1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 Petition of Adamar of New Jersey, Inc., (Adamar) 6 for renewal of its casino license and other matters 7 (PRN 2140705, 2910706, 2910708) 8 Volume 4 - AM Session 9 - - - - - - - - - - - - - - - - - - - 10 11 Wednesday, November 28, 2007 12 Atlantic City Commission Offices 13 Joseph P. Lordi Public Meeting Room - First Floor 14 Tennessee Avenue and Boardwalk 15 Atlantic City, New Jersey 08401 16 10:08 a.m. to 12:56 p.m. 17 18 19 Certified Court Reporter: Darlene Sillitoe 20 - - - - - - - - - - - - - - - - - - - - - - - - - - - 21 ATLANTIC CITY COURT REPORTING, LLC 22 CERTIFIED SHORTHAND REPORTERS AND VIDEOGRAPHERS 23 1125 ATLANTIC AVENUE, SUITE 416 24 ATLANTIC CITY, NEW JERSEY 08401 25 (609) 345-8448 www.accourtreporting.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 STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 10 11 12 A P P E A R A N C E S : 13 DIVISION OF GAMING ENFORCEMENT: 14 YVONNE G. MAHER, ACTING DIRECTOR MARYJO FLAHERTY, DEPUTY ATTORNEY GENERAL 15 STERNS & WEINROTH, PC 16 BY: PAUL M. O'GARA, ESQ: AND: GRAIG P. CORVELEYN, ESQ. 17 FOR: TROPICANA ENTITIES 18 MICHAEL & CARROLL BY: GUY S. MICHAEL, ESQ: 19 AND: JOHN J. MERCUN, ESQ. 20 COOPER LEVENSON BY: LLOYD D. LEVENSON, ESQ. 21 AND: LYNNE KAUFMAN, ESQ. 22 23 24 25 3 1 I N D E X : 2 WITNESS: Direct Cross Redirect Recross 3 4 JOHN G. JACOB 5 By Mr. Levenson 14, 23 6 By Ms. Flaherty 18 7 8 9 KEVIN E. PRESTON 10 By Mr. Levenson 25 160 11 By Ms. Maher 51 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 E X H I B I T S : 2 Commission No. Description EVD 3 C-1 Entities and Qualifiers Report, 11-16-07 X C-2 CHAB License Report, 11-20-97 X 4 C-3 EEBOP, 11-9-07 X 5 Division No. Description EVD 6 D-1 Division Report X D-2 DGE Report to Commission X 7 D-3 DGE Financial Report to Commission X D-4 DGE to Commission X 8 D-5 DGE Sworn Statement of Fred Buro, 9-25-07 X D-6 DGE Sworn Statement of William J. Yung, III, X 9 9-27-07 D-7 DGE Sworn Statement of Donna More, 10-1-07 X 10 D-8 DGE Sworn Statement of Tama Hughes, 10-2-07 X D-9 DGE Sworn Statement of Michael S. Lyons, X 11 10-5-07 D-10 DGE Sworn Statement of William J. Yung, III, X 12 9-27-07 D-11 Memorandum, 8-29-07, Richard Iannacone to X 13 Richard Carretta, Richard Handzo D-12 E-mail, 9-5-07, Ted Mitchel to George Clark X 14 D-13 DGE Memorandum, 10-5-07, Richard Iannacone X to Wendy Way 15 D-14 DGE Memorandum, 8-14-07, Richard Iannacone to Richard Carrettare 16 D-15 DGE Memorandum, 8-14-07, Michael Scotten to Richard Iannacone 17 D-16 DGE Memorandum, 8-14-07, Lauren Massara to Richard Iannacone 18 D-17 Fred Buro Interview Outline by Thomas Hollinger, 8-14-07 19 D-18 Casino Services Agreement, 1-3-07 X D-19 Service Agreement, 1-3-07 X 20 D-20 Letter, 4-17-07, Lynne Kaufman to X Dorothy Turi 21 D-21 Letter, 9-18-07, MaryJo Flaherty to Lynne X Kaufman 22 D-22 Letter, 5-2-07, William J. Yung, III, to X Len DiGiacomo and Dorothy Turi 23 D-23 Letter, 7-23-07, Larry King to Dorothy Turi X D-24 E-mail, 3-9-07, Dorothy Turi to Antoinette 24 Hill D-25 DGE Interview Report, 8-6-07, Joseph X 25 Stratman 5 1 2 Division No. Description EVD 3 D-26 Revised Agenda, 6-7-07, Indiana X Gaming Commission 4 D-27 LexisNexis Article, 9-13-07 X D-28 Evansville Courier and Press, 9-13-07 X 5 D-29 Evansville Courier and Press, 8-12-07 X D-30 Letter, 9-23-07, William J. Yung, III, to X 6 Lonna Willingham D-31 Chart of Violation Numbers/Chart of X 7 Violations D-32 Louisiana Gaming Control Board Notice of X 8 Recommendation of Administrative Action, 12-27-05 9 D-33 Louisiana Gaming Control Board Notice of X Recommendation of Administrative Action, 10 3-8-06 D-34 E-mail, 5-9-06, Kelly Duncan to Vivian Raby X 11 D-35 Louisiana Gaming Control Board Notice of X Decision and Order, 6-20-06 12 D-36 Louisiana Gaming Control Board Notice of X Decision and Order, 8-15-06 13 D-37 Louisiana Gaming Control Board Order, X 10-17-06 14 D-38 Letter, 1-26-06, Nevada Gaming Control Board X to William J. Yung, III, 15 D-39 Park Cattle Company's Amended Counterclaim, X 6-15-07 16 D-40 DGE Interview Report, 1-11-07, X Re: Marvin Cato 17 D-41 DGE Interview Report, 7-11-07, X Re: Charles Cato 18 D-42 Rainbow Capital Requirements Ownership X Information 19 D-43 Letter, 3-20-07, William J. Yung, III, to X Marvin Cato 20 D-44 Letter, 8-7-02, Thomas A. Ryder to Ken Ibsen X D-45 Letter, 10-9-02, Paul S. Pilecki to Thomas X 21 A. Ryder D-46 Letters, 11-1-02, Paul S. Pilecki to Thomas X 22 A. Ryder D-47 Consent to Assessment of Civil Money Penalty X 23 5-23-03, Re: Greenville Riverboat D-48 Letter, 5-27-03, Alma Angotti to Paul X 24 Pilecki D-49 Copy of Check 100475160, Huntington X 25 National Bank 6 1 CONTINUED: E X H I B I T S : 2 Division No. Description EVD 3 D-50 DGE Investigation Report, 9-10-07 X D-51 DGE Investigation Report, 8-16-07 X 4 D-52 Commission Opinion, 7-13-83, Re: Bally's X Manufacturing Corp. 5 D-53 Letter, Guy S. Michael to Mitchel Schwefel X D-54 Legal Representation Agreement, 2-19-07 X 6 D-55 Letter, 12-28-06, John J. Mercun to Len X DiGiacomo and Raymond J. Marquez 7 D-56 Letter and petition, 6-1-07, Lynne Kaufman X to Commission 8 D-57 Letter, 6-1-07, Dorothy Turi to Hon. Linda X M. Kassekert 9 D-58 Letter and Amended Petition, Lynne Kaufman X to Commission 10 D-59 Letter, 6-14-07, Dorothy G. Turi to Hon. X Linda M. Kassekert 11 D-60 E-mail, 7-10-07, to Commission X with attachments 12 D-61 DGE Qualifier Report, 10-30-07 X 13 Applicant's No. Description EVD 14 A-1 Equal Employment Business Opportunity Plan X A-2 E-mail, 2-15-07, Tama Hughes to Bruce Ladd, X 15 Re: Response to 2-14-07 Inquiry A-3 E-mail, 2-22-07, Tama Hughes to Bruce Ladd, X 16 Re: Followup on 2-14-07 E-mail A-4 E-mail of 2-22-07, Bruce Ladd to Tama Hughes,X 17 Re: Acknowledges Receipt of E-mail A-5 E-mail of 3-9-07, Bruce Ladd to Tama Hughes, X 18 Re: Provide List A-6 E-mail of 3-9-07, Tama Hughes to Bruce Ladd, X 19 Re: List of Expected Terminations A-7 Expected Terminations X 20 A-6 Letter e-mailed of 3-15-07, Dianna X Fauntleroy to Tama Hughes, Re: Proposed 21 Terminations, Casino Division A-7 E-mail of 3-15-07, S. Cooper to Tama Hughes, X 22 Re: Letter Proposing a Termination A7a E-mail of 3-29-07, Bruce Ladd to Tama Hughes,X 23 Re: FYI A-9 E-mail of 3-15-07, Tama Hughes to Fred Buro, X 24 Re: Revised that Tama Will Contact Ms. Fauntleroy 25 7 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-10 E-mail of 3-29-07, Bruce Ladd to Tama Hughes, X Re: "Please don't forget my stats" E-mail 4 A-11 E-mail of 3-30-07, Rose Williams to Tama X Hughes, Re: Numbers 5 A-12 E-mail Series of 3-30-07, Chris Costanzo to X Tama Hughes, Re: HR Metrics Grid 6 A-13 E-mail of 3-30-07, Chris Costanzo to Tama X Hughes, Re: HR Metrics Grid 7 A-14 E-mail of 3-30-07 from Tama Hughes to Bruce X Ladd, Re: Two-monthly Update Summary Report 8 A-15 E-mail of 4-2-07 from Tama Hughes to Scott X Griffin, Re: RIF Breakdown 9 A-16 E-mail of 4-2-07, Tama Hughes to Bruce Ladd, X Re: With Attached Memo Detailing Breakdown 10 In Staff Reduction A-17 E-mail of 4-3-07, Tama Hughes to Bruce Ladd, X 11 Re: Explanation for Discrepancy A-18 E-mail of 4-4-07, Tama Hughes to Bruce Ladd, X 12 Re: Self Report A-19 E-mail of 4-30-07, Tama Hughes to Bruce Ladd, X 13 Re: Limousine Services A-20 Letter of 5-3-07, Bruce Ladd to Mike Lyons, X 14 Re: Approval of Amended Security Submission A-21 E-mail of 5-4-07, Tama Hughes to Bruce Ladd, X 15 Re: RIF A-22 E-mail of 5-15-07, Tama Hughes to Carol X 16 Defoor, Re: Notice of Upcoming Terminations A-23 E-mail of 5-17-07 from Tama Hughes to Carol X 17 Defoor, Re: Notice of Upcoming Terminations A-24 E-mail of 5-17-07 from Tama Hughes to Carol X 18 Defoor, Re: Hotel Cage A-25 E-mail of 5-25-07 from Tama Hughes to X 19 Dorothy Turi Re: Qualifier Information A-26 Letter of 5-31-07, Tama Hughes to Chair X 20 Kassekert Re: Proposed Terminations, Slot Department 21 A-27 Letter of 5-25-07, Tama Hughes to Dorothy X Turi Antoinette Hill, Re: Qualifier Information 22 A-28 E-mail of 6-1-07, Carol Defoor to Tama X Hughes, Re: Two Month Update Summary Report, 23 HR Metrics Grid A-29 E-mail of 6-1-07, Tama Hughes to Carol X 24 Defoor, Re: Two Month Update Summary Report, HR Metrics Grid 25 8 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-30 E-mail of 6-1-07, Carol Defoor to Jim X Fehon/CCC, Re: Two Month Update Summary 4 Report, HR Metrics Grid A-31 E-mail of 6-1-07, Tama Hughes to Carol X 5 Defoor, Re: Breakdown of Terminations by Reason, Total 804 6 A-32 E-mail of 6-5-07, Tama Hughes to Carol X Defoor, Re: Termination Numbers Explanation 7 About HR Metrics Grid Numbers A-33 E-mail of 6-7-07, Tama Hughes to Dorothy X 8 Turi, Re: Qualifier letters A-34 E-mail of 6-12-07, Tama Hughes to Carol X 9 Defoor, Mitch Schwefel, Rich Handzo, Re: Staff Reductions 10 A-35 E-mail of 6-21-07, Carol Defoor to Tama X Hughes, Re: Rumors of Layoffs 11 A-36 E-mail of 6-27-07, Tama Hughes to Carol X Defoor, Mitch Schwefel, Dianna Fauntleroy, 12 Re: AC Press Letter A-37 E-mail of 7-3-07, Tama Hughes to Carol withdrawn 13 Defoor and George Homa, Re: Self Report, Task Force Personnel and Response 14 A-38 E-mail of 7-3-07, Tama Hughes to Carol X Defoor and George Homa, Re: Task Force Summary 15 A-39 E-mail of 7-6-07, Tama Hughes to Carol X Defoor, Mitch Schwefel, Richard Handzo, 16 Re: RIF advisement A-40 E-mail of 7-6-07, Tama Hughes to Carol withdrawn 17 Defoor, Mitch Schwefel, Richard Handzo, Re: RIF 18 A-41 E-mail of 7-18-07, Tama Hughes to Carol X Defoor, Mitch Schwefel, Richard Handzo, 19 Re: RIF Advisement A-42 E-mail of 7-18-07 Tama Hughes to Carol withdrawn 20 Defoor, Mitch Schwefel, Richard Handzo, Re: RIF 21 A-43 E-mail of seven 20 seven, Tama Hughes to X Carol Defoor, Andy Fiorentino, Mario 22 DeGuiseppe, Re: Slot Tech Impact Analysis A-44 E-mail of 7-20-07, Tama Hughes to Carol X 23 Defoor, Mitch Schwefel, Rich Handzo, Re: Revised RIF advisement 24 A-45 E-mail of 7-20-07, Tama Hughes to Carol withdrawn Defoor, Mitch Schwefel, Rich Handzo, 25 Re: Reductions 9 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-46 E-mail of 7-20-07, Tama Hughes to Carol withdrawn Defoor, Re: Slot Tech Impact Analysis 4 Undertaking and Assignment A-47 E-mail of 7-24-07, Tama Hughes to Fred Buro, X 5 Re: Rumors of Reduction A-48 E-mail of 8-6-07, Tama Hughes to Dianna X 6 Fauntleroy, Re: Tropicana Slot Tech Impact Study A-49 E-mail Series of 8-7-07, Re: Impact Study X 7 Submission A-50 E-mail of 8-7-07 Tropicana to submission, X 8 Re: August 7th Tropicana Atlantic City Proposed Department Layoffs and 2007 FTEs 9 A-52 E-mail of 8-10-07, Dianna Fauntleroy to Tama X Hughes, Re: Potential Department Layoffs 10 A-53 E-mail Series of 8-10-07, Dianna Fauntleroy, X Re: Potential Department Layoff, Clarification 11 A-55 E-mail Series of 8-14-07, Re: Qualifier X Notification 12 A-56 E-mail of 8-18-07, Tama Hughes to Dianna X Fauntleroy, Re: Proposed Staff Reductions 13 Security-Relief Rovers A-57 E-mail of 8-18-07, Dianna Fauntleroy to X 14 Tama Hughes Re: Reply proposed security Reductions 15 A-58 E-mail of 8-18-07, Tama Hughes to Dianna X Fauntleroy, Re: Reply to Item 34 16 A-59 E-mail of 8-18-07 Dianna Fauntleroy to X Tama Hughes, Re: Reply to Item 35 17 A-60 E-mail and letter of 8-18-07, Tama Hughes X to Dianna Fauntleroy, Re: Proposed 18 Tropicana Security Department Reductions A-61 E-mail Series of 8-23-07, Dianna Fauntleroy X 19 to Tama Hughes, Re: Tropicana Security Staffing Violation 20 A-62 E-mail 8-29-07, Tama Hughes to Dianna X Fauntleroy, Re: Request for meeting to 21 A-63 E-mail and Letter 9-5-07, Tama Hughes to X Dianna Fauntleroy, Re: Proposed Reductions 22 A-64 E-mail Series of 2-22-07, Tama Hughes to X Bruce Ladd, Re: Revised RIF List 23 A-65 E-mail 2-27-07, Tama Hughes to Bruce Ladd, X Re: Staffing Reduction Advisory 24 A-66 E-mail of 8-20-07, Tama Hughes to Carol X Defoor, Re: Tropicana Security Staffing 25 Violation 10 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-67 E-mail of 5-3-07, Len DiGiacomo to Lynne X Kaufman, Re: Morgan and Brugler 4 A-68 E-mail of 5-3-07, Len DiGiacomo to Lynne X Kaufman, Re: Brugler 5 A-69 E-mail 5-10-07, Lynne Kaufman to Dorothy X Turi, Re: Audit Committee 6 A-70 E-mail of 5-15-07, Guy Michael to Dorothy X Turi, Re: Tropicana Confirmations/Status 7 A-71 E-mail 6-14-07, Lynne Kaufman to Dorothy X Turi, Re: Audit Committee 8 A-72 E-mail of 6-14-07, Lynne Kaufman to Dorothy X Turi, Re: Audit Committee 9 A-73 E-mail of 6-14-07, Dorothy Turi to Lynne X Kaufman, Re: Audit Committee 10 A-74 E-mail of 6-14-07, Dorothy Turi to Lynne X Kaufman, Re: Audit Committee 11 A-75 E-mail of 6-18-07, Len DiGiacomo to Lynne X Kaufman, Re: Audit Committee 12 A-76 E-mail of 6-19-07, Dorothy Turi to Lynne X Kaufman, Re: Audit Committee 13 A-77 Chart, Second Level Casino Floor Plan X A-78 Photograph X 14 A-79 Photograph X A-80 Chart, Tropicana Termination/Turnover X 15 Summary 1-31-7 to 10-31-07 16 17 18 19 20 21 22 23 24 25 (Exhibits retained.) 11 1 (The Special Meeting was commenced at 2 10:08 am.) 3 CHAIR KASSEKERT: Pledge of Allegiance? 4 (The flag salute was recited.) 5 CHAIR KASSEKERT: Good morning. 6 MR. NANCE: Good morning. 7 CHAIR KASSEKERT: We'll continue with 8 testimony today with respect to the Tropicana 9 relicensing process. 10 Let me first ask. Are there any 11 procedural matters that need to be brought to 12 our attention? 13 MR. O'GARA: No, ma'am. 14 MS. MAHER: No, Chair. 15 MR. DiGIACOMO: No, ma'am. 16 MR. O'GARA: I don't have any. I don't. 17 MR. DiGIACOMO: I think, Madame Chair, 18 that we're waiting for additional copies of 19 some additional A exhibits, but I think they 20 were shared with, at least, you this morning. 21 CHAIR KASSEKERT: Yes. 22 MR. DiGIACOMO: A letter signed by Mr. 23 Mercun on behalf of the Applicant and the 24 Acting Director on the behalf of the Division 25 concerning a -- duplicate copies of various 12 1 exhibits that were introduced as part of the 2 Applicants' exhibit list. If -- 3 CHAIR KASSEKERT: Correct. You want me 4 to read them into the record? 5 MR. DiGIACOMO: Is Mr. Mercun or Mr. 6 Michael can put them on the record. 7 MR. MICHAEL: I can put that on the 8 record. 9 CHAIR KASSEKERT: Okay. 10 MR. MICHAEL: I don't have it right in 11 front of me, but there were certain exhibits 12 that were listed in the correspondence that 13 were inadvertently duplicated, and so the 14 duplicates have been removed, and the 15 sequencing needs to be adjusted. 16 CHAIR KASSEKERT: I'll put it on the 17 record. It's Exhibits Nos. A-38, A-40, A-42, 18 A-45, and A-46 are duplicates of other 19 exhibits, specifically A-38 is a duplicate of 20 A-37; A-40 is a duplicate of A-39; A-42 is a 21 duplicate of A-41; A-45 is a duplicate of A-44; 22 and A-46 is a duplicate of A-43. 23 Therefore, you're requesting, Mr. 24 Michael, that Exhibits A-38, 40, 42, 45 and 46 25 be withdrawn. 13 1 MR. MICHAEL: That's correct. 2 CHAIR KASSEKERT: And has Miss Maher, 3 you have consented to this? 4 MS. MAHER: That's correct. 5 CHAIR KASSEKERT: Thank you. 6 MR. MICHAEL: Thank you. 7 CHAIR KASSEKERT: Okay. I'll put that 8 on the record, and so that's done. 9 MR. Di'GIACOMO: Through you, Chair, do 10 we have the extra -- the copies of -- 11 MR. MICHAEL: The copies of -- there 12 have been some other documents that have been 13 requested, and we'll be entering in connection 14 with the audit committee issue. Copies are 15 being made as we speak. So as soon as they're 16 here, we'll advise the Commission. 17 MR. DiGIACOMO: At a break, then, Chair, 18 we can have those admitted. 19 CHAIR KASSEKERT: We -- absolutely. We 20 can continue. 21 Mr. O'Gara, are you prepared to call 22 your next witness? 23 MR. O'GARA: Yes, Madame Chair. Recall 24 Mr. Jacob. 25 CHAIR KASSEKERT: Thank you. 14 JOHN G. JACOB - redirect 1 Since a couple days have passed, do we 2 need to reswear him? 3 MR. NANCE: We can reswear him. 4 CHAIR KASSEKERT: Okay. We'll reswear 5 you, Mr. Jacob. 6 7 JOHN G. JACOB, having been first duly 8 sworn to tell the truth, testified as follows: 9 10 MR. NANCE: Please state your name for 11 the record. 12 MR. JACOB: John Jacob. 13 MR. NANCE: Thank you. 14 CHAIR KASSEKERT: You can proceed, Mr. 15 O'Gara. 16 17 REDIRECT EXAMINATION BY MR. O'GARA: 18 19 Q. Mr. Jacob, you were here last week? 20 A. I was. 21 Q. And you are back today. 22 A. I am. 23 Q. Since you were here last, have you 24 resigned your position with Tropicana Entertainment? 25 A. I have. 15 JOHN G. JACOB - redirect 1 Q. And when did you resign? 2 A. I gave Bill official notice on Monday. 3 Q. And are you going to be employed 4 somewhere else? 5 A. Yes. 6 Q. And in what position with the new 7 company? 8 A. Chief financial officer. 9 Q. And is this -- what type of company is 10 it? 11 A. It's a middle market company that sells 12 into the home improvement industry. 13 Q. And I'd ask you the name of the new 14 company, but has your new company issued a press 15 release yet regarding you -- 16 A. It has not. 17 Q. So there are people there at that 18 company, who are unaware of the circumstances? 19 A. That's correct. 20 Q. And do you anticipate them releasing 21 that in terms of you doing that? 22 A. I do. 23 Q. And will you furnish that a copy of the 24 release so we can furnish it to the Commission? 25 A. Yes. 16 JOHN G. JACOB - redirect 1 Q. When did you -- first of all, were you 2 recruited to this position? 3 A. I was. 4 Q. And where is that company located that 5 you'll be doing it? 6 A. It's about an hour outside of Columbus, 7 Ohio, where my primary residence is. 8 Q. And where is Tropicana located? 9 A. Tropicana -- the headquarters is located 10 in Northern Kentucky, which is a little over two hours 11 from my home. 12 Q. And when you were initially approached 13 by the company and -- did you indicate to Mr. Yung 14 that you had received an approach from the company? 15 A. I did. 16 Q. And at that time did you have 17 discussions with him? 18 A. Yes. 19 Q. And did he ask you to remain with 20 Tropicana Entertainment? 21 A. He did. 22 Q. And during the course of discussions, 23 did he make you an offer to continue with -- 24 A. Yes. 25 Q. And did you consider that? 17 JOHN G. JACOB - redirect 1 A. I did. I talked it over with my family 2 over the holiday weekend and gave him a decision on 3 Monday. 4 Q. And that decision was to join your new 5 company? 6 A. Correct. 7 Q. Can you give us a general idea ofwhat 8 factors entered into the decision that you ultimately 9 made? 10 A. Yeah. Generally, I mean, certainly 11 location was a key issue. Compensation was an issue. 12 The nature of the company and the hands-on aspect of 13 the new position were -- were key factors in my 14 decision. 15 Q. When you say "compensation," is the 16 company you're joining privately owned? 17 A. It's a portfolio company of a private 18 equity firm. Yes. 19 Q. And, as such, were they able to offer 20 you a type of compensation that's unique to private 21 equity companies that's not available generally to 22 other companies? 23 A. That's correct. 24 Q. Did you leave because you had any 25 accounting disagreements with things that had been 18 JOHN G. JACOB - redirect 1 handled at Tropicana Entertainment? 2 A. No. 3 Q. Did you leave because you had any policy 4 disagreements with Mr. Yung or major disputes that you 5 had had that went unresolved and that's why you felt 6 you had to leave? 7 A. No. I felt we had a very good 8 relationship. 9 Q. And had you not been approached by these 10 people, were you actively seeking something else at 11 the time? 12 A. No. 13 MR. O'GARA: I don't have any other 14 questions. 15 CHAIR KASSEKERT: Miss Maher? Or -- 16 Miss Flaherty? 17 MS. FLAHERTY: Yes. Thank you. Thank 18 you, Commissioner. 19 20 RECROSS-EXAMINATION BY MS. FLAHERTY: 21 Q. Mr. Jacob, good morning. 22 A. Good morning. 23 Q. I have a few questions. In your current 24 employment you hold the positions of Senior Vice 25 President and Chief Financial Officer of Tropicana 19 JOHN G. JACOB - redirect 1 Casinos and Resorts and its affiliates; correct? 2 A. That's correct. 3 Q. And you're also the Vice President and 4 the Chief Financial Officer of Columbia Sussex and CHC 5 Holdings? 6 A. That's correct. 7 Q. And, finally, you serve as the Senior 8 Vice President, the CFO and Treasurer of both Aztar 9 and Ramada New Jersey Holdings? 10 A. That's correct. 11 Q. Now, in with regard to your positions 12 with Aztar and Ramada, New Jersey, it appeared in your 13 testimony last week that there was a lack of 14 familiarity with the Adamar, notes payable to Aztar, 15 some of the forecasting, and especially with regard to 16 the Commission quarterly financial report. Did that 17 have to do with the scope of your responsibilities or 18 that you were relatively new to your positions? 19 A. I believe in the four months that I had 20 been with the company -- you know, three, I think 21 officially with Tropicana -- the focus had really been 22 more on external events, investors. I believe there's 23 probably more than -- over 400 investors in the 24 company's credit facility or public bonds. I think a 25 lot of time was spent relative to that covenant 20 JOHN G. JACOB - redirect 1 compliance and so forth. 2 In -- in terms of some of the specific 3 items you mentioned, we've been reforecasting the 4 business pretty much every month, and I believe the 5 information in the forecasts that we were discussing 6 last week had been updated subsequently, and it was -- 7 you know, I think my familiarity is with probably more 8 current events in that regard. 9 Q. Now, if I'm correct, did you provide one 10 week's notice with regard to your Tropicana position? 11 Would that be accurate? 12 A. From our initial discussions, it was 13 just over two weeks. 14 Q. And that would be typical for someone 15 with your positions with the substantial company, that 16 amount of notice? 17 A. I believe so. 18 Q. And you've only been with Tropicana for 19 three months. Would that be accurate? 20 A. Yeah. I think officially it was around 21 August 21st or the 23rd. 22 Q. Now, did you continue to seek any other 23 employment while you were employed with Tropicana? 24 A. I did not. 25 Q. And does the change in your employment 21 JOHN G. JACOB - redirect 1 have anything to do with the debt covenant 2 miscalculation? 3 A. No. 4 Q. Does it have anything to do with 5 potential liabilities under Sarbanes-Oxley in light of 6 the scope of your responsibilities? 7 A. No. 8 Q. Okay. Now, prior to your positions with 9 Tropicana and Columbia Sussex, did you have any prior 10 casino or gaming experience? 11 A. No prior casino and gaming experience. 12 Q. How about hotel experience? 13 A. No. 14 Q. Leisure or entertainment experience? 15 A. No. 16 Q. Did that affect your decision in any way 17 in terms of the change? 18 A. Well, certainly in terms of going to a 19 supplier to the home improvement industry -- my 20 previous employer, Union Tools in Columbus when I was 21 CFO for seven and a half years, was a direct supplier 22 into the home improvement industry. So I do have a 23 familiarity with the customer base and some of the 24 issues that surround that industry. 25 MS. FLAHERTY: Thank you. That's all I 22 JOHN G. JACOB 1 have. Thank you. 2 CHAIR KASSEKERT: Thank you. 3 Any questions from the commissioners? 4 COMMISSIONER EPPS: Just out of 5 curiosity, how does this come about? If you're 6 not looking for a job, and you're three months 7 into a position with a company that's getting 8 established. How does it happen where somebody 9 plucks you out of that situation into a new 10 position? 11 THE WITNESS: Well, I received a call, 12 had some preliminary discussions. And when I 13 considered the entire package and all the 14 issues, it seemed too good an opportunity for 15 my family and I to pass up. 16 COMMISSIONER EPPS: And did the company 17 contact you? Or did someone doing a search on 18 the behalf of the company? 19 THE WITNESS: The private equity firm 20 that owns the company contacted me directly. 21 COMMISSIONER EPPS: And did they know 22 you from your prior work experience? 23 THE WITNESS: Yes. We have some mutual 24 acquaintances. 25 CHAIR KASSEKERT: Anything else? 23 JOHN G. JACOB - redirect 1 Anything more on redirect? 2 MR. O'GARA: Just one thing. 3 CHAIR KASSEKERT: Sure. 4 5 REDIRECT EXAMINATION BY MR. O'GARA: 6 Q. You're aware you'll be succeeded by Mr. 7 Mitchel? 8 A. That's correct. 9 Q. Are there any issues -- have you had a 10 beginning of the transition with Mr. Mitchel? 11 A. Yes. Ted is very capable, very 12 accomplished, and has hit the ground running on all 13 the outstanding issues. 14 Q. And he -- you've worked with Mr. Mitchel 15 for the four months you've been here? 16 A. That's correct. 17 Q. And if he has any questions, you'll be 18 available to him? 19 A. I will be. 20 MR. O'GARA: I have nothing. 21 CHAIR KASSEKERT: Thank you. 22 Anything else? 23 MS. FLAHERTY: No. Thank you, Chair. 24 CHAIR KASSEKERT: You may step down, 25 thank you, Mr. Jacob. 24 1 MR. O'GARA: Thank you. 2 CHAIR KASSEKERT: Uh-hum. 3 We're switching attorneys out? 4 MR. O'GARA: Yeah, I think so. I'll be 5 back. 6 CHAIR KASSEKERT: Oh, okay. 7 COMMISSIONER EPPS: Promise? 8 CHAIR KASSEKERT: Now where did 9 Mr. Levenson go? 10 MR. LEVENSON: Good morning. 11 CHAIR KASSEKERT: Good morning, Mr. 12 Levenson. 13 I guess he anticipated. It's obvious 14 who your next witness is. 15 Good morning, Mr. Preston. 16 THE WITNESS: How are you? 17 18 KEVIN E. PRESTON, having been first duly 19 sworn to tell the truth, testified as follows: 20 21 MR. NANCE: Please state your name for 22 the record. 23 THE WITNESS: Kevin Preston. 24 MR. NANCE: Thank you. 25 CHAIR KASSEKERT: You may proceed, Mr. 25 KEVIN E. PRESTON - direct 1 Levenson, when you're ready. 2 MR. LEVENSON: Thank you. 3 4 DIRECT EXAMINATION BY MR. LEVENSON: 5 Q. Mr. Preston, you are employed by whom? 6 A. Tropicana Entertainment. 7 Q. And when did you start that employment? 8 A. Approximately the first week of June of 9 2007. 10 Q. Okay. Just to give the Commission a 11 feel for your background, could you tell us of your 12 experience in the gaming industry before taking your 13 present position? 14 A. Sure. I started with Harrah's 15 Entertainment at the property level in Joliet, 16 Illinois, as they were opening one of their first 17 riverboat operations in Joliet as an intern during my 18 senior year of college. Spent about four years at the 19 property level in all aspects of operations. 20 I was fortunate during the internship 21 program to work in the gaming, finance, marketing, 22 accounting fields during that time to really get a 23 broad understanding of the gaming industry. Went into 24 human resources and operations at the property level 25 and then received a promotion to the corporate office 26 KEVIN E. PRESTON - direct 1 where I was traveling to 10 of the 23 casinos at the 2 time for Harrah's, the riverboats, and then our Las 3 Vegas properties. 4 During that time I was involved in the 5 acquisitions of the Rio and the Showboat properties 6 when Harrah's acquired those. Went on to Majestic 7 Star and -- 8 Q. Where you get to Majestic Star, what was 9 your final position, title at Harrah's? 10 A. Actually, the final position I was 11 working with the regional -- it was another sort of 12 learning -- not internship but I was working with one 13 of the regional VPs, going through the properties in 14 operations basically. And in the Majestic Star in 15 Gary, worked with -- Indiana -- worked with -- then 16 went as a GM, my first GM position with Grace 17 Entertainment, a small company that had two casinos in 18 Missouri, one in Iowa, and one in Kansas. Stayed 19 there for just about five years as a GM, both at -- 20 with an opening property as well as their largest 21 property in Iowa. Went on to Wild Rose Entertainment 22 in Iowa. We built and started a company, casino 23 company. And then during that same period, as we were 24 constructing another -- acquired another additional 25 casino during that time. 27 KEVIN E. PRESTON - direct 1 Q. And what was your position there? 2 A. Senior Vice President of Operations, 3 overseeing all casino operations for that company. 4 It should be mentioned that when I was 5 with Grace Entertainment for that five or so year 6 period, the owner had passed away, and Mr. Yung and 7 his staff came out as one of the potential buyers of 8 the -- of that company, and that's when I first met 9 Mr. Yung and a couple of his staff members. And we 10 sort of kept in contact here and there throughout. 11 And then once this opportunity came up for the company 12 for Tropicana, Mr. Yung called me personally and asked 13 if I'd be interested in coming on board in this -- in 14 its current role as Senior Vice President of 15 Operations for the company. 16 Q. Okay. You just answered my next 17 question, which is, your current position is Senior 18 Vice President of Casino Operations? 19 A. Correct. 20 Q. And in that role what areas of the 21 company are you in charge of? 22 A. All gaming operations. Marketing and 23 gaming operations. I'm talking security as well. 24 Q. So you're talking gaming operations and 25 casino marketing, too? 28 KEVIN E. PRESTON - direct 1 A. Yeah. Everything in our company -- 2 everything on the gaming side, excluding food, 3 beverage, and hotel operations. 4 Q. What do you believe you bring or now 5 have brought to the company as far as your benefits to 6 have joined this company? What's your assets? 7 A. Well, I think from my perspective, you 8 know, I guess I can tell you that by, you know, the 9 first two or three weeks that I came aboard, really, 10 it was really really learning, you know, more in-depth 11 about the company, touring, and going to every 12 property that we currently have under the Tropicana 13 umbrella, and really getting a feel for the company, 14 the employees. 15 You know, and I think it was great at 16 the point of this transition to get a fresh view, 17 fresh eyes on some things that were going on and 18 things that needed to take place. And, you know, 19 after traveling to all the properties, it was evident 20 that there was a lot of efficiencies that I think -- 21 that I thought I can bring to the table from an 22 analysis standpoint, from a structure standpoint, 23 which, you know, we've been able to do over the course 24 of the last couple of months and continue to work on 25 as we're moving forward into the end of this year into 29 KEVIN E. PRESTON - direct 1 2008. 2 Q. So -- I'm sorry. 3 A. It was-- I'm sorry. 4 Q. Go ahead. 5 A. It was evident, I think from a property 6 standpoint, that there needed to be some leadership 7 from the property level up to Mr. Yung in that middle 8 role there. And I really felt from that standpoint 9 that, you know, I could be that person that could 10 generally provide tools and knowledge to the 11 properties but also be that buffer in between the 12 properties and Mr. Yung and really provide him with 13 some in-depth analysis and information what I felt 14 needed to be done at each of the properties, not only 15 Atlantic City, but all the properties from a gaming 16 perspective. 17 Q. So do you believe that your ability to 18 conduct in-depth analysis and convey those to Mr. Yung 19 is one of your main strengths. 20 A. Well, I don't know if -- it's 21 necessarily a strength. I think it's something that 22 you're sort of brought up with from a Harrah's 23 organization that I just continued to do throughout, 24 you know, my gaming career and into -- up until this 25 point. 30 KEVIN E. PRESTON - direct 1 Q. When you started in your role at the 2 company, and as far as the Atlantic City property was 3 concerned, what did you note, you know, as you started 4 to review the market here in Atlantic City? 5 A. Well, you know, one thing that I did 6 note, I guess just looking at it from a global 7 standpoint, you know, we -- the way that we operate 8 from a company standpoint is we have a regional vice 9 president of operations, which is in the Nevada area, 10 and a regional VP of the operations that's in the 11 River Region that we call it, all of our riverboats. 12 And the one thing I identified immediately was that 13 there really wasn't any regional person in charge of 14 Evansville or Atlantic City. And I thought it was 15 extremely important from my perspective, given my 16 background in gaming, it was -- you know, obviously as 17 you can tell from, you know, my background, I didn't 18 have a whole lot of Atlantic City experience. And so 19 what I did was talked to-- talked to Mr. Yung and told 20 him that I had an individual that I had worked with 21 that had Atlantic City background and thought it would 22 be extremely important moving forward, especially with 23 the size of the property here in Atlantic City and 24 Evansville to bring someone in that could sort of be 25 that regional person over Atlantic City and 31 KEVIN E. PRESTON - direct 1 Evansville, and that's when I hired Bob Little to be a 2 Regional VP of Operations. 3 As many of you may or may not know, Bob 4 brings 11 years of experience here in Atlantic City 5 working with Resorts early on, Las Vegas for 13 years, 6 and also in the Riverboat Region in the Midwest. So I 7 thought it was important to bring that leadership here 8 to Atlantic City in a way to make sure that, you know, 9 you surround yourself with good people that could, you 10 know, really get involved day-to-day in the operations 11 not only here but working with Mark and his staff to 12 really gain some additional knowledge and make sure 13 that we're doing the necessary things in order to be 14 successful here in the market. 15 Especially what was going on, just to 16 answer your question, Lloyd, you know, obviously 17 coming in with the perfect storm with the smoking 18 issue, with Pennsylvania coming on board, and so it 19 was important for us to really get our -- you know, 20 sort of our arms around the Atlantic City market and 21 do the things necessary that was going to, you know, 22 ensure our health of the company moving forward. 23 Q. And, just by the way, Bob little who you 24 mentioned as the regional individual, he is stationed 25 right here on the Atlantic City property? 32 KEVIN E. PRESTON - direct 1 A. Yeah. That's correct. We made sure 2 that Bob was stationed here. You know, more from a -- 3 I guess, a support issue for Mark. And then, also, 4 it's fairly easily getting flights out of Philly to 5 our other riverboat destinations that he's responsible 6 for at this point. 7 Q. As the person in charge of casino 8 marketing and casino gaming operations, did you have 9 to analyze what was working at the property and what 10 was not working at the property? Was that part of 11 your charge? 12 A. Well, I mean that was one of the charges 13 that I, you know, going into the properties, that's 14 one thing that I want to do is just make sure that 15 we're doing the right things from a marketing 16 standpoint, from a slot perspective, you know, from my 17 employees' standpoint. So that's one thing we did not 18 only here but at all the other properties as well. 19 And, you know, obviously, it was determined that from 20 a marketing perspective there was some efficiencies 21 that we needed to work on and some things that we 22 needed to change from a marketing perspective, not 23 only here in Atlantic City but as well as all our 24 other riverboat and land-based operations. 25 Q. And give the Commission, if you would, 33 KEVIN E. PRESTON - direct 1 the benefit of that analysis. What did you see that 2 was working, and what did you see maybe that wasn't 3 working? 4 A. Well, you know, I think, you know, I 5 guess to, you know, to talk further, I mean, there's 6 still things that we're changing from an operations 7 standpoint that will continue on that we're in the 8 middle of now. You know, looking at the slot floor, 9 we're in the final stages of our remodel there, which 10 is going to help out a great deal. But, you know, 11 really, looking at our slot product we've been to 12 change out our slot product. Not only here in 13 Atlantic City, but our other gaming properties that we 14 had a large share of lease and participation machines/ 15 which, obviously, depending on how they do, 16 win-per-unit per day, can either hurt or help you. 17 And what we found out in many cases is that, you know, 18 we weren't getting our fair share from a slot 19 perspective. And so we needed to change out some of 20 our slot machines with some new product or some 21 conversions. 22 And then from a marketing perspective, I 23 think, to take a step back, you know, we -- one 24 thing -- one of the first things I did from a 25 corporate perspective was really change our marketing 34 KEVIN E. PRESTON - direct 1 structure at the corporate office where, you know, we 2 have regional people that are responsible for the 3 River Region and for the Nevada Region. And basically 4 what was happening, there would be project that is 5 come into the corporate office that any one individual 6 would just get and work on. And so what I did is I 7 actually took that structure further into our 8 corporate office and sort of regionalized our 9 marketing department at the corporate office so that 10 if Nevada had projects they needed to do, they would 11 know that they go to Jim or Sally or whoever on a 12 regular basis, so that those people would know the 13 market and get accustomed to the market and to the 14 properties so that they could better serve those 15 areas. And we did the same thing in the River Region. 16 Atlantic City is a little different 17 because of its size. Atlantic City really has its own 18 marketing department here, that they really don't 19 utilize our corporate marketing department that much 20 just because of the size and the amount of volume that 21 goes through here. So it was determined that we would 22 just leave the marketing department as it is and not 23 utilize the corporate office for any marketing 24 programs. 25 Q. All right. In your review of the 35 KEVIN E. PRESTON - direct 1 company from a casino marketing, casino operations 2 perspective, did you come across certain areas of the 3 operation that you found that needed to be changed or 4 you found that there was -- the things that occurred 5 maybe needed to be massaged and changed? 6 A. Yeah. I think that's part of it. I 7 think, you know, from a gaming perspective, you're 8 always looking at the gaming operations on a daily 9 basis, how you can become efficient or generate 10 additional revenue. So the great thing about, you 11 know, being -- you know, in the situation we're in 12 from a private company standpoint is that, you know, 13 if anything needs to be changed or done or you need 14 additional monies or capital to do things, you know -- 15 you really, you know -- there's one person to go to to 16 get that authority. And over the course of the last, 17 I guess five or six months that I've been here, we've 18 been able to do some things. And so long as you 19 provide that analysis and show what the return is, you 20 know, that there's really no issues. It's sort of a 21 short meeting with Mr. Yung to get those monies needed 22 to do the things you need to do. 23 But I think that's where the difference 24 is from my relationship with Bill to where the 25 relationship was prior to with the gentleman that I 36 KEVIN E. PRESTON - direct 1 replaced is that I think we just have a totally 2 different relationship. And, you know, we're in and 3 out of each other's offices on a fairly regular basis 4 throughout the day and always trying to do the right 5 things from a property perspective. 6 Q. Let's just take one -- one of those 7 areas and talk about it in, let's say, the slot 8 attendants and the cage personnel. There was a point 9 in time when there was a reduction in staff in those 10 two areas. And I'm assuming, from having talked to 11 you before now, that that was an area that you looked 12 at with regard to staffing; is that correct? 13 A. Yeah. You know, we definitely looked at 14 those two areas. Obviously, you know, there was 15 always analysis being done from a company perspective. 16 But I think coming in, you know, I sort of brought a 17 different look to the analysis and some more in-depth 18 analysis, maybe, that needed to be done. And 19 basically what we determined after doing our analysis 20 is that we actually needed additional slot staff, cage 21 staff, slot techs, to better serve our customers. 22 And, you know -- and then taking it a step further, 23 just recently, as Mr. Yung stated when he was up here, 24 we did some additional in-depth analysis that 25 determined that we needed definitely to hire 37 KEVIN E. PRESTON - direct 1 additional player development staff that have those 2 relationships with customers that we could bring in 3 that will -- you know, this business is so 4 relationship based, that it's important to have those 5 player development people to have those relationships 6 that can bring those individuals in and generate new 7 customers to your property. 8 Q. And, in fact, have you and/or Mr. Yung 9 met with some of the individuals who were let go from 10 the player development area in order to see if they 11 were amenable to returning? 12 A. Yeah. We did. And, you know, we met 13 with several already. We have one commitment from an 14 individual that was with us for over nine years that's 15 coming back. We've met with another individual, and 16 we should have an answer today on him. And we feel 17 pretty good and confident that he'll be back as well. 18 So I think it says a lot that, you know, individuals 19 that have been here, team members that have been here 20 for many years, nine, ten, 11 years, although they 21 experienced a situation, you know, way back when, 22 they're still excited and want to get back to our 23 property and work and are here for the same reason 24 that we are, to be successful, so. 25 Q. Getting back to those additional slot 38 KEVIN E. PRESTON - direct 1 attendants and cage personnel and slot techs, 2 certainly there's been a lot of testimony -- 3 examination here, particularly of Mr. Yung and others, 4 which paints Mr. Yung as somebody that cuts people, 5 doesn't add people. How did you go to somebody like 6 Mr. Yung -- not like Mr. Yung. How did you go to Mr. 7 Yung and tell him that, you know, he needed to expand 8 the workforce? How -- what's that dynamic like? 9 A. Well, I think, again, it's really just a 10 fresh pair of eyes, you know, in coming into this 11 situation. You know, again, in the -- in June and 12 really getting involved in the property probably the 13 middle of July, you know, up until this point. You 14 know, it was evident that, you know, analysis that was 15 being done needed to be done even further. And I 16 think, you know, what we were able to do is really, 17 you know, through looking at slot jackpot pay-out 18 times and, you know, how many slot attendants and slot 19 attendants it is per X amount of machines, you know, 20 if Mr. Yung has the information in front of him, and 21 you can show him what you need to do in order to get 22 better service to our customers, he's going to do it. 23 And that's what I did. As I -- I think I just brought 24 a different feel and different analysis to him that 25 showed him, you know, really what was evident and what 39 KEVIN E. PRESTON - direct 1 we needed to do. And I think that's, you know, what 2 we did in order to get to the point that we're at 3 right now. 4 Q. And would you say that's rather routine 5 now? If you come in with an analysis and you sit down 6 and you show him that analysis that he routinely goes 7 along with your recommendation? 8 A. So far, yeah. And I think one thing 9 that I think should be noted is that the analysis that 10 we do here, we -- you know, we've put in place not 11 only here but all of our other casinos as well. There 12 wasn't -- there was analysis, but we went even further 13 with the analysis. And so now there's really 14 structured reports that we get from the property, from 15 all the properties on proformas and postformas and all 16 the marketing programs. And really, you know, that's 17 how we determine, in essence, what marketing programs 18 was working and wasn't working by doing these 19 proformas and postformas. And what we did was really 20 redirected some of those dollars of those market 21 programs that weren't working into either marketing 22 programs that were currently working and/or new 23 programs that we wanted to utilize or try to see what 24 effect they would have on increasing the business in 25 volumes of our properties. 40 KEVIN E. PRESTON - direct 1 The bad thing about that is, 2 unfortunately, the timing of my an arrival, the third 3 quarter marketing plan and a lot of direct-mail pieces 4 were already out, and so we couldn't really manipulate 5 some of the bigger changes until this fourth quarter. 6 So we're starting to see the fruits of that now. 7 Specific for Atlantic City, we're hitting numbers on 8 certain days now that exceed last year, which is I 9 think a very good positive trend as we continue moving 10 forward. And we just implemented some additional 11 marketing programs here recently that we feel are 12 really going to do us well as we continue to move 13 forward into this quarter and into the next year. 14 Q. Let's just talk about goals and 15 initiatives and the like. I mean, what -- what 16 initiatives have you been involved with? You 17 mentioned the marketing one and the other initiatives 18 or any other goals, and what do you see in your 19 crystal ball as to what's going to happen down the 20 line at Tropicana here in Atlantic City? 21 A. Well, I think, you know, one of the 22 things that I just want to touch on real quick is, you 23 know, coming into the company in June -- actually, one 24 of the first meetings that I attended, fortunately, 25 was a compliance meeting of all our compliance people 41 KEVIN E. PRESTON - direct 1 in Kentucky. And I was able to attend the meeting and 2 really sort of put a face on the operations end of it 3 and just let the compliance know that from an 4 operations standpoint if there are any situations with 5 any GMs, not only here but at any of the properties, 6 you need to let me know. But from the standpoint of 7 making sure that we're compliant and doing the things 8 necessary to run the best property possible from a 9 regulatory compliance and operations standpoint, 10 that's the goal that we need to attain. And so, you 11 know, I guess I just want to make sure that that was 12 out. 13 And then the other aspect of that is, 14 over the course of the last four or five months, I've 15 had GM meetings with all of our GMs that -- we did one 16 in Nevada or all of our GMs in Nevada as well as the 17 River Region. And during those meetings we actually 18 had our corporate internal auditor and our compliance 19 people out, and attended those meetings with the GMs 20 and actually had the agenda items where they actually 21 did, you know, presentations on both the audit side of 22 it and the compliance side of it. And that was just 23 done over the course of the last, you know, four or 24 five months as well. 25 Q. Just to make something clear, when you 42 KEVIN E. PRESTON - direct 1 brought back some slot techs, that was as a result of 2 customer service, not in any way as a result of being 3 out of compliance; is that correct? 4 A. That's correct. Yeah. 5 Q. All right. There is a document A-50? 6 (Conferring.) 7 MR. LEVENSON: I just want to show it to 8 the witness. John had the copies. 9 MR. MICHAEL: We'll get it. 10 MR. NANCE: A-50. A-50. 11 MR. LEVENSON: Does everybody have it, 12 Commissioners? Yes? 13 Q. There was some -- some testimony the 14 other day with regard to this document, which is dated 15 August 7, 2007, and it's entitled "Tropicana Atlantic 16 City potential"-- "potential department layoffs." Do 17 you see that? 18 A. Yes. 19 Q. Do you have that in front of you? 20 A. Yes. 21 Q. Okay. Tell us how that came about, that 22 document. What led up to that document? 23 A. Well, I think it's stated in earlier 24 testimony Donna More and myself met initially with 25 members of the Commission to talk about -- well, 43 KEVIN E. PRESTON - direct 1 actually, so that I could really get to meet them, and 2 give a little bit about my background and sort of, as 3 you said, the goals and objectives of the company. 4 And then, you know, talked about, obviously, some of 5 the things that were going on and up and including 6 some of the layoffs that had taken place. And some of 7 the things that were happening with layoffs up until 8 the point of my arrival and potentially what we 9 foresaw down the line. And, you know, so I guess it 10 was discussed about maybe coming to some finalization 11 of that number. 12 And so we went back and worked with the 13 property and came up with the most efficient way 14 without -- again, as basically outlined in this 15 document, without doing any further analysis. The 16 most efficient operation number that we could come up 17 with. Now, again, keep in mind that the document in 18 several respects of this, almost every bullet point 19 says that until further analysis is done -- and the 20 key is that being fairly new to the company, you know, 21 I needed to get my arms around this and really get 22 that analysis done with myself and Bob and the 23 property department managers to really come back with 24 an actual number that we felt was -- was what we could 25 work with. And in many respects, as we talked about 44 KEVIN E. PRESTON - direct 1 earlier, there was situations where nothing needed to 2 be touched, and/or in some circumstances, we hired 3 additional people back. 4 Q. Okay. But in -- in coming to the actual 5 physical document here, had you met with the various 6 heads of the departments at Tropicana? 7 A. You know, in some respects. But I mean, 8 from my perspective, you know, I didn't want to 9 dictate a number. Obviously, it's not my role. I 10 mean, I'm more of a provide tools and support. But, 11 you know, that again, it was culmination of the 12 department managers coming up with the most efficient 13 number to operate and without doing any further 14 analysis. 15 Q. Okay. 16 A. And so that's what needed to be done, 17 and we did it, and then we came back with the number 18 that is today. 19 Q. Go to, for example, the second page. As 20 I just want to show the Commission what you really 21 mean with regard to the fact that these weren't fixed 22 numbers. These were numbers that needed analysis. 23 Just look, for example, at the slot supervisor. Can 24 you read that last sentence of the paragraph with 25 regard to the slot supervisors? 45 KEVIN E. PRESTON - direct 1 A. Starting with "However"? 2 Q. Yes. 3 A. "However, we do want to analyze this 4 number and ensure that our service levels are 5 appropriate." 6 Q. Take the next one, slot tech. The last 7 sentence there. 8 A. "However, we do want to analyze this 9 number and ensure that our service levels are 10 appropriate." 11 Q. And in security, the next one down, if 12 you could read -- read that last sentence. 13 A. "We will analyze this area and report 14 back with a number that is sufficient for the safety 15 of our guests as well as the protection of our 16 assets." 17 Q. And this is a further, maybe a final 18 example, look at the beverage server one. The final 19 sentence with regard to that paragraph. 20 A. "However, we will analyze this area to 21 ensure that our service levels are appropriate." 22 Q. So this document, A-50, this potential 23 department layoffs, was not an intention of the 24 Tropicana to lay off 320 people; is that correct? 25 A. No. Not at all. I think it was just 46 KEVIN E. PRESTON - direct 1 a-- it was a number that was out there. But, 2 obviously, it was something that, you know, we 3 wanted-- we needed to look at further. And, you know, 4 in one instance, it's just an example of that, you 5 know, when we were able to get in-depth from a table 6 game perspective, what we found was that on the 7 weekends, there's between 40 and 60 tables that 8 weren't open. And so we -- and what we found was that 9 those tables not -- the effect of them not being 10 opened when we went back to our records indicated that 11 those tables were bringing in about $10 million a year 12 in revenue. And so that's where -- you know, once we 13 analyzed it and found out what that was, we didn't 14 need to do anything in that area, even though 15 initially based upon our analysis of what was being 16 opened, it was determined that, you know, we thought 17 that there would be additional, you know, employees to 18 look at. 19 But, you know, again, until you actually 20 do the analysis of these specific departments, you 21 know, it's hard to really determine, you know, what 22 the outcome is going to be. And once we completed all 23 that analysis, obviously, the number was significantly 24 different than what was project -- you know, what was 25 presented. 47 KEVIN E. PRESTON - direct 1 Q. Okay. And, there was a meeting, was 2 there not, with Mr. Yung, yourself, and Ms. More with 3 the Commission and the Division on August 8th, which 4 was the next day from the day that this document is 5 dated; is that correct? 6 A. Correct. 7 Q. And was this document created as part 8 and parcel of discussions to take place at that August 9 8th meeting? 10 A. I'm sorry. Can you say that again? I'm 11 sorry. 12 Q. Did you have this document prepared as 13 part of the agenda -- 14 A. Yes. 15 Q. -- for your meeting with the Division? 16 A. Yes. 17 Q. -- and the Commission? 18 A. Yes. 19 Q. Okay. And the reason that you have in 20 here all the different comments with regard to you 21 need further analysis, was that explained to the 22 Division and Commission, that this was not a list of 23 definite layoffs but one that needed some further 24 analysis? 25 A. Yes. 48 KEVIN E. PRESTON - direct 1 Q. And you finished off -- or the memo on 2 potential department layoffs is finished off with the 3 last sentence. Could you read that into the record? 4 The last sentence of the -- where it says, "We will 5 continue" -- 6 A. "We will continue to analyze our 7 staffing in light of safety, security, cleanliness, 8 and patron satisfaction and provide updates on our 9 findings to you." 10 Q. And did you do that? 11 A. Yes. Well, I didn't personally. Mark 12 and I think Tama reported back to the Commission. 13 Q. And just take -- because I think there 14 was some misunderstanding the other day that you could 15 clear up for us. There was some testimony and then 16 some newspaper coverage or whatever which reported 17 that the 320 number that's contained in this potential 18 department layoff was reduced to the actual number of 19 layoffs being 33. Is that a fair comparison? Is that 20 apples to apples of what actually happened here? 21 A. No. 22 Q. Okay. What was the 33 compared to what 23 number? 24 A. To the 70 security officers. 25 Q. Okay. And was there a communication to 49 KEVIN E. PRESTON - direct 1 the Casino Control Commission contained in A-60? 2 MR. LEVENSON: Did you ever find John? 3 MR. MICHAEL: It's there. 4 MR. LEVENSON: Right here. 5 MR. MICHAEL: Copies are in that folder. 6 Q. Don't be scared. There's just copies of 7 copies here. 8 You were copied on this letter, which is 9 A-60, August 17th, 2007, I believe. Kevin Preston is 10 in the cc's. The letter from Tama Hughes to Dianna 11 Fauntleroy, General Counsel at the Commission. 12 A. Correct. 13 Q. All right. And at the end of that 14 letter, it talks about the total number of reductions 15 which will occur on this date, which is 33; is that 16 correct? 17 A. That's correct. 18 Q. And that 33 applies to the potential 19 staff reduction in A-50, your memo, of security being 20 the number of 70. 21 A. Correct. 22 Q. Is that correct? 23 A. Right. 24 Q. And at that meeting of August 8th, Mr. 25 Yung was there; is that correct? 50 KEVIN E. PRESTON - direct 1 A. Correct. 2 Q. Okay. And, by the way, obviously, you 3 had had some conversations with Mr. Buro before he 4 left, which was right around that same time of 5 August-- August 8th; is that correct? 6 A. Correct. 7 Q. And did Mr. Buro, during the time that 8 you were there and he was there, explain to you that 9 whatever cuts were going to be made that Fred would 10 continue to inform the regulators? 11 A. Yes. 12 Q. Okay. And what did you say to that? 13 A. Without a doubt. You have to. Yeah. 14 Yeah. 15 Q. You were in complete agreement with 16 that? 17 A. Oh, yeah. Of course. 18 (Conferring.) 19 MR. LEVENSON: That's all the questions 20 I have at this time. 21 Thank you. 22 CHAIR KASSEKERT: Cross-examination, 23 Miss Maher? 24 MS. MAHER: Thank you. 25 51 KEVIN E. PRESTON - cross 1 CROSS-EXAMINATION BY MS. MAHER: 2 Q. Good morning, Mr. Preston. 3 A. Hi. 4 Q. I was going to ask you how tall you are 5 but -- 6 A. Six-six, for the record. 7 Q. An easy one. 8 MR. LEVENSON: How come you never ask me 9 how tall I am? 10 MS. MAHER: You're not on the stand. 11 A. Is that all the questions? Is that it? 12 Q. No. You're not done. 13 A. Go ahead. 14 Q. You took Howard Reinhardt's place; is 15 that correct? 16 A. That's correct. 17 Q. And that was in June of 2007? 18 A. Correct. 19 Q. And do you know why Mr. Reinhardt left? 20 Were you aware of that? 21 A. Yeah. He left to go start -- there's a 22 small company, I think in Rhode Island, that was in 23 the hotel business that wanted to pursue some gaming 24 opportunities. 25 Q. How long had he been with the company 52 KEVIN E. PRESTON - cross 1 prior to leaving? Are you aware of that? 2 A. You know, I think about ten years or so 3 maybe. It was quite a -- significant amount of time. 4 Q. Okay. And, again, what was your 5 position with the company at this point? 6 A. Senior Vice President of Gaming 7 Operations. 8 Q. And what do you see your duties as, in 9 general? 10 A. Well, I mean, oversight of all of our 11 gaming entities. Obviously, I have two direct 12 reports, both who oversee, again, the Nevada Region 13 and the River Region, but the ultimate responsibility 14 for all the casinos. 15 Q. And who reports to you directly? 16 A. Bob Little and Rick Yuhas. 17 Q. And who is Rick Yuhas? 18 A. Rick Yuhas is the Regional Vice 19 President of the Nevada Region for us. 20 Q. Were those individuals in place when you 21 came in? Or did you place both of them? 22 A. Rick Yuhas was in place. There was 23 another individual, Mike Smith, who was over the 24 Nevada Region, and Rick Yuhas was over the Riverboat 25 Region. Mike Smith departed. Rick Yuhas is from 53 KEVIN E. PRESTON - cross 1 Nevada and worked there before, so I put him in 2 Nevada. And then Bob ended up basically taking on 3 Atlantic City, Evansville, and then the remainder of 4 the riverboat operations. So he's really, you know, 5 that Eastern Regional at this point, I guess. 6 Q. When did you bring him on board, Bob 7 Little? 8 A. He would have been on, I guess, the 9 middle or end of July. 10 Q. Of this year? 11 A. Of this year. Correct. 12 Q. And did you bring him from outside of 13 the company and bring him in? 14 A. Yes. 15 Q. Okay. And you're -- that was at your 16 initiative; is that correct? 17 A. Correct. 18 Q. What are his duties, please? 19 A. He oversees the operations of Atlantic 20 City, Evansville. Again, the rest of our riverboat 21 properties. The GMs report directly to him. He has 22 oversight in those properties with, obviously, direct 23 reporting up to me. 24 Q. Okay. And you report to Mr. Yung? 25 A. Correct. 54 KEVIN E. PRESTON - cross 1 Q. You indicated that when you came in, the 2 first thing you wanted to -- or one of the first 3 things you wanted to do was quote-unquote get your 4 arms around the Atlantic City market; is that correct? 5 A. Atlantic City market as well as the -- 6 you know, the rest of the company to really understand 7 what was going on, you know, who the players were, you 8 know, who my reports were. And, you know, the 9 background and really what was going on at the 10 properties from an operation standpoint. 11 Q. And at any point did you decide that you 12 needed to focus on Atlantic City, the Trop in Atlantic 13 City, for any reason? 14 A. Yeah. Only because, you know, going 15 into this, as discussions were with Mr. Yung, 16 obviously, Atlantic City is, you know, over half of 17 our company. And I wanted to make sure that really 18 with what was going on from the smoking ban in 19 Pennsylvania that, you know, we sort of were getting 20 in gear to preparing for that as we were moving 21 forward. 22 Q. Well, when you came into Atlantic City, 23 how did you -- what did you do to quote-unquote get 24 your arms around the Atlantic City market? What did 25 you do specifically? 55 KEVIN E. PRESTON - cross 1 A. Well, I, obviously, had a lot of 2 discussion with Fred Buro. Toured some of the other 3 properties here in Atlantic City. Just really got a 4 feel for what their games was, what kind of marketing 5 programs they were doing. 6 Q. How did you do it? How did you go about 7 doing it? 8 A. I actually went to the properties, 9 toured them. Talked to Fred. Fred had a really good 10 idea of what was happening from the marketing 11 perspective within the market. And, you know, really 12 just sort of understand the numbers, and then where we 13 fell into that place and what we needed to do to 14 improve what we were doing. 15 Q. And you talk about analyzing 16 inefficiencies that you needed to work on; is that 17 correct? 18 A. That's correct. 19 Q. What kind of analysis did you do to the 20 market? 21 A. Well, the first thing we did was 22 proformas and postformas on our marketing product, 23 waht we currently had in place from our marketing 24 perspective, all our marketing promotions and programs 25 that we had going on. Looked at, you know, as an 56 KEVIN E. PRESTON - cross 1 operations standpoint. You know, we started to get 2 into slot jackpot times, how many people were waiting 3 at cage lines. You know, just different aspects of 4 the business. 5 Q. And who was performing these analysis? 6 A. Well, the property would do that. 7 Q. Who on the operate property? 8 A. Whoever the specific department manager 9 was and Fred. 10 Q. Did you task them to do these things? 11 A. Well, I think, you know, going into 12 this, you know, my goal is always to do as a team 13 approach. So I think, I mean, we looked at a team and 14 decide what we needed to do, and then Fred would 15 dictate to those individuals what needed to be done. 16 Q. Because it seems to me in your testimony 17 it's rather unspecific. I mean, exactly what was 18 done? Did you call a team together? Did you say I 19 designate you to make this analysis? I designate you 20 to make this analysis? I designate you to make this 21 analysis? And I want reports. How did that specific 22 happen? 23 A. Well, I mean, you know, when you're at 24 my level, you really dictate a lot the general manager 25 of what to do and he dictates down from there as to 57 KEVIN E. PRESTON - cross 1 what -- you know, what information I'm going to need 2 in order to make the decision with him and the 3 property. 4 Q. Okay. Did you sit down with Mr. Buro 5 and talk about that? 6 A. Yeah. 7 Q. And did you sit down with Mr. 8 Giannantonio and talk about that? 9 A. Well, you mean when Mark took over 10 for Fred? 11 Q. Well, no. Let me back up. When you 12 first came on board, you dealt with Mr. Buro only; 13 correct? 14 A. Correct. Right. 15 Q. And specifically did you task him to 16 begin these analyses? 17 A. Yeah. And not only here in Atlantic 18 City but at all our other properties as well. 19 Q. You did -- Mr. Buro didn't deal with 20 Atlantic City or anything outside of Atlantic City? 21 A. No, no. No. But I just want to make to 22 clear that it wasn't just an Atlantic City thing that 23 we needed to do. It was all our other properties as 24 well. 25 Q. Okay. And what did Mr. Buro provide in 58 KEVIN E. PRESTON - cross 1 return for you, then, based on your direction? 2 A. Well, I mean, we provided the analysis 3 that needed to be done. And basically what that 4 determined was there probably needed to be additional 5 analysis done in certain areas to determine what, you 6 know, effects -- what we were -- what the effect we 7 were having on marketing programs and where we needed 8 to redirect some of those marketing dollars, whether 9 it was, you know, in the same programs that we were 10 doing or redirect those dollars into new types of 11 marketing functions that we could try to gain 12 additional market share or start, you know, sort of 13 putting the trend in other areas. 14 Q. So your analysis indicated you needed 15 more analysis. That's what you just said. 16 A. Well, in certain respects, that's what 17 happens. When you look at things and we probably 18 needed to dig a little differently and determine if 19 there was additional. 20 Q. Was this a written analysis? Do you 21 have any written reports? 22 A. Yeah. There were reports that not only 23 Atlantic City but all of the other properties do as 24 well. 25 Q. And specifically what -- in marketing 59 KEVIN E. PRESTON - cross 1 was it your understanding when you came in there there 2 had been some cuts in the marketing department? 3 A. Yeah. I mean, there was definitely some 4 areas that we needed to improve upon and definitely 5 areas that we needed to increase what we were doing 6 from a marketing perspective. 7 Q. And what areas were those? 8 A. Definitely, without a doubt, we needed 9 to, you know, obviously increase some of our cash 10 back. Look at our marketing programs and try to find 11 ways to gain customers back that we had lost for 12 whatever reason. And so we looked at it and 13 determined that, you know, we needed to implement some 14 programs that would allow us to do that. 15 Q. Okay. And you've said that. What 16 programs? What ways can you -- I mean, the target of 17 my marketing program is to get customers back. 18 A. Right. 19 Q. What programs? 20 A. Cash back. 21 Q. What were you going to do specifically? 22 A. Complimentary -- 23 MR. LEVENSON: I don't know. She was 24 still asking the questions when he started -- 25 CHAIR KASSEKERT: I think she's trying 60 KEVIN E. PRESTON - cross 1 to get answer, Mr. Levenson. 2 MR. LEVENSON: I'm not trying to 3 criticize her. I'm just saying they're both 4 talking at the same time. 5 A. Cash back, complimentary. Possibly 6 additional entertainment at the property. So I mean, 7 you know, in that respect, I mean, you know, there's 8 really, again -- there's nothing that no one else has 9 done within the market that you can come and deal with 10 me. I mean, obviously, you have to look at what 11 you're doing and either increase what you're doing or 12 change some things. Again, you know, comps we need to 13 look at. We need to look at a cash-back program. We 14 needed to look at players that hadn't been back in 60, 15 90 days, to send direct-mail pieces out to them to try 16 and get them back with some incentives. Those are the 17 things we needed to work on. 18 Q. And have you done those things? 19 A. Yes. 20 Q. And now you also indicated that you were 21 going to do analysis regarding your slot floor 22 remodeling; is that correct? 23 A. No. I think we talked about the slot 24 floor, but we didn't talk about doing some analysis on 25 jackpot wait times. 61 KEVIN E. PRESTON - cross 1 Q. No. You specifically indicated that you 2 are doing analysis regarding slot floor remodeling and 3 changing out the slot product. 4 A. Yeah. As far as lease and participation 5 and the performance of the games. Correct. There 6 were elements on games and so forth. Yes. Correct. 7 Q. Was it your understanding that as part 8 of the slot floor remodelings, you were going to be 9 adding machines, changing out, were you going to be 10 decreasing slot machines? What was your strategy 11 regarding the slot machine and the floor remodelings? 12 A. If I remember correct, prior to my 13 arrival, there was also a decrease in the slot count. 14 But what I was really doing was looking at what was 15 our lease and participation games. What were the 16 games doing as a win- per-unit basis. And if there 17 needed to be changes from a conversion standpoint, 18 just simply converting the machines into new games or 19 the purchase of additional games, which would be 20 involve -- we're doing right now. We just added some 21 machines to our floor as we speak. 22 Q. So you have added more slot machines; is 23 that correct? 24 A. We haven't added. We just have taken 25 some games that weren't performing and replaced them 62 KEVIN E. PRESTON - cross 1 with new product. Correct. 2 Q. Have you added more slot machines? 3 A. Not to my knowledge. No. 4 Q. Have you decreased the amount of the 5 slot machines? 6 A. I have not. No. 7 Q. Has the Tropicana Atlantic City reduced 8 the number of slot machines? 9 A. I believe prior to my arrival, they have 10 decreased product. I'm not sure, though. 11 Q. Okay. And are you aware if any of that 12 came back? Was it your conscious effort or decision 13 to try to decrease slot machines at all? 14 A. No. Not at all. 15 Q. Okay. Now, you said you regionalized a 16 lot of the marketing; is that correct? Corporate -- 17 A. Which doesn't affect Atlantic City. 18 Q. And why doesn't that affect Atlantic 19 City? 20 A. It's just too big, and we wanted to make 21 sure that we were, you know, as efficient as possible 22 here and focus really, since it's such a large 23 property, that we wanted to keep everything as it was 24 here. 25 Q. So Atlantic City hasn't been affected by 63 KEVIN E. PRESTON - cross 1 that? 2 A. No. Not at all. No. 3 Q. How about big is the marketing 4 department here in Atlantic City at this point? 5 A. You know, I couldn't tell you that. I 6 mean, if you look at the player development and 7 marketing assistance, and -- I don't know. 8 Q. You can't give me a number? 9 A. No. 10 Q. You can't give me a ballpark number? 11 A. No. No. Not at this time. 12 Q. And this is something that you have 13 analyzed with some -- in some detail. Would that be 14 correct? 15 A. The marketing department? No. 16 Q. No? 17 A. Uh-uh. 18 Q. You haven't analyzed the marketing 19 department? 20 A. No. 21 Q. What aspect of the marketing have you 22 been analyzing? 23 A. Just the player development aspect of 24 it. 25 Q. And how many do you have in the player 64 KEVIN E. PRESTON - cross 1 development part? 2 A. I believe we have ten right now. And 3 we're adding additional. 4 Q. Okay. How many -- do you know how many 5 the property had in that area in January of 2007? 6 A. I don't. I'm sorry. 7 Q. So you don't know where the property is 8 now in relation to where it was in January -- 9 A. No. 10 Q. -- of 2007? 11 A. No. No. I just knew that after -- 12 after Mark basically put together the analysis, it 13 showed that we needed to hire additional staff. 14 Q. And Mark who? 15 A. Mark Giannantonio. 16 Q. And he put together that analysis when? 17 A. Several weeks back. Two, three weeks 18 ago. 19 Q. So the decision to start hiring player 20 development back has been a very recent occurrence; is 21 that correct? 22 A. Yes. Yes. Uh-huh. 23 Q. Now, you talked about hiring back slot 24 attendants and cage personnel, slot techs; is that 25 correct? 65 KEVIN E. PRESTON - cross 1 A. Slot attendants, cage cashiers, and slot 2 techs. That's correct. 3 Q. When was that decision made to begin -- 4 to begin, I guess, rehiring or bringing some of those 5 people back? 6 A. I don't know the exact date of that, but 7 I would assume somewhere around August, maybe. 8 Q. August of 2007? 9 A. Correct. 10 Q. And that was driven by customer service 11 levels dropping; is that correct? 12 A. Not necessarily service levels. More of 13 a -- yeah. I guess, service levels as well as, you 14 know, long time for our customers waiting for jackpot 15 pay-outs. 16 Q. Well, that would be service level. 17 A. Yeah. I understand. 18 Q. So if a customer has to wait a long time 19 for a jackpot? 20 A. Yeah. 21 Q. And this -- would I be correct in saying 22 that basically you're hiring back people that you had 23 laid off or cut in previous months. Would that be 24 correct? 25 A. That the property -- yeah. Correct. 66 KEVIN E. PRESTON - cross 1 Q. Same with player development. Would 2 that also be correct? 3 A. That's correct. 4 Q. You're not hiring new and additional 5 people, you're just bringing some of the people back 6 that you've already cut in the previous nine months. 7 A. That's correct. 8 Q. Are you back to where you were in the 9 previous nine months with calling these people back? 10 A. All of them? No. No. 11 Q. So you're no further ahead, really, than 12 where you were in January of 2007 with bringing some 13 of these people back. You're just bringing people 14 back that you laid off? 15 A. That's correct. 16 Q. And you realized pretty much that you 17 made a mistake? 18 A. Well, after I did some analysis, it was 19 determined that we needed additional staff. That is 20 correct. 21 Q. And when did you make this determination 22 that you needed additional staff after your analysis? 23 When did this come to you? When did you say, I've 24 done my analysis. Mr. Yung, we need to bring 25 additional staff back. 67 KEVIN E. PRESTON - cross 1 A. I think it was towards the middle to end 2 of August. And then, obviously, just recently here 3 with the player development people. You know, we've 4 been looking at all areas to find out, you know, what 5 we can do to increase our revenues and increase our 6 patron counts. 7 Q. Okay. Now, we -- you've been shown a 8 couple exhibits, and I want to reference those again. 9 And I'll reference them by the defense numbers, to 10 make it a little bit easier. And I believe the first 11 one was A-51, which is the August 7th letter. You 12 have that in front of you? 13 MR. LEVENSON: A-50? 14 MS. MAHER: I'm sorry. No. Actually, 15 if I'm looking at -- A-50 is an e-mail. A-51, 16 I think, is the letter. 17 MR. LEVENSON: Says A-50 on mine. 18 MS. MAHER: But I could be -- 19 A. Talking about this right here? 20 Q. The August 8th letter. Either A-50 or 21 A-51. 22 A. Yeah. I have it here. 23 Q. Who created the document? 24 A. I actually created the document with 25 information that was compiled by the property. 68 KEVIN E. PRESTON - cross 1 Q. Okay. And who provided the information 2 to you that was compiled by the property? Who put 3 this document together? 4 A. I believe it was Fred with the 5 department managers, and then I put it into this form. 6 Q. Okay. So you think it was Mr. Buro as 7 well as the department managers, and they brought the 8 information to you? 9 A. Yeah. And myself. I mean, we have -- 10 again, it was more of a team approach for the initial 11 letter. 12 Q. Okay. And this document is dated right 13 about the time that Mr. Buro was terminated. Would 14 that be correct? 15 A. I don't know the exact dates, but I'm 16 sure it was pretty close. Yeah. 17 Q. But he provided the information to put 18 in this document to you? 19 A. Correct. 20 Q. What was the impetus for creating this 21 document? Why was this created? 22 A. Well, I think it was -- as I said 23 earlier, it was sort of -- the way that we created 24 this was really to meet with the Commission and to -- 25 they wanted a finality to what was going on. And 69 KEVIN E. PRESTON - cross 1 although our analysis was still going on, we wanted to 2 provide an idea of what the most efficient way for us 3 to operate was. But again, as I said, you know, in 4 many of these respects, the analysis wasn't complete. 5 Q. Okay. 6 A. And, you know, we needed to -- 7 Q. My question was just this -- 8 A. Okay. 9 Q. -- why was this created? 10 A. To really give a finality to the 11 Commission as to where we were with our employee 12 staffing levels. 13 Q. You were coming to the Commission to say 14 we potentially want to lay off 320 more people; is 15 that correct? 16 A. No. We didn't say that. This is just a 17 potential department layoff. But, again, we needed to 18 have further analysis. And, as it says in the last 19 statement, we would come back to them with our 20 findings. 21 Q. But, again, my question is this. You 22 came to the Commission and Division with this document 23 saying we potentially want to lay off more than 320 24 people? 25 A. I don't think we said we potentially 70 KEVIN E. PRESTON - cross 1 want to. I think that -- 2 Q. Well, what does that say then? 3 A. It just says potential department 4 layoffs, not that we potentially wanted to. It just 5 said "potential department layoffs." 6 (Laughter.) 7 Q. Okay. I guess you -- 8 A. Want to -- you know, you to leave out 9 that "want to." 10 Q. Okay. And you said -- and you've noted 11 a number of times -- 12 A. Right. 13 Q. -- that -- that we want to do further 14 analysis. We want to do further analysis. 15 A. Right. 16 Q. This is not a complete document. We 17 want to do further analysis? 18 A. Exactly. 19 Q. Well, then, how did you get these 20 numbers? Did you just pick them out of the air? 21 A. No. Again, it was culmination of the 22 department managers going to the most efficient 23 employee counts that they could come up with. And, 24 again, without doing any analysis, just the most 25 efficient way. 71 KEVIN E. PRESTON - cross 1 Q. But how -- what do you mean the most 2 efficient way? How -- if you didn't do any analysis 3 or did very little analysis to prepare this 4 document -- 5 A. Uh-huh. 6 Q. -- where did you get these numbers? 7 A. Well, again, I think we're looking at 8 the number in that respect. But at the end of 9 the day, this number wasn't was the final outcome was. 10 Q. I didn't -- that's not my question. 11 A. I don't know while we're focus the 12 number. 13 Q. That wasn't my question -- 14 A. No. No I know. 15 Q. My question is, that you had more 16 analysis to do -- 17 A. Uh-huh. 18 Q. -- and you didn't do a thorough analysis 19 to get this, where did these numbers come from? 20 A. Again, they came from the departments. 21 And those are the numbers they gave us. But, again, 22 it was without doing any further in-depth analysis 23 that needed to be done. 24 Q. Why would you even put out any numbers 25 like this if you hadn't done any analysis? What do 72 KEVIN E. PRESTON - cross 1 these numbers mean? 2 A. Well, obviously, it doesn't mean much at 3 all because we didn't get to this point. 4 Q. When you came to the regulators with 5 this potential 320 number, could it have been more 6 than 320 -- 7 A. No, not at all. 8 Q. -- or where was this the maximum? 9 A. Again, this was the most efficient way. 10 The maximum. 11 Q. But does the document state indicate 12 that this is the maximum, or does it just say total 13 number of potential layoffs? 14 A. It says potential number. 15 Q. If you had -- you were at the meeting 16 with the Commission and the Division when this 17 document was presented; correct? 18 A. Correct. 19 Q. And along with Mr. Yung and Miss More; 20 is that correct? 21 A. That's right. 22 Q. What was the regulators' response to 23 think? 24 A. Obviously, they are very professional 25 about it. And I think that they realized that 73 KEVIN E. PRESTON - cross 1 again -- I hate to sound redundant, but I think they 2 realized that there was additional analysis that 3 needed to be developed before we could come to them 4 with a final number. 5 Q. Would it be fair to say that they were 6 somewhat unhappy with this potential number of 7 layoffs? 8 A. I don't think they were unhappy at the 9 time. I think it was just a general conversation with 10 them. I think later on is when they came and talked 11 about the number of security personnel and so forth, 12 and, you know, with our analysis and with they said, 13 obviously, we want to comply with what the 14 Commission's feelings are as well, so. 15 Q. Now, you indicated that in August of 16 2007 your analysis had indicated that you should hire 17 some slot techs and some slot attendants back; is that 18 correct? 19 A. That's correct. 20 Q. However, if you look at Page 2 of this 21 document, August 7th document, you're talking about 22 laying off slot supervisors and slot techs; am I 23 correct? 24 A. That's correct. 25 Q. What changed between August 7th and this 74 KEVIN E. PRESTON - cross 1 other date in August where you decided you needed to 2 hire people back? 3 A. That's when the analysis came out of the 4 slot jackpot pay-out times and so forth and service 5 levels, that's when it was determined that we needed 6 more. 7 Q. Okay. So this had arisen as a concern 8 prior to August 7th creating this document. You only 9 became aware of the jackpot response time and some of 10 the customer response time on the floor between the 11 two weeks of August 7th when this document was created 12 and the end of August when you decided to hire back? 13 A. I mean, we were compiling information to 14 make the right determination of what needed to be 15 done. And, obviously, unfortunately, it was still 16 being conducted during the time that we had met with 17 the Commission and then afterwards as it came about. 18 Q. I just don't understand why you would 19 put this in a document like this, and a few weeks 20 later do an abrupt turnaround. You weren't looking at 21 some of this stuff prior to getting the document? You 22 weren't getting complaints? You weren't getting 23 complaints about jackpot response times? 24 A. Well, we were. But, again, until we get 25 our arms around it -- we couldn't get some analysis -- 75 KEVIN E. PRESTON - cross 1 analysis a month or two in some respects, you know, 2 there was some information being compiled prior to 3 that and leading up to this. And then afterwards that 4 showed that we needed to hire additional staff. 5 Q. Were you aware that-- did you ever have 6 to pay out a -- close a pay-out cage because of lack 7 of personnel? Are you familiar with that all? 8 A. Close a pay-out cage? 9 Q. Close a pay-out cage because you did 10 didn't have enough staff? 11 A. Not to my knowledge, no. 12 Q. Now, you also talked -- and on Page 1 13 there's a race and sports book that you're talking 14 about eliminating; is that correct? 15 A. Right. That's correct. 16 Q. What were you going to do with that 17 particular area? 18 A. We were just going to add additional 19 slot product to there. But, obviously, we have not 20 done that to this point so. 21 Q. Okay. But you did indicate in this that 22 you were going to add slot machines; is that correct? 23 A. Correct. 24 Q. And that, that you were eliminating that 25 area because it wasn't profitable, and to make it more 76 KEVIN E. PRESTON - cross 1 profitable you would add slot machines? 2 A. Right. 3 Q. Which would mean more slot machines? 4 A. Correct. 5 Q. But on the second page of the document 6 you're talking about decreasing the number of slot 7 machines, and that's why you want to lay off slot 8 supervisors and slot techs. Which was it? 9 A. Well, again, until we did further 10 analysis as to what needed to be done, we couldn't 11 really give a solid answer, you know. 12 Q. But your only document shows 13 inconsistencies. Talking about adding slot machines 14 on the first page and reducing slot machines on the 15 second page to compensate for layoffs. 16 A. Well, if you understand the gaming 17 industry, sometimes there are slot areas, and the 18 amount of slot machines that would go in this area may 19 not have a lot -- may have not generated additional 20 slot personnel needed to cover those machines. So it 21 just depends on, you know, when you look at your 22 analysis, what -- how many employees you need, so. 23 Q. Now, would it be fair to say that there 24 was some concern on the regulators' part about your 25 proposed reductions in the security department? 77 KEVIN E. PRESTON - cross 1 A. Yes. 2 Q. Okay. And that takes us to the August 3 17th letter; is that correct? Which specifically 4 discussed the security reductions; is that correct? 5 A. That's correct. 6 Q. And this letter is -- was written by 7 Miss Hughes; is that correct? 8 A. That's correct. 9 Q. Did you have any part in composing this 10 letter, considering these reductions and in furthering 11 this conversation with the regulators? 12 A. I had no influence in the letter. 13 However, you know, obviously, when there was it was 14 determined the amount of security personnel, you know, 15 it was brought to my attention and -- and, you know, 16 then the letter was generated. 17 Q. Okay. So, again, did you have input 18 into the letter in terms of the content? 19 A. Not the content. No. 20 Q. Okay. What was your input into this 21 letter then? 22 A. Just the number that the property came 23 up with as far as the number that they were going to 24 be reduced to based upon their analysis of what was 25 needed in that specific area. 78 KEVIN E. PRESTON - cross 1 Q. And who, according to your 2 understanding, would you have provided the information 3 to Miss Hughes to put in this letter regarding the 4 specific areas of the security department that were to 5 be -- to be cut? Where would this information have 6 come from? Who would have made the decisions? And 7 there's, I believe, eight specific areas that they're 8 talking about in this letter to cut staff. 9 A. For security? 10 Q. Uh-huh. 11 A. The department manager and the general 12 manager of the property would have given the 13 information to Tama. 14 Q. And the department manager being whom? 15 A. Either Michael Lyons at the time or the 16 new -- I'm not sure when -- 17 Q. I don't know that Mike Lyons was here at 18 this time. 19 A. Okay. Then it would have been the new 20 gentleman. 21 Q. Who would that have been? 22 A. Or -- 23 Q. No. 24 A. I'm trying to think of the guy's name. 25 Q. You -- 79 KEVIN E. PRESTON - cross 1 A. His name is Ron. But either he or Mark 2 would have done it. I'm not -- the timing I'm not for 3 sure on the exact date. But it could have came from 4 the property. 5 Q. Okay. Were you involved at all in the 6 security issue in the property? 7 A. Just through communication with the GM. 8 Q. Okay. And did you become involved with 9 it at all that summer, an analysis or anything of that 10 nature? 11 A. That summer? 12 Q. The -- security. Yes. June, July of 13 2007? 14 A. Yeah. I mean, we had discussions, you 15 know, through July up until, you know, that letter 16 came about. 17 Q. Okay. Well -- and I'll come back to 18 that later. But there's a number of areas in this 19 particular letter that they were proposing to cut? 20 A. Uh-hum. 21 Q. And were you in agreement with these 22 areas? 23 A. So long as the department manager felt 24 comfortable with those cuts. I -- obviously, he has 25 to manage the department. So if he feels those -- 80 KEVIN E. PRESTON - cross 1 that staffing level is appropriate to service our 2 guests and to provide the safety needed, then, yes. 3 Q. Well, did you understand all these 4 areas? Because this is was something -- you're the -- 5 A. Right. 6 Q. You're in charge of the gaming 7 operations. You're in charge of security; correct? 8 A. That's correct. 9 Q. And do you think it would be important 10 for to you understand the specific securities cuts 11 that they were proposing? 12 A. Right. 13 Q. And the areas in which they were 14 proposing? 15 A. Yeah. I think I stated that. But so 16 long as, again -- if the department manager is 17 comfortable. You know, they have to give me the 18 information in order for me to make my decision. And 19 if they feel comfortable with that, then I'm going 20 to-- I'm not going to micromanage the situation. I 21 make sure they have the tools necessary, if that's 22 what they feel they need. Then I'll work with them. 23 Q. But you're in charge of security at the 24 Trop; correct? That's one of the reports to you? 25 A. That's correct. 81 KEVIN E. PRESTON - cross 1 Q. For instance, if you'll look at the 2 August 17th letter, there was an indication that they 3 wanted to cut -- to eliminate entirely security 4 escorts. 5 A. Two things -- 6 Q. Your August 17th letter? 7 A. Okay. 8 Q. I assume you're familiar with the 9 letter. 10 A. Uh-huh. Right. 11 Q. You were, I believe, copied on it? 12 A. Uh-huh. That's right. 13 Q. If you look at the first page, there was 14 a proposal to entirely eliminate security escorts? 15 A. Right. 16 Q. Did you understand the ramifications of 17 that particular elimination? 18 A. Yeah. I did. Yes. 19 Q. And what did you understand them to be? 20 What if -- what's your understanding of what the 21 security escorts did? And how were you going to 22 compensate for what they did if you totally eliminated 23 them? 24 A. Well, I mean, there would be other 25 officers that would sort of accommodate that area if 82 KEVIN E. PRESTON - cross 1 there was -- 2 Q. In what way? 3 A. They would obviously cross-train, and 4 they would do those -- in essence, fill in those 5 escort roles. 6 Q. Would you take people off mandated 7 positions? 8 A. No. No. No. No. There are 9 specifically mandated positions you have to have. And 10 then there's additional officers that are within the 11 department. And if based upon their duties, 12 obviously, it was determined that they could provide 13 the escort services needed to be -- you know, 14 efficient in that specific department. 15 Q. Did you understand what the security 16 escorts did when you -- 17 A. Yeah. I mean -- 18 Q. -- proposed eliminating them. 19 A. Well, I mean, yeah. Fourteen years in 20 this business you know what an escort is. And so -- 21 but, again, there's ways of being efficient in those 22 specific departments. And if you can be efficient 23 with having another individual, you know, either 24 assisting or doing those escorts, then that's what 25 needs you -- 83 KEVIN E. PRESTON - cross 1 Q. Another individual from where? Who 2 else -- 3 A. From security. 4 Q. Pulling off somewhere else? 5 A. Yes. Pretty simple. From security. 6 Q. Okay. And the jackpot elimination, do 7 you understand the ramifications of the eliminating 8 the jackpot officer that you wanted to eliminate? 9 A. Yeah. Yes. 10 Q. And what kind of analysis did you do 11 with these areas when you proposed these cuts? 12 A. Well, again, I didn't propose the cuts. 13 I was involved with the -- I guess, the outcome of 14 after the department manager looked at the department 15 and determined that was what we could do. So, again, 16 I mean, if you want to get into specifics about 17 security, then you might want to ask that specific 18 person those specific questions. 19 Q. Well, right now I'm asking you. 20 A. No. I know. 21 Q. And, again, hotel security. You were -- 22 you proposed eliminating nine officers to six 23 officers. And there was a grave concern that, given 24 the size and nature of the Tropicana property, that 25 that wasn't going to cut it. You weren't going to be 84 KEVIN E. PRESTON - cross 1 able to cover all the areas. Did you consider that 2 when these cuts were proposed? 3 A. Yeah. But there were rovers that took 4 care of that situation as well. 5 Q. Now, this particular document proposed 6 33 security cuts rather than the 70 that were 7 initially proposed. 8 A. Correct. 9 Q. Is that correct? 10 A. That's correct. 11 Q. And this -- was this based on more 12 analysis that you had promised than the August 7th 13 letter? 14 A. Yes, exactly. 15 Q. Which occurred in these ten days 16 between -- 17 A. It was still going on. I mean, I'm 18 going through that. Correct. Yeah. 19 Q. And the 33, actually the Commission did 20 not -- the Commission and the Division did not allow 21 the 33 even proposed in this particular document. 22 Would that be correct? 23 A. I think it was 31, actually. I don't 24 know if it was 33. 25 Q. Did you end up making all the security 85 KEVIN E. PRESTON - cross 1 cuts proposed in this document? Do you know? 2 MR. LEVENSON: I'm sorry. Which 3 document are you referring to? 4 MS. MAHER: August 17th. 5 CHAIR KASSEKERT: A-60. 6 A. I believe so. Yes. 7 Q. Okay. Well, then -- and I don't know if 8 this is marked as a defense exhibit. I'm going to 9 hand you a letter dated September 5th. 10 MR. LEVENSON: A-63? 11 MS. MAHER: Thank you. 12 Q. Are you familiar with this letter? I 13 believe you're copied on it. 14 A. Yes. 15 Q. Okay. And what is that letter, please? 16 A. Again, proposed Tropicana reductions. 17 Food and beverage, IT. Goes into several different 18 departments. 19 Q. Do you know how many people were -- in 20 that letter Tropicana indicated that it was going to 21 eliminate? 22 A. I know that -- I believe the total 23 number with security in this was approximately 62. 24 Q. Are you sure? 25 A. (Reviewing.) Looks like 32 here. 86 KEVIN E. PRESTON - cross 1 Q. Are there any security cuts? 2 A. No, not in this specific letter. 3 Q. Well, it appears that based on 4 discussions, ongoing discussions with the regulators, 5 you didn't cut any security; is that correct? 6 A. I think this is a separate letter from 7 that. 8 Q. Well, it says in the letter that you 9 would not be making any additional reductions in 10 security or slots; is that correct? 11 A. Well, additional from the 70 that we 12 initially talked about. It was the 33. But, then 13 again, the initial 70 that were in this letter, we 14 said that we weren't going to do any further than 15 that. 16 Q. And then in this letter you indicated 17 that you added back slot attendants; is that correct? 18 A. Correct. Slot attendants. Cage 19 personnel and slot attendants. That's correct. 20 Q. All right. I want to talk a little bit 21 about the security issue. Do you recall bringing in 22 someone during the summer to assess security needs at 23 the property? 24 A. Yeah. I think that was right before my 25 time. 87 KEVIN E. PRESTON - cross 1 Q. Okay. Do you recall at least speaking 2 with this individual after he was brought in? 3 A. Yes. Yes. 4 Q. And who was that, please? 5 A. Glenn Kohler. 6 Q. And where was he brought in from? Do 7 you know? 8 A. He was brought in from our Lake Tahoe 9 property. 10 Q. Do you know why he was brought in? 11 A. He was -- he's sort of the corporate 12 security -- expert, if you want to call it that. 13 Helps out in different situations from a security 14 standpoint at the properties. 15 Q. Okay. And at that time, when he was -- 16 when he came in in June, July of 2007, who was the 17 director of security on the property? 18 A. For Atlantic City? 19 Q. For Atlantic City. 20 A. I believe Mike Lyons. 21 Q. Okay. And do you know that -- do you 22 know what happened with Mr. Kohler? Do you know what 23 he did on the property, what his function was when he 24 came into the Tropicana Atlantic City? 25 A. I think he just did an analysis of the 88 KEVIN E. PRESTON - cross 1 amount of security officers and potentially what he 2 thought was needed for the property. 3 Q. Okay. And are you aware that he -- he 4 stayed on the property several days? 5 A. I don't know. Again, that was before my 6 time. I assume that he was -- he had spent some time 7 here to do the analysis. Yeah. 8 Q. Okay. And, again, if you are not aware, 9 you're not. Are you aware that the Mike Lyons, the 10 Director of Security, took him around the property. 11 A. Oh, I'm sure he did. Uh-hum. 12 Q. And are you aware that at some point he 13 was going to prepare a report and report his analysis 14 or his findings regarding Tropicana security 15 department needs -- 16 A. Yes. 17 Q. -- to eventually Mr. Yung? 18 A. Yes. 19 Q. And was there a point in time where you 20 actually spoke to Mr. Kohler about this assessment? 21 A. You know, I believe I spoke with Mr. 22 Kohler with Mr. Lyons and Fred. Again, that was 23 fairly early on in my tenure. So yeah. Yes. 24 Q. Okay. When would that have been? 25 A. Probably sometime in July, I would say. 89 KEVIN E. PRESTON - cross 1 Q. And who did you speak to? Who was 2 there? 3 A. Fred and Mike Lyons. 4 Q. Okay. And what was the understanding or 5 what was the -- 6 A. I just wanted to -- 7 Q. -- part of that conversation? 8 A. I wanted Glenn to give us a-- just a 9 synopsis of his findings with Mike and Fred there 10 because there were some-- some information from the 11 property as well as from Glenn that just wasn't right. 12 And if there was, you know, going to be anything done, 13 I wanted to make sure that I had the, you know -- the 14 information necessary to make any decisions that 15 potentially may have been needed to be made. 16 Q. What do you mean there was some 17 information from the property that wasn't right? 18 A. Well, I think, you know, what -- Glenn 19 had indicated from what Mike and Fred told me that, 20 you know, he felt that there needed to be any other 21 cuts made. But I believe in his report it said that 22 there -- there could be potential, you know, 23 additional layoffs if -- based upon his findings. 24 But, again, until I put my arms around it, and 25 obviously, with my responsibility, I'm not going to -- 90 KEVIN E. PRESTON - cross 1 if there's some discrepancies, I want to make sure 2 that we look at those and get the correct information 3 out. 4 Q. Well, wait a minute. Was it your 5 understanding initially before you talked to Mr. 6 Kohler that Mr. Kohler was not going to recommend that 7 not only that there were be going to be cuts but 8 additional security staff be added to the Tropicana 9 property? 10 A. I don't recall what was in the memo, and 11 I don't -- I believe that's what Fred and Mike said, 12 because until we looked it and did that further 13 analysis -- 14 Q. Well -- 15 A. Yeah. 16 Q. I'm just asking this specific question. 17 Was it your understanding from either Fred or Mike 18 Lyons that when Mr. Kohler came in and made his 19 analysis that he was not recommending -- not only was 20 he not recommending cuts, he was recommending 21 additional security staff be added? 22 A. Until I look at the report, I can't tell 23 you for sure. That's where the inconsistent 24 information came out of. 25 Q. Well, what's the inconsistent 91 KEVIN E. PRESTON - cross 1 information? 2 A. Again, like I said, until I see the 3 report, you know -- 4 Q. What report? 5 A. There was some -- the Glenn Kohler's 6 report that he put together on the security staffing 7 levels. Mike and Fred said that he came in, and he 8 thought that staffing was either adequate or maybe 9 needed to be additional -- additional staffing. And 10 then in -- in the report -- again, I don't have the 11 report to read what it said there, but I want to make 12 sure that the information provided was consistent. 13 Q. Consistent with what? 14 A. Consistent with both parties and myself. 15 If I'm going to make a -- if I'm going to make an 16 ultimate decision on security, I want to make sure I 17 have all the information correct in order to make a 18 solid and sound decision on security staffing. There 19 were no decisions made at that time. 20 Q. Oh, I -- 21 A. I mean, so we're going into things 22 that -- 23 Q. I know that. 24 A. -- were or were not. But, I mean, in 25 the end, isn't it what the decision is at the end of 92 KEVIN E. PRESTON - cross 1 the day, not necessarily what the information is -- 2 Q. Well, actually, I'm curious about how 3 the process of how you got to the decision at the end 4 of the day. Because, it is -- and correct me if I'm 5 wrong, it sounds will like the inconsistency here was 6 that Mr. Kohler was recommending not only no cuts but 7 more additional staff, according to what Mr. Buro and 8 Mr. Lyons were telling you. 9 A. Well, again, without seeing the report, 10 you know, I can only go off of what you're saying. 11 But again, at the end of the day, you know, with 12 further analysis, you know, we needed to get 13 additional staffing levels looked at. And we needed 14 to see what -- you know, where we were from a security 15 standpoint, service standpoint, and if we were 16 protecting our customers the way that we needed to 17 protect them. 18 Q. Well, were you concerned about a report 19 going up if to Mr. Yung from Mr. Kohler that might 20 recommend not only cuts but more staffing be added? 21 A. Was I concerned about it? No. Not at 22 all. 23 Q. Well, why would you -- I'm -- I -- 24 curious as to what inconsistencies that you're trying 25 to resolve. 93 KEVIN E. PRESTON - cross 1 A. Well, there was just an inconsistent 2 message between what Glenn said and what the property 3 thought that Glenn said when he was there. But, 4 again, until we investigate it and looked through it, 5 and then did further analysis, you know, this is the 6 determination that we had. 7 Q. How did you resolve the inconsistency 8 between what Mr. Buro was telling you and what Mr. 9 Kohler's report to Mr. Yung finally indicated? 10 A. That's when we had that -- again, that's 11 when we had the conversation on the phone with 12 everybody. 13 Q. What conversation on the phone with 14 everybody? 15 A. That's what I just said earlier, that we 16 had a conference call, myself, Fred, Glenn, and Mike 17 Lyons. I did. Earlier on. I said that we had a 18 conference call to really talk about security and what 19 needed to be done. 20 But, again, without me looking at it 21 further and/or with Mike and Fred and the rest of the 22 staff, I didn't want to just take someone's 23 recommendation. I wanted to look at it further and 24 see, you know, what the effects would be. 25 Q. In the end what was the recommendation 94 KEVIN E. PRESTON - cross 1 from Mr. Kohler that went up to Mr. Yung regarding the 2 security staffing at the property? 3 A. Again, I don't -- the report was in 4 July. I don't remember what the report said, to be 5 honest with. 6 Q. Can you remember whether it -- it 7 recommended cuts, staffing levels staying the same, or 8 adding additional? 9 A. I don't remember. I don't recall. 10 Q. What happened -- 11 A. Regardless of what -- if the report 12 would have said add, cut, or additional, I would have 13 still went and did further analysis to make sure that 14 was correct. 15 Q. I understand that. But so based on Mr. 16 Kohler's report and his report to Mr. Yung, did you 17 ever go back to Buro and say, we're not adding. We're 18 not leaving it the same. You got to do more cuts in 19 security. 20 A. No. Not at all. I mean, we needed to 21 do additional analysis before I would even say that. 22 Q. Were you comparing the Tropicana 23 property to the Showboat property regarding staffing 24 levels? 25 A. No. I think that -- I think it's been 95 KEVIN E. PRESTON - cross 1 brought out, but I think what we did was that was some 2 information that we were able to attain just with one 3 property. And we just analyzed what they had, and 4 it's not that we were necessarily doing a comparison. 5 We were really just seeing how they structured their 6 security officers and how they had it laid out within 7 their casino floor. 8 Q. Well, if you would look on the August 9 7th letter -- 10 A. Right. 11 Q. -- on the second page under security? 12 A. Uh-huh? 13 Q. It says, "After checking with Harrah's, 14 Showboat security, which is approximately our same 15 size, they have a department total of 96 employees." 16 A. Yeah. The same size is really revenue 17 wise. It was -- approximately the same size. It's 18 not necessarily floor size or whatnot. I just wanted 19 to see how everything was laid out, what their 20 required positions were, and just get another feel for 21 another prperty, not necessarily compared. 22 Q. So why were you using the Showboat? 23 A. That was the only information that I 24 could attain. 25 Q. Because it was the only information you 96 KEVIN E. PRESTON - cross 1 could attain, that's what you were using for your 2 comparison? 3 A. Again, I wasn't using it as a 4 comparison. I was using just to get a gauge for how 5 they set their security staff up within their -- 6 within their property. 7 Q. And why were you using them? 8 A. Why was I -- that's the information that 9 we attained. That I was able to get. And I said I 10 just wanted to see where -- where they had their 11 regulatory spots at, regulated spots at, and how they 12 structured their security staff. 13 Q. So when you indicate in here, "which is 14 approximately our same size," that would not be 15 correct? 16 A. Same size as far as revenue. 17 Q. What does revenue have to do with 18 physical size and security, though? 19 A. I'm not saying that. That's why I said 20 we didn't really compare it. We just looked to see 21 what the structure was, how -- where the regulated 22 spots ran, how they were set up within their -- within 23 their layout. 24 Q. How would you able to get the security-- 25 or the Showboat information regarding security and 97 KEVIN E. PRESTON - cross 1 staffing? 2 A. I didn't say -- I didn't get it. I just 3 talked to the security manager who I used to work with 4 at Harrah's. 5 Q. So it was someone you used to work with? 6 A. Correct. 7 Q. Thank you. 8 (Conferring.) 9 MS. MAHER: Nothing further. 10 Thank you. 11 CHAIR KASSEKERT: Thank you. 12 Do the Commission -- 13 Let ask first ask, do you need a break? 14 THE COURT REPORTER: Yes, I do. 15 CHAIR KASSEKERT: We'll take ten 16 minutes. 17 (A recess was taken from 11:35 a.m. to 18 11:58 a.m.) 19 CHAIR KASSEKERT: We'll go back on the 20 record. 21 Thank you. We'll now turn to the 22 commissioners for questions. 23 Mr. Preston. 24 THE WITNESS: Yes. 25 CHAIR KASSEKERT: You have discussed in 98 KEVIN E. PRESTON 1 your testimony that you undertook an analysis 2 of these various departments that came onto you 3 that dealt with -- I'm assuming the casino 4 management side of things. 5 THE WITNESS: Correct. 6 CHAIR KASSEKERT: And what were -- those 7 departments were security? 8 THE WITNESS: Security, slots, table 9 games. Then marketing wise what we really did 10 in the beginning was just looked at the 11 promotions and programs that we were working 12 on. And what that led us to is why -- you 13 know, we have good things in place, but we're 14 still not seeing the patron come back. And 15 that's when we analyzed the player development 16 side of it and found, you know, as Mark said in 17 his testimony, that of these player development 18 people that were let go, you know, 58 percent 19 of their customers had not come back after the 20 initial trip. 21 CHAIR KASSEKERT: Uh-huh. 22 THE WITNESS: So that's when we 23 determined to hire back -- try to hire back 24 some of those individuals. 25 CHAIR KASSEKERT: And when this analysis 99 KEVIN E. PRESTON 1 took place, besides the -- this end of the 2 process, which you're talk telling me about, 3 the players had not come back, you looked at 4 the player development people. Was there any 5 sort of analysis taken with respect to the 6 amount of money being spent? Was there an 7 effort to look at reducing the amount of money? 8 THE WITNESS: You know, I think that's 9 something that you looked at, but I think more 10 importantly is that money being spent 11 correctly, and are you getting your return on 12 the investments that you're spending, if you 13 get that back at the casino. And if not, you 14 look at redirecting other dollars from other 15 areas from marketing perspective. But I think 16 at the end of the day, when from a marketing 17 standpoint, it's important to know what you're 18 doing, how are you going to get there? And 19 what you are doing is actually affecting the 20 bottom line. 21 CHAIR KASSEKERT: Uh-huh. So there was 22 no direction that, you know, we have to meet a 23 certain staffing level in terms of funding? 24 That direction never came from anyone and was 25 never issued down to the Tropicana managers? 100 KEVIN E. PRESTON 1 THE WITNESS: You know, not to my 2 recollection. I think it's always about 3 looking and see how efficient you can be. And 4 part of that efficiency is, are you servicing 5 the customers? And if you need to hire more, 6 then you need to get up to the efficient level 7 to hire back more individuals to satisfy the 8 customers' demands and service levels that you 9 expect from the property levels. 10 CHAIR KASSEKERT: And in a short period 11 of time when that Mr. Buro was leaving and you 12 were coming on, which granted, was probably 13 only about a month or so, did you ever have any 14 discussions that there were too many layoffs? 15 THE WITNESS: I don't know if it was 16 actually too many layoffs. I think it was just 17 making sure that we were doing the right 18 things. And, again, I think, you know, early 19 on it was really just trying to get my arms 20 around not only this property but, you know, 13 21 other properties. 22 CHAIR KASSEKERT: Uh-huh. 23 THE WITNESS: So, again, there were some 24 efficiencies that needed to be made at all the 25 properties, market operations, slot 101 KEVIN E. PRESTON 1 perspective, you know. So that, again, it was 2 sort of learning the Atlantic City market. 3 Learning the business here and getting to learn 4 the employers and who's involved. 5 CHAIR KASSEKERT: Now, Miss Maher asked 6 you about a report from Mr. Kohler. Do you 7 recall seeing that report? 8 THE WITNESS: I recall seeing it. I 9 just don't recall the substance of it. 10 CHAIR KASSEKERT: Do you know who it 11 went to at either Columbia Sussex or at 12 Tropicana? 13 THE WITNESS: Well, I know that the 14 Tropicana had one, property here in Atlantic 15 City. I don't know for sure if Mr. Yung had 16 one. I know that it was e-mailed to me. But, 17 again, the substance of it, it's been so long, 18 honestly, I just don't remember. 19 CHAIR KASSEKERT: So you don't really if 20 Mr. Yung got a copy of the report? 21 THE WITNESS: I don't recall that. 22 CHAIR KASSEKERT: Okay. And, in that 23 report my understanding is that Mr. Kohler 24 talked about adding securities. There were 25 some concerns about the security cuts had been 102 KEVIN E. PRESTON 1 too deep? 2 THE WITNESS: Again, I don't remember. 3 I can't recall what was in the report. I 4 apologize. 5 CHAIR KASSEKERT: Okay. As a result of 6 the changes in security -- and I want to ask 7 you to kind of take me through some of the 8 letters we talked about. But before I get 9 there, has Tropicana been ever cited with 10 respect to moving security people, either 11 mandated security people to roving security 12 posts? I mean, has that occurred? 13 THE WITNESS: Well, I believe, as Donna 14 stated, there was a situation where there's -- 15 I believe a patron went down, and one of the 16 security officers went to satisfy that 17 individual and left a post that was supposed to 18 be -- obviously required -- to help that 19 individual. But other than that, I don't 20 recall any others other than that. 21 CHAIR KASSEKERT: Okay. And since 22 security is one of the functions you look at 23 with respect to your respirabilities on the 24 casino management side of things, would you -- 25 you know, there are mandated security posts. 103 KEVIN E. PRESTON 1 THE WITNESS: Uh-hum. 2 CHAIR KASSEKERT: There are roving 3 security posts. Wouldn't it -- would it not 4 concern you if we had people leaving the 5 mandated security posts because they're there 6 to perform a function to go someplace else? 7 THE WITNESS: Without a doubt. Without 8 a doubt. Yes. 9 CHAIR KASSEKERT: Okay. I want to talk 10 a little bit about some of the letters. 11 Specifically A-50, which is the August 7th 12 letter, and then follow up with A-60, which is 13 the August is 17th letter. 14 And you had testified that the 320 15 potential layoffs that were a part of the A-50 16 letter were not -- 17 Thanks, Lloyd. 18 THE WITNESS: Yeah. I have it right 19 here. 20 CHAIR KASSEKERT: Okay. 21 You got it? 22 THE WITNESS: Yes. 23 CHAIR KASSEKERT: Okay. That those 320 24 layoffs had nothing to do with the 33 25 reductions that ultimately came out, that that 104 KEVIN E. PRESTON 1 really had to do with the security plan; is 2 that correct? 3 THE WITNESS: That's correct. Yeah. 4 CHAIR KASSEKERT: Okay. So, can you 5 tell me on the -- on A-50, which is the August 6 7th letter, there are recommendations for 7 potential layoffs -- not that you wanted to lay 8 them off but that there were recommendations 9 for certain numbers. Race and sports book, for 10 example, that there were ten potential layoffs. 11 Did that occur? 12 THE WITNESS: No, it did not. 13 CHAIR KASSEKERT: Okay. And did that 14 occur at any time? 15 THE WITNESS: No, it did not. 16 CHAIR KASSEKERT: Okay. It didn't occur 17 when you made that recommendations? 18 THE WITNESS: No. 19 CHAIR KASSEKERT: So you backed off that 20 number. 21 THE WITNESS: Correct. 22 CHAIR KASSEKERT: Then you recommended a 23 hundred table game employees. 24 THE WITNESS: Correct. 25 CHAIR KASSEKERT: Did that occur? 105 KEVIN E. PRESTON 1 THE WITNESS: No, it did not. 2 CHAIR KASSEKERT: Okay. Did any portion 3 of that occur? 4 THE WITNESS: No, it did not. 5 CHAIR KASSEKERT: Okay. Then in poker 6 you recommend 50 poker dealers and five poker 7 room seating supervisors. Did that occur? 8 THE WITNESS: I believe there were only 9 four of the poker that took place. 10 CHAIR KASSEKERT: Okay. 11 THE WITNESS: If I remember correctly. 12 CHAIR KASSEKERT: The dealers or the 13 supervisors? 14 THE WITNESS: The poker room seating. 15 CHAIR KASSEKERT: Seating people. 16 THE WITNESS: Yes. 17 CHAIR KASSEKERT: Okay. So only four 18 occurred? 19 THE WITNESS: Yes. I believe so. 20 CHAIR KASSEKERT: Yeah. With respect to 21 IT, and I know that might not be your area -- 22 THE WITNESS: It is not. 23 CHAIR KASSEKERT: Do you know how many 24 employees were recommended? 25 THE WITNESS: It's not my area, but I 106 KEVIN E. PRESTON 1 believe there were only one of the three. 2 CHAIR KASSEKERT: Okay. And 3 administration, again, that's probably not your 4 area. They talk about 15 administrative 5 assistants on the property, and that there was 6 a recommendation for six administrative 7 assistants. 8 THE WITNESS: Yeah, I don't. 9 CHAIR KASSEKERT: You don't know. 10 THE WITNESS: Yeah. 11 CHAIR KASSEKERT: Locksmiths? 12 THE WITNESS: None. 13 CHAIR KASSEKERT: None. Okay. 14 Scheduling? 15 THE WITNESS: There was one. 16 CHAIR KASSEKERT: One? Okay. 17 THE WITNESS: Yes. 18 CHAIR KASSEKERT: So one. 19 Credit and collections? Again, I know 20 that's probably not -- 21 THE WITNESS: Yeah. But in that section 22 there was only one. 23 CHAIR KASSEKERT: One? Okay. 24 The slot supervisors? 25 THE WITNESS: No. No supervisors. 107 KEVIN E. PRESTON 1 CHAIR KASSEKERT: None? 2 THE WITNESS: No slot techs. 3 CHAIR KASSEKERT: And no slot techs. 4 Okay. 5 And then the security went from 70 to 6 33. 7 THE WITNESS: Correct. 8 CHAIR KASSEKERT: Did though 33 9 ultimately go or -- 10 THE WITNESS: I think there was -- I 11 think the final number was 31. 12 CHAIR KASSEKERT: Uh-huh. Okay. 13 Accounting? 14 THE WITNESS: None. 15 CHAIR KASSEKERT: Okay. And beverage 16 servers, 50? 17 THE WITNESS: Fifteen. 18 CHAIR KASSEKERT: Fifteen. Okay. 19 So, actually, maybe the analysis was 20 wrong with respect to the 320 going down to 33, 21 but the 320 did go down? 22 THE WITNESS: Right. Yeah. I mean -- I 23 mean, no pun intended, from but from my 24 perspective, if I was a Monday morning 25 quarterback, I would say that number, the 108 KEVIN E. PRESTON 1 initial number presented to you would have been 2 a lot less than that after the further analysis 3 that needed to be done. And, right or wrong, 4 you know, that's what was presented. But, 5 again, we want to make sure that we run the 6 properties as efficiently as possible and 7 deliver the service to our customers. And, 8 again, after the further analysis that was 9 determined, you know. 10 CHAIR KASSEKERT: And, again, it's your 11 testimony here today that that was the done on 12 the basis of efficiencies, not on the basis of 13 reducing pure dollars? 14 THE WITNESS: That's correct. Right. 15 CHAIR KASSEKERT: Okay. Now, with 16 respect to A-60, which is the August 17th 17 e-mail with a letter underneath addressed to 18 Ms. Fauntleroy, the General Counsel here. 19 THE WITNESS: Yes. 20 CHAIR KASSEKERT: Okay. Again, can you 21 take me -- I'd like to take you through these 22 numbers so you can tell me what ultimately 23 happened. Are you able to do that? 24 THE WITNESS: You know, I know that from 25 this perspective when you talk about security, 109 KEVIN E. PRESTON 1 again, I'm probably 99 percent sure that there 2 was 31. 3 CHAIR KASSEKERT: Okay. 4 THE WITNESS: Total. If you look 5 through those. 6 CHAIR KASSEKERT: So if I ask you, was 7 the Tropicana, you know -- I mean, there are 8 responses here where the Commission -- as a 9 part of A-60 where the Commission expressed 10 concerns and the Division expressed concerns. 11 For example, in security administration, you 12 indicate you were seeking to reduce the number 13 by two. Our response was, that's okay. You 14 know, because they -- you know, that's our 15 administrative changes. But you need to make 16 sure that everybody is key licensed and that 17 the security submission is correct. 18 THE WITNESS: Correct. 19 CHAIR KASSEKERT: Okay. With respect to 20 employee entrance security, you were seeking to 21 reduce that number by two. And our response 22 was, that's okay, but we want to make sure that 23 the credentials being handed out from the 24 third-floor security, it must be handled from 25 the security. Do you know if those two people 110 KEVIN E. PRESTON 1 went? 2 THE WITNESS: Yes. 3 CHAIR KASSEKERT: They did go. Okay. 4 And the security escorts. We had some 5 conversations about that earlier in your 6 testimony about our concerns about move -- the 7 movement. Did those nine people go? 8 THE WITNESS: From that perspective, you 9 know -- I apologize. I know there was 31. I 10 just don't know the specific breakdown. 11 CHAIR KASSEKERT: You just don't know. 12 THE WITNESS: Okay. 13 CHAIR KASSEKERT: So if I take you 14 through the rest of this -- 15 THE WITNESS: Yeah. You know, again, I 16 apologize. I just know the total number for 17 each of those areas. 18 CHAIR KASSEKERT: Okay. 19 THE WITNESS: Where we went through the 20 initial are in A-50. 21 CHAIR KASSEKERT: Okay. Now, you 22 testified a little bit about the player 23 development people, that player development 24 people were laid off. Those were the people 25 that were there to service the customers. They 111 KEVIN E. PRESTON 1 probably have very good relationships with 2 those particular customers? 3 THE WITNESS: Correct. 4 CHAIR KASSEKERT: Okay. And when the 5 player development people left, were there new 6 player development people hired? Do you know? 7 THE WITNESS: Do you mean when the 8 initial were laid off? 9 CHAIR KASSEKERT: Yeah. 10 THE WITNESS: No. We were left with the 11 ten that we have currently. And then, as I 12 said, we're hiring additional player 13 development individuals. We've got commitments 14 from one who was formerly with us who was part 15 of the initial layoff. And the second 16 gentleman we should hear today. But, you know, 17 it looks like he is going to come back with us 18 as well. 19 But both of those individuals, if I'm 20 not mistaken, one had -- was with us nine 21 years. One was with us 11 years. And they're 22 again, excited about coming back. One is -- 23 one's with Harrah's. And one is -- actually, 24 they are both with Harrah's. One is actually 25 on staff. One is sort of, I guess you want to 112 KEVIN E. PRESTON 1 call sort of a consultant. He brings them in 2 and then gets paid through that aspect of it 3 so. 4 CHAIR KASSEKERT: Okay. I guess I'm 5 thinking back to some earlier testimony I 6 heard, and I want to see if you know or if you 7 can refute this testimony that there were 8 friends of Fred Buro's that were hired in 9 player development. 10 THE WITNESS: Yeah. You know, I don't 11 know that for sure. 12 CHAIR KASSEKERT: You don't know that. 13 Okay. All right. 14 Were you part of any part of the 15 decision-making process to fire Mr. Buro? 16 THE WITNESS: Me personally? 17 CHAIR KASSEKERT: Yes. 18 THE WITNESS: No. No. 19 CHAIR KASSEKERT: Did you review any of 20 his severance documents? 21 THE WITNESS: No. No. That was done -- 22 CHAIR KASSEKERT: So when Mr. Buro was 23 fired, you moved on to working directly with 24 Mr. Giannantonio? 25 THE WITNESS: That's correct. Yes. 113 KEVIN E. PRESTON 1 CHAIR KASSEKERT: Okay. And let me just 2 ask you. You were brought on from Harrah's. 3 You had a lot of experience in the casino 4 management, a lot of experience throughout the 5 country in doing different things. What would 6 you say your business philosophy was with 7 respect to staffing? We've heard a lot of 8 discussion about Mr. Yung. And you, obviously, 9 made recommendations to Mr. Yung. What was 10 your philosophy? 11 THE WITNESS: Well, I mean, at the end 12 of the day, you know, the business that we're 13 all in is about servicing our guests and making 14 sure that we are providing a great environment 15 for our employees as well. And, you know, part 16 of -- as I said earlier, part of my job is to 17 make decisions and bring decisions to Mr. Yung 18 that I feel are necessary for us to do that. 19 It's been my -- I guess experience over 20 the last six months that when you bring 21 information to Mr. Yung, and you do it in such 22 a way that shows the effects of what's going to 23 happen, whether positive or negative, if it's a 24 positive effect, then he's going to go ahead 25 and allow you to do that. And in this case, 114 KEVIN E. PRESTON 1 from a hiring standpoint, you know, that's what 2 I did. And we were, obviously, you know -- we 3 were able to hire additional bodies to improve 4 our service levels at the property. And I 5 might add that we didn't only do it here in 6 Atlantic City, but we also added individuals in 7 Evansville as well and dealers that were 8 needed. So, you know, this was a thing that 9 when we were looking at it from an analysis 10 standpoint, you know, it wasn't just here in 11 Atlantic City. We looked at it, you know, at 12 several of our properties to determine, you 13 know, what was going on, what we needed to do. 14 And, you know, if staffing was one of those 15 items that we needed to increase or improve 16 upon, then that's what we did. 17 CHAIR KASSEKERT: And you've done that 18 at other properties? 19 THE WITNESS: Correct. 20 CHAIR KASSEKERT: Okay. I thought that 21 was going to be my last question, but a note 22 just reminded me. 23 Again, I have to go back to the security 24 plan and the comparison with Showboat. Because 25 if you had been able to get all the other 115 KEVIN E. PRESTON 1 security plans -- I mean, you worked at 2 Harrah's so you said -- 3 THE WITNESS: Uh-huh. 4 CHAIR KASSEKERT: -- you said you knew 5 the security person over there. 6 THE WITNESS: Right. 7 CHAIR KASSEKERT: What would that 8 comparison have been? Because I -- I find it, 9 frankly, a little confusing and a little 10 frustrating that you would think that the 11 security plan comparing it to Harrah's, 12 comparing a facility like the Tropicana, which 13 is a different layout completely, and how this 14 would even mesh with comparing to the Showboat. 15 THE WITNESS: Well, you know, that was 16 the -- you know, that wasn't the decision just 17 based upon Harrah's. I mean, I just wanted to 18 get a feel for what the regulated or mandatory 19 positions were and how, you know, different 20 properties set that up. And, fortunately or 21 unfortunately, you know, I was only able to 22 attain Harrah's security staffing, again 23 through a relationship. But, you know, that 24 wasn't, obviously, the deciding factor of, you 25 know, how we're going to staff ourselves. 116 KEVIN E. PRESTON 1 Obviously, from our standpoint, you know, it's 2 evident that we're much larger from that 3 respect. But, again, I think just to get a 4 feel, regardless, small, large, medium size, I 5 mean, just to get a feel for how the layout was 6 and if we could learn anything from that in 7 that respect, so. 8 CHAIR KASSEKERT: But when you say 9 "layout," you know, obviously each property is 10 different in terms of -- of where columns are, 11 where escalators are, where -- 12 THE WITNESS: Yeah. I'm sorry to 13 interrupt you. 14 What I really meant by -- you know, the 15 mandatory positions, where they were posted at. 16 And then, you know, how they had other 17 individuals assigned around those, you know, 18 sort of mandatory posts and how many there 19 were. I mean, you can in a sense relate to 20 that, and then you just have to grow it as if 21 it was your own property. So again, it didn't 22 have any, you know -- it wasn't a final 23 decision in our decision making of the actual 24 employees. It was just sort of a reference as 25 to see. Nothing -- 117 KEVIN E. PRESTON 1 CHAIR KASSEKERT: Okay. I -- I'll take 2 you at your word. But I am concerned because 3 it's in the report. It's referenced that "We, 4 after checking with Harrah's Showboat security, 5 which is approximately our same size, they have 6 a department of" X. 7 THE WITNESS: Well, yeah. Same size as 8 far as revenues, not same size as far as size, 9 as far as space goes. 10 CHAIR KASSEKERT: But I guess that leads 11 me to the further questions -- 12 THE WITNESS: That's probably -- 13 CHAIR KASSEKERT: How do you do an 14 analysis of revenues? What does that matter if 15 the floor plans are so radically different? 16 THE WITNESS: Well, you know, there's a 17 lot of things to look at this. Really, sizes 18 is just one. There's different ways to look at 19 it. And that's just one respect. In hindsight 20 I should have worded it different, but I 21 didn't. So, again, that wasn't the deciding 22 factor. 23 CHAIR KASSEKERT: Okay. 24 THE WITNESS: Nor was it, you know, it 25 was just a piece of -- 118 KEVIN E. PRESTON 1 CHAIR KASSEKERT: And what was the 2 deciding factor? 3 THE WITNESS: Well, I think the analysis 4 that the property did, and that, you know, sort 5 of laid out our entire floor, our size floor, 6 you know, basically implemented the mandatory 7 positions. And then we looked at the amount of 8 slot machines, how many jackpots we had. And 9 we looked at all that stuff to determine how 10 many people were needed in that specific area 11 for that time. 12 CHAIR KASSEKERT: Okay. So initially 13 when you -- when A-50 was done, you had looked 14 at Harrah's-- you looked at Harrah's. 15 THE WITNESS: Yeah. 16 CHAIR KASSEKERT: For whatever reason, 17 you looked at Harrah's -- 18 THE WITNESS: Yeah. Right. 19 CHAIR KASSEKERT: You made a 20 recommendation of 70, but then when you went 21 back and did furhter analysis, you went back 22 down to 33. 23 THE WITNESS: Yeah. It says further 24 analysis was needed. Again, it was getting our 25 arms around the Atlantic City market and 119 KEVIN E. PRESTON 1 looking at, you know, some other properties and 2 seeing how they basically are structured. 3 Again, you know, they could be structured one 4 way, but when you put that basically on top of 5 your structure, obviously, if you're larger, 6 you need to expand that in a sense. And so, 7 and that's why we're not at 96. 8 CHAIR KASSEKERT: But it wasn't other 9 properties. It was just one property. 10 THE WITNESS: Exactly. Yeah. Just 11 comparison. Yeah. 12 CHAIR KASSEKERT: Okay. Commissioner 13 Epps? 14 COMMISSIONER EPPS: You started at 15 Harrah's in Illinois? 16 THE WITNESS: Correct. 17 COMMISSIONER EPPS: Okay. And what was 18 your title at that company? 19 THE WITNESS: Well, I started as an 20 intern and then worked through all the 21 departments. And then when H -- human 22 resources, then went into operations. 23 COMMISSIONER EPPS: In what title? 24 THE WITNESS: Well -- 25 COMMISSIONER EPPS: After intern, what 120 KEVIN E. PRESTON 1 next? 2 THE WITNESS: Human resources. 3 COMMISSIONER EPPS: Human resources. 4 Then what? 5 THE WITNESS: Well, assistant, then went 6 to manager and then up from there. 7 COMMISSIONER EPPS: You were manager of 8 human resources? 9 THE WITNESS: Right. Uh-hum. 10 COMMISSIONER EPPS: For how long? 11 THE WITNESS: Probably a year or so. 12 And then cross-trained into the gaming side of 13 the business. 14 COMMISSIONER EPPS: And what position on 15 the gaming side? 16 THE WITNESS: Again, it was more of a 17 role of -- you know, in Harrah's they have 18 various presidential assistants and interns. 19 And what I did was, I was sort of in the role 20 of -- continue to learn the business from the 21 internship. So I worked under the casino 22 manager and learned the casino operations side 23 of dealing, supervising, scheduling, you know, 24 all that -- all -- everything that relates to 25 the gaming side of the business. 121 KEVIN E. PRESTON 1 COMMISSIONER EPPS: Well, what was your 2 title? 3 THE WITNESS: I believe it was Assistant 4 Games Manager? Something like that. It was a 5 while back, so. 6 COMMISSIONER EPPS: Assistant games 7 manager. 8 THE WITNESS: Table games. Yeah. 9 COMMISSIONER EPPS: And you were -- you 10 remained in that title for the rest of your 11 time at Harrah's? 12 THE WITNESS: Right. No. Then I went 13 to the corporate office. 14 COMMISSIONER EPPS: In what title? 15 THE WITNESS: In the finance area. 16 COMMISSIONER EPPS: In what title? 17 THE WITNESS: It would have been Risk 18 Control Manager at the time. 19 COMMISSIONER EPPS: Risk Control 20 Manager? 21 THE WITNESS: Yeah. 22 COMMISSIONER EPPS: And you remained in 23 that title for the left rest of your time at 24 Harrah's? 25 THE WITNESS: No. That's when I went 122 KEVIN E. PRESTON 1 into the regional person and learned the rest f 2 the business. 3 COMMISSIONER EPPS: So after Risk 4 Management title, what position did you assume 5 at Harrah's? 6 THE WITNESS: It would have been 7 manager. Basically just called Manager of the 8 Operations. And I was reporting directly to 9 the regional person and went to each of the 10 properties, looked at their goals and 11 objectives, their gaming operations, worked 12 with the regionals, worked with the general 13 managers, and found the inefficiencies of how 14 we could improve. 15 COMMISSIONER EPPS: So Manager of 16 Operations at the corporate level? 17 THE WITNESS: Regional. 18 COMMISSIONER EPPS: Corporate level? 19 THE WITNESS: Uh-hum. 20 COMMISSIONER EPPS: And for how long 21 were you in that title? 22 THE WITNESS: Until '99. That's when I 23 left to go to Majestic Star. 24 COMMISSIONER EPPS: Okay. And Majestic 25 Star, you were there for how long? 123 KEVIN E. PRESTON 1 THE WITNESS: A year. I was hired as a 2 GM with Grace Entertainment in 2001. 3 COMMISSIONER EPPS: Slow down. 4 Majestic Star. 5 THE WITNESS: Right. 6 COMMISSIONER EPPS: Majestic Star is 7 where? 8 THE WITNESS: It's a casino in Gary, 9 Indiana. 10 COMMISSIONER EPPS: How many casinos? 11 THE WITNESS: One. 12 COMMISSIONER EPPS: Just one? 13 THE WITNESS: Yeah. 14 COMMISSIONER EPPS: And you were what 15 position at Majestic Star? 16 THE WITNESS: It would have been 17 equivalent to Director of Operations. 18 COMMISSIONER EPPS: Well, what was your 19 position? Not the -- 20 THE WITNESS: Director of Operations. 21 COMMISSIONER EPPS: -- equivalent. 22 THE WITNESS: Director of Operations. 23 COMMISSIONER EPPS: Director of 24 Operations of the entire thing or casino 25 operations. 124 KEVIN E. PRESTON 1 THE WITNESS: It would have been casino 2 operations. Yeah. 3 COMMISSIONER EPPS: How big is that 4 casino? 5 THE WITNESS: At the time that was the 6 largest riverboat casino in the United States. 7 COMMISSIONER EPPS: How many slots? 8 THE WITNESS: 3500? 3,000? 9 COMMISSIONER EPPS: And then you went to 10 Grace Entertainment? 11 THE WITNESS: Correct. 12 COMMISSIONER EPPS: What is that 13 operation? 14 THE WITNESS: That was an operation out 15 of Missouri. They had two casinos in Missouri 16 and one in Iowa, and one in Kansas. I went in 17 as the general manager of the brand-new casino 18 in Missouri for the company. 19 COMMISSIONER EPPS: So you ran the 20 Missouri casino for the larger company? 21 THE WITNESS: Correct. 22 COMMISSIONER EPPS: And what title in 23 Missouri? 24 THE WITNESS: General Manager. 25 COMMISSIONER EPPS: And how long were 125 KEVIN E. PRESTON 1 you with Grace? 2 THE WITNESS: I was with them for five 3 years. 4 COMMISSIONER EPPS: Five years as 5 General Manager of Missouri? 6 THE WITNESS: One year in Missouri, and 7 they sent me to their largest property in Iowa 8 for four years. As General Manager. 9 COMMISSIONER EPPS: And then you went to 10 Wild Rose? 11 THE WITNESS: Correct. As Senior 12 President of Operations. We opened a brand-new 13 property in Iowa. And as we were opening that 14 property, we had acquired another property that 15 was already in existence. 16 COMMISSIONER EPPS: And how long -- how 17 large of that operation was Wild Rose? 18 THE WITNESS: Two casinos. 19 COMMISSIONER EPPS: And you oversaw both 20 of them? 21 THE WITNESS: Correct. 22 COMMISSIONER EPPS: And where are those 23 casinos? 24 THE WITNESS: Both of those are in Iowa. 25 COMMISSIONER EPPS: Okay. And how large 126 KEVIN E. PRESTON 1 of an operation, totally, was that? 2 THE WITNESS: You know, totally, it was 3 a small company. Probably 1500 machines, 4 total, 40 table games. Restaurant outlets. 5 Hotel. 6 COMMISSIONER EPPS: And so from -- from 7 Wild Rose you -- you went to -- 8 THE WITNESS: I got the call from Mr. 9 Yung. 10 COMMISSIONER EPPS: And you became the 11 Senior Vice President of Casino Operations of 12 all the Columbia Sussex gaming operations? 13 THE WITNESS: Correct. 14 COMMISSIONER EPPS: Everywhere in the 15 country? 16 THE WITNESS: Correct. 17 COMMISSIONER EPPS: And how many slot 18 machines is that? About. 19 THE WITNESS: Roughly 15,000, probably. 20 COMMISSIONER EPPS: Okay. So you jumped 21 from, the largest you had managed was 3500 to 22 15,000 slot machines. That was your next 23 progression? 24 THE WITNESS: Right. But traveling with 25 Harrah's to the ten properties when I was at 127 KEVIN E. PRESTON 1 the corporate level, you know, obviously, ten 2 large -- fairly large properties. 3 COMMISSIONER EPPS: I'm talking about 4 for you to be over -- in charge of. 5 THE WITNESS: Right. Exactly. No. 6 You're correct. 7 COMMISSIONER EPPS: That was your next 8 progression? 9 THE WITNESS: Correct. 10 COMMISSIONER EPPS: The Chair spoke to 11 you about A-50. You created that document. 12 Was that your testimony? 13 THE WITNESS: I put the document 14 together based on information from the 15 property-- along with myself. Yeah. 16 COMMISSIONER EPPS: Now, she went 17 through with you the Showboat comparison, and 18 you said that was maybe in hindsight a mistake 19 to write it the way you wrote it. 20 THE WITNESS: Right. 21 COMMISSIONER EPPS: But you got that 22 information, you said, because you had a 23 connection at Harrah's? 24 THE WITNESS: Correct. 25 COMMISSIONER EPPS: Harrah's owns 128 KEVIN E. PRESTON 1 Showboat. 2 THE WITNESS: And Harrah's, right. 3 COMMISSIONER EPPS: In addition to 4 Caesars and -- 5 THE WITNESS: Right. 6 COMMISSIONER EPPS: Harrah's Marina? 7 THE WITNESS: Right. 8 COMMISSIONER EPPS: And Bally's? 9 THE WITNESS: Right. 10 COMMISSIONER EPPS: Did you get the slot 11 organization -- I mean the security 12 organization for Bally's, Caesars, or Harrah's 13 Marina? 14 THE WITNESS: No. Because this 15 individual is just at the Showboat location. 16 COMMISSIONER EPPS: So your contact was 17 only at -- 18 THE WITNESS: Showboat. Correct. Yeah. 19 COMMISSIONER EPPS: Showboat. 20 Did you ask for the other security 21 analysis -- organizations in the company which 22 he was employed? 23 THE WITNESS: No. No. 24 COMMISSIONER EPPS: Did you ask for it? 25 THE WITNESS: No, I did not. 129 KEVIN E. PRESTON 1 COMMISSIONER EPPS: Okay. The testimony 2 earlier was that this 320 number drastically 3 dropped down to 33. But I think after your 4 going through that with the Chair, a 5 significant number of those 320 were, in fact, 6 made; is that correct? 7 THE WITNESS: No. No. 62 total. 33 8 was out of the 70 security officers. 9 COMMISSIONER EPPS: Okay. 10 THE WITNESS: Yeah. 11 COMMISSIONER EPPS: So, then, why 12 weren't the other changes made? 13 THE WITNESS: Well, as I stated through 14 the testimony, the analysis that we did showed 15 that those decisions didn't need to be made, 16 and in some respects we actually needed to hire 17 additional bodies. 18 COMMISSIONER EPPS: Okay. Now, another 19 area that you spoke to was the Kohler report. 20 THE WITNESS: Yes. 21 COMMISSIONER EPPS: What is the table of 22 organization from you down with respect to -- 23 let's just go with security. From you down to 24 security. What is the table of organization? 25 THE WITNESS: Well, it would be the 130 KEVIN E. PRESTON 1 security director's, managers of the property 2 up to the GM, and then the GM to me. And Glenn 3 is sort of just a dotted line to me. We -- we 4 utilized Glenn in situations where there's 5 security issues at the properties that we my 6 need him to go and look at or investigate. 7 COMMISSIONER EPPS: Now, is it your 8 testimony that you didn't get Glenn's report? 9 Or you just don't remember what it said? 10 THE WITNESS: No. I did get the report. 11 It was e-mailed to me. I just don't remember 12 what was in the report, the substance of the 13 report. 14 COMMISSIONER EPPS: Now, this report 15 then went to Mr. Yung? 16 THE WITNESS: Again, I don't remember if 17 it went to Bill or not. But I know that it 18 went to the property. I know that I was 19 e-mailed on it. But I don't -- I'm not for 20 sure that it went to Mr. Yung or not. 21 COMMISSIONER EPPS: Were there any 22 changes made or recommended based on this 23 report? 24 THE WITNESS: That we currently did? 25 COMMISSIONER EPPS: Yes. 131 KEVIN E. PRESTON 1 THE WITNESS: No, not at all. 2 COMMISSIONER EPPS: So none of the 3 changes -- 4 THE WITNESS: As a matter of fact, the 5 report that was there. I mean, we needed to do 6 our own analysis to determine what it was. We, 7 obviously, appreciate Glenn doing this work, 8 but -- 9 COMMISSIONER EPPS: Well, this work 10 wasn't your analysis? Your company's analysis? 11 THE WITNESS: Well, he did an initial 12 analysis. That analysis was done prior to me 13 coming aboard. So as we move forward, if I was 14 going to put my name on something, I wanted to 15 make sure we did further analysis to determine 16 if that was indeed the case if we needed to 17 cut, if we needed to hire, whatever we needed 18 to do, so. 19 COMMISSIONER EPPS: So, then, any 20 analysis -- that report was just for a 21 reference. But any analysis on cuts or 22 maintaining the status quo was made strictly by 23 you in review with your lower level -- the 24 staff below you. 25 THE WITNESS: No. The analysis was done 132 KEVIN E. PRESTON 1 by the property and then presented up to me. 2 COMMISSIONER EPPS: Now, in the table of 3 organization on the casino ops side. 4 THE WITNESS: Yes. 5 COMMISSIONER EPPS: At some point Mr. 6 Buro worked -- was a direct report to you? 7 THE WITNESS: Correct. 8 COMMISSIONER EPPS: Okay. And then at 9 some point he was terminated? 10 THE WITNESS: Correct. 11 COMMISSIONER EPPS: And you didn't have 12 any input into that termination? 13 THE WITNESS: No. 14 COMMISSIONER EPPS: Okay. So you 15 didn't-- the so the guy below you running your 16 Atlantic City unit is going to be terminated, 17 and you don't get to say I need him. That's a 18 good idea. That's a bad idea. That's going to 19 hurt me. You don't have any input in that 20 regard? 21 THE WITNESS: Well, you have to 22 understand, really, I got involved in Atlantic 23 City in July. And you know, Mr. Yung has a lot 24 more tenure with Fred than I did. And, you 25 know, his decision was made and, you know, you 133 KEVIN E. PRESTON 1 go along with that decision. 2 COMMISSIONER EPPS: But if I understand 3 the table of op -- organization, this is your 4 area and these guys your support, if you will. 5 THE WITNESS: Right. 6 COMMISSIONER EPPS: And you're about to 7 lose a leg of your chair, and you don't get to 8 say whether or not you need that leg. 9 THE WITNESS: I didn't get to know Fred 10 that well. I mean, obviously, Mr. Yung had -- 11 before I came aboard, Fred reported directly to 12 Mr. Yung. The regional person that -- I mean, 13 the Senior Vice President of Operations that 14 was in my role didn't have responsibility for 15 Atlantic City. Fred reported directly to Mr. 16 Yung. And until I came aboard, Fred started 17 reporting to me. But, again just with a month 18 and a half experience dealing with Fred, you 19 know, obviously, Mr. Yung has two years of 20 experience with him. And his decision was 21 made, and, you know, I went along with it. 22 COMMISSIONER EPPS: So your -- your 23 comfort level with the Atlantic City operation 24 would then come from where? 25 THE WITNESS: I don't understand your 134 KEVIN E. PRESTON 1 question. 2 COMMISSIONER EPPS: So if -- what I'm 3 saying, in your organization, Fred is now gone. 4 THE WITNESS: Uh-huh. Right. 5 COMMISSIONER EPPS: How do you get 6 comfortable with the operation in Atlantic 7 City? Where does that comfort come from? 8 THE WITNESS: Through the time you deal 9 with other individuals, and Mark Giannantonio 10 was that individual on the hotel side, and he 11 was promoted to oversee both sides of the 12 property, which after talking -- you know, to 13 Bill, we had made a change prior to that in 14 Lake Tahoe putting one general manager over 15 both sides, the casino and hotel, and it worked 16 out very well. And, you know, basically, in 17 Atlantic City that's the same thing Bill wanted 18 to do. And I knew Mark, and so I felt 19 comfortable with Mark, you know, stepping into 20 that role. 21 CHAIR KASSEKERT: Commissioner 22 Sommeling? 23 COMMISSIONER SOMMELING: Mr. Preston, 24 I'm just curious to know, what experience have 25 you garnered through your casino career working 135 KEVIN E. PRESTON 1 actually in the casino? Have you ever been a 2 dealer? 3 THE WITNESS: Yes. 4 COMMISSIONER SOMMELING: Have you ever 5 been a floor person or pit boss or manager? 6 THE WITNESS: Floor person for a short 7 time. Yes. 8 COMMISSIONER SOMMELING: Okay. Was the 9 highest level that you attained in the casino? 10 THE WITNESS: No. Obviously, I was 11 general manager of the whole operation. 12 COMMISSIONER SOMMELING: I understand 13 that. But I'm talking specifically about 14 casinos. 15 THE WITNESS: Yes. 16 COMMISSIONER SOMMELING: Working on the 17 floor. 18 THE WITNESS: Yes. Right. 19 COMMISSIONER SOMMELING: Did you ever 20 work in the slot area? 21 THE WITNESS: Just through the 22 internship program, yeah. 23 COMMISSIONER SOMMELING: Were you ever a 24 slot mechanic or anything like that? 25 THE WITNESS: No. No. 136 KEVIN E. PRESTON 1 COMMISSIONER SOMMELING: Did you ever 2 require -- I mean, did you ever have any 3 workings with the security in the casino floors 4 that you were working in? 5 THE WITNESS: Just through the time when 6 I was in human resources in the -- in the -- we 7 had some dealings with risk management. So 8 yeah, definitely dealing with security. 9 COMMISSIONER SOMMELING: Are you 10 familiar with the other operations in the 11 casino, the cage operations, the booths? 12 THE WITNESS: Yeah. That was part of 13 the program I was involved in, yeah. 14 Interacting and working those areas and 15 formulating -- doing projects in those areas. 16 Yes. Yes. 17 COMMISSIONER SOMMELING: When you came 18 to Atlantic City and you talk about 19 efficiencies in the workforce, what did you 20 compare it with? I mean, when you first looked 21 at the security department -- 22 THE WITNESS: Uh-huh. 23 COMMISSIONER SOMMELING: -- there were 24 some suggestions made by certain cuts in 25 certain positions within the casino floor 137 KEVIN E. PRESTON 1 itself? 2 THE WITNESS: Right. 3 COMMISSIONER SOMMELING: Did you ever 4 think maybe you should check beforehand with 5 the regulators to see whether or not, first of 6 all, these staff positions were required? And 7 second of all, if they were required, how many 8 personnel there would be needed to carry out 9 those functions? 10 THE WITNESS: Well, yeah. I think that, 11 you know, from a global perspective, that would 12 be something that I would rely on the 13 properties to do, to make sure that those -- 14 that they're -- if those are required positions 15 that they make sure that they still have them, 16 and they are required, make sure that they are 17 staffed appropriately. 18 COMMISSIONER SOMMELING: So you're 19 relying people on the here at Atlantic City to 20 tell you -- 21 THE WITNESS: Correct. 22 COMMISSIONER SOMMELING: -- what 23 position needed to be staffed in security? 24 THE WITNESS: Correct. Yeah. That was 25 part of the analysis. Yeah. 138 KEVIN E. PRESTON 1 COMMISSIONER SOMMELING: And when you 2 first talked about the -- needing some of the 3 security officer positions, did anyone ever 4 talk about what in terms of efficiency would be 5 required to carry out the individual functions 6 of security? 7 THE WITNESS: As far as what their roles 8 were? 9 COMMISSIONER SOMMELING: Yes. 10 THE WITNESS: Yeah. I mean, they went 11 into it but, again, I can only rely on what 12 those experts tell me. You know, again, you 13 have to surround yourself with good people and 14 people who know those specific areas. And they 15 are the ones that conducted a lot of that 16 analysis, to determine what the number was. 17 COMMISSIONER SOMMELING: And I don't 18 know if I understand you correctly a moment 19 ago, but did Fred Buro ever discuss this with 20 you or did you discuss it with him when the 21 cuts were first talked about whether or not 22 some of these cuts should not be made? 23 THE WITNESS: You know, there was -- 24 there was discussions back and forth on things. 25 And, you know, obviously, you got to listen to 139 KEVIN E. PRESTON 1 the people at the property. And in some 2 respects, as we said, some of these cuts at the 3 end were made, and some weren't even touched at 4 all. 5 COMMISSIONER SOMMELING: Let me go over 6 for marketing for a minute. When you first 7 came to the property, what was your observation 8 as with respect to the people who were current 9 on board in the marketing program that they 10 were then carrying out? 11 THE WITNESS: Uh-huh. 12 COMMISSIONER SOMMELING: As far as that 13 being productive -- 14 THE WITNESS: Right. 15 COMMISSIONER SOMMELING: -- for 16 Tropicana? 17 THE WITNESS: I definitely think we have 18 a strong marketing department. I think there 19 need to be a little bit of guidance. And, 20 again, I think some further analysis of what 21 programs were working and what wasn't and 22 redirecting some of those dollars in some other 23 areas. 24 COMMISSIONER SOMMELING: Well, some of 25 people that you let go from the marketing area, 140 KEVIN E. PRESTON 1 now those people, you said, are coming back? 2 THE WITNESS: Well, yeah. Prior to my 3 coming, we've hired some people. We've hired 4 one individual back, and we're hiring two more. 5 Prior to that? Prior to these player 6 development people, we actually did hire six 7 more marketing associates that are in 8 marketing. That basically what they do is they 9 call customers and invite them to come into the 10 casinos. So we hired six more of those 11 individuals as well, I guess about 45 days ago. 12 COMMISSIONER SOMMELING: And was one of 13 the reasons for that is because that after you 14 had laid these people off that you had decided 15 that the work that they were actually doing in 16 marketing was productive? And that you maybe 17 have acted too soon to let those people go or 18 too hastily in making those -- making those 19 cuts? 20 THE WITNESS: Well, that's when we did 21 the analysis, that's what it shows. That those 22 individuals we let go, 58 percent of their 23 customers were not coming back after the last 24 trip since those individuals were gone. So we 25 determined, that, yeah, we needed to hire those 141 KEVIN E. PRESTON 1 individuals back. 2 COMMISSIONER SOMMELING: No more 3 questions, Madame Chair. 4 COMMISSIONER EPPS: Just real quick. On 5 A-50, was it your testimony that these cuts 6 that you were proposing, they were not designed 7 to get to a magic payroll number? 8 THE WITNESS: That's correct. 9 COMMISSIONER EPPS: So there was 10 never -- as far as you're concerned, there was 11 never intention to match a number of positions 12 eliminated with a payroll number? 13 THE WITNESS: That was never my 14 intention. My intention was to make sure that 15 we were running as efficiently as possible. 16 And if it entails hiring more people, then 17 that's what we're going to do. 18 (Conferring.) 19 CHAIR KASSEKERT: We can come back. 20 Commissioner Fedorko? 21 VICE CHAIR FEDORKO: Thank you, Chair. 22 COMMISSIONER EPPS: Oh, I remember. 23 (Laughter.) 24 VICE CHAIR FEDORKO: With regard to Mr. 25 Kohler, do you know what his background is in 142 KEVIN E. PRESTON 1 security? 2 THE WITNESS: I know he was in law 3 enforcement. I'm not sure the extent of his -- 4 you know, significant extent of his background. 5 No. 6 VICE CHAIR FEDORKO: How hard is it to 7 go from security in Nevada and come here in 8 Atlantic City and look at what the operation is 9 here? 10 THE WITNESS: I'm sure there's a little 11 bit of a learning curve. That's why I -- as I 12 was saying, I'm sure he spent some time here 13 looking and understanding what's going on. 14 But, again, you know, at the end of the day, 15 you know, while we appreciate what he did, his 16 report really had little to do with the outcome 17 after we, you know, looked at our own 18 individuals and our department managers to sort 19 of analyze what was happening and what needed 20 to be done there in security. 21 VICE CHAIR FEDORKO: Then why was he 22 sent here? 23 THE WITNESS: That was before me, so I'm 24 not -- obviously, to look at it but -- 25 VICE CHAIR FEDORKO: Well, let me ask 143 KEVIN E. PRESTON 1 you this question then. You weren't here when 2 the transfer of the property was made in 3 January; right? 4 THE WITNESS: That's correct. 5 VICE CHAIR FEDORKO: You came here in 6 July? 7 THE WITNESS: June. 8 VICE CHAIR FEDORKO: June? 9 Do you think if you were here in the 10 beginning, you would have made some 11 recommendations that weren't made? 12 THE WITNESS: Personally, I think so, 13 yes. Just because of the relationship that I 14 have with Bill versus the gentleman that I 15 replaced. I think it's a little more open. We 16 do a -- I like to do a little more analysis to 17 make sure that we're going doing the right 18 things from the property standpoint. 19 VICE CHAIR FEDORKO: Do you think there 20 were mistakes made? 21 THE WITNESS: Well, obviously, there's 22 been some mistakes made now that we're going 23 back and hiring people, putting in additional 24 marketing programing and so forth. 25 VICE CHAIR FEDORKO: There was also a 144 KEVIN E. PRESTON 1 change with the director of security? 2 THE WITNESS: Yes. 3 VICE CHAIR FEDORKO: Why was that? 4 THE WITNESS: Mark had made that 5 decision. You know, obviously, I'm not sure 6 why. You'd have to go into detail with Mark on 7 that. 8 VICE CHAIR FEDORKO: Have you seen all 9 the customer complaint letters? We have been 10 inundated with many of these. Have you seen 11 them? 12 THE WITNESS: Yes. One of the things 13 is, too, sitting down, looking at some of those 14 things and making sure that we're handling 15 those situations. And with Mark now, you know, 16 we provide responses back now. In some 17 instances Mark will call those customers if it 18 gets to that point. 19 But at the end of the day, I mean, I 20 think we all know, regardless, you're always 21 going to get some sort of complaints. There 22 are issues that you have from customers. And 23 it's our goal to do what we can to minimize 24 those but also follow up to make sure that 25 we're handling those situations at this point. 145 KEVIN E. PRESTON 1 At least that's my -- that's my directive to 2 all of the properties, not just here in 3 Atlantic City. 4 VICE CHAIR FEDORKO: So you actually 5 follow up? You actually call people and -- 6 THE WITNESS: Yeah. We have someone 7 that does that. And, like I said, in some 8 respects, if Mark needs to get involved, he'll 9 get involved at all. 10 VICE CHAIR FEDORKO: Are there any 11 reports done on that? 12 THE WITNESS: Reports done after of the 13 calls are made? 14 VICE CHAIR FEDORKO: Yeah. 15 THE WITNESS: Yeah. I'm not sure if the 16 report's made. 17 VICE CHAIR FEDORKO: That's all I have. 18 CHAIR KASSEKERT: Commissioner Frulio? 19 COMMISSIONER FRULIO: Yeah. Mr. 20 Preston, I'm interested in knowing your 21 feelings during snapshots of the occurrences. 22 Okay? 23 THE WITNESS: Uh-huh. 24 COMMISSIONER FRULIO: You got 14 years 25 experience. You're hired by the Trop. You 146 KEVIN E. PRESTON 1 come to Atlantic City. You're handed the ball. 2 How did you feel at that moment about competing 3 against the other casino hotels in Atlantic 4 City with 20, 25 percent of your team taken 5 away? 6 THE WITNESS: Well, you know, the thing 7 that I can tell you is that, you know, looking 8 at it from a -- I think it was good to come in 9 from the outside and really look at it from my 10 perspective because there were, in some cases, 11 payroll and staffing levels that exceeded, you 12 know, what needed to be not only in Atlantic 13 City but at some of the other properties as 14 well. Evansville not as much, obviously. 15 But, you know, going in, I think that's 16 why we looked at the analysis to see what we 17 needed to improve upon and not only from a 18 staffing level but from a marketing 19 perspective, slot perspective, slot product. 20 And one of the first things that I did is we -- 21 again, as I said earlier, you know, taking some 22 of the poor product off and asking Mr. Yung for 23 $6 million worth of new slot product for 24 several of the properties. So there's things 25 that we needed to do and that we're continuing 147 KEVIN E. PRESTON 1 to do that we actually have on our plate now 2 that we're working on to make improvements on. 3 But I think if you look at it from specifically 4 an Atlantic City standpoint, the improvements 5 that were made in the hotel, both prior and 6 during the takeover, and then what's happening 7 in the casino now, I guess I could tell you 8 that I feel extremely comfortable that we'll be 9 in a position to, you know, seriously compete 10 in this market once those projects are done. 11 You know, we have the right marketing programs 12 in place now. Once we get these player 13 development people in place, you know, what 14 we'll be, you know, in a very good situation at 15 that point. 16 COMMISSIONER FRULIO: All right. Let's 17 turn to Exhibit A-60, No. 8, about hotel 18 security. I see where the Trop sought to 19 reduce the security to six officers. To me, 20 that's like two per shift covering the hotel of 21 about 2,000 rooms. My question is, if you and 22 your family were to book a room at the Trop, 23 would you feel secure knowing that there's two 24 security guards covering the hotel? That 25 probably includes the garage. 148 KEVIN E. PRESTON 1 THE WITNESS: Well, I mean, I feel 2 comfortable there now. I would bring my family 3 there. Sure. 4 COMMISSIONER FRULIO: You would? 5 THE WITNESS: Yeah. 6 COMMISSIONER FRULIO: Let's talk the 7 locksmith caper. I'm interested in knowing 8 what was your take on the Trop wanted to go to 9 two locksmiths, according to Exhibit A-50 to 10 cover 2,000 rooms and 4,000 slot machines. 11 THE WITNESS: Yeah. After doing the 12 analysis, there's no way that could have been 13 done. But, again, I think, you know, as Mr. 14 Yung stated, we don't have those at any of our 15 other properties and didn't really fully 16 understand the capacity that those individuals 17 have. But once -- once we did that analysis, 18 you know, there was no way that we could do 19 that. 20 COMMISSIONER FRULIO: Okay. Thank you. 21 Thanks for your candor. 22 THE WITNESS: Okay. 23 COMMISSIONER FRULIO: That's all. 24 CHAIR KASSEKERT: Commissioner Epps? 25 COMMISSIONER EPPS: Did you -- and I'm 149 KEVIN E. PRESTON 1 just trying to understand your testimony. 2 THE WITNESS: That's fine. 3 COMMISSIONER EPPS: Was your testimony 4 just a second ago that you compared Evansville 5 and Atlantic City, and you noticed that you had 6 payroll inconsistencies? 7 THE WITNESS: No. No. No. No. No. 8 No. What I said was that there was some 9 overstaffing not only here but in some of the 10 other properties that Aztar had, including 11 Evansville. Not that there was any comparison. 12 No, not at all. That's not what I said. 13 COMMISSIONER EPPS: Okay. So if you 14 have overstaffing based on payroll, how do you 15 know that if you don't compare it to something? 16 THE WITNESS: Well, I mean, staffing 17 levels, it's pretty easy to determine how many 18 employees you need based upon your customer 19 counts. And in Evansville it's a little bit 20 easier because you actually have customer 21 counts where, unlike here in Atlantic City, you 22 have to go through a turnstile. So you can 23 determine how many people are playing machines, 24 how many people are at tables, and really 25 determine what staffing levels you need to 150 KEVIN E. PRESTON 1 account for those individuals at the property. 2 It makes it a little bit -- makes it a lot 3 easier to look at your staffing levels. 4 COMMISSIONER EPPS: So did you -- how 5 did you -- so you couldn't make the analysis 6 right away with Atlantic City with respect to 7 staffing levels because you had to see the 8 operation first? 9 THE WITNESS: Yeah. Exactly. We had to 10 get to know the business and understand, you 11 know, how -- what we were doing marketingwise, 12 if it was affecting the amount of customers 13 that we were having. We can look at and see if 14 a customer's playing a machine, they have a 15 card in. We can see how many machines are 16 active. You know, obviously, we can't see if 17 they don't have their card in or whatnot. So 18 there's certain analysis that can be done, how 19 many slot techs, how many slot attendants you 20 need for those areas based upon the games that 21 are actually in action. 22 COMMISSIONER EPPS: Okay. And lastly, 23 just for my clarification. 24 THE WITNESS: Sure. 25 COMMISSIONER EPPS: On your history. 151 KEVIN E. PRESTON 1 Where was it that you did your -- you were a 2 dealer and floor person? 3 THE WITNESS: That was at Harrah's 4 during -- my beginning, the internship program. 5 COMMISSIONER EPPS: By the internship 6 part of the internship program was -- 7 THE WITNESS: Yeah. Uh-huh. 8 COMMISSIONER EPPS: -- part of the floor 9 person? 10 THE WITNESS: Yeah. 11 COMMISSIONER EPPS: Okay. 12 CHAIR KASSEKERT: Commissioner 13 Sommeling? 14 COMMISSIONER SOMMELING: I'm going to go 15 back to your discussion or testimony with 16 compliance. 17 THE WITNESS: Yes. 18 COMMISSIONER SOMMELING: You had 19 indicated at some point all the compliance 20 units or people had gotten together for a big 21 meeting out in, I guess, Las Vegas. 22 THE WITNESS: Kentucky. Yeah. 23 COMMISSIONER SOMMELING: Kentucky. 24 And what was the purpose of this -- 25 specific purpose of that meeting with regard to 152 KEVIN E. PRESTON 1 what compliance people do for your corporation? 2 THE WITNESS: Really, you know, Donna 3 More and Karen Brugler and Brian Doyle, who 4 they mentioned earlier -- Brian's in charge of 5 compliance, Karen's internal audit, and Donna 6 is, obviously, our general counsel -- brought 7 everyone together specifically just to go over 8 procedures, talk about goals, objectives. And, 9 really, from my perspective, that was about a 10 week after I started. And, from my 11 perspective, to me, compliance and internal 12 audits have always been important and I just 13 wanted to make sure that they knew from an 14 operation standpoint, we were going to be sort 15 of in a situation where all of our employees 16 were going to be on board with their internal 17 audits and making sure we're getting timely 18 information to them, and whatever information 19 they needed to be, that they were working on 20 that we would give it to them as quick as 21 possible, and to be sort of a team in one 22 respect. 23 COMMISSIONER SOMMELING: And I guess 24 that there was some policy, some global policy 25 for the whole corporation and all your 153 KEVIN E. PRESTON 1 properties? 2 THE WITNESS: Right. 3 COMMISSIONER SOMMELING: And I guess 4 maybe there were some local policies with 5 regard to specific gaming venues? Like New 6 Jersey, for example. 7 THE WITNESS: Yeah. Right. Right. 8 Right. 9 COMMISSIONER SOMMELING: And were you -- 10 at that particular meeting, did you discuss the 11 New Jersey regulations in regard to compliance? 12 THE WITNESS: No, I didn't. Basically 13 what it was was really just a global sort of 14 introduction of who I was and what my goals and 15 objectives were from an operations standpoint, 16 in making sure that all of my people, the GMs, 17 were working hand in hand by the compliance and 18 internal auditors at the properties. So I 19 didn't go into any of the details that they 20 went through. 21 COMMISSIONER SOMMELING: And one last 22 question. With regard to your relationship 23 with the regulators in the various venues -- 24 THE WITNESS: Uh-huh. 25 COMMISSIONER SOMMELING: -- where the 154 KEVIN E. PRESTON 1 casinos exist, in New Jersey specifically, you 2 realize that there were two regulatatory 3 agencies? 4 THE WITNESS: Correct. 5 COMMISSIONER SOMMELING: And the 6 Commission is the one that does the licensing 7 and so forth. 8 THE WITNESS: Right. 9 COMMISSIONER SOMMELING: And the 10 Division is like a law enforcement agency that 11 does the other side of the equation. 12 THE WITNESS: Right. 13 COMMISSIONER SOMMELING: And how do you 14 see that in terms of the role of your casino 15 executives in New Jersey working together with 16 the Commission and Division on regulatory 17 issues? 18 THE WITNESS: Well, I mean, obviously, 19 as I said earlier, we want to make sure that 20 we're working hand in hand with both sides and 21 making sure that we're, you know, aboveboard on 22 everything that we're doing. And if something 23 happens, we want to make sure we take care of 24 that situation, rectify it, and so that doesn't 25 happen again. 155 KEVIN E. PRESTON 1 As Donna said earlier, sometimes, human 2 errors occurs, and we do what we can in order 3 to provide the tools for those employees from 4 the training perspective as well as 5 understanding perspective to understand how 6 important it is to have the positive and great 7 relationship both from the communication 8 standpoint and other with both sides. 9 COMMISSIONER SOMMELING: And that would 10 include timely reporting? 11 THE WITNESS: Correct. 12 COMMISSIONER SOMMELING: To the Division 13 and the Commission? 14 THE WITNESS: Correct. 15 COMMISSIONER SOMMELING: No more 16 questions. 17 CHAIR KASSEKERT: Give me an idea about 18 what your process is as the -- as the vice 19 president in charge of casino operations for -- 20 for Columbia Sussex going forward what your 21 process is going to be in terms of looking at 22 specifically the Atlantic City property that's 23 under your jurisdiction. Is it going to be a 24 top-down process? Is it going to be a 25 bottom-up process? How are you going to make 156 KEVIN E. PRESTON 1 decisions and recommendations to Mr. Yung 2 ultimate -- who ultimately makes the decision 3 on changes that you might need in the Atlantic 4 City property. You know, maybe -- maybe this 5 is all good news, and revenue is going to 6 increase, and the changes you make are going to 7 bring people back -- 8 THE WITNESS: Uh-huh. 9 CHAIR KASSEKERT: But what's going to be 10 your process if it isn't? 11 THE WITNESS: Well, you know, I think as 12 I said earlier, you got to work together with 13 the team here. We got a great marketing team 14 here. And they've been here in Atlantic City 15 for a long time. And, you know, my goal at the 16 end of the day is to increase revenues. And if 17 we have to sort of minimize a little bit of the 18 bottom line to get there, then that's what 19 we're going to do, you know, to get there. 20 But, you know, our goal right now is to get our 21 customers back, deliver great service, and do 22 what we can to increase our revenues from not 23 only a property standpoint, but also -- and not 24 only here in Atlantic City but as well as our 25 other properties at this point. 157 KEVIN E. PRESTON 1 CHAIR KASSEKERT: So is that your 2 priority list then? Getting customers back, I 3 mean, revenues falls a little further down 4 along the line. 5 THE WITNESS: Yeah. 6 CHAIR KASSEKERT: So it's not going to 7 be revenue driven. 8 THE WITNESS: No. It has to be revenue 9 driven. But we knew we have to get some of 10 those customers back. Right now if you look at 11 the numbers, you know, our table games has 12 really sustained pretty well. It's really our 13 slot side of the business and those slot PDs 14 are the ones that, unfortunately, were let go, 15 and now we're getting those people back. But I 16 thinka, along with the marketing programs 17 really trying to do -- again, gain additional 18 market share not only with those customers that 19 we know hadn't haven't been back, but hopefully 20 some new customers as well. 21 CHAIR KASSEKERT: So, say, six months 22 from now revenues are still not great. What 23 are you going to do? 24 THE WITNESS: Well, I hope it's not six 25 months. I mean, if revenues aren't great in -- 158 KEVIN E. PRESTON 1 probably next month, then we're going to have 2 to start looking. But, you know, and that's 3 the thing. We look at that every day. We 4 analyze every day. And if we need to -- you 5 know, we just added some programs in last week. 6 Some cash-back programs that we think are -- 7 actually, probably exceed anything anyone's 8 doing in the market right now. And so, you 9 know, if we need to add something in, you know, 10 we're going to add something in to try to get 11 that revenue driven, you know, driving upwards. 12 CHAIR KASSEKERT: And you would go back 13 with that recommendation to Mr. Yung? 14 THE WITNESS: Yeah. I mean, that's what 15 we've done thus far. Yeah. Yeah. And we've 16 basically implemented the same program in 17 several other properties now. So we're doing 18 that. 19 CHAIR KASSEKERT: Any other questions? 20 VICE CHAIR FEDORKO: I have one 21 question. 22 CHAIR KASSEKERT: Sure. Commissioner 23 Fedorko. 24 VICE CHAIR FEDORKO: Just thinking about 25 this as you were talking. When I asked you 159 KEVIN E. PRESTON 1 about the change in the director of security, 2 you said that was Mark's decision. 3 THE WITNESS: Yeah. 4 VICE CHAIR FEDORKO: Don't -- does he 5 run that by you? 6 THE WITNESS: Well, yeah. I mean, he 7 runs it by me, but I don't have ultimate 8 responsibility for that specific security 9 person. You know, what I mean is, obviously, 10 there's Mark and then Bob Little and then 11 myself. So, I mean, there's layers in between 12 that actual security personnel, so. 13 VICE CHAIR FEDORKO: But would you want 14 to know why? I mean -- I'm not asking you why, 15 what happened. I'm not going to ask you that. 16 But -- 17 THE WITNESS: Yeah. Well, I -- I don't 18 remember what the exact reasoning was, but I 19 mean, you know, he would tell me. But, again, 20 you have to rely on your -- your GMs to make 21 decisions and then, you know, support those 22 decisions that they're making unless you think 23 it's something that you feel is significantly, 24 you know, opposite on. But, again, you know, 25 that when Mark to Bob and then to me so, you 160 KEVIN E. PRESTON - redirect 1 know, again, you have to support your people. 2 VICE CHAIR FEDORKO: Okay. 3 CHAIR KASSEKERT: Mr. Levenson? 4 Anything on redirect? 5 MR. LEVENSON: Yeah. Just a couple of 6 things. 7 8 REDIRECT EXAMINATION BY MR. LEVENSON: 9 Q. You know, I get resumes all the time and 10 for summer interns, and then we put them into filing 11 things and the like. You mentioned the word 12 "interning" at Harrah's. I think we need a little 13 meat on the bones of that. 14 A. Yeah. No. There was -- 15 Q. What was that? 16 A. My whole senior year. And what they did 17 was set up a program where I was able to cross-train 18 in every single department that's in the casino to get 19 to know the gaming business. And so it was -- it 20 wasn't just a four or six week sort of deal. It was 21 the entire senior year. 22 Q. Now, at the casino since Mr. Yung took 23 over, are you aware that there's approximately 500 24 fewer slot machines on the floor? 25 A. Since he took over. Correct. Yeah. 161 KEVIN E. PRESTON - redirect 1 Yeah. Now not since, we haven't -- 2 Q. Right. Since he took over. And are you 3 aware that part of that was done to make the casino 4 more patron friendly, like wider aisles and things of 5 that sort? 6 A. Correct. 7 Q. And some of the areas where machines 8 were taken off were what they call in the business 9 "dead" zones where, you know, in the corner somewhere 10 where people never really went? 11 A. Yeah. That's a -- uh-hum. 12 Q. And as a result of those-- or let me -- 13 before I get to that one. And are you aware that 14 there's an area in the casino called the "M" Zone that 15 no longer has machines but has been turned into sort 16 of a tournament area -- 17 A. Right. 18 Q. -- when you have tournaments? 19 A. Right. 20 Q. And as a result of reductions in the 21 number of machines over the last, I guess, ten months, 22 since January, would there necessarily, therefore, be 23 a rationale to have, for example, fewer cocktail 24 servers or fewer slot attendants, slot techs, and 25 fewer security? 162 KEVIN E. PRESTON - redirect 1 A. Well, again, that's part of the 2 analysis. You know, that -- that was a situation 3 where that M section was on the second floor. So it 4 would take, you know, additional bodies to just be up 5 there. So if you're eliminating that section, 6 obviously -- you know, you may not need those 7 individuals. But, again, that was prior to me coming 8 on, so. 9 MR. LEVENSON: I have no further 10 questions, Chair. 11 CHAIR KASSEKERT: Anything on redirect? 12 MS. MAHER: No, thank you. 13 CHAIR KASSEKERT: Commissioner 14 Sommeling? 15 COMMISSIONER SOMMELING: Mr. Preston, 16 just something caught my ear. You said in your 17 senior year, you were cross-training in the 18 casino. Can you expound on that a little bit? 19 You went through an internship -- 20 THE WITNESS: Correct. 21 COMMISSIONER SOMMELING: -- through a 22 college program? 23 THE WITNESS: Right. 24 COMMISSIONER SOMMELING: So when you 25 were in a university or college, you were 163 KEVIN E. PRESTON 1 getting your training in the casino? 2 THE WITNESS: Correct. 3 COMMISSIONER SOMMELING: You said this 4 you were cross-training, that was what part of 5 the curriculum, college? 6 THE WITNESS: Yeah. Right. 7 COMMISSIONER SOMMELING: So did that 8 also include the time you were a dealer and 9 floor person? 10 THE WITNESS: Yes. 11 COMMISSIONER SOMMELING: It did. 12 THE WITNESS: Yes. 13 COMMISSIONER SOMMELING: Outside of that 14 experience, do you have independent experience 15 as an employee in a casino, as a casino 16 employee? 17 THE WITNESS: Other than just working in 18 a casino environment, you know, whether it be 19 as a GM or whatever the case may be. But, 20 yeah. 21 COMMISSIONER SOMMELING: Okay. I was 22 talking specifically about the casino. But for 23 the record now, your casino experience in the 24 terms of cross-training -- 25 THE WITNESS: Right. 164 KEVIN E. PRESTON 1 COMMISSIONER SOMMELING: -- was actually 2 acquired at the time you were in school? 3 THE WITNESS: That was part of it. 4 COMMISSIONER SOMMELING: Yeah. 5 THE WITNESS: And then once I was 6 working full-time for the-- for Harrah's. 7 COMMISSIONER SOMMELING: On the casino 8 floor? 9 THE WITNESS: Yeah. Uh-hum. Right. 10 COMMISSIONER SOMMELING: That's all I 11 have. 12 CHAIR KASSEKERT: I'm going to follow up 13 on a question that Mr. Levenson just asked you 14 with respect to dead zones and the like. And, 15 obviously, you develop a security plan based on 16 need and where there's activity and the like. 17 But if -- for example, if you were cited for 18 not having enough roving security guards or 19 enough mandated positions, what would you do? 20 THE WITNESS: Well, we'd hire some more. 21 CHAIR KASSEKERT: You'd hire some more. 22 Okay. 23 THE WITNESS: Yeah. Yeah. 24 CHAIR KASSEKERT: All right. 25 Any other questions? 165 KEVIN E. PRESTON 1 COMMISSIONER EPPS: Just one other thing 2 with this internship thing. You said it was 3 the one year that you were a senior in 4 college -- 5 THE WITNESS: Right. 6 COMMISSIONER EPPS: -- but you testified 7 earlier that were other times that you were an 8 intern -- 9 THE WITNESS: Right. Right. No. I 10 said it was similar to. I was training under 11 different individuals that were higher up than 12 I was. He just asked specifically about the 13 internship. 14 COMMISSIONER EPPS: So there was only 15 one year of an internship program? 16 THE WITNESS: Internship. Correct. 17 Right. 18 COMMISSIONER EPPS: Everything else, 19 you were in a title -- 20 THE WITNESS: Exactly. Right. 21 COMMISSIONER EPPS: Right. 22 THE WITNESS: And working with 23 individuals. Continued to run the business, 24 but working not in an internship capacity, by 25 no means, no. 166 KEVIN E. PRESTON 1 COMMISSIONER EPPS: Because you confused 2 me. 3 THE WITNESS: Yeah. I'm sorry. 4 COMMISSIONER EPPS: Because you said 5 that, and I didn't -- 6 THE WITNESS: Sorry. 7 COMMISSIONER EPS: I didn't understand. 8 Because you referred to earlier to 9 internship in several occasions, and I wanted 10 to know -- I was trying to get my mind around 11 how long this internship -- 12 THE WITNESS: It was just the year. 13 COMMISSIONER EPPS: So the first year 14 with Harrah's was an internship? 15 THE WITNESS: Exactly. Right. 16 COMMISSIONER EPPS: Anything after that 17 you were in -- 18 THE WITNESS: Exactly. 19 COMMISSIONER EPPS: -- a position. 20 THE WITNESS: Right. Correct. 21 CHAIR KASSEKERT: Any other questions? 22 All right. 23 MR. LEVENSON: No. 24 CHAIR KASSEKERT: It is now -- 25 Mr. Preston, you may step down. 167 1 It is now 1:00. Why don't we take an 2 hour for lunch and be back here for 2:00? 3 Everybody agreeable? We'll adjourn to 4 2:00. 5 (The luncheon recess was taken at 1:56 6 p.m.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 168 1 2 C E R T I F I C A T E 3 4 5 I, DARLENE SILLITOE, a Certified Court 6 Reporter and Notary Public of the State of New 7 Jersey, certify that the foregoing is a true 8 and accurate transcript of the proceedings. 9 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 CCR 20 License No XI01023 21 22 Dated: November 28, 2007 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25