1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 08-03-05 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, March 5, 2008 10 Atlantic City Commission Offices 11 Joseph P. Lordi Public Meeting Room - First Floor 12 Tennessee Avenue and Boardwalk 13 Atlantic City, New Jersey 08401 14 10:32 a.m. to 11:19 a.m. 15 16 17 Certified Court Reporter: Darlene Sillitoe 18 - - - - - - - - - - - - - - - - - - - - - - - - - - - 19 20 ATLANTIC CITY COURT REPORTING, LLC 21 CERTIFIED COURT REPORTERS AND VIDEOGRAPHERS 22 1125 ATLANTIC AVENUE, SUITE 416 23 ATLANTIC CITY, NEW JERSEY 08401 24 (609) 345-8448 www.accourtreporting.com 25 2 1 B E F O R E : 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 MICHAEL A. FEDORKO, COMMISSIONER MICHAEL C. EPPS, COMMISSIONER 4 RALPH G. FRULIO, COMMISSIONER 5 PRESENT FOR THE CASINO CONTROL COMMISSION: 6 DARYL W. NANCE, ADMINISTRATIVE ANALYST DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 7 OFFICE OF THE GENERAL COUNSEL: 8 DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE SECRETARY 9 STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL TERESA M. NAGENGAST, SENIOR COUNSEL 10 E. DENNIS KELL, ASSISTANT GENERAL COUNSEL LON E. MAMOLEN, SENIOR COUNSEL 11 BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 12 13 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 14 BRIAN BISCIEGLIA, DEPUTY ATTORNEY GENERAL TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL 15 16 17 18 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 ITEM NO. 3 STEVEN M. INGIS, SENIOR COUNSEL BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY 3 GENERAL FOX ROTHSCHILD 4 JOHN KAPLAN, ESQ. FOR: CHRISTOPHER W. JOERG 5 ITEM NO. 4d BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 6 BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL 7 JORGE COOMBS, ESQ. FOR: DARIO VASQUEZ 8 ITEM NO. 6 E. DENNIS KELL, ASSISTANT GENERAL COUNSEL 9 TIMOTHY C. FICCHI, DEPTUTY ATTORNEY GENERAL 10 LORETTA I. PICKUS, ESQ. FOR: TRUMP TAJ MAHAL 11 ITEM NO. 9 STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 12 BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL 13 TAMA HUGHES, ESQ. FOR: ADAMAR OF NEW JERSEY, INC. 14 ITEM NO. 10 STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 15 BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL 16 JUSTICE GARY S. STEIN FOR: ADAMAR OF NEW JERSEY, INC. 17 18 19 20 21 22 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 08-03-05 2 MARCH 3, 2008, 10:32 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of 8 9 4 February 20, 2008 2 Applications for employee and casino 5 Service industry licenses 6 Applications for initial and/or renewal 9 9 6 of casino key and casino employee licenses 10 Applications for initial and/or renewal 9 10 7 of casino key and casino employee licenses 3 Stipulations of settlement and consent 8 agreements: a) Christopher W. Joerg (06-0456-EA) 10 12 9 b) Jackie Ames (07-0621-ER) 10 12 c) Elizabeth M. Raughley (07-0522-ER) 10 12 10 d) Jacques Antoine (07-0277-EA) 10 12 e) Kevin C. Beavers, Jr. (07-0551-EA) 10 12 11 f) Lele Lam (07-0407-EA) 10 12 g) Hallie E. Silverman (07-0596-ER) 10 12 12 h) Lu Wang (07-0558-RC) 10 12 i) Tonya A. Reaves (07-0483-EA) 10 12 13 j) Maritza M. Romero (08-0004-EA) 10 12 k) Ramona D. Suggs (07-0593-EA) adj. 14 (a/k/a Ramona D. Kim) l) Denise M. Vona (08-0176-EA) 10 12 15 m) Deborah L. Washington (07-0439-ER) adj. 4 Applications for suspension: 16 a) Ashley K. Horcey (08-0147-RC) 13 14 b) Latoya L. Mitchell (08-0146-RC) 13 14 17 c) Clarence A. Smith (08-0148-RC) 13 14 d) Dario Vasquez (08-0175-RC) 13 18 18 5 Petition of Harrah's Entertainment, Inc., adj. Harrah's Operating Company, Inc., 19 Harrah's Atlantic City Operating Company, LLC, Showboat Atlantic City Operating Company, 20 LLC, Bally's Park Place, Inc., and Boardwalk Regency Corporation, requesting permission 21 for Joseph Tyrell to perform the duties and exercise the powers of Regional Vice President 22 of Governmental Affairs prior to qualification (PRN 0500804) 23 24 25 5 1 CONTINUED AGENDA PUBLIC MEETING NO. 08-03-05 2 MARCH 3, 2008, 10:32 a.m. ITEM PAGE VOTE 3 6 Petitions of Trump Taj Mahal Associates, 19 20 4 LLC, (d/b/a Trump Taj Mahal Casino Resort) requesting approval of an agreement for the 5 addition of qualifying sleeping units pursuant to NJSA 5:12-83(c) and amendments to its 6 operation certificate to permit a reconfiguration of its gaming floor 7 (PRN 0380802, 0570809) 7 Reproposed publication and temporary 21 22 8 adoption of amendment to NJAC 19:47-20.11 (Minimum Payout Odds for Pair Plus Wager and 9 Ante Bonus in Three Card Poker) 8 Proposed publication and temporary 22 24 10 adoption of amendments for Optional Pair Wagers in baccarat and minibaccarat; 11 Authorization of rulemaking experiment for Optional Pair Wagers pursuant to NJSA 5:12-69(e) 12 9 Petition of Adamar of New Jersey, Inc., 24 27 (d/b/a Tropicana Casino and Resort) seeking 13 approval to retain the consulting services of Joseph Jablonski pursuant to NJAC 19;43-13 14 (PRN 0600804) 10 Petition of Adamar of New Jersey, Inc., 27 42 15 et al., for suspension of the requirement to pay a civil penalty and other matters 16 (PRN 0440803) 17 18 19 20 21 22 23 24 25 6 1 E X H I B I T S : 2 ITEM NO. 2 DESCRIPTION EVD 3 4 EL-1 Remand for hearings 6 license X applications 5 EL-2 Grant 10 licenses X 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Exhibits retained by Commission.) 7 1 (Public Meeting 08-03-05 was commenced 2 at 10:32 a.m.) 3 MR. NANCE: I'd like to read an opening 4 statement: 5 This is to advise the general public 6 that in compliance with Chapter 231 of the 7 Public Laws of 1975 entitled the "Open Public 8 Meetings Act," the New Jersey Casino Control 9 Commission on October 16th, 2006, filed with 10 the Secretary of State at the State House in 11 Trenton an annual meeting schedule. On October 12 16th, copies were mailed to subscribers. 13 Members of the press will be permitted 14 to take photographs, and we would ask that this 15 be done in a manner which is not disruptive or 16 distracting to the Commission. 17 The use of cellular telephones in the 18 public meeting room while the Commission is in 19 session is prohibited. 20 Any members of the public who wish to 21 address the Commission will be given the 22 opportunity to do so before the Commission 23 adjourns for the day. 24 Please stand for the Pledge of 25 Allegiance. 8 ITEM NO. 1 1 (The flag salute was recited.) 2 CHAIR KASSEKERT: Good morning. 3 MR. NANCE: Good morning. 4 The matters discussed in closed session 5 were: Employee license matters. 6 The Commissioners approved the February 7 20, 2008, closed-session minutes. 8 Litigation update regarding: Warren 9 Lackland and Lewis J. Springer, Jr., versus the 10 State of New Jersey, Casino Control Commission; 11 Gloria Ford versus State of New Jersey, 12 Casino Control Commission et al.; 13 Tyron J. Floyd versus the Casino Control 14 Commission, the Sands Hotel Casino; 15 Husain versus the Casino Control 16 Commission, et al.; 17 And the matter of petition of SD for 18 removal from the voluntary self-exclusion list. 19 The petition of Tropicana, et al., for 20 renewal of casino license; 21 And application of Dana White for 22 renewal of a casino employee license. 23 Item No. 1, ratification of the minutes 24 of February 20th, 2008, public meeting. 25 COMMISSIONER FEDORKO: Motion to 9 ITEM NO. 2 1 approve. 2 COMMISSIONER FRULIO: Second. 3 COMMISSIONER EPPS: Second. 4 CHAIR KASSEKERT: The motion has been 5 made and seconded. All in favor? 6 (Ayes.) 7 CHAIR KASSEKERT: Opposed? 8 (No response.) 9 CHAIR KASSEKERT: Motion carries. 10 MR. NANCE: Item No. 2, application for 11 employee and casino service industry licenses. 12 This agenda item will be entered as Exhibit 13 List 1 and 2. 14 Exhibit List 1 consists of six 15 applications for initial and/or renewal of 16 casino key and casino employee licenses. 17 The Division have objected to licensure. 18 COMMISSIONER FRULIO: Motion to remand 19 for hearings. 20 COMMISSIONER FEDORKO: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 10 ITEM NO. 3 1 CHAIR KASSEKERT: Motion carries. 2 MR. NANCE: Exhibit List 2 consists of 3 ten applications for initial and/or renewal of 4 casino key and casino employee licenses. 5 Staff and the Division have recommended 6 that these licenses be granted. 7 COMMISSIONER FRULIO: Motion to grant 8 applications. 9 COMMISSIONER FEDORKO: Second. 10 CHAIR KASSEKERT: The motion has been 11 made and seconded. All in favor? 12 (Ayes.) 13 CHAIR KASSEKERT: Opposed? 14 (No response.) 15 CHAIR KASSEKERT: Motion carries. 16 MR. NANCE: Item No. 3, stipulation of 17 settlement and consent agreements. 18 When I call your name, please come 19 forward, stand behind this middle table, 20 spreading across the room so that you may be 21 seen: Christopher Joerg, Jackie Ames, 22 Elizabeth Raughley, Jacques Antoine, Kevin 23 Beavers, Jr., Lele Lam, Hallie Silverman, Lu 24 Wang, Tonya Reaves, Maritza Romero, and Denise 25 Vona. 11 ITEM NO. 3 1 Stipulation of settlement in Ramona 2 Suggs and Deborah Washington has been 3 adjourned. 4 CHAIR KASSEKERT: Mr. Ingis? 5 MR. INGIS: Good morning, Madame Chair 6 and Commissioners. 7 At this time the staff has nothing to 8 add. 9 CHAIR KASSEKERT: Thank you. 10 I'm going to ask that you each state 11 your name for the record, starting with you, 12 sir. 13 MR. KAPLAN: John Kaplan from the law 14 firm of Fox Rothschild on behalf of Christopher 15 Joerg. 16 CHAIR KASSEKERT: Okay. Ma'am? 17 MS. AMES: Jackie Ames. I work at Taj 18 Mahal. 19 MS. VONA: Denise Vona. 20 MR. SILVERMAN: Hallie Silverman. I 21 work at Resorts. 22 MR. BEAVERS: Kevin Beavers. 23 MR. WANG: My name is Lu Wang. 24 MR. BEAVERS: Kevin Beavers. 25 MR. ANTOINE: Jack Antoine. I work at 12 ITEM NO. 3 1 Resorts. 2 CHAIR KASSEKERT: Okay. In a moment we 3 are going to vote on the stipulations which you 4 have agreed to with the Division of Gaming 5 Enforcement. I'm going to ask at this point if 6 any of you wish to be heard on your matter. 7 You don't have to say anything if you don't 8 want to. 9 Does anyone wish to be heard? 10 (No response.) 11 CHAIR KASSEKERT: No? Okay. 12 Mr. Biscieglia? 13 MR. BISCIEGLIA: Good morning, Chair, 14 Commissioners. 15 The Division has nothing further and ask 16 that the stipulations be adopted as submitted. 17 CHAIR KASSEKERT: Thank you. 18 Any questions? 19 COMMISSIONER FEDORKO: Motion to approve 20 stipulations. 21 COMMISSIONER FRULIO: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Ayes.) 25 CHAIR KASSEKERT: Opposed? 13 ITEM NO. 4 1 (No response.) 2 CHAIR KASSEKERT: Motion carries. 3 Thank you very much for coming. Good 4 luck. 5 FROM THE FLOOR: Thank you. 6 MR. NANCE: Item No. 4, application for 7 suspension: Ashley Horcey, Latoya Mitchell, 8 Clarence Smith, and Dario Vasquez. 9 Miss Frigen? 10 MS. FRIGEN: Good morning, Madame Chair, 11 Commissioners. Ooph, sorry. 12 Before we get to 4d, Dario Vasquez, let 13 me -- I'm sorry. Just got a little fluttered 14 there. 15 Let me see whether Ashley Horcey, Latoya 16 Mitchell are present or represented today. 17 (No response.) 18 MS. FRIGEN: Clarence Smith did call me 19 yesterday and advised me he is not coming to 20 today's meeting. 21 CHAIR KASSEKERT: Okay. 22 MS. FRIGEN: So the first three, I don't 23 believe, are not present or -- I don't know if 24 you want to -- 25 CHAIR KASSEKERT: Yeah. Why don't we 14 ITEM NO. 4 1 have Mr. Biscieglia proceed. 2 MR. BISCIEGLIA: The only thing that the 3 Division would like to add is that all three of 4 those matters are currently pending a grand 5 jury with no date at the time. 6 CHAIR KASSEKERT: Thank you. 7 MR. BISCIEGLIA: Thank you. 8 CHAIR KASSEKERT: Any questions for Mr. 9 Biscieglia? 10 COMMISSIONER EPPS: Madame Chair, I move 11 that we suspend the credentials on items a, b, 12 and c, Miss Horcey, Miss Mitchell, and Mr. 13 Smith. 14 COMMISSIONER FEDORKO: Second. 15 CHAIR KASSEKERT: The motion has been 16 made and seconded. All in favor? 17 (Ayes.) 18 CHAIR KASSEKERT: Opposed? 19 (No response.) 20 CHAIR KASSEKERT: Motion carries. 21 We'll now move to d. 22 MS. FRIGEN: Yes, Madame Chair. 23 With respect to Dario Vasquez, Jorge 24 Coombs is here. He is seeking an adjournment 25 of the application for suspension. The 15 ITEM NO. 4 1 Division is opposing this request. 2 I guess it would be appropriate for Mr. 3 Coombs to proceed first and put the basis for 4 his request and then hear from the Division. 5 CHAIR KASSEKERT: Thank you. 6 Mr. Coombs? 7 MR. COOMBS: Good morning, Madame Chair, 8 and Commissioners. Jorge Coombs appearing on 9 behalf of Dario Vasquez. 10 My client is currently visiting family 11 in the Dominican Republic and will not return 12 to New Jersey until March 19th in the evening, 13 which I understand is your very next meeting 14 date. Naturally, and because he will not be 15 available, I would respectfully request that 16 the hearing be pushed and any adjudication on 17 this matter be pushed until your April 2nd, 18 2008, meeting. 19 CHAIR KASSEKERT: Is Mr. Vasquez still 20 working? 21 MR. COOMBS: It is my understanding that 22 he is still working. 23 CHAIR KASSEKERT: Mr. Biscieglia? 24 MR. BISCIEGLIA: Thank you. 25 The Division's position on objecting to 16 ITEM NO. 4 1 this deferral is quite simply that Mr. 2 Vasquez's appearance here today is kind of 3 irrelevant to the proceedings that we're 4 looking at. 5 Mr. Vasquez was observed on film 6 attempting to take a box containing $270 worth 7 of liquor. He admitted during questioning with 8 the New Jersey State Police that he did attempt 9 to try to take this liquor, and he also 10 admitted that he has done this in the past, 11 taken bottles of liquor and drank them while on 12 the job. On the basis of the facts, I think 13 his appearance today is irrelevant to the 14 Commission's ruling on a suspension motion. 15 If the Commission did choose to grant 16 the motion, the Division would ask that 17 assurances be made that Mr. Vasquez will not 18 work. But that seems kind of problematic in 19 this matter considering that he is working 20 right now, and we wouldn't be meeting again on 21 this matter for two meeting cycles, about four 22 weeks from now. 23 So based on those circumstances, the 24 Division must oppose this petition -- excuse 25 me -- this request for a deferral. 17 ITEM NO. 4 1 Thank you. 2 CHAIR KASSEKERT: Mr. Coombs, any 3 response before I ask if the Commissioners have 4 any questions? 5 MR. COOMBS: Madame Chair, like I said, 6 I don't have my client present in order to 7 defer to his decision or to have him make any 8 representations on his behalf. So I'll have to 9 defer to the Commission. 10 CHAIR KASSEKERT: Okay. Any questions? 11 COMMISSIONER EPPS: I just -- just a 12 question. How would you recommend that we 13 navigate this difficult box that we're put in? 14 Because if we grant what you want, he continues 15 to work until we hear this matter next. And 16 the whole purpose of a suspension hearing is so 17 that that doesn't happen in view of the record 18 that we have in front of us, particularly his 19 admission to having done the things that the 20 Division is seeking suspension for. Granting 21 him another month to work kind of flies in the 22 face of what we have before us. How does that 23 square? How do we square that? 24 MR. COOMBS: The only way I can square 25 it, Commissioner, is that my client obviously 18 ITEM NO. 5-6 1 has made representations to me that he denies 2 all of the allegations against him. Obviously, 3 the underlying criminal matter has yet to be 4 resolved. And due to that matter, he believes 5 that he has full right to continue working. 6 COMMISSIONER EPPS: Well, I think he has 7 a full right to a hearing, and he has an 8 obligation to take care of those situations and 9 make those representations at the time of a 10 hearing. But given our normal process in this 11 matter and given what we have before us, I have 12 to move that we suspend credentials. 13 COMMISSIONER FEDORKO: I second that. 14 CHAIR KASSEKERT: The motion has been 15 made and seconded. All in favor? 16 (Ayes.) 17 CHAIR KASSEKERT: Opposed? 18 (No response.) 19 CHAIR KASSEKERT: The motion carries. 20 Thank you. 21 MR. COOMBS: Thank you. 22 MR. BISCIEGLIA: Thank you. 23 MR. NANCE: Item No. 5 has been 24 adjourned. 25 Item No. 6, petition of Trump Taj Mahal 19 ITEM NO. 6 1 Associates, LLC, requesting an approval of an 2 agreement for the addition of qualifying 3 sleeping units pursuant to NJSA 5:12-83(c) and 4 amendments to its operation certificate to 5 permit a reconfiguration of its gaming floor. 6 Mr. Kell? 7 MR. KELL: Good morning, Madame Chair, 8 Commissioners. Loretta Pickus is here 9 representing the Petitioners in this matter, 10 and Deputy Attorney General Tim Ficchi for the 11 Division. 12 And I have drafted a -- excuse me. I 13 have circulated a draft resolution in this 14 matter. 15 CHAIR KASSEKERT: Thank you. 16 Good morning, Miss Pickus. 17 MS. PICKUS: Thank you. Good morning. 18 CHAIR KASSEKERT: I didn't mean -- 19 MS. PICKUS: I'd just wanted to ask you 20 to please approve the resolution. I wanted to 21 thank Joe Papp, our principal inspector, and 22 Dennis and Tim for their hard work. It's a 23 little bit complicated, but we got it, and I 24 appreciate everyone's efforts. 25 CHAIR KASSEKERT: Thank you. 20 ITEM NO. 6 1 Mr. Ficchi? 2 MR. FICCHI: Madame Chair and 3 Commissioners, the Division has no objection to 4 the resolution as drafted. 5 CHAIR KASSEKERT: Thank you. 6 Any questions? 7 COMMISSIONER EPPS: Are you going to 8 have some new rooms soon? 9 MS. PICKUS: Yes. We hope so. 10 COMMISSIONER EPPS: When are you going 11 to start building that? 12 CHAIR KASSEKERT: Any questions? 13 COMMISSIONER EPPS: Madame Chair, I move 14 that -- 15 CHAIR KASSEKERT: Okay. 16 COMMISSIONER EPPS: -- we adopt the 17 draft resolution and grant the relief requested 18 subject to the conditions set forth therein. 19 COMMISSIONER FEDORKO: Second. 20 CHAIR KASSEKERT: The motion has been 21 made and seconded. All in favor? 22 (Ayes.) 23 CHAIR KASSEKERT: Opposed? 24 (No response.) 25 CHAIR KASSEKERT: Motion carries. 21 ITEM NO. 7 1 MS. PICKUS: Thank you. 2 CHAIR KASSEKERT: Thank you. 3 MR. FICCHI: Thank you. 4 MR. NANCE: Item No. 7, reproposed 5 publication and temporary adoption of amendment 6 to NJAC 19:47-20.11. 7 Mr. Mamolen? 8 MR. MAMOLEN: Good morning, Madame Chair 9 and Commissioners. 10 This matter is before you for 11 reproposal. As we recall, it's been before the 12 Commission a couple of occasions. This time 13 Shuffle Master desires to introduce a couple 14 new pay tables relative to the ante bonus 15 pay-out in which there would be no pay-out for 16 a straight as is a currently authorized pay 17 table. 18 It's before you for reproposal and 19 temporary adoption, and this would, in effect, 20 enable offering casinos to participate in a 21 tournament promotion. 22 CHAIR KASSEKERT: Thank you. 23 Any questions? 24 COMMISSIONER FEDORKO: Motion to approve 25 for republication and temporary adoption. 22 ITEM NO. 8 1 COMMISSIONER FRULIO: Second. 2 CHAIR KASSEKERT: The motion has been 3 made and seconded. All in favor? 4 (Ayes.) 5 CHAIR KASSEKERT: Opposed? 6 (No response.) 7 CHAIR KASSEKERT: Motion carries. 8 MR. NANCE: Item No. 8, proposed 9 publication and temporary adoption of 10 amendments for Optional Pair wagers in baccarat 11 and minibaccarat and authorization for rule 12 making experiment for Optional Pair wagers, 13 pursuant to NJSA 5:12-69(e). 14 Mr. Mamolen? 15 MR. MAMOLEN: This is a matter before 16 you for first publication and temporary 17 adoption in the side wager in the games of 18 baccarat, punto-bunco, and minibaccart, and 19 it's fairly easy. As far as I understand, it's 20 a wager on either or both the player hand or 21 the banker hand. And the two cards that are 22 initially dealt have to pair up and there's 23 pay-outs for that, 11 to 1. 24 CHAIR KASSEKERT: Thank you. 25 Any questions? 23 ITEM NO. 8 1 COMMISSIONER FRULIO: Move we -- Madame 2 Chair, move that we: 3 A, preliminarily approve the Optional 4 Pair wagers for baccarat, punto-bunco, and 5 minibaccarat as a new wager compatible with the 6 public interest pursuant to Section 5 of the 7 Act; 8 B, authorize the publication of the 9 notice of proposal to appear in the New Jersey 10 Register for the public to comment thereon; 11 C, authorize the publication of the 12 notice of temporary adoption which will permit 13 a test of the new wager to begin on or after 14 April 14, 2008, subject to the conditions 15 listed and continue for a period of time not to 16 exceed 270 days; 17 C -- D, temporarily adopt the amendments 18 contained in the notice of proposal for the 19 purpose of conducting the test. 20 D, delegate to the Director of the 21 Division of Compliance the authority to 22 establish the terms and conditions of a test of 23 the new wager; 24 And, f, condition any test of optional 25 pair wagers upon the filing with and approval 24 ITEM NO. 9 1 by the Division of Compliance of all necessary 2 test submissions for a Section 69(e) test of 3 the new wager. 4 COMMISSIONER EPPS: Second. 5 CHAIR KASSEKERT: The motion has been 6 made and seconded. All in favor? 7 (Ayes.) 8 CHAIR KASSEKERT: Opposed? 9 (No response.) 10 CHAIR KASSEKERT: Motion carries. 11 MR. MAMOLEN: Thanks. 12 CHAIR KASSEKERT: Thank you. 13 MR. NANCE: Item No. 9, petition of 14 Adamar of New Jersey, Inc., seeking to approve 15 the consulting services of Joseph Jab -- 16 CHAIR KASSEKERT: Jablonski. 17 MR. NANCE: Oh, thank you. 18 -- pursuant to NJAC 19:43-13. 19 Mr. Ingis? 20 MR. INGIS: Good morning, Madame Chair, 21 Commissioners. 22 Tama Hughes is here on behalf of the 23 Petitioner, and Brian Biscieglia is sitting in 24 for the Division of Gaming Enforcement. 25 Before we begin, I just want to 25 ITEM NO. 9 1 represent on the record that Justice Stein 2 advised me in an e-mail that he has authorized 3 and consented to the filing of this petition 4 and the hiring of Mr. Jablonski. 5 CHAIR KASSEKERT: Thank you. 6 Good morning, Miss Hughes. 7 MS. HUGHES: Good morning, Madame Chair, 8 Commissioners. 9 As you are aware, Tropicana has filed 10 this petition to hire as a consultant Mr. 11 Jablonski. His skill set is very unique. And 12 what Tropicana is looking to use his services 13 for is in assessing the tax needs for the year 14 2007 for both state and the federal income tax 15 purposes. Also, he would assist in the 16 determining the appropriate tax provisions for 17 the financial statements which have been 18 required for the year. 19 In addition to that, he's also going to 20 take a look at the innercompany debt and assist 21 in the analysis in that regard. 22 And so we rely on the papers, for the 23 most part. I'm here to answer any questions, 24 but I would urge and request respectfully that 25 you grant this petition. 26 ITEM NO. 9 1 CHAIR KASSEKERT: Thank you. 2 Let me ask if any of the Commissioners 3 have any questions? 4 Mr. Biscieglia? 5 MR. BISCIEGLIA: Thank you. 6 As Mr. Ingis stated, the Division does 7 not oppose this petition. 8 Thank you. 9 CHAIR KASSEKERT: Thank you. 10 Miss Hughes, you understand the 11 condition contained in the order relating to 12 the potential hiring of subcontractors; 13 correct? 14 MS. HUGHES: Yes. 15 CHAIR KASSEKERT: We would want to make 16 sure that any subcontractor that comes in also 17 goes through the licensing process. 18 MS. HUGHES: We will ensure that. 19 CHAIR KASSEKERT: Thank you very much. 20 MS. HUGHES: Thank you. 21 CHAIR KASSEKERT: Any questions? 22 Is there a motion? 23 COMMISSIONER EPPS: Madame Chair, I move 24 that we grant the petition subject to the 25 conditions contained in the order relating to 27 ITEM NO. 10 1 the potential hiring of subcontractors by Mr. 2 Jablonski. 3 COMMISSIONER FRULIO: Second. 4 COMMISSIONER FEDORKO: Second. 5 CHAIR KASSEKERT: The motion has been 6 made and seconded. All in favor? 7 (Ayes.) 8 CHAIR KASSEKERT: Opposed? 9 (No response.) 10 CHAIR KASSEKERT: Motion carries. 11 I think we'll take a brief adjournment. 12 I believe Justice Stein is expected soon. So 13 we'll take a brief adjournment until he gets 14 here. 15 MS. HUGHES: Thank you. 16 CHAIR KASSEKERT: Thank you. 17 (A recess was taken from 10:48 to 11:00 18 a.m.) 19 CHAIR KASSEKERT: We'll go back on the 20 record, consider Item 10. 21 MR. NANCE: Item No. 10, petition of 22 Adamar of New Jersey, Inc., et al. For the 23 suspension of the requirement to pay a civil 24 penalty and other matters. 25 Mr. Ingis? 28 ITEM NO. 10 1 MR. INGIS: Good morning, again, Madame 2 Chair, Commissioners. 3 Justice Stein is here on behalf of the 4 Petitioner and Brian Biscieglia for the 5 Division. 6 CHAIR KASSEKERT: Thank you. 7 Good morning, Justice Stein. 8 JUSTICE STEIN: Good morning, Madame 9 Chair Kassekert. Good morning, members of the 10 Commission. 11 I apologize for being late. We hit a 12 little traffic up around Route 3, but otherwise 13 it was a good trip. 14 This application concerns the $750,000 15 fine, and it's -- it's our position that it 16 would be highly appropriate if we had 17 discretion on this. We've got a cash flow 18 projection through the end of June, and the 19 Tropicana is clearly capable of making these 20 payments when they come due in full. And 21 they're, in fact, built into our cash flow 22 projection. But the other Respondents who, as 23 you know filed their brief in the Appellate 24 Division yesterday, have taken the position 25 that at least until that appeal is resolved, 29 ITEM NO. 10 1 they don't intend to participate in the 2 payments, which leaves the burden of the 3 payments on the casino. The Commission imposed 4 the fine jointly and severally. And we've 5 never had a negotiation with them or a 6 discussion to allocate responsibility. If the 7 payment were made out of the sale as a priority 8 item, there would be no need to have that 9 allocation. 10 And so we think for a number of reasons 11 it's just appropriate that we have that 12 discretion if the Commissioners -- we're -- 13 candidly, we're very appreciative of the 14 installment payment schedule that you set up 15 for us. It's a very reasonable schedule. But 16 from my perspective as trustee and conservator, 17 I'm very anxious to be sure that we preserve 18 liquidity. 19 The Delaware bond holders suit has put a 20 fair amount of pressure on me and on some of 21 the participants here because it's required a 22 fair amount of attention to demands for 23 documents and discovery, and we need to address 24 the findings of the Court. We're not sure 25 what's going to happen in the intervening 30 ITEM NO. 10 1 months. It appears as if the subordinated 2 bondholders are determined to find a way to 3 intervene in the sale proceeding that I'm 4 conducting, and so I don't know what our cash 5 requirements are. 6 As I outlined in my letter to the 7 Commission, aggregate capital spending, 8 including what was spent in January and 9 February through June is about $14 million. We 10 have a property tax payment that was $6 11 million. We have state income tax liabilities 12 that were around three million of property tax. 13 Property insurance billed about a million and a 14 half. And so perhaps it's my unfamiliarity 15 with the cash flow requirements of the 16 business. But, candidly, I work very closely 17 on a daily basis with Gary Simpson to make sure 18 that our cash flow is being managed properly. 19 And I'm confident that it is. But to have this 20 added flexibility would be helpful. 21 If the Commission, in its discretion, 22 decides it's not appropriate, then we'll make 23 the payments. But I felt it was my 24 responsibility to make the request and to ask 25 because it would give us the flexibility. 31 ITEM NO. 10 1 Candidly, we might make the payments on 2 schedule if it turns out that we don't need the 3 added time. But I would like to have the 4 discretion either to make the payments on time 5 or to make them out of the sale. 6 So that's all. 7 CHAIR KASSEKERT: Thanks, Justice. 8 JUSTICE STEIN: That's our position. 9 CHAIR KASSEKERT: Mr. Biscieglia, you 10 want to just put your position on? 11 MR. BISCIEGLIA: Yes, thank you. 12 CHAIR KASSEKERT: Okay. 13 MR. BISCIEGLIA: The Division defers to 14 the Commission's authority in this matter in 15 regards to fines and collections, and we'll 16 leave it to your discretion. And we'll leave 17 the ruling in this matter to your discretion. 18 Thank you. 19 CHAIR KASSEKERT: Thank you, Mr. 20 Biscieglia. 21 Let me ask if the Commissioners have 22 questions? 23 Commissioner Epps? 24 COMMISSIONER EPPS: I guess I just have 25 one question, I guess primarily. I do have an 32 ITEM NO. 10 1 additional question -- I mean, an initial 2 question. Let's put it that way. 3 With respect to the sale, does -- is 4 there the option to determine whether or not 5 from whatever is payable to the other parties 6 to this penalty that 750 would be withheld or 7 some negotiation concerning withholding that 8 for their lack of participation in the payments 9 as it's being made concurrent -- I mean, 10 currently? Assuming the payments are made 11 currently, or if there was a lump-sum payment 12 or even over time if at the sale whatever 13 proceeds are due to those other parties to this 14 situation were to be withheld or negotiated at 15 that point, is that an option? 16 JUSTICE STEIN: Commissioner, I haven't 17 thought it through. My -- but my response is 18 this. As you know, there are going to be 19 significant expenses of the sale, the 20 investment bankers, the New York lawyers, other 21 aspects of the sale that are going to require 22 out-of-pocket expenditures. And it just seemed 23 to me that it would be a simple matter for me 24 to represent that the amount of this fine would 25 simply be withheld from the proceeds and 33 ITEM NO. 10 1 treated as a priority responsibility of 2 Tropicana, and that the fine be paid before any 3 proceeds of the sale be remitted consistent 4 with the statute and the Commission's order to 5 the owner, the ultimate owner. 6 So that's -- that's my notion of how it 7 would be handled, that it would simply be 8 withheld and remitted to the Commission as one 9 of the priority expenses of the sale, and I 10 would take responsibility for that. I would 11 make sure that out of the proceeds of the sale 12 a check was cut to the Commission in full 13 payment of the fine. So that there's no doubt 14 at all that the payment would be made. 15 COMMISSIONER EPPS: I mean, I guess, 16 with all due respect, I just view it a little 17 bit differently in that it seems to me that the 18 payment should be made or at least begun to be 19 made in the installment process, and that any 20 argument about responsibility or apportionment 21 or whatever be made between the parties -- the 22 joint and several parties -- at distribution of 23 the proceeds when the sale is concluded. And 24 however that is apportioned and cut up is a 25 negotiation that can take place with those 34 ITEM NO. 10 1 funds, and it has nothing to do with the State 2 or the beneficiaries of the penalty, including 3 the Casino Revenue Fund. And so it seems to me 4 more prudent that it occur in that process as 5 opposed to the state waive waiting until the 6 transaction is complete. 7 JUSTICE STEIN: Well, my response, 8 Commissioner, is this. I think as a practical 9 matter, the proceeds of the sale may very well 10 turn out under the order to inure to the former 11 owner. And so whether -- if the Tropicana 12 casino, Adamar of New Jersey, makes the payment 13 monthly, it will have that much less cash, 14 $750,000 less cash in its coffers at the time 15 of closing. If it didn't make the payment, it 16 would have $750,000 more cash, which would be a 17 credit to the seller at the closing. In other 18 words, the buyer is going to have to account 19 for cash on hand. And so if we pay it, it's 20 money we won't have. If we don't pay it, it's 21 money we will have. And so the buyer will have 22 to pay $750,000 more to reflect the fact that 23 we have the money on hand. 24 If it then develops that all of the 25 proceeds are going to be available to the 35 ITEM NO. 10 1 former owner, then, in effect, the former owner 2 will bear the burden of the fine because it 3 will receive $750,000 less. And even if we 4 decided to split it, it wouldn't matter if the 5 former owner is going to get the benefit of the 6 proceeds of the sale for purposes of paying off 7 the senior debt. There's no need for us to 8 negotiate an allocation at that point. And so 9 the only reason I'm making the request is, 10 candidly, to make me as comfortable as I can be 11 about liquidity as we go forward. That's the 12 only reason. We can make the payments. I 13 don't think in the long run it makes a 14 difference. 15 I could withhold the money from the 16 contributions we're paying on the senior debt 17 every month. I could. But I know -- I know 18 from discussions that the former owners is 19 having its own problems. And, candidly, we're 20 trying, as we go through this sale process, not 21 to let the bankruptcy courts intercede. 22 COMMISSIONER EPPS: Right. 23 JUSTICE STEIN: Because that makes it 24 more complicated. And so I'm not saying that 25 this is going to break the bank because it's 36 ITEM NO. 10 1 not. We can make the payments. I just think 2 it would be comfortable for us to have the 3 added liquidity. I can assure the Commission 4 that the money will be there because I'll 5 assume personal responsibility to withhold it. 6 And I just am saying that, as trustee, it gives 7 me added flexibility not to have to make that 8 cash payment. 9 If the Commission thinks its regulatory 10 interests is not served by that arrangement, I 11 understand. 12 COMMISSIONER EPPS: I think that the 13 Commission was mindful of the operating 14 company, the current operating company's 15 liquidity issues, and I think that that went a 16 long way to the -- to the incremental 17 payments -- 18 JUSTICE STEIN: Sure. 19 COMMISSIONER EPPS: -- being broken down 20 in a way such that I think the assessment of 21 the Commission was that it would be as -- cause 22 as little disruption to your liquidity as 23 possible in breaking it out the way we did. 24 JUSTICE STEIN: And it does. It's very 25 helpful. I guess I'm -- because I don't know 37 ITEM NO. 10 1 what's around the corner -- 2 COMMISSIONER EPPS: I understand. 3 JUSTICE STEIN: -- I'm seeking as much 4 flexibility as I can have. And whatever the 5 Commission's pleasure is on it is okay with me. 6 But, candidly, I worry a lot. 7 COMMISSIONER EPPS: I understand. 8 JUSTICE STEIN: And I want to make sure 9 that we're putting our best foot forward when 10 we go through the phase of the sale process 11 where prospective buyers are visiting the 12 casino and looking at the work we're doing and 13 some of the capital improvements that we're 14 making. I just want to make sure that we have 15 the ability to go forward. 16 CHAIR KASSEKERT: Thank you. 17 Yes, Commissioner Fedorko? 18 COMMISSIONER FEDORKO: Justice, I just 19 have a quick question. 20 Do you think it would impact on the 21 buyers at all if they had this $750,000 fine 22 that they had to pay? 23 JUSTICE STEIN: Commissioner Fedorko, I 24 don't think the buyers would view it that way. 25 I think all of the buyers, candidly, are 38 ITEM NO. 10 1 informed because of our offering memorandum of 2 the Commission's decision and the imposition of 3 the fine, and I don't think the buyers view it 4 as a cost that they bear. I think that they 5 simply will understand that whatever cash on 6 hand that we have. In other words -- I think 7 I'm speaking accurately, it's been a long time 8 since I've negotiated a sale of this magnitude. 9 But I think cash on hand is simply a 10 fluctuating asset. And so if, as of the date 11 of closing, the cash on hand is $15 million, I 12 think that's an add-on to the buy. That is, 13 when the buyer bids, the bid is based, I 14 suppose, on a balance sheet or a state of facts 15 on a given day. And at the time of closing, if 16 we have happen to have a good deal more cash on 17 hand, that's a closing adjustment that the 18 lawyers will make so that the buyer will have 19 to account for whatever cash is on hand. 20 All I'm saying is, in the grand scheme 21 of things, and as the Commission knows when I 22 hired advisors, one of my negotiations was that 23 they get paid at the closing rather than as we 24 go along, if possible, because that, again, 25 gave us more liquidity. And all I'm saying is 39 ITEM NO. 10 1 that whatever cash we have on hand at the 2 closing may increase or decrease depending on 3 the expenses we pay between now and then. I 4 don't think it would impact the buyer at all, 5 Commissioner. 6 COMMISSIONER FEDORKO: Okay. Thank you. 7 CHAIR KASSEKERT: No other questions? 8 Thank you. 9 Let me just say on behalf of the 10 Commission, Justice, we appreciate your 11 diligence in this matter and how seriously 12 you've taken your responsibilities. 13 You know, my concern is that this was 14 the largest fine ever assessed by the 15 Commission on a regulatory matter, and I think 16 that it is important that we start this process 17 and not delay it. 18 So, accordingly, I'm going to say that 19 in denying Tropicana renewal of its casino 20 license on December 12th, 2007, the Commission 21 also imposed a $750,000 civil penalty against 22 it and two of its disqualified holding 23 companies for failure to institute and maintain 24 an independent audit committee consistent with 25 the Casino Control Act and the Commission's 40 ITEM NO. 10 1 regulations. 2 Tropicana, those holding companies, and 3 Justice Stein as conservator and trustee, now 4 seek essentially a deferral of the obligation 5 to pay that civil penalty pending a sale of the 6 property and securities relating to the casino 7 hotel. And, as we've heard, the Division takes 8 no position, leaving the disposition of the 9 matter to our sound discretion. 10 I see no basis to request the requested 11 relief. The violations involved were most 12 serious and commanded the highest total civil 13 penalty meted out. The Commission's Revenue 14 Unit promptly issued an invoice for the civil 15 penalty with payment due upon receipt. 16 Although, certainly, a reasonable installment 17 arrangement, such as the one instituted by the 18 Revenue Unit, may merit consideration, a 19 complete deferral of the obligation, even if 20 designed to coincide with the sale, would serve 21 only to diminish the gravity of the misconduct 22 involved. 23 Insofar as part of the argument for 24 deferral points to the Tropicana's need for 25 financial flexibility, that certainly was a 41 ITEM NO. 10 1 consideration that factored into the Revenue 2 Unit's proposed installment arrangement. In my 3 view, allowing the civil penalty to be paid in 4 six equal monthly installments versus a 5 lump-sum payment due immediately provides 6 sufficient flexibility for Tropicana to fund 7 the penalty and, thus, it should not place an 8 undue financial strain on the property. 9 Further, the former casino licensee 10 apparently continues to possess the requisite 11 financial wherewithal which should allay any 12 public concern regarding the company's ability 13 to pay out winnings. 14 As for the suggestion that the 15 Petitioners have not discussed how to allocate 16 the payment among themselves, that discussion 17 can just as readily proceed after the invoice 18 is satisfied, whether in a lump sum now or in 19 six equal monthly installments. 20 In that regard, the first monthly 21 installment, although due in February, has not 22 been paid, presumably because the Petitioners, 23 who filed their application in advance of the 24 deadline, were awaiting the outcome of this 25 proceeding. If the Commission agrees with that 42 ITEM NO. 10 1 view -- my view of the matter, I trust that 2 Petitioners by this Friday will at least attend 3 to the first monthly installment. 4 So, accordingly, I now move to deny the 5 petition and seeking relief from the obligation 6 to pay the civil penalty of $750,000, whether 7 pending the sale of the casino hotel or 8 otherwise, and I so move. 9 Is there a second? 10 COMMISSIONER EPPS: Second. 11 COMMISSIONER FRULIO: Second. 12 CHAIR KASSEKERT: The motion has been 13 made and seconded. All in favor? 14 (Ayes.) 15 CHAIR KASSEKERT: Opposed? 16 COMMISSIONER FEDORKO: I oppose this, 17 Madame Chair. 18 CHAIR KASSEKERT: Okay. 19 The motion passes three/one. 20 Thank you very much. 21 JUSTICE STEIN: Thank you. 22 CHAIR KASSEKERT: Thank you. 23 MR. NANCE: In accordance with 24 Resolution No. 07-12-12-26, the next closed 25 session of the Commission shall be held on 43 1 Wednesday, March 19th, 2008, at 9:15 a.m. in 2 the Commission offices. 3 It is now time for the public 4 participation portion of the meeting. 5 CHAIR KASSEKERT: Is there anyone from 6 the public that wishes to be heard? 7 (No response.) 8 CHAIR KASSEKERT: Seeing no one, I'll 9 declare this portion of the meeting closed and 10 entertain a motion to adjourn. 11 COMMISSIONER EPPS: Motion to adjourn. 12 COMMISSIONER FEDORKO: Second. 13 CHAIR KASSEKERT: The motion has been 14 made and seconded. All in favor? 15 (Ayes.) 16 CHAIR KASSEKERT: Opposed? 17 (No response.) 18 CHAIR KASSEKERT: Motion carries. 19 (Public Meeting 08-03-05 was adjourned 20 at 11:19 a.m.) 21 22 23 24 25 44 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: March 6, 2008 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25