated in the 19 Casino Control Act. 20 The testimony today has focused 21 primarily on the financial stability of the 22 licensees, and I have reviewed the entire 23 record of these proceedings, and I am satisfied 24 that the Applicants have met the Statutory 25 standards for financial stability, integrity, 165 ITEM NO. 17 1 and responsibility. 2 After the company emerged from 3 bankruptcy in 2005, the Trump properties 4 commenced a significant capital improvement 5 program which includes the new 786-room hotel 6 tower at the Taj Mahal, as well as other 7 renovations and refurbishments at the Plaza and 8 the Marina. 9 In the last two years, the company 10 invested more than $225 million into the 11 properties, and that's more than twice the 12 amount it invested in the prior five years and 13 a strong statement of management's confidence 14 in the future of the company. 15 Now, as the Division has said today, I 16 agree and wish I could share the same level of 17 confidence going forward. But uncertainties 18 exist that compel a continuing review of the 19 Trump licensee's ongoing financial stability. 20 And during the next five-year license term, 21 they will face new and increased competition 22 from on the jurisdictions and the potential 23 effects of the partial smoking ban or moving on 24 to a total smoking ban. There's going to be a 25 new CEO at the company, albeit a well-known 166 ITEM NO. 17 1 CEO, at the helm of the company. And 2 apparently there are discussions, although we 3 got no information today, that could lead to 4 the sale of the company. If any of these 5 factors should result in the inability to meet 6 the projections that were submitted to us, 7 there will be some flexibility with the timing 8 of some of its capital expenditures. But the 9 impact of these factors cannot be predicted 10 with any degree of certainty at this time. 11 Therefore, it is appropriate to impose 12 various financial reporting requirements as a 13 condition of relicensure and, among other 14 things, in 2009 the licensees and their holding 15 companies must provide the Commission and the 16 Division with mid-term financial forecasts for 17 the final three years of the license term. 18 However, in conclusion, a review of the 19 record establishes that Trump Taj Mahal 20 Associates, Trump Marina Associates, and Trump 21 Plaza Associates have demonstrated their 22 suitability for relicensure. 23 So I will move that we adopt the draft 24 resolution, each revised to add the conditions 25 5a, 5b, 5c, which is marked as Commission 167 ITEM NO. 17 1 Exhibit C-6 for identification and to: 2 (a), grant the approval of the material 3 debt transactions; 4 (b), grant the waivers pursuant to 5 section 85f of the Act to Morgan Stanley and 6 Franklin Mutual Advisors; 7 And (c), renew the casino and casino 8 hotel alcoholic beverage licenses held by each 9 of the Trump licensees, subject to the 10 findings, rulings, and conditions contained in 11 the resolutions. 12 And I so move. Is there a second? 13 COMMISSIONER SOMMELING: Second. 14 VICE CHAIR FEDORKO: Second. 15 CHAIR KASSEKERT: Okay. Motion has been 16 made and second. This is a roll call vote. 17 MR. NANCE: Commissioner Sommeling? 18 COMMISSIONER SOMMELING: Yes. 19 MR. NANCE: Commissioner Epps? 20 COMMISSIONER EPPS: Yes. 21 MR. NANCE: Commissioner Frulio? 22 COMMISSIONER FRULIO: Yes. 23 MR. NANCE: Vice Chair Fedorko? 24 VICE CHAIR FEDORKO: Yes. 25 MR. NANCE: Chair Kassekert? 168 ITEM NO. 17 1 CHAIR KASSEKERT: Yes. 2 MR. NANCE: The record will reflect that 3 the motion is unanimous. 4 CHAIR KASSEKERT: Thank you. 5 Congratulations. 6 MR. FUSCO: Thank you very much, Madame 7 Chair, and I appreciate it. 8 MR. NANCE: In accordance with 9 resolution No. 06-12-13-20, the next closed 10 session of the Commission shall be held on 11 Wednesday, July 18th, 2007, at 9:15 a.m. in the 12 Commission offices. 13 It is now time for the public 14 participation of the meeting. 15 CHAIR KASSEKERT: Is there anyone from 16 the public that wishes to be heard at this 17 time? 18 (No response.) 19 CHAIR KASSEKERT: Seeing no one, I'll 20 declare this portion of the meeting closed and 21 entertain a motion to adjourn. 22 COMMISSIONER SOMMELING: Motion to 23 adjourn. 24 VICE CHAIR FEDORKO: Second. 25 CHAIR KASSEKERT: The motion has been 169 1 made and seconded. All in favor? 2 (Ayes.) 3 CHAIR KASSEKERT: Opposed? 4 (No response.) 5 CHAIR KASSEKERT: The motion carries. 6 (Public Meeting 07-06-20 was adjourned 7 at 1:44 a.m.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 170 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 I further certify that I am neither 12 attorney, of counsel for, nor related to or 13 employed by any of the parties to the action; 14 further that I am not a relative or employee of 15 any attorney or counsel employed in this case; 16 nor am I financially interested in the action. 17 18 19 DARLENE SILLITOE CSR 20 License No XI01023 21 22 Dated: June 25, 2007 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25