1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 09-10-28 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, October 28, 2009 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 10:35 a.m. to 12:09 p.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 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 MICHAEL C. EPPS, VICE CHAIR WILLIAM T. SOMMELING, COMMISSIONER 4 SHARON ANNE HARRINGTON, 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 DENIS J. CORBETT, SENIOR COUNSEL SETH H. BRILIANT, SENIOR COUNSEL 10 ROBERT A. MONCRIEF, COUNSEL TRACY E. RICHARDSON, COUNSEL 11 SANDRA DeLIA, LEGAL SUPPORT SPECIALIST BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 12 DIVISION OF GAMING ENFORCEMENT: 13 DEPUTY ATTORNEYS GENERAL BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL 14 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL 15 R. LANE STEBBINS, DEPUTY ATTORNEY GENERAL 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. 2 DARYL NANCE, ADMINISTRATIVE ANALYST JOSEPH CORBO, ESQ. 3 FOR: MARINA DISTRICT DEVELOPMENT COMPANY, LLC 4 ITEM NO. 4 DENIS J. CORBETT, SENIOR COUNSEL 5 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 6 WILLIAM DOWNEY, III, ESQ. FOR: BALLY'S PARK PLACE, INC. 7 ITEM NO. 5 DENIS J. CORBETT, SENIOR COUNSEL 8 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 9 WILLIAM DOWNEY, III, ESQ. FOR: BALLY'S PARK PLACE, INC. 10 ITEM NO. 6 DENIS J. CORBETT, SENIOR COUNSEL 11 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 12 WILLIAM DOWNEY, III, ESQ. FOR: BALLY'S PARK PLACE, INC. 13 ITEM NO. 12 ROBERT A. MONCRIEF, COUNSEL 14 FOX ROTHSCHILD, LLP NICOLAS CASIELLO, JR., ESQ. 15 FOR: PETITIONERS 16 ITEM NO. 14 TRACY E. RICHARDSON, COUNSEL JAMES C. FOGARTY, DEPUTY ATTORNEY 17 FOX ROTHSCHILD, LLP NICOLAS CASIELLO, JR., ESQ. 18 FOR: INFINITY WORLD INVESTMENTS, LLC AND INFINITY WORLD (CAYMAN) LP 19 20 21 22 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 09-10-28 2 October 28, 2009, 10:35 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 8 8 October 14, 2009, public meeting 4 2 Applications for employee and casino service industry licenses 5 2 initial and/or renewal of casino key 8 9 and casino employee licenses 6 Applications for initial and renewal of casino key employee licenses and for qualification: 7 Signe J. Huff, Vice President of Talent 9 11 for Marina District Development Company, LLC 8 Alphonso Maiorani, Jr., Senior Vice 9 11 President of Resorts Operation for Adamar 9 of New Jersey, Inc. Andrew L. Swenson, Vice President of 9 11 10 Analysis P&A Regional for Harrah's Atlantic City Operating Company, LLC, Bally's Park 11 Place, Inc., Boardwalk Regency Corporation, and Showboat Atlantic City Operating 12 Company, LLC 3 Stipulations of settlement and consent agreements: 13 a) Anthony L. Evans, Jr. (09-0367-EA) 11 13 b) Sara I. Washington (09-0252-EA) 11 13 14 c) Patrick G. Martin (09-0295-ER) 11 13 d) Kai Wang Wong (09-0517-ER) 11 13 15 e) Cynthia L. Hannon (09-0097-RC) 11 13 f) Donald L. Mankow (09-0704-ER) 11 13 16 g) Vinubhai K. Patel (09-0372-ER) 11 13 h) Van D. Vo (09-0560-ER) 11 13 17 4 Stipulation of settlement in State v. 13 15 Boardwalk Regency Corporation (d/b/a Caesars 18 Atlantic City) (07-0070-VC) 5 Stipulation of settlement in State v. 15 16 19 Bally's Park Place, Inc., (d/b/a Bally's Atlantic City) (08-0939-VC) 20 6 Stipulation of settlement in State v. 17 20 Bally's Park Place, Inc., (d/b/a Bally's 21 Atlantic City) (08-0973-VC) 7 Consideration of forfeiture orders in 20 23 22 State v.: a) Marina District Development, LLC 23 (d/b/a Borgata Hotel Casino & Spa (09-0434-VC) b) Adamar of New Jersey, Inc. (d/b/a 24 Tropicana Casino and Resorts) (09-0435-VC) c) Marina District Development, LLC 25 (d/b/a Borgata Hotel Casino & Spa (08-0919-VC) 5 1 CONTINUED AGENDA PUBLIC MEETING NO. 09-10-28 2 October 28, 2009, 10:35 a.m. ITEM PAGE VOTE 3 8 Reconsideration of Commission final 24 26 orders due to non-compliance of conditions 4 herein: a) Lawrence E. Blackledge (09-0494-NC) 5 b) Donald Burton (09-0396-NC) c) Donald K. Larmore (09-0495-NC) 6 9 Proposed publication of amendments to 26 27 NJAC 19:43-1.12 (entertainment in the Casino 7 or simulcasting facility) 10 Proposed publication of amendment to 27 28 8 NJAC 19:43-7.7 (temporary amendments to operation certificate) 9 11 Proposed adoption of amendments to NJAC 28 29 19:45-1.11 (petition of the DGE to amend 10 NJAC 19:45-1.11 to expand the authority of casino licensee security departments) 11 (PRN 1590902) 12 Proposed temporary adoption of amendments 30 34 12 and new rules for three card poker progressive wager with Envy Bonus; authorization of 13 rulemaking experiment for three card poker progressive wager with Envy Bonus pursuant 14 to NJSA 5:12-69e 13 Petition of MGM MIRAGE for waiver of the 15 qualification requirement of three officers pursuant to NJSA 5:12-85d(1) and NJAC 16 19:43-5.4 (Vice President-Corporate Accounting - 34 36 17 Michele Ensign) (PRN 2670907) (Vice President-Financial Reporting - 34 37 18 Todd Meinert) (PRN 2680902) (Senior Vice President and Corporate 34 38 19 Controller Ricky E. Arpin) (PRN 2680903) 14 Petition of Infinity World Investments, 38 83 20 LLC, and Infinity World (Cayman) LP for clarification of a prior resolution of the 21 Casino Control Commission and certain other relief (PRN 2750903) 22 23 24 25 6 1 E X H I B I T S : 2 NO. DESCRIPTION EVD 3 4 P-2 Grant 2 licenses X 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (Exhibits retained by Commission.) 25 7 1 (Public Meeting 09-10-28 was commenced 2 at 10:35 a.m.) 3 MR. NANCE: Good morning. I'd like to 4 read an opening statement: 5 This is to advise the general public 6 that in compliance with Chapter 231 of the 7 public laws of 1975 entitled the "Open Public 8 Meetings Act," the New Jersey Casino Control 9 Commission on October 7, 2008, filed with the 10 Secretary of State at the State House in 11 Trenton, New Jersey, a notice of this hearing. 12 On October 7, copies were mailed to 13 subscribers. 14 Members of the press will be permitted 15 to take photographs, and we ask that this be 16 done in a manner which is not disruptive or 17 distracting to the Commission. 18 The use of cell phones in the public 19 meeting room while the Commission is in session 20 is prohibited. 21 Any member of the public who wish to 22 address the Commission will be given the 23 opportunity to do so before the Commission 24 adjourns for the day. 25 Would everyone please stand for the 8 ITEM NO. 1-2 1 Pledge of Allegiance. 2 (The flag salute was recited.) 3 CHAIR KASSEKERT: Good morning. 4 MR. NANCE: Good morning. 5 MS. FAUNTLEROY: Good morning. 6 MR. NANCE: The matters discussed in 7 closed session were: Employee and enterprise 8 license matters. 9 The Commission approved the October 10 14th, 2009, closed-session minutes. 11 Item No. 1, ratification of the minutes 12 of October 14th, 2009, public meeting. 13 COMMISSIONER SOMMELING: Move to 14 approve. 15 VICE CHAIR EPPS: Second. 16 CHAIR KASSEKERT: The motion has been 17 made and seconded. All in favor? 18 (Ayes.) 19 CHAIR KASSEKERT: Opposed? 20 (No response.) 21 CHAIR KASSEKERT: Motion carries. 22 MR. NANCE: Item No. 2, applications for 23 employee and casino service industry licenses. 24 This agenda item will be entered as 25 Exhibit List 2. 9 ITEM NO. 2 1 Exhibit List 2 consists of two 2 applications for initial and/or renewal of 3 casino key and casino employee licenses. 4 Staff and the Division have recommended 5 that these licenses be granted. 6 VICE CHAIR EPPS: I move that we grant 7 the applications. 8 COMMISSIONER SOMMELING: Second. 9 CHAIR KASSEKERT: The motion has been 10 made and seconded. All in favor? 11 (Ayes.) 12 CHAIR KASSEKERT: Opposed? 13 (No response.) 14 CHAIR KASSEKERT: Motion carries. 15 MR. NANCE: For consideration are the 16 following applications for initial and renewal 17 of casino key employee licenses and for 18 qualification: For Signe J. Huff, Vice 19 President of Talent for Marina District 20 Development Company, LLC; Alphonso Maiorani, 21 Jr., Senior Vice President of Resorts Operation 22 for Adamar of New Jersey, Inc.; and Andrew L. 23 Swenson, Vice President of Analysis P&A 24 Regional for Harrah's Atlantic City Operating 25 Company, LLC, Bally's Park Place, Inc., 10 ITEM NO. 2 1 Boardwalk Regency Corporation, and Showboat 2 Atlantic Operation Company, Inc. 3 Staff and the Division have recommended 4 that these applications be granted. 5 CHAIR KASSEKERT: Good morning, Mr. 6 Corbo. 7 MR. CORBO: Good morning. Thank you. 8 Thank you, Chair Kassekert, 9 Commissioners. Joe Corbo on behalf of Borgata. 10 With me here is our current Vice 11 President of Talent, Signe Huff. You're 12 considering her renewal application today in 13 the role that she serves with us. Of course, 14 she's also a Borgata qualifier, and we 15 appreciate your consideration for renewal. 16 CHAIR KASSEKERT: Good morning. Thank 17 you 18 MS. HUFF: Okay. 19 CHAIR KASSEKERT: Any questions? 20 COMMISSIONER SOMMELING: No questions, 21 Madame Chair. 22 VICE CHAIR EPPS: Madame Chair, I move 23 that we grant the initial and renewal of key 24 licenses and for qualification. 25 COMMISSIONER SOMMELING: Second. 11 ITEM NO. 3 1 CHAIR KASSEKERT: Motion has been made 2 and seconded. This is a roll call vote. 3 MR. NANCE: Commissioner Harrington? 4 COMMISSIONER HARRINGTON: Yes. 5 MR. NANCE: Commissioner Sommeling? 6 COMMISSIONER SOMMELING: Yes. 7 MR. NANCE: Vice Chair Epps? 8 VICE CHAIR EPPS: Yes. 9 MR. NANCE: Chair Kassekert? 10 CHAIR KASSEKERT: Yes. 11 MR. NANCE: The record will reflect that 12 the motion is unanimous. 13 Item No. 3, stipulation of settlement 14 and consent agreements. When I call your name, 15 please come forward, standing behind this 16 middle table, spreading across the room so that 17 you may be seen: Anthony Evans, Jr., Sara 18 Washington, Patrick Martin, Kai Wang Wong, 19 Cynthia Hannon, Donald Mankow, Vinubhai Patel, 20 and Van Vo. 21 CHAIR KASSEKERT: Are any of these 22 applicants here? 23 MS. FRIGEN: Mr. Vo. 24 CHAIR KASSEKERT: Thank you. 25 I'm going to ask that both of you state 12 ITEM NO. 3 1 your name for the record, starting with you, 2 sir. 3 MR. VO: Yes. 4 CHAIR KASSEKERT: What's your name? 5 MR. VO: V-o. 6 CHAIR KASSEKERT: Okay. 7 MR. MANKOW: Donald Mankow. 8 CHAIR KASSEKERT: Okay. Mr. Mankow. 9 Sir, are you on the stipulations? 10 UNIDENTIFIED PERSON: Yes. Helping with 11 the language. 12 CHAIR KASSEKERT: I'm sorry? 13 UNIDENTIFIED PERSON: I'm here to help 14 him with translation. 15 CHAIR KASSEKERT: Okay. Very good. 16 Thank you. 17 I'm going to ask if any of you have 18 anything you wish to say? 19 (No response.) 20 CHAIR KASSEKERT: Okay. Seeing not, Mr. 21 Biscieglia? 22 MR. BISCIEGLIA: Good morning, Chair, 23 Commissioners. 24 The Division has nothing further and ask 25 that the stipulations be approved as submitted. 13 ITEM NO. 4 1 CHAIR KASSEKERT: Thank you. 2 Any questions? 3 COMMISSIONER SOMMELING: No questions, 4 Madame Chair. 5 Motion to approve the stipulations. 6 COMMISSIONER HARRINGTON: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: Motion carries. 13 Thank you for coming. Good luck. 14 MR. MANKOW: Thank you. 15 MR. VO: Thank you. 16 MR. NANCE: Item No. 4, stipulation of 17 settlement in State versus Boardwalk Regency 18 Corporation. 19 Mr. Corbo? 20 Mr. Corbett. Excuse me. 21 MR. CORBETT: Yes, thank you. 22 (Laughter.) 23 MR. CORBETT: Chair, Commissioners, in 24 the stipulation of settlement in this case, the 25 casino licensee admits the regulatory violation 14 ITEM NO. 4 1 regarding underage gambling and internal 2 controls and agrees to a penalty of $30,000. 3 Mr. Downey is here for the casino 4 licensee, and Mr. Ficchi for the Division. 5 CHAIR KASSEKERT: Thank you. 6 Good morning, Mr. Downey. 7 MR. DOWNEY: Good morning, Madame Chair. 8 Bill Downey from Fox Rothschild for Boardwalk 9 Regency Corporation. 10 We are -- subject to any questions you 11 might have, we are ready to rely on the 12 stipulation. 13 CHAIR KASSEKERT: Thank you. 14 Mr. Ficchi? 15 MR. FICCHI: Yes. Good morning, Madame 16 Chair, Commissioners. 17 The Division doesn't have anything 18 further. We request the Commission approve the 19 stipulation of settlement. Thank you. 20 CHAIR KASSEKERT: Thank you. 21 Any questions? 22 COMMISSIONER SOMMELING: No questions, 23 Madame Chair. 24 VICE CHAIR EPPS: Madame Chair, I move 25 that we approve the stipulation of settlement 15 ITEM NO. 5 1 and approve a civil penalty of $30,000 against 2 Boardwalk Regency Corporation for violation of 3 Commission regulations regarding underage 4 gambling and compliance with its approved 5 system of internal controls. 6 COMMISSIONER HARRINGTON: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: Motion carries. 13 MR. NANCE: Item No. 5, stipulation of 14 settlement in State versus Bally Park Place, 15 Inc. 16 Mr. Corbett? 17 MR. CORBETT: Chair, Commissioners, in 18 the stipulation in this case the casino 19 licensee admits the regulatory violation 20 regarding the underage gambling and agrees to a 21 penalty of $55,000. 22 Mr. Downey is here for the casino 23 licensee and Mr. Ficchi for the Division. 24 CHAIR KASSEKERT: Thank you. 25 Mr. Downey? 16 ITEM NO. 5 1 MR. DOWNEY: Chair, Bill Downey again 2 for Bally's Park Place, Inc. We again are 3 prepared to rely on the stipulation subject to 4 any questions you might have in the matter. 5 CHAIR KASSEKERT: Thank you. 6 Mr. Ficchi? 7 MR. FICCHI: Again, Madame Chair and 8 Commissioners, the Division has nothing 9 further. We just ask that the stipulation be 10 adopted. 11 Thank you. 12 CHAIR KASSEKERT: Thank you. 13 Any questions? 14 COMMISSIONER SOMMELING: Madame Chair, I 15 move to approve the stipulation of settlement 16 and impose a civil penalty of $55,000 against 17 Bally Park Place, Inc., for violation of 18 Commission regulation regarding underage 19 gambling. 20 VICE CHAIR EPPS: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 17 ITEM NO. 6 1 CHAIR KASSEKERT: Motion carries. 2 MR. NANCE: Item No. 6, stipulation of 3 settlement in State versus Bally Park Place, 4 Inc. 5 Mr. Corbett? 6 MR. CORBETT: In the stipulation of 7 settlement in this case, the casino licensee 8 admits to the regulatory violation regarding 9 the sale of alcoholic beverages and agrees to a 10 penalty of $6,000. 11 Mr. Downey is here for the casino 12 licensee and Mr. Ficchi for the Division. 13 CHAIR KASSEKERT: Mr. Downey, again? 14 MR. DOWNEY: Chair, Bill Downey for 15 Bally's Park Place, Inc. And, finally, we are 16 prepared to rely on the stipulation subject to 17 any questions. 18 CHAIR KASSEKERT: Thank you. 19 Mr. Ficchi? 20 MR. FICCHI: Again, nothing further, 21 Commissioners. Just ask that the stipulation 22 be adopted. 23 CHAIR KASSEKERT: Thank you. 24 Any questions? Commissioner Epps? 25 VICE CHAIR EPPS: I have a question on 18 ITEM NO. 6 1 this one. 2 Mr. Ficchi, why do we only have Bally's? 3 MR. FICCHI: As opposed to the American 4 Culinary Federation or Gallo? 5 VICE CHAIR EPPS: Gallo? 6 MR. FICCHI: Well, I mean, it depends 7 how far removed we get from the core violation. 8 The way the Division views it is Bally's was 9 responsible for any regulatory violations with 10 regard to its, you know, CHAB license. And 11 they were the ones that could have stopped this 12 by not having this event on there that is, as 13 your form indicates, the last page is for the 14 licensee to sign off on the -- you know, on the 15 event. So it's up to the person, the entity 16 seeking a social affairs permit, to get the 17 permit. But the licensee is also intimately 18 involved in that process. 19 Now, with Gallo, they were -- they had 20 notified the Commission that they were going 21 to -- they intended to provide alcohol to a 22 social event, which they were licensed to do, 23 and they do have a permit to do that. 24 Unfortunately, in this case, they thought that 25 they were providing -- going to be providing 19 ITEM NO. 6 1 alcohol to an entity which had the permit in 2 place, and they did not. But if Bally's had 3 done what they should have done, taken the due 4 care, you know, in handling this matter, that 5 would have ended the whole process. And 6 regardless of what Gallo did or American 7 Culinary -- American Culinary Federation did, 8 you know, the violation wouldn't have happened. 9 So we saw more Gallo as someone who is 10 authorized to provide alcohol to a social 11 affairs, to donate alcohol to a social affair 12 type of a situation. But that there was a, you 13 know, misstep, that they didn't actually have 14 the permit in place, you know, at the time that 15 they were donating the wine. But Bally's could 16 have stopped the entire process. 17 So that's the way we look at it. 18 CHAIR KASSEKERT: Okay. Any other 19 questions? 20 COMMISSIONER SOMMELING: No other 21 questions, Madame Chair. 22 Move to approve the stipulation of 23 settlement and impose a civil penalty of $6,000 24 against Bally Park Place, Inc., for violation 25 of Commission regulations regarding 20 ITEM NO. 7 1 unauthorized sale of alcoholic beverages. 2 COMMISSIONER HARRINGTON: Seconded. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 Thank you. 10 MR. FICCHI: Thank you. 11 MR. DOWNEY: Thank you. 12 MR. NANCE: Item No. 7, consideration of 13 forfeiture orders in State versus Marina 14 District Development, LLC, Adamar of New 15 Jersey, Inc., and Marina District Development 16 LLC. 17 Miss Frigen? 18 MS. FRIGEN: Good morning, Madame Chair, 19 and Commissioners. 20 Let me inquire whether there is anyone 21 here on behalf of these forfeiture actions? 22 (No response.) 23 MS. FRIGEN: I don't believe so, 24 checking the sign-in sheet. 25 For your consideration are these 21 ITEM NO. 7 1 forfeiture complaints which the Division had 2 filed seeking for the casinos to turn over 3 money that they received from underaged 4 patrons. 5 I would note that we have on file 6 letters from respective counsel, Joseph Corbo 7 for the Borgata and Tammy Hughes for Tropicana, 8 advising that they do not oppose these 9 forfeiture actions. 10 The staff has recommended that the 11 forfeiture cases concerning five patrons, 12 though, be dismissed. With respect to Borgata 13 complaint 09-0434-VC, at the time of their 14 gaming activity, two of the patrons did not 15 have ID, and the money was confiscated. 16 However, both subsequently brought in ID 17 showing they were over the age of 21. They are 18 patrons "GB" and "LC." 19 With respect to the second Borgata 20 complaint 08-0919-VC, three of the individuals 21 the staff was unable to effectuate service. We 22 had incomplete address information. They are 23 patrons "DP," "SR," and "BM." Likewise, the 24 staff would recommend that those forfeiture 25 matters be dismissed. 22 ITEM NO. 7 1 The remaining individuals have either 2 contacted staff through telephone 3 communication, advising that they are not 4 contesting the forfeiture action or have 5 abandoned, failed to show up for proceedings or 6 failed to respond at all to the complaints. In 7 those cases, the staff recommends that thee be 8 deemed to have waived the right to a hearing 9 and constructively admitted the allegations and 10 have no contest to the forfeiture action. 11 CHAIR KASSEKERT: Thank you. 12 Mr. Stebbins? 13 MR. STEBBINS: I have nothing further to 14 ask. 15 Miss Frigen covered all the ground that 16 needed to be covered. I just urge you to enter 17 the appropriate order. 18 CHAIR KASSEKERT: Thank you. 19 Any questions? 20 COMMISSIONER SOMMELING: I have no 21 questions, Madame Chair. 22 VICE CHAIR EPPS: Madame Chair, with 23 respect to Borgata complaint in Agency Docket 24 No. 09-0434-VC, I move that we dismiss without 25 prejudice the forfeiture actions with respect 23 ITEM NO. 7 1 to patrons "GP" and "LC" based upon both 2 patrons providing identifying documentation, 3 evidencing their being 21 years of age or older 4 on the date of their gaming activity. 5 I also move that with respect to Borgata 6 complaint, Agency Docket No. 08-0919-VC we 7 dismiss without prejudice the forfeiture 8 actions with respect to patrons "DP," "SR," and 9 "BM" based upon the Commission's inability to 10 effectuate proper notice as required by Section 11 71.3(c) of the Act; but, otherwise, that we 12 order that the remaining money seized from the 13 other patrons in these three complaints be 14 forfeited due to their having gambled while 15 underage and the respective casinos have 16 directed to remit the forfeited funds to the 17 Commission for appropriate disposition in 18 accordance with NJSA 5:12-71.3(c). 19 CHAIR KASSEKERT: Is there a second? 20 COMMISSIONER HARRINGTON: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 24 ITEM NO. 8 1 CHAIR KASSEKERT: Motion carries. 2 MR. STEBBINS: Thank you. 3 CHAIR KASSEKERT: Thank you. 4 MR. NANCE: Item No. 8, reconsideration 5 of Commission final orders due to noncompliance 6 of conditions therein for Lawrence Blackledge, 7 Donald Burton, and Donald Larmore. 8 Miss DeLia? 9 MS. DeLIA: Good morning. 10 I don't believe any of these individuals 11 are here today. 12 These cases are being presented to the 13 Commission for action due to the licensees 14 failing to comply with conditions that had been 15 ordered by the Commission pursuant to the terms 16 of agreed-upon stipulation of settlements. 17 Each of these licensees failed to respond to 18 letters from the Division and the Commission, 19 and they failed to appear for scheduled 20 conferences to address their noncompliance. 21 The matter is now being presented to the 22 Commission for final action. 23 CHAIR KASSEKERT: Thank you. 24 Mr. Biscieglia? 25 MR. BISCIEGLIA: Thank you. 25 ITEM NO. 8 1 As has been stated, these individuals 2 have entered into stipulations of settlement 3 with the Division which were approved by the 4 Commission, and they failed to abide by the 5 terms. Most importantly, they have been given 6 several chances to come into compliance and 7 have chosen to ignore each one of the chances, 8 letters submitted by both the Division and the 9 Commission and scheduled settlement conferences 10 and the final chance today to appear here at 11 the meeting and try to come into compliance 12 with the stipulation and settlement, and this 13 has not happened. So, unfortunately, the 14 Division must request that the respective 15 orders granting licensure be vacated. 16 Thank you. 17 CHAIR KASSEKERT: Thank you. 18 Any questions for Mr. Biscieglia? 19 COMMISSIONER SOMMELING: I have no 20 questions, Madame Chair. 21 COMMISSIONER HARRINGTON: I'll move that 22 based upon their noncompliance with conditions 23 set forth in the existing Commission orders 24 granting their licensure and subsequent failure 25 to address the noncompliance issue after having 26 ITEM NO. 9 1 been afforded the opportunities to do so, we 2 vacate the existing orders granting the license 3 applications of the referenced individuals and 4 deny their respective license applications. 5 COMMISSIONER SOMMELING: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: Motion carries. 12 MR. BISCIEGLIA: Thank you. 13 CHAIR KASSEKERT: Thank you. 14 MS. DeLIA: Thank you. 15 MR. NANCE: Item No. 9, proposed 16 publication to amendments to NJAC 19:43-1.12. 17 Mr. Briliant? 18 MR. BRILIANT: Good morning, Madame 19 Chair, and Commissioners. 20 This proposed amendment would codify a 21 recent Commission ruling regarding 22 entertainment on the casino floor, and it's now 23 before you for your consideration for 24 publication and register for public comment. 25 CHAIR KASSEKERT: Thank you. 27 ITEM NO. 10 1 Any questions for Mr. Briliant? 2 COMMISSIONER SOMMELING: No questions, 3 Madame Chair. 4 Move to approve for publication. 5 VICE CHAIR EPPS: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: Motion carries. 12 MR. NANCE: Item No. 10, proposed 13 publication of amendment to NJAC 19:43-7.7. 14 Mr. Briliant? 15 MR. BRILIANT: All right. 16 Commissioners, this proposed amendment 17 would increase the maximum term for a temporary 18 operation certificate from 60 days to 120 days. 19 This was part of what we call the "wish list" 20 from the casinos. And, hopefully, it will 21 provide a little more flexibility and be a 22 little more practical with regard to their 23 plans for expansions and reconfigurations. 24 CHAIR KASSEKERT: Thank you. 25 Any questions? 28 ITEM NO. 11 1 VICE CHAIR EPPS: No. 2 COMMISSIONER SOMMELING: No questions, 3 Madame Chair. 4 VICE CHAIR EPPS: I move that we approve 5 this for publication. 6 COMMISSIONER SOMMELING: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: Motion carries. 13 MR. BRILIANT: Thank you. 14 CHAIR KASSEKERT: Thank you. 15 MR. NANCE: Item No. 11, proposed 16 adoption of amendments to NJAC 19:45-1.11. 17 Mr. Moncrief? 18 MR. MONCRIEF: Madame Chair, members of 19 the Commission, for your consideration right 20 now is the proposed adoption of amendments to 21 NJAC 19:45-1.11 which addresses the security 22 department's authority to address the problem 23 of underaged gambling and drinking within the 24 casinos. 25 This rule change was initiated by a 29 ITEM NO. 11 1 petition filed by the Division of Gaming 2 Enforcement. They were -- the right changes 3 were published for public comment on July 16th. 4 No comments were received when the comment 5 period ended October 16th. 6 Here for the Division is Mr. Stebbins. 7 CHAIR KASSEKERT: Good morning, again, 8 Mr. Stebbins. 9 MR. STEBBINS: Good morning, Chair and 10 Commissioners. 11 The regulation change is to conform the 12 regulation to the statutory change which 13 preceded it, and I urge its adoption. 14 CHAIR KASSEKERT: Thank you. 15 Any questions? 16 COMMISSIONER SOMMELING: No questions, 17 Madame Chair. 18 VICE CHAIR EPPS: Madame Chair, I move 19 we adopt as published. 20 COMMISSIONER HARRINGTON: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 30 ITEM NO. 12 1 CHAIR KASSEKERT: Motion carries. 2 Thank you. 3 MR. STEBBINS: Thank you. 4 CHAIR KASSEKERT: Thank you. 5 MR. NANCE: Item No. 12, proposed 6 temporary adoption of amendments and new rules 7 for three card poker progressive wager with 8 Envy Bonus, authorization of rulemaking 9 experiment for three card poker progressive 10 wager with Envy Bonus pursuant to NJSA 11 5:12-69(e). 12 Mr. Moncrief? 13 MR. MONCRIEF: Madame Chair, members of 14 the Commission, before you is a joint petition 15 filed by Shuffle Master and the Trump Marina 16 seeking to add a new progressive wager with an 17 Envy Bonus to the game of three card poker. 18 Basically, the progressive wager is similar to 19 other progressive wagers and table games. If a 20 patron receives a hand that beats one of the 21 hands in the progressive pay table, they 22 receive a set amount from the progressive pay 23 meter. The Envy Bonus is similar to a bad-beat 24 type of win. If a player places a progressive 25 wager in a three-card poker and loses to one of 31 ITEM NO. 12 1 a few predetermined hands, they would receive 2 an Envy Bonus for their wager. 3 Mr. Casiello is here for the Petitioner 4 and Mr. Fogarty for the Division. 5 MR. CASIELLO: Nick Casiello, Fox 6 Rothschild. 7 VICE CHAIR EPPS: I didn't say anything. 8 MR. CASIELLO: I am not Marie Jones. 9 (Laughter.) 10 MR. CASIELLO: Mr. Moncrief did a better 11 job of explaining that than I could. 12 I'd be happy to try to answer any 13 questions that you have. 14 Thank you. 15 CHAIR KASSEKERT: Thank you. 16 Mr. Fogarty? 17 MR. FOGARTY: Well, I'm here, but I'm 18 not here on that item. He threw me a curve 19 ball. 20 CHAIR KASSEKERT: You thought we were 21 already on 13; right? 22 MR. FOGARTY: I was getting ready for 23 the next one. 24 CHAIR KASSEKERT: For 14. Right. 25 MR. CASIELLO: He just follows me 32 ITEM NO. 12 1 wherever I go. 2 (Laughter.) 3 MR. FOGARTY: However, what is it that 4 you'd like me to say? 5 CHAIR KASSEKERT: Why don't you explain 6 this rule change? 7 (Laughter.) 8 MR. FOGARTY: This is the one with the 9 Envy thing? 10 VICE CHAIR EPPS: What is the house 11 calculation? 12 MR. FOGARTY: One of those seven capital 13 deadly sins. I try to keep away from them. 14 VICE CHAIR EPPS: What is the house odd 15 calculation? 16 (Laughter.) 17 MR. FOGARTY: I don't know. 18 CHAIR KASSEKERT: Any questions for Mr. 19 Casiello? 20 VICE CHAIR EPPS: How does this game 21 work? 22 MR. FOGARTY: Ha-ha-ha. 23 VICE CHAIR EPPS: Never mind. I get it. 24 MR. CASIELLO: All right. 25 VICE CHAIR EPPS: Madame Chair, I move 33 ITEM NO. 12 1 that we preliminary approve the three card 2 progressive pay-out wager with Envy Bonus as a 3 game compatible with the public interest 4 pursuant to Section 5 of the Act; that we, B, 5 authorize the adoption which will permit a test 6 of the three card poker progressive pay-out 7 wager with Envy Bonus to begin on or after 8 December 14, 2009, subject to the conditions 9 listed and continue for a period of time not to 10 exceed 270 days; that we, C, temporarily adopt 11 the amendments contained in the Notice of 12 Proposal for the purpose of conducting the 13 test; that we, D, delegate to the Director of 14 the Division of Compliance the authority to 15 establish the terms and conditions of a test of 16 three card poker progressive pay-out wager with 17 Envy Bonus and to approve any gaming equipment 18 necessary to implement -- necessary to the 19 implementation of the test; and that we 20 condition any test of three card poker 21 progressive pay-out wager with Envy Bonus upon 22 the filing with and the approval by the 23 Division of Compliance of all necessary test 24 submissions for Section 69(e) test of three 25 card poker progressive pay-out wager with Envy 34 ITEM NO. 13 1 Bonus. 2 That's a mouthful. 3 (Laughter.) 4 COMMISSIONER HARRINGTON: Second that. 5 COMMISSIONER SOMMELING: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: Motion carries. 12 We'll tell Marie that you did a good job 13 for her. 14 MR. CASIELLO: Thank you very much. 15 VICE CHAIR EPPS: We'll lie to her. 16 MR. NANCE: Item No. 13, petition of MGM 17 MIRAGE for a waiver of the qualification 18 requirement of three officers pursuant to NJSA 19 5:12-85d(1) and NJAC 19:43-5.4. 20 COMMISSIONER SOMMELING: This is the one 21 you're on, Jim? 22 MR. FOGARTY: Yes. 23 (Laughter.) 24 MR. FOGARTY: This and the next one. 25 Got my roster. 35 ITEM NO. 13 1 MR. NANCE: Miss Richardson? 2 MS. RICHARDSON: Good morning, Chair, 3 and Commissioners. 4 A draft resolution for three officers 5 has been circulated to the parties. And 6 appearing for Petitioners is Nick Casiello and 7 for the Division is DAG Jim Fogarty. 8 CHAIR KASSEKERT: Mr. Casiello? 9 MR. CASIELLO: Thank you. 10 No comments. I'd be pleased to answer 11 any questions you have. The form and substance 12 of the draft resolution is acceptable to us. 13 Thank you. 14 CHAIR KASSEKERT: Thank you. 15 Mr. Fogarty? 16 MR. FOGARTY: Yes. Good morning. 17 We're here on Mr. Arpin, Mr. Meinert, 18 and Ms. Ensign. I've seen the draft 19 resolution, and all three of those individuals 20 are in that draft resolution, which I have no 21 objection to. We filed under my signature, 22 separate writings as to each dated October 5 as 23 to Mr. Meinert and October 5 as to Ms. Ensign, 24 and October 16th as to Mr. Arpin, concurring on 25 behalf of the Director and the waivers that are 36 ITEM NO. 13 1 being requested. 2 Thank you. 3 CHAIR KASSEKERT: Thank you. 4 Any questions? 5 VICE CHAIR EPPS: No. 6 COMMISSIONER SOMMELING: No questions, 7 Madame Chair. 8 VICE CHAIR EPPS: Madame Chair, I move 9 that we adopt the draft resolution and waive 10 the qualification requirement pursuant to NJSA 11 5:12-85d(1) as to Michele Ensign in her 12 capacity as Vice President Corporate 13 Accounting. 14 CHAIR KASSEKERT: Is there a second? 15 COMMISSIONER SOMMELING: Second. 16 CHAIR KASSEKERT: Motion is made and 17 seconded. This is a roll call vote. 18 MR. NANCE: Commissioner Harrington? 19 COMMISSIONER HARRINGTON: Yes. 20 MR. NANCE: Commissioner Sommeling? 21 COMMISSIONER SOMMELING: Yes. 22 MR. NANCE: Vice Chair Epps? 23 VICE CHAIR EPPS: Yes. 24 MR. NANCE: Chair Kassekert? 25 CHAIR KASSEKERT: Yes. 37 ITEM NO. 13 1 MR. NANCE: The record will reflect that 2 the motion is unanimous. 3 VICE CHAIR EPPS: I move that we adopt 4 the draft resolution and waive the 5 qualification requirement pursuant to NJSA 6 5:12-85d(1) as to Todd Meinert in his capacity 7 as Vice President of Financial Reporting. 8 COMMISSIONER SOMMELING: Second. 9 CHAIR KASSEKERT: Motion has been made 10 and seconded. This is a roll call vote. 11 MR. NANCE: Commissioner Harrington? 12 COMMISSIONER HARRINGTON: Yes. 13 MR. NANCE: Commissioner Sommeling? 14 COMMISSIONER SOMMELING: Yes. 15 MR. NANCE: Vice Chair Epps? 16 VICE CHAIR EPPS: Yes. 17 MR. NANCE: Chair Kassekert? 18 CHAIR KASSEKERT: Yes. 19 MR. NANCE: The record will reflect that 20 the motion is unanimous. 21 VICE CHAIR EPPS: And I move that we 22 adopt the draft resolution and waive the 23 qualification requirement pursuant to NJSA 24 5:12-85d(1) as to Ricky E. Arpin in his 25 capacity as Senior Vice President Corporate 38 ITEM NO. 14 1 Controller. 2 COMMISSIONER HARRINGTON: Second. 3 COMMISSIONER SOMMELING: Second. 4 CHAIR KASSEKERT: Motion has been made 5 and seconded. This is a roll call vote. 6 MR. NANCE: Commissioner Harrington? 7 COMMISSIONER HARRINGTON: Yes. 8 MR. NANCE: Commissioner Sommeling? 9 COMMISSIONER SOMMELING: Yes. 10 MR. NANCE: Vice Chair Epps? 11 VICE CHAIR EPPS: Yes. 12 MR. NANCE: Chair Kassekert? 13 CHAIR KASSEKERT: Yes. 14 MR. NANCE: The record will reflect that 15 the motion is unanimous. 16 Item No. 14, petition of Infinity World 17 Investments, LLC, and Infinity World, LP, for 18 clarification of a prior resolution of the 19 Casino Control Commission and certain other 20 relief. 21 Miss Richardson? 22 MS. RICHARDSON: Good morning, again. 23 And appearing for the Petitioners is Nick 24 Casiello and for the Division is DAG Jim 25 Fogarty. 39 ITEM NO. 14 1 CHAIR KASSEKERT: Thank you. 2 Mr. Casiello? 3 MR. CASIELLO: Thank you, Madame Chair. 4 Let me start off by reviewing the 5 ownership interests of the Infinity World 6 entities down to casino licensee MDDC, also 7 known as Borgata, to try to put this matter in 8 context. Dubai World owns the Infinity World 9 entities. The Infinity World entities own less 10 than six percent of MGM MIRAGE. The Tracinda 11 Corporation, an unrelated entity, owns 12 approximately 36 percent of MGM MIRAGE. MGM 13 MIRAGE then owns Mirage Resorts, Inc. Mirage 14 Resorts then owns MAC CORP. MAC CORP. owns 50 15 percent of MDDC, the casino licensee known as 16 Borgata, with Boyd owning the other 50 percent 17 and being the managing member of that entity. 18 Therefore, on a fully diluted basis, the 19 interests of the Infinity World entities in 20 MDDC is less than three percent. 21 In August of 2008, this Commission made 22 certain rulings with respect to the application 23 of the Infinity World entities for ICA, one was 24 that Dubai World was an entity qualifier, not a 25 holding company. Another was that the chairman 40 ITEM NO. 14 1 of Dubai World, Sultan Bin Sulayem had to 2 qualify. The resolution embodying those 3 rulings says, and I quote, "The chairman of 4 Dubai World who is also its chief executive," 5 is an individual qualifier. 6 On September 18th of this year, the 7 chairman of Dubai World, Sultan Bin Sulayem 8 recreated the new position of Group Chief 9 Executive Officer and appointed Jamal Bin 10 Thaniah -- screwed that one up -- to fill that 11 position. In our position, it is simply that 12 the resolution, the prior resolution, does not 13 require Mr. Bin Thaniah to qualify as Chairman 14 Bin Sulayem is the Chief Executive Officer of 15 Dubai World under the bylaws. The new position 16 of Group Chief Executive Officer does not even 17 exist in the bylaws. It was created by the 18 Chairman, and he has the power to fill that 19 position as he has the power to fill all other 20 officer and director positions. 21 So it's our position that the prior 22 ruling does not require Mr. Bin Thaniah to file 23 as Chief Executive Officer. It, obviously, 24 could not since the position did not exist at 25 the time. Obviously, though, this Commission, 41 ITEM NO. 14 1 of course, has the an authority to determine 2 that anybody is a qualifier, essentially. And 3 I don't think the matter before you today 4 should be limited to whether or not anyone 5 should have to qualify under the prior 6 resolution. 7 I think there are two aspects of the law 8 that are relevant to determining whether Mr. 9 Bin Thaniah is a qualifier. I said earlier 10 that Dubai World is a entity qualifier, not a 11 holding company. With respect to entity 12 qualifiers, there are no set rules as to the 13 natural persons who must qualify with respect 14 to an entity qualifier. There are, however, 15 certain set rules which apply to holding 16 companies. And, therefore, those set rules are 17 much stricter than the rules that apply to an 18 entity qualifier. 19 Using the strict rules that apply to a 20 holding company, the standard is that an 21 officer is eligible for waiver from the 22 qualification requirement if he is not 23 significantly involved in the activities of a 24 casino licensee. Mr. Bin Thaniah is not at all 25 involved in the activities of casino licensee, 42 ITEM NO. 14 1 MDDC, so even under the stricter rules 2 applicable to a holding company, he should not 3 have to qualify. 4 The other aspect of the law that is 5 relevant here is the concept that certain 6 persons -- natural persons -- need to be 7 qualified in order to find an entity qualified. 8 That stems from the concept that an entity has 9 no character of its own. You cannot assess the 10 good character of an entity, a corporation, 11 partnership without assessing the good 12 character of the individuals, the natural 13 persons who own it, control it, are the 14 officers, directors, or their equivalents. And 15 I'm sure you're all familiar with the Trap Rock 16 case, which was referred to in the earlier 17 casino licensing decision. That's where it 18 comes from. We submit that Mr. Bin Thaniah 19 should not be required to qualify under these 20 analysis, either. 21 If ever there was an entity which was 22 controlled by one person, it is Dubai World. 23 The chairman of Dubai World, as I said earlier, 24 has the authority to create positions such as 25 officer positions. He has the authority to 43 ITEM NO. 14 1 fill officer positions, and he has the 2 authority to fill all the director positions. 3 In addition, the CFO of Dubai World, who is now 4 also the COO, and the general counsel of Dubai 5 World have applied for qualification. And we 6 think that is sufficient. Those persons are 7 sufficient for this Commission to assess the 8 good character of Dubai World. 9 Two other points quickly. One, the 10 Chairman has executed a delegation of authority 11 resolution under which Mr. Bin Thaniah will 12 have no responsibility with respect to the MGM 13 MIRAGE investments. And the second is that for 14 religious reasons, Mr. Bin Thaniah does not 15 want to have any involvement in the MGM MIRAGE 16 investments. 17 Thank you. 18 CHAIR KASSEKERT: Understanding all 19 that, Mr. Casiello, I think your argument 20 ignores the people at the next level which we 21 deemed also had to qualify, the -- I believe it 22 was the chief financial officer, and the chief 23 legal officer. And these individuals, do they 24 not, report to this new position created by the 25 Sultan? 44 ITEM NO. 14 1 MR. CASIELLO: They do report to the 2 Group Chief Executive Officer, the person 3 holding this new position. But with the -- 4 this gets a little complicated because we're 5 dealing with multiple jurisdictions here, okay? 6 Under the delegation of authority resolution, 7 which clearly carries more weight in other 8 jurisdictions than it does here, the CFO is the 9 one to be involved in the MGM MIRAGE 10 investment. The general counsel, you know, 11 George Dalton, the -- who's a US citizen who 12 came here and testified on behalf of ICA, you 13 know, is involved in the MGM MIRAGE investment. 14 I guess my point is that you have the 15 people who are responsible for making decisions 16 with respect to the MGM MIRAGE investments at 17 the Infinity World entity level. At the parent 18 company level, again, it's a little bit of a 19 different analysis because you're assessing the 20 good character of Dubai World, the people up 21 there. Okay? And you have the chairman, the 22 CFO, who is now the -- who is now also the COO, 23 and the general counsel. 24 CHAIR KASSEKERT: Yes. But they report 25 to -- they -- those individuals report to this 45 ITEM NO. 14 1 new position. And I -- I guess I'm just -- you 2 know, I understand your arguments, and I 3 understand we're dealing with a different 4 culture here, but just trying to put in my 5 mind, you know, a logical organization chart as 6 you move down the process. 7 MR. CASIELLO: I understand. And you 8 make a good point yourself that this not the US 9 corporation. 10 CHAIR KASSEKERT: Right. 11 MR. CASIELLO: This is not the same 12 thing. Okay? But those -- Mr. Thaniah does 13 not want to have anything to do with the MGM 14 MIRAGE investments. Okay? Under the -- for 15 religious reasons. And under the delegation of 16 authority -- 17 CHAIR KASSEKERT: I understand. 18 MR. CASIELLO: -- he will not have 19 anything to do with the MGM MIRAGE investments. 20 So to the extent that other individuals report 21 to him, they are not reporting to him with 22 respect to the MGM MIRAGE investments. 23 CHAIR KASSEKERT: Okay. Any questions 24 for Mr. Fogarty before we -- or Mr. Casiello? 25 COMMISSIONER SOMMELING: Mr. Casiello, 46 ITEM NO. 14 1 he's like the Sultan. He can change things at 2 will; right? I mean -- 3 MR. CASIELLO: The Sultan can. Not Mr. 4 Bin Thaniah. 5 COMMISSIONER SOMMELING: Well, can Mr. 6 Bin Thaniah -- am I pronouncing that correctly? 7 MR. CASIELLO: I'm not sure. 8 COMMISSIONER SOMMELING: Can he change 9 the officers in question at will if he wants 10 to? 11 MR. CASIELLO: No. He cannot -- 12 COMMISSIONER SOMMELING: No. In other 13 words, he has to go strictly by the delegation 14 of authority? 15 MR. CASIELLO: Yes. Only the chairman, 16 Sultan Bin Sulayem, has the authority to 17 appoint officers and directors. 18 COMMISSIONER SOMMELING: And can they -- 19 can he -- I guess, I'm assuming if he can do 20 that, he can change their responsibilities as 21 well. 22 MR. CASIELLO: The chairman. 23 COMMISSIONER SOMMELING: Is that 24 correct? 25 MR. CASIELLO: Yes, he can. 47 ITEM NO. 14 1 COMMISSIONER SOMMELING: Okay. That's 2 all I have. 3 CHAIR KASSEKERT: Commissioner Epps? 4 MR. CASIELLO: Which, by the way, was 5 one of the reasons why that Mr. Fogarty 6 insisted that the Chairman be a qualifier. 7 VICE CHAIR EPPS: I guess my difficulty 8 is, cultural differences notwithstanding, I've 9 got a corporate structure in front of me with 10 bright line reporting. Or dark line, not 11 dotted line. Solid line reporting. And solid 12 line reporting gives me pause to say he's a 13 direct report. But don't worry about it in 14 this case because he's not going to tell him 15 anything, talk to him anything about this one 16 thing. But he's his direct line -- but he's 17 his direct report. So if your direct report's 18 got a problem with you or your duties or your 19 function or whatever, how is it that a guy 20 above him and a guy below him but not the guy 21 in the middle? It gives me -- I have a hard 22 time. 23 MR. CASIELLO: See, I really think that 24 we have to separate the two analyses I talked 25 about earlier. Okay? If Jamal Bin Thaniah -- 48 ITEM NO. 14 1 if you simply look at him as an officer of 2 Dubai World, okay? under the holding company 3 analysis, the standard for determining whether 4 or not he's entitled to be eligible for a 5 waiver is whether he's significantly involved 6 in the activities of the casino licensee. And 7 he's not. Okay? He's agreed not to have 8 anything to do with the MGM MIRAGE investments. 9 Even if he were involved in the MGM MIRAGE 10 investments, you know, that is -- Dubai World 11 has a six percent interest or Infinity World 12 has a six percent interest in MGM MIRAGE, not 13 enough to control or influence MGM MIRAGE, 14 especially since someone else has 36 percent. 15 And putting all that aside, when you get 16 down to the casino licensee here in New Jersey, 17 Boyd is the managing partner of that entity. 18 Okay? With exception -- with the exception of 19 certain extraordinary events and capital calls 20 and things like that, MGM MIRAGE does not 21 operate Borgata. So if we apply the holding 22 company analysis, the test for waiving an 23 officer, I think it's clear that Jamal Bin 24 Thaniah is entitled to a waiver from the 25 qualification requirement as an officer because 49 ITEM NO. 14 1 he's not significantly involved in the 2 activities of a casino licensee. But that's 3 part -- that's one part of the analysis. And 4 that's the part of the analysis I think that 5 goes to the reporting lines and all that. 6 Okay? 7 There's another part of the analysis, 8 and that is whether you have enough people in 9 the box to decide whether or not Dubai World 10 has good character, honesty, and integrity. 11 And under that analysis, forget about the 12 reporting lines and all that, I don't think 13 that matters. Okay? I think you have enough. 14 Because, number one, you have the Chairman, 15 okay? And the Chairman is the person who has 16 the authority to create positions, fill 17 positions, officers and director positions, 18 remove officers and directors. There is no 19 doubt that the character of Dubai World resides 20 principally upon the shoulders of the Chairman. 21 Okay? But plus you've got the CFO who is now 22 the CCO and the general counsel. 23 VICE CHAIR EPPS: But that -- that's the 24 very part, I think, that gives us part of the 25 problem that we have here is that we had the 50 ITEM NO. 14 1 Chairman, and we had those guys in the box. 2 But the Chairman kind of brought another guy 3 into the box, and then said, but don't pay 4 attention to him because he's not really -- you 5 don't need to worry about him. But he -- but 6 the guy wasn't in the box before. We had kind 7 of sealed the box and said, as hard as it is, 8 this is enough. And then you bring a guy in 9 the box, and now we've got to say he's in 10 there, but he's not, and that's what gives. 11 MR. CASIELLO: He's kind of peeking in 12 the tent, okay? 13 VICE CHAIR EPPS: Well, yeah. 14 (Laughter.) 15 MR. CASIELLO: But he's not all the way 16 in the tent. 17 VICE CHAIR EPPS: But that little bit of 18 a head in the tent makes it different. If he 19 wasn't in the tent at all, we wouldn't have a 20 problem, but he's in there. It's like the 21 elephant -- a hundred pound elephant in the 22 middle of the room. Eight-hundred pound 23 elephant in the room. 24 MR. CASIELLO: Eight-hundred pound 25 gorilla. But -- 51 ITEM NO. 14 1 CHAIR KASSEKERT: And I -- 2 VICE CHAIR EPPS: White elephant. 3 (Laughter.) 4 VICE CHAIR EPPS: Whatever. And I see 5 it him. I see him, and that's my problem. 6 CHAIR KASSEKERT: And not speaking for 7 the Division, but I'm sure the Division would 8 never make an argument that, okay, we have 9 enough here and ignore positions. Even though 10 I know Mr. Fogarty's going to argue to the 11 contrary here. But -- but and not argue that, 12 you know, it really has to be an analysis on 13 the reporting lines on the position. And, you 14 know, after all, this Dubai World is -- is an 15 applicant for ICA, which is a very -- as you 16 know, a very high standard. 17 MR. CASIELLO: Yeah. And I understand 18 that. And I don't know what more to say other 19 than I can see how you can separate out the two 20 legal requirements from each other, and if you 21 do that, I don't think anybody here would 22 suggest that Jamal Bin Thaniah has any 23 involvement in the activities of Borgata. I 24 mean, he could walk in there tomorrow, and 25 they're certainly not going to know who he is. 52 ITEM NO. 14 1 He's not going to get a free room. You know. 2 CHAIR KASSEKERT: That's not the 3 standard. 4 (Laughter.) 5 MR. CASIELLO: Although I'm not sure 6 about him getting a free room nowadays. 7 Putting that aside. Okay? 8 I think the real issue is whether you 9 need another person to determine the 10 suitability of Dubai World, and I think you 11 have enough. 12 CHAIR KASSEKERT: But we've -- this 13 position was created by the Chairman. I mean, 14 we didn't create this position. We didn't go 15 looking for this position. He created it. 16 MR. CASIELLO: Yes, he did. 17 COMMISSIONER SOMMELING: See, that was 18 my concern. He can create and uncreate, and we 19 set a precedent for the other clubs that are -- 20 casinos in the industry every time we make a 21 decision. So the format for qualification has 22 been well set down and documented in the 23 history of the Commission with respect to the 24 qualifiers and how they -- you know, how they 25 should be eligible. But in this situation 53 ITEM NO. 14 1 where you have a kingdom or fiefdom and a 2 person that has the authority, the overall 3 authority beyond the scope of boards of 4 directors and others, as we do in the normal 5 course of things, can make decisions at will 6 with respect to the people that he has already 7 put in place now and could change any time or 8 put in place any time in the future and change 9 the makeup of -- I mean, it could go on ad 10 infinitum. Although he's the head, he doesn't 11 want to have any anything to do with it on 12 religious grounds or other grounds, no 13 disrespect intended, but nevertheless, he is 14 the man. The buck stops here. 15 MR. CASIELLO: Well -- 16 COMMISSIONER SOMMELING: So I think it's 17 important to us to qualify the people in the 18 manner that they should be qualified so that we 19 keep the continuity of what the Commission has 20 required since day one. 21 MR. CASIELLO: Just two comments. To 22 the extent you are concerned about setting a 23 precedent, some people would say there are no 24 precedents set by the Commission under 25 administrative law. I may not be one of those 54 ITEM NO. 14 1 people but -- 2 (Laughter.) 3 VICE CHAIR EPPS: Did you get that? 4 (Laughter.) 5 MR. CASIELLO: I think -- 6 MR. FOGARTY: I would say that -- 7 MR. CASIELLO: Two -- 8 COMMISSIONER SOMMELING: Number two. 9 Let's have two. 10 MR. CASIELLO: All right. We'll, 11 sticking with number one, you know, this is a 12 unique situation. You never had a sovereign 13 entity, an entity created by a sovereign 14 government be an applicant for a licensure 15 for -- for licensure here or qualification 16 here. So I don't -- so and it is a foreign 17 entity. So I don't think you would be setting 18 a precedent regardless of what you do here that 19 would apply to the normal US corporation. 20 CHAIR KASSEKERT: Maybe for the next 21 foreign entity we would be. 22 MR. CASIELLO: Maybe you would. It 23 depends. 24 COMMISSIONER SOMMELING: Thank you. 25 MR. CASIELLO: Every case is fact 55 ITEM NO. 14 1 sensitive. All individual cases. 2 Thank you. 3 CHAIR KASSEKERT: Commissioner 4 Harrington, did you have a question? 5 COMMISSIONER HARRINGTON: No. Most of 6 my comments and observations have been 7 revealed. 8 CHAIR KASSEKERT: Commissioners? 9 Thank you. 10 Mr. Fogarty? 11 MR. FOGARTY: Thank you for the added 12 pressure, Chair. 13 (Laughter.) 14 MR. FOGARTY: But I'm still going to 15 stick basically with my script and then try to 16 address your concern. 17 We purposely -- or I purposely -- chose 18 not to address this question as to -- try to 19 parse what it was you all did before in the 20 resolution. I understand the significance of 21 it and it's applicability, but I just thought 22 that it would be best to cut right to the 23 quick, and that is is Mr. Bin Thaniah in or 24 out? And that's how I addressed it in my 25 writing to you all. 56 ITEM NO. 14 1 Secondly, Mr. Casiello alluded to it, 2 that although some of the analysis as to 3 whether Bin -- Mr. Bin Thaniah should be in or 4 out approaches the waiver holding company 5 thing, that's not what this is. This is 6 entirely your decision. I -- we as a Division 7 don't get input as a concurring waiver, and but 8 we recommend, because that's what we do, to you 9 a certain course of action, which you as the 10 umpire ultimately get to decide on that. And 11 make no mistake, we -- and I'll say it in 12 somewhat of in a loud, clear voice -- we don't 13 think you ought to designate Mr. Bin Thaniah as 14 a qualifier. Although I'm saying that in a 15 loud, clear voice it's not like a real, real 16 loud, clear voice. 17 (Laughter.) 18 MR. FOGARTY: And the reason I say that 19 is -- 20 MR. CASIELLO: I'm sorry. What did you 21 say? 22 (Laughter.) 23 MR. FOGARTY: Because we kind of went 24 over this ground previously when we discussed, 25 if you will, the status of an individual known 57 ITEM NO. 14 1 as Maryam Sharaf as CFO of Dubai World. And we 2 took the position then that Miss Sharaf ought 3 not to be designated as an individual required 4 for qualification then, but you all disagreed. 5 Hey, that happens in life. That you all are 6 the umpire, and we go forward from that point. 7 But, if anything, I'm consistent with my 8 consistency, and that is to say that pretty 9 much for the same reasons that were discussed 10 in our position relative to Miss Sharaf is the 11 same here with Bin Thaniah. And ultimately the 12 touchstone of that is what I described in the 13 papers that pretty much -- not pretty much, but 14 the over-arching authority -- I don't want to 15 say absolute, but it's the over-arching 16 authority of Sultan -- not the Sultan, just 17 Sultan Bin Sulayem as Chairman of Dubai World. 18 That was critical to us before. It remains 19 obvious, I would suggest to you, now. He is 20 the person of Dubai World. 21 I had to smile a couple times as I read 22 the moving papers, the petition, where it was 23 said, I think more than once, that Sultan Bin 24 Sulayem voluntarily stepped up to qualification 25 here in New Jersey. Well, that belied a lot of 58 ITEM NO. 14 1 efforts on behalf of our office to convince 2 this gentleman to my immediate left and Mr. Bin 3 Sulayem and others at Dubai World that he 4 should step up for qualification. Be that as 5 it may, and I don't mean to quibble over that. 6 But the point here is that we 7 recognized, having been there -- and I'm 8 pointing Pakistan here because Mr. Sivetz was 9 with me -- that clearly this gentleman, Sultan 10 Bin Sulayem, was and is, as far as we know, the 11 key individual. So our focus was getting that 12 individual to file and to be qualified. Well, 13 he's filed. It's yet to be said that he's 14 qualified, but likely he would be. He will be. 15 Having said that, that's why once we 16 determined or once we took the position that he 17 was so darn powerful that really anybody else 18 in Dubai World in the context of what Dubai 19 World owned vis-a-vis the MGM MIRAGE 20 investments which, as you've heard, by 21 percentages is significantly less than what 22 they started off with, we really didn't pay 23 attention, if you will, to anybody else in 24 Dubai World because we thought we had Dubai 25 World wrapped up. We had the company and we 59 ITEM NO. 14 1 had the -- the individual we identified as 2 being most critical, most important. The 3 button pusher, if you will, at -- the decision 4 maker, if you will, at Dubai World. So we 5 didn't pay much attention to Sharaf, Miss 6 Sharaf as CFO. We didn't think that was 7 necessary, and we took that position with you. 8 As to the chief legal officer, then, it 9 was occupied, if you will, by Mr. Ulama. Al 10 Ulama. And -- even there, Mr. Ulama had a dual 11 role. He was an Infinity person. So clearly 12 he was in the suit -- he was in the box of 13 qualification. And the fact that he was also 14 Chief Legal Officer for Dubai World was, quite 15 frankly, I didn't pay attention a whole lot to 16 that. And, again, so long as I had the 17 Chairman in there, that was critical. I didn't 18 care about anybody else in Dubai World. 19 And I say that in interest of candor and 20 to just put-- put the mindset or attempt to 21 give you the idea of where the Division's head 22 was throughout all this. And -- and that is 23 why, principally, the why being because 24 Chairman Sultan Bin Sulayem is still the 25 main -- the main person at this company that we 60 ITEM NO. 14 1 feel we can freely recommend to you, that it's 2 not necessary to have anyone else in Dubai 3 World -- the only person that's before us is 4 Bin Thaniah -- be qualified. 5 We were, as my paper makes clear, as my 6 filing makes clear -- there is some 7 persuasiveness, if you will, to Mr. Bin 8 Thaniah's certification where he makes 9 essentially the statement that casino gaming is 10 against his view of what his religion allows, 11 and hence because of that, he's not going to 12 get involved in the affairs of Dubai World, 13 Infinity as it relates to the gaming enterprise 14 MGM MIRAGE. That is, I will suggest to you, 15 persuasive. It makes a difference. It does. 16 Secondly, there is this business about 17 the delegation from the Chairman, Bin Sulayem, 18 to others, including Bin Thaniah and, for that 19 matter, Maryam Sharaf who is going to occupy a 20 new position called the Chief Operating 21 Officer. It's kind of a different -- another 22 problem. Before, earlier in the prior 23 proceeding we had about the qualification 24 status of all manner of Dubai World, such a 25 certification was unpersuasive to us. It was 61 ITEM NO. 14 1 unpersuasive because it was going to -- to -- 2 in an attempt to argue that Dubai World itself 3 was out of the mix. It went to argue that 4 Chairman Bin Sulayem was out of the mix. And 5 we didn't find it persuasive in that context 6 for the reasons we said. However, a similar 7 delegation now as long as you got that main 8 gate, it gives -- it makes some difference. It 9 does apply with some force. Where it didn't 10 apply before as to one individual, it could 11 apply to here. So long as you've got that main 12 individual in focus. 13 I don't know what to say a whole lot 14 about the fact -- and I -- raised by Chair 15 Kassekert and rejoined in by Commissioner Epps, 16 you know, you've got now, here we sit or here 17 we stand. We've got a -- the Chief Legal 18 Officer in the box -- in the qualification box. 19 And you've got the CFO, and they're going to 20 report to this new guy, who's Bin Thaniah, who 21 is going to report up to the Chair. And, gee, 22 how can you have -- how can you do that? And I 23 don't understand. And I don't know the answer 24 to that other than what I've said already, and 25 that is to say that I'm not sure, ultimately, 62 ITEM NO. 14 1 it much matters. Perhaps it's a form over 2 substance. I say that in a kindly fashion. So 3 long as you have the principal individual 4 that's there. 5 As to Mr. Casiello's remarks, not that I 6 adopt them all, but they all made sense to me 7 in the main. With the exception of the 8 business about a sovereign. I wish he hadn't 9 gone there. We're not here talking about a 10 sovereign. We're here talking about a 11 commercial enterprise known as Dubai World. 12 The sovereign has nothing to do with your 13 decision, I would suggest. It's a fact that 14 the sovereign owns Dubai World, but I don't 15 think that is relevant, quite frankly, to 16 whatever decision you're going to make here 17 today. 18 I'll be happy to answer questions. 19 VICE CHAIR EPPS: Well, I'm glad -- I'm 20 glad you ended the way you ended because if we 21 assume that the sovereign is the red herring in 22 this situation and we're looking at a strict 23 corporate structure, and you put a guy -- let's 24 say the corporate -- the CEO or the owner of 25 the company, whoever is the titular head, has 63 ITEM NO. 14 1 all the power, and you say, well, you still got 2 to get the CFO and the legal guy because they 3 are involved in the business so we need them 4 in. And then they stick an executive in the 5 middle as their direct report who's between 6 this titular head and these people you add in. 7 And he holds some sway over those people, and 8 he has entree to the big guy. Assuming he can 9 recommend some action against these people, and 10 the big guy concurs, he's now knocked you guys 11 out of the box. Having that ability to knock 12 your guys out of the box shouldn't concern us? 13 Because that issue that he knocked him out of 14 the box for had nothing to do with the business 15 that we do? You know, the fact that he can do 16 that, I guess, is what gives me pause. 17 MR. FOGARTY: I'm -- I am not going to 18 suggest to you, Mr. Epps, that Bin Thaniah is 19 in a position to exert some influence in Dubai 20 World and, therefore, with the top guy, with 21 Sultan. But we do have a certification that 22 says I'm not going to do it relative to that 23 investment in gaming operations. So, for 24 whatever that's worth, there is an indication 25 that he's not going to exert that. 64 ITEM NO. 14 1 VICE CHAIR EPPS: But I guess my 2 question is he doesn't -- 3 MR. FOGARTY: And -- excuse me, sir. 4 But perhaps -- I mean, Sultan is not -- that 5 individual, Sultan, is not the sovereign. He's 6 not part of the sovereign. He's simply the 7 head of a commercial enterprise. 8 VICE CHAIR EPPS: All right. 9 CHAIR KASSEKERT: Uh-huh. 10 MR. FOGARTY: Now, he knows the 11 sovereign. I'm sure. 12 (Laughter.) 13 MR. FOGARTY: But he did get that job 14 from the sovereign, but in case you were 15 thinking that way, and I don't know if you 16 were, but Sultan is not the sovereign. 17 VICE CHAIR EPPS: Right. 18 MR. FOGARTY: Okay. 19 VICE CHAIR EPPS: But I guess my 20 question is, if he doesn't knock him -- take 21 some action against him for this limited place 22 where he can't touch, is -- is that okay, 23 though? Or -- go ahead. 24 MR. FOGARTY: You're asking me is that 25 okay? 65 ITEM NO. 14 1 MR. CASIELLO: I just want to make sure 2 I understand your question. And I think if I 3 understand you correctly, you're saying -- 4 VICE CHAIR EPPS: What I'm saying is he 5 holds sway with them on ten items. But number 6 nine he can't touch because he said I'm not 7 going to bother number nine. But say number 8 six he had some problem with, and he goes to 9 the -- 10 MR. CASIELLO: The Sultan. 11 VICE CHAIR EPPS: -- the Sultan and 12 says, you know, what? I'm tired of this guy. 13 And they're going to take some action on him. 14 Now, we lost our person we have in the box 15 because his higher up -- you know what I'm 16 saying? I mean, there's -- 17 MR. FOGARTY: So that -- that 18 replacement for that box -- 19 VICE CHAIR EPPS: Comes in the box. 20 MR. FOGARTY: Gets in the box. 21 CHAIR KASSEKERT: Right. 22 VICE CHAIR EPPS: But he has ability to 23 hold sway over people on the box. 24 MR. FOGARTY: I understand he's holding 25 sway over that individual. 66 ITEM NO. 14 1 VICE CHAIR EPPS: He's holding sway over 2 that individual. 3 MR. FOGARTY: For other reasons. I 4 think what you're saying -- 5 VICE CHAIR EPPS: Right. 6 MR. FOGARTY: For other reasons 7 unrelated to the investments -- 8 VICE CHAIR EPPS: Right. He's just 9 not -- he's holding sway over nine because he 10 said he's not going to. 11 MR. FOGARTY: I think that's a reality, 12 yes, that could happen. 13 VICE CHAIR EPPS: So I shouldn't worry 14 about that? 15 MR. FOGARTY: That's something you 16 should worry about? My suggestion is it is 17 not. 18 VICE CHAIR EPPS: Okay. 19 MR. CASIELLO: I like that answer. 20 MR. FOGARTY: Damn. 21 CHAIR KASSEKERT: Commissioner 22 Harrington? 23 COMMISSIONER HARRINGTON: As we read the 24 stated responsibility of the Group Chief 25 Executive Officer, the very first one is to 67 ITEM NO. 14 1 uphold the integrity and reputation of the 2 group, and the second is to provide day-to-day 3 leadership and direction. And then as we 4 cascade down, it's to chair any management 5 executive committees as a forum for ensuring 6 the Group Chief Executive Officer is kept fully 7 informed on all major issues, to approve the 8 appointment and removal of group key executives 9 and consult with the Chairman. I mean, I think 10 that gives him, whether, you know, as a 11 responsible businessman and CEO, you know, you 12 can say that you're going to eliminate part of 13 your portfolio, but I think as a practical 14 matter, I'm having a hard time understanding 15 how you can fulfill that and successfully and 16 responsibly perform your duty as the CEO. 17 MR. CASIELLO: The only comment I want 18 to make to that is that Dubai World is a large, 19 diversified business. There are at least 15 20 other subsidiaries of Dubai World in addition 21 to the Infinity World entities, and some of 22 those subsidiaries are partially publicly 23 traded. They are the, I believe, third largest 24 port operator in the world. There are 25 significant businesses in the scheme of things. 68 ITEM NO. 14 1 This is this small -- 2 MR. FOGARTY: And getting smaller. 3 MR. CASIELLO: What? 4 MR. FOGARTY: And getting smaller. 5 MR. CASIELLO: And Jim's point is 6 that -- 7 COMMISSIONER HARRINGTON: I understand 8 that. 9 MR. CASIELLO: -- the original 10 investment in MGM MIRAGE stock was about $2.1 11 billion. It's now worth a little over $200 12 million. They've lost roughly $1.9 billion on 13 this investment. And 200 million -- 265 14 million, I think is the actual current value of 15 the stock as of yesterday -- is insignificant 16 compared to everything else they have going on. 17 COMMISSIONER HARRINGTON: Which I 18 appreciate. But, as you know, for any of us 19 who has run a company or managed an 20 organization, you know, you can't -- you can't 21 fulfill that role without paying attention to 22 every single thing. And my limited experience 23 here is that we pay as much attention to the 24 smaller holdings as we do to the major holdings 25 because it's all part and parcel of the same 69 ITEM NO. 14 1 success. 2 CHAIR KASSEKERT: Any other questions? 3 COMMISSIONER SOMMELING: No questions, 4 Madame Chair. 5 CHAIR KASSEKERT: Commissioner Epps? 6 VICE CHAIR EPPS: I'm just trying to 7 imagine what we would do if it were just a US 8 company. You know, if it was some other 9 investor, a US company investing with the same 10 kind of structure, and they stuck a guy in, and 11 we said his underlings had to qualify. Would 12 we not qualify the boss if he gave you a 13 certification that says I'm not going to touch 14 the work? 15 CHAIR KASSEKERT: Fact -- making it fact 16 sensitive. 17 MR. FOGARTY: I jumped up. 18 VICE CHAIR EPPS: You did. 19 MR. FOGARTY: I'm not sure you directed 20 this at me, and I think I'm doing this at my 21 peril. 22 (Laughter.) 23 MR. FOGARTY: But I understood your 24 question. But I -- I would answer it this way, 25 and that is it's unlikely you would get this 70 ITEM NO. 14 1 situation in a US company. And what I mean is 2 is that this guy, Sultan, has so much authority 3 that you don't get that, with all due respect, 4 in a typical American company that the 5 chairman, yeah, he's an important guy in a 6 traditional American corporation. And sure, he 7 wields a lot of influence. But, you know, on 8 the board of directors he's got one vote just 9 like the other members of the board of 10 directors when it comes down to actually doing 11 business. So I'm not so certain that you're 12 going to be able to get that analogy in an 13 American corporation. 14 And I know I haven't addressed the 15 delegation that you're talking about. I mean, 16 I assume you could have that in an American 17 corporation, but it might mean something 18 differently because of the way things are 19 constructed from the get-go, the way the 20 structural business is about the American 21 corporation. I mean, corporations in America, 22 you can have all sorts of -- usually 23 shareholders unless it's a private corporation, 24 big enough. Well, here you got one, it's that 25 sovereign guy that we don't really care about, 71 ITEM NO. 14 1 but that's a fact. You just have that one. An 2 American company, that, you know -- and if you 3 get CALPERS, for example, and the pension 4 system out in California. Man, it's a big 5 investor in stuff. And when they invest, well, 6 they get to throw a lot of weight around as a 7 shareholder just because they got a lot to 8 invest and do invest in something. So I don't 9 know you can make the analogy, I guess, is what 10 I'm getting at. 11 VICE CHAIR EPPS: I guess it's probably 12 an academic excise, but let's take the private 13 company that you were talking about where, 14 again, there's a titular head. We would have 15 to look at that company and see who below him 16 we would want to capture. 17 MR. FOGARTY: Yes, sir. 18 VICE CHAIR EPPS: And if he -- if he 19 stuck somebody overtop of the guys we decided 20 that we would want to capture, we would 21 probably capture that guy, too. 22 MR. FOGARTY: In candor and fairness, we 23 probably would. You probably would. I don't 24 mean to separate us out. 25 VICE CHAIR EPPS: Right. 72 ITEM NO. 14 1 MR. FOGARTY: But I think the 2 regulations would require that, yeah, we take a 3 real hard look at the guy. And it is a bit of 4 an anomaly to have people down below, if you 5 will, reporting to an unqualified guy here who 6 reports to a qualified guy. I -- yeah. That 7 is different. 8 COMMISSIONER SOMMELING: It sounds very 9 complicated. 10 MR. FOGARTY: I can do nothing but 11 acknowledge it, sir. 12 COMMISSIONER SOMMELING: Sounds very 13 complicated, Jim. 14 MR. FOGARTY: Well, yes, and no. 15 COMMISSIONER SOMMELING: Almost like 16 being in the UN and you're trying to interpret 17 everything. 18 But I would like to say this as regard 19 to this, why should we change the system as it 20 now exists and has been utilized, you know, 21 since we've approved corporations to run 22 casinos? Why should we make this difference, 23 these changes and expose ourselves to a 24 situation with a foreign entity that really has 25 a lot of control over their investments and can 73 ITEM NO. 14 1 pretty much do what they want and whether 2 they're sultans or kings or whatever. I mean, 3 I think we try to accommodate these 4 corporations in giving what is really required, 5 which in common sense is the minimum required 6 as to qualifications of the individuals within 7 the corporations. I don't think we go 8 overboard on that. I think we approach that 9 with a reasonable approach. 10 MR. CASIELLO: I think the hallmark -- 11 hallmark of this Commission over the years has 12 been its willingness to be flexible and to 13 adapt to changing times. At one point this 14 Commission was the first gaming regulatory 15 authority in the world to allow institutional 16 investor waivers. It was because of this 17 Commission's support with the legislature that 18 the law was changed to allow that, a provision 19 that has been copied by almost every 20 jurisdiction in the United States and some 21 other foreign jurisdictions. So I'm sure 22 you're not suggesting that this Commission 23 should never change, should never -- 24 COMMISSIONER SOMMELING: Absolutely not. 25 I think it has a track record for how it's 74 ITEM NO. 14 1 accommodated the industry over the years and 2 has been flexible. You're absolutely right. 3 We have been very flexible. And I think that's 4 why we are where we are today, is the way we've 5 managed the governing or regulating the casino 6 industry in this state. And we become a model 7 for every other jurisdiction. 8 MR. CASIELLO: And I think all I'm 9 saying is that I think this is a situation 10 where a little bit more flexibility rather than 11 looking at this simply as a US corporation 12 would be appropriate. 13 And the only other comment I want to 14 make is I want to just clarify for the record, 15 when I refer to "sovereign" earlier I was 16 referring to Dubai World as being a sovereign 17 entity. I was not referring to the ruler of 18 Dubai, and Dubai World is owned by the 19 government of Dubai and not the ruler of Dubai. 20 Thank you. 21 CHAIR KASSEKERT: Thank you. 22 COMMISSIONER SOMMELING: Thank you. 23 CHAIR KASSEKERT: Let me ask if there 24 are any other questions? 25 I think we're going to take a brief 75 ITEM NO. 14 1 recess. All right. 2 (A recess was taken from 11:41 a.m. to 3 12:00 p.m.) 4 CHAIR KASSEKERT: We'll go back on the 5 record. 6 Let me just ask if there are any other 7 questions? 8 COMMISSIONER SOMMELING: No questions, 9 Madame Chair. 10 CHAIR KASSEKERT: Or the parties have 11 anything else they wish to say? 12 MR. CASIELLO: Nothing further, Madame 13 Chair. 14 MR. FOGARTY: Nothing for me. I've 15 spoken much louder than I intended when I came 16 in. 17 CHAIR KASSEKERT: Okay. I can't wait 18 until we send you over to take on the 19 sovereign. 20 (Laughter.) 21 CHAIR KASSEKERT: Because I can just 22 imagine you with the Sultan. 23 MR. FOGARTY: I can't wait. 24 CHAIR KASSEKERT: The Commission is 25 considering today the request by Petitioners, 76 ITEM NO. 14 1 Infinity World Investments, LLC, and Infinity 2 World Cayman, LP, for a clarification of the 3 Commission regulation concerning the necessary 4 individuals who must qualify on behalf of Dubai 5 World. Clarification is being sought 6 specifically to address whether it is necessary 7 for Dubai World's newly appointed Group Chief 8 Executive Officer to submit to the 9 qualification process. 10 In the relevant resolution from August 11 of 2008, the Commission entered various rulings 12 concerning the completeness of Infinity's 13 application for interim casino authorization. 14 Most of those rulings, such as those regarding 15 the approval of the ICA trust and the trustee 16 thereunder, have no bearing on today's 17 proceedings. However, one of the relevant 18 rulings from a year ago was our determination 19 that Dubai World had to qualify under Section 20 85 of the Casino Control Act which meant that, 21 among other things, Dubai World's good 22 character eventually would need to be 23 established in order for Infinity to receive 24 plenary qualification. 25 As the Commission's remarks from that 77 ITEM NO. 14 1 earlier proceeding made clear, the good 2 character of any entity such as Dubai World 3 depends upon the good character of those 4 individuals who bring the entity to life. 5 Despite the authority invested in the Dubai 6 World Chairman, who is also its Chief 7 Executive, the Commission concluded that he was 8 not the only officer who would be required to 9 qualify in order to measure adequately the 10 entity's good character. Rather, we also 11 identified as necessary qualifiers Dubai 12 World's Chief Investment Officer, Chief Legal 13 Officer, and Chief Financial Officer. 14 As Petitioners point out, Dubai World's 15 Chairman will remain its Chief Executive, 16 whereas the Group Chief Executive Officer title 17 is newly created and, thus, was not nor could 18 it have been before us for consideration a year 19 ago. To that limited extent, I would agree 20 with Petitioners that they are not precluded by 21 last year's resolution from raising this in the 22 present matter. 23 Petitioners also note in their petition 24 that Group Chief Executive Officer for Dubai 25 World will have "duties that are ordinarily and 78 ITEM NO. 14 1 customarily performed by the second-most senior 2 management employee in the company." While 3 Petitioners emphasize that the new title 4 essentially ranks the second-in-command behind 5 the Chairman, the endeavor to downplay that the 6 new CEO is nevertheless otherwise in command of 7 Dubai's World's activities as Exhibit A to the 8 petition seemingly attests. 9 Accordingly, I am satisfied from the 10 totality of the circumstances, particularly the 11 duties, decision-making authorities, and 12 leadership responsibilities of the new CEO 13 title within Dubai World which includes 14 reporting lines from and oversight of other 15 Dubai World officers who we have already 16 determined are necessarily -- are necessary 17 qualifiers that the new CEO position is a 18 qualifying one which ultimately must be 19 evaluated in order to measure Dubai World under 20 the Act's statutory criteria, including good 21 character. 22 I reach that conclusion mindful of 23 Petitioners' argument that if Dubai World were 24 a holding company, then the new CEO title would 25 be entitled to a waiver of the qualification 79 ITEM NO. 14 1 requirement as lacking any significant 2 involvement in the activities of casino 3 licensee Borgata. 4 I cannot accept the premise underlying 5 that argument, for Subsection 85d(1) leaves no 6 doubt that such waivers with the Division's 7 concurrence are not mandatory but rather are 8 ultimately left to our discretion. In that 9 regard, the Commission has always carefully 10 applied the waiver provisions of Section 85 to 11 ensure that the qualifiers necessary for 12 assessing a holding company's good character 13 submit to the application process. 14 While Petitioners point out that the 15 Infinity entities have been delegated all 16 authorities over the MGM investment, that 17 delegation is not determinative. Similarly, 18 the new CEO's religious beliefs, which 19 assertedly prevent him from being involved in 20 any way with the casino gaming and, therefore, 21 the MGM investment, are also not determinative. 22 Any revocable action by Dubai World to separate 23 itself and its principals from the MGM 24 investments does not alter the Commission's 25 obligation to ensure that at the appropriate 80 ITEM NO. 14 1 time it will be judging the good character of 2 Dubai World by its essential officers and other 3 qualifying individuals. And, in passing, I 4 would note that the newly recreated title of 5 Group Chief Operating Officer is also a 6 qualifying position, in my view, and the 7 petition seemingly acknowledges as much. 8 If the other Commissioner members agree 9 that the new CEO must qualify, ideally we 10 should have also been considering today a 11 petition to temporarily qualify him. That 12 would be the typical process now that Infinity 13 has attained ICA. However, the necessary 14 application form and the accompanying petition 15 have not been filed. But I recognize that, 16 with the Division not opposing the relief in 17 the pending petition, Petitioners may have 18 expected a favorable outcome in this matter 19 that would have made an application from the 20 new CEO unnecessary. 21 In any event, to leave no doubt if a 22 similar situation arises in the future, I 23 believe it is appropriate to impose a condition 24 requiring Dubai World to comply as if it were a 25 holding company with certain Commission 81 ITEM NO. 14 1 regulations regarding temporary qualifiers. In 2 that way, Dubai World will be treated no 3 differently from its affiliated entity 4 qualifiers that are already subject to a 5 similar condition. 6 It certainly would be helpful if we 7 could address the temporary qualification 8 matters as quickly as possible, and our next 9 scheduled public meeting is on November 12th. 10 Whether everything that needs to be 11 accomplished can be done in that short time 12 frame remains to be seen. But I definitely 13 encourage the parties to work towards that 14 goal. While recognizing that, without the 15 Division's consent, accelerating the proceeding 16 would be problematic. 17 The addition of a new CEO as a qualifier 18 also potentially impacts the timing of 19 Infinity's plenary qualification at the end of 20 its ICA period. Currently the Division would 21 be expected to report in sufficient time for 22 the Commission to rule on plenary qualification 23 by the statutory deadline in mid-January of 24 2010. Rather than needlessly strain regulatory 25 resources within a compressed time period, the 82 ITEM NO. 14 1 Petitioners should seriously consider applying 2 within a month for the statutorily-permitted 3 three-month extension of the ICA period. 4 Accordingly, I would move that the 5 Commission adopt the proposed resolution and, 6 one, deny the request to declaratory relief for 7 the ruling that the new CEO need not qualify; 8 two, require Dubai World to comply with NJAC 9 19:43-2.3 and 2.7, as if it were a holding 10 company; three, require that reasonable efforts 11 are undertaken to cause the filing of a 12 petition seeking the temporary qualification of 13 the new CEO accompanied by the requisite 14 personal history disclosure form in sufficient 15 time for the Division to respond and the 16 Commission to hear the matter on November 12, 17 but in any event, with any filing should occur 18 by that date and authority delegated to me as 19 Chair to extend such deadline with the 20 Division's consent upon a written extension 21 request that is filed before such deadline 22 expires and is supported by good cause, 23 particularly addressing the propriety of 24 allowing the new CEO to continue to serve 25 without temporary qualification; and, four, 83 ITEM NO. 14 1 require the filing by November 30th of a 2 petition seeking the extension of the period of 3 ICA with the expectation that serious 4 consideration will be given to a sooner filing 5 around November 13th that would allow the 6 Division to respond and the Commission to 7 consider the matters at our December 2nd 8 meeting. And I so move. 9 Is there a second? 10 COMMISSIONER SOMMELING: Second. 11 CHAIR KASSEKERT: A motion has been made 12 and seconded. This is a roll call vote. 13 MR. NANCE: Commissioner Harrington? 14 COMMISSIONER HARRINGTON: Yes. 15 MR. NANCE: Commissioner Sommeling? 16 COMMISSIONER SOMMELING: Yes. 17 MR. NANCE: Vice Chair Epps? 18 VICE CHAIR EPPS: Yes. 19 MR. NANCE: Chair Kassekert? 20 CHAIR KASSEKERT: Yes. 21 MR. NANCE: The record will reflect that 22 the motion is unanimous. 23 CHAIR KASSEKERT: Thank you. 24 MR. FOGARTY: Thank you. 25 MR. CASIELLO: Madame Chair, I do have 84 1 one comment. 2 I don't know off the top of my head what 3 the two regulations you referred to which are 4 now conditions on our ICA. I just want to make 5 it clear that I'll need an opportunity to 6 review those and may be back before you. 7 CHAIR KASSEKERT: Surely. 8 MR. CASIELLO: Thank you. 9 CHAIR KASSEKERT: Uh-hum. 10 MR. NANCE: In accordance with 11 Resolution No. 08-12-10-22, the next closed 12 session of the Commission shall be held on 13 Thursday, November 12th, 2009, at 9:15 a.m. in 14 the Commission offices. 15 It is now time for the public 16 participation portion of the meeting. 17 CHAIR KASSEKERT: Is there anyone from 18 the public that wishes to be heard? 19 (No response.) 20 CHAIR KASSEKERT: Seeing no one, I'll 21 declare this portion of the meeting closed and 22 entertain a motion to adjourn. 23 COMMISSIONER SOMMELING: Motion to 24 adjourn. 25 VICE CHAIR EPPS: Second. 85 1 CHAIR KASSEKERT: The motion has been 2 made and seconded. All in favor? 3 (Ayes.) 4 CHAIR KASSEKERT: Opposed? 5 (No response.) 6 CHAIR KASSEKERT: Motion carries. 7 Thank you. 8 (Public Meeting 09-10-28 was adjourned 9 at 12:09 p.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 86 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 1, 2009 23 My Notary Commission Expires July 22, 2014 24 ID No 2062871 25