1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 10-01-06 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, January 6, 2010 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 9:15 a.m. to 11:30 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 SHARON ANNE HARRINGTON, COMMISSIONER MICHAEL C. EPPS, COMMISSIONER 4 WILLIAM T. SOMMELING, COMMISSIONER 5 6 PRESENT FOR THE CASINO CONTROL COMMISSION: DARYL W. NANCE, ADMINISTRATIVE ANALYST 7 DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 8 OFFICE OF THE GENERAL COUNSEL: DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE 9 SECRETARY MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 10 SETH H. BRILLIANT, SENIOR COUNSEL ROBERT A. MONCRIEF, COUNSEL 11 TRACY E. RICHARDSON, COUNSEL 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 CHARLES F. KIMMEL, DEPUTY ATTORNEY GENERAL DOROTHY TURI, 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. 5a DIANNA W. FAUNTLEROY, GENERAL COUNSEL BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY 3 GENERAL SWIFT LAWFIRM 4 CLAIRE SWIFT, ESQ. FOR: RENEE BROWN 5 ITEM NO. 5b DIANNA W. FAUNTLEROY, GENERAL COUNSEL BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY 6 GENERAL SETH GROSSMAN & ROBERT A. LOEFFLAD 7 ROBERT A. LOEFFLAD, ESQ. FOR: DAVID HO 8 ITEM NO. 6 SETH H. BRILIANT, SENIOR COUNSEL 9 CHARLES F. KIMMEL, DEPUTY ATTORNEY GENERAL N. LYNNE HUGHES, ESQ. 10 STERNS WEINROTH, PC DENNIS DALY, ESQ. 11 FOR: HARRAH'S ENTITIES FOX ROTHSCHILD, LLP 12 NICHOLAS CASIELLO, JR., ESQ. FOR: SIEMANS 13 14 ITEM NO. 7 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL DOROTHY TURI, DEPUTY ATTORNEY GENERAL 15 MICHAEL A. MAGAZZU, ESQ. FOR: HARRAH'S ENTITIES 16 ITEM NO. 10 SETH H. BRILIANT 17 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL KAREN M. WOSNACK, ESQ. 18 FOR: RESORTS INTERNATIONAL HOTEL, INC. 19 ITEM NO. 12 ROBERT A. MONCRIEF, COUNSEL TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL 20 TAMA HUGHES, ESQ. FOR: ADAMAR OF NEW JERSEY, INC. 21 22 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 10-01-06 2 JANUARY 6, 2010, 9:15 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 8 8 December 16, 2009, public meeting 4 2 Approval of Annual Meeting Schedule 8 9 3 Election of Vice Chair 9 10 5 4 Applications for employee and casino service industry licenses 6 22 initial and/or renewal of casino key 11 11 and casino employee licenses 7 10 initial and/or renewal of casino key 11 12 and casino employee licenses 8 5 Stipulations of settlement and consent agreements: a) Renee D. Brown (08-0005-EA) 12 14 9 b) David Ho (09-0514-ER) 14 16 c) Rachelle Demosthenes (09-0483-EA) 12 14 10 6 Petition of Harrah's Entertainment, Inc., 16 77 Harrah's Operating Company, Inc., Bally's 11 Park Place, Inc., Boardwalk Regency Corporation, Showboat Atlantic City Operating 12 Company, LLC, and Harrah's Atlantic City Operating Company, LLC, for permission to: 13 Offer non-cashable electronic slot credits; permit employees of Harrah's Entertainment, 14 Inc., to create and load compute code for Harrah's casino licensees and to revise and 15 consolidate its MIS Help Desk staffing and procedures (PRN 2050901) 16 Sam Dillard, sworn 22 Alexander Blair Linville, sworn 49 17 7 Petitions of Harrah's Entertainment, Inc., (HEI) Harrah's Operating Company, 18 Inc., (HOC) Harrah's Atlantic City Operating Company, LLC, Showboat Atlantic City 19 Operating Company, LLC, Bally's Park Place, Inc., and Boardwalk Regency Corp. for a waiver 20 of qualification for HEI and HOC officer positions a) Vice President Corporate Marketing 78 79 21 (PRN 3560901) b) Vice President Lean Enterprise 78 80 22 (PRN 3560902) 8 Petition of Marina District Development 80 82 23 Company, LLC, (d/b/a Borgata Hotel Casino & Spa) for waiver of the qualification 24 requirement for a new officer of its holding company Boyd Gaming Corporation pursuant to 25 NJSA 5:12-85d(1) (PRN 3370903) 5 1 CONTINUED AGENDA PUBLIC MEETING NO. 10-01-06 2 JANUARY 6, 2010, 9:15 a.m. ITEM PAGE VOTE 3 9 Petition of TotalUp, Inc., and Trump 83 84 Marina Associates, LLC (d/b/a Trump Marina) 4 for approval of "Total Craps" as a variation of the authorized game of craps pursuant to 5 NJSA 5:12-5 and NJAC 19:47-8.4 (PRN 0720905) Proposed publication of amendments to NJAC 6 19:45-1.12; 19:46-1.15 and 1.16A; and 19:47-1.2; and proposed new rules: NJAC 7 19:46-1.11A and 19:47-1A1 et seq. 10 Petition of Resorts International Hotel, 84 95 8 Inc., for an amendment to NJAC 19:47-2.3 pursuant to NJAC 19:40-3.6 and NJAC 19:47-8.4 9 (PRN 3620901). Proposed temporary adoption of amendments to NJAC 19:46-1.10 and 1.15; 10 19:47-2.1, 2.3 and 8.3 (Hand Fee in Blackjack) Kevin Brown, sworn 86 11 11 Proposed publication and temporary 95 96 adoption of amendments to NJAC 19:43-7.3 12 and 7.6 (Alternate Configurations or locations for gaming pits and slot zones; sealed 13 floor plans) 12 Petition of Adamar of New Jersey, Inc., 97 105 14 (d/b/a Tropicana Casino Resort) for an amendment to its operation certificate to 15 permit a reconfiguration of its gaming floor and delete its simulcast facility (PRN 3520904) 16 Mario DiGuiseppe 100 13 Joint Petition of Shuffle Master, Inc.; 106 108 17 Boardwalk Regency Corporation (d/b/a Caesars Atlantic City) and Trump Marina Associates, 18 LLC, to permit the game Crazy 4 Poker (PRN 3020906) 19 PUBLIC PARTICIPATION: ELIZABETH JACKSON 109 20 VIRGINIA CASTRO 111 SAMANTHA PEZZOTTI 115 21 ERIC KNUTTEL 118 ED WELENC 119 22 ERNIE GRECCO 120 JEROME COHEN 122 23 24 25 6 1 E X H I B I T S : 2 ITEM NO. 2 3 NO. DESCRIPTION EVD 4 P-1 Remand for hearings 22 license X 5 P-2 Grant 10 licenses X 6 7 ITEM NO. 6 8 P-1 Chart: Harrah's Entertainment X Help Desk Process 9 (Staff Analysis) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (Exhibits retained by Commission.) 25 7 1 (Public Meeting 10-01-06 was commenced 2 at 9:15 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 Meeting Act," the New Jersey Casino Control 9 Commission on October 15, 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 16, 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 is prohibited. 20 Any member 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. 1-2 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 and enterprise license matters. 6 The Commission approved the December 7 16th, 2009, closed-session minutes. 8 Item No. 1, ratification of the minutes 9 of December 16th, 2009, public meeting. 10 COMMISSIONER SOMMELING: Move to 11 approve. 12 VICE CHAIR EPPS: 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: The motion carries. 19 MR. NANCE: Item No. 2, approval of 20 annual meeting schedule. 21 COMMISSIONER SOMMELING: Move to 22 approve. 23 COMMISSIONER HARRINGTON: Second. 24 VICE CHAIR EPPS: Second. 25 CHAIR KASSEKERT: The motion has been 9 ITEM NO. 3 1 made and seconded. All in favor? 2 (Ayes.) 3 CHAIR KASSEKERT: Opposed? 4 (No response.) 5 CHAIR KASSEKERT: The motion carries. 6 MR. NANCE: Item No. 3, election of vice 7 chair. 8 CHAIR KASSEKERT: Let me open the floor 9 for nominations for the position of vice chair. 10 VICE CHAIR EPPS: Madame Chair, I would 11 nominate Sharon Anne Harrington as Vice Chair 12 of the Commission until the reorganization 13 meeting in January of 2011. 14 COMMISSIONER SOMMELING: Second. 15 CHAIR KASSEKERT: We have a nomination 16 and second. 17 Is there any other nominations? 18 COMMISSIONER SOMMELING: Move to close 19 the nominations. 20 CHAIR KASSEKERT: I'd like a second to 21 close the nominations? 22 VICE CHAIR EPPS: I would second that. 23 And inasmuch as it's a rite of passage, 24 and it's almost like rookie hazing that you 25 have to become -- 10 ITEM NO. 3 1 (Laughter.) 2 VICE CHAIR EPPS: -- Vice Chair, so God 3 bless you, Commissioner Harrington. 4 CHAIR KASSEKERT: Thank you. 5 Oh. We have a nomination. 6 Is this a roll call vote, Mr. Nance? 7 MR. NANCE: Yes. 8 CHAIR KASSEKERT: Shall we give her a 9 roll call vote? Okay. 10 MR. NANCE: Commissioner Sommeling? 11 COMMISSIONER SOMMELING: Yes. 12 MR. NANCE: Vice Chair Epps? 13 COMMISSIONER EPPS: Yes. 14 MR. NANCE: Chair Kassekert? 15 CHAIR KASSEKERT: Yes. 16 MR. NANCE: Commissioner Harrington? 17 COMMISSIONER HARRINGTON: I guess so, 18 yes. 19 (Laughter.) 20 MR. NANCE: The record will reflect that 21 the motion is unanimous. 22 COMMISSIONER EPPS: Congratulations. 23 CHAIR KASSEKERT: Congratulations. 24 VICE CHAIR HARRINGTON: Thank you. I 25 hope I can serve in the exemplary role that 11 ITEM NO. 4 1 I've seen Commissioner Epps. 2 CHAIR KASSEKERT: Very good. 3 COMMISSIONER EPPS: Well done. 4 VICE HARRINGTON: Thank you. 5 (Laughter.) 6 COMMISSIONER EPPS: Just like I wrote 7 it. 8 VICE CHAIR HARRINGTON: Is that good? 9 COMMISSIONER EPPS: Just like I wrote 10 it. 11 MR. NANCE: Item No. 4, applications for 12 casino service and employee service industry 13 licenses. This agenda item will be entered as 14 Exhibit List 1 and 2. Exhibit 1 consists of 22 15 applications for initial and/or renewal of 16 casino key and casino employee licenses. 17 The Division has objected to licensure. 18 COMMISSIONER EPPS: Move that we remand 19 these matters for hearing. 20 COMMISSIONER SOMMELING: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 12 ITEM NO. 5 1 CHAIR KASSEKERT: Motion carries. 2 MR. NANCE: Exhibit List 2 consists of 3 10 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 EPPS: Move that we grant 8 the applications. 9 COMMISSIONER SOMMELING: 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: The motion carries. 16 MR. NANCE: Item No. 5, stipulation of 17 settlement and consent agreements. When I call 18 your name, please come forward, standing behind 19 this middle table, spreading across the room so 20 that you may be seen: Renee Brown and Rachelle 21 Demosthenes. 22 MS. SWIFT: Good morning, Commissioners. 23 Claire Swift of the Swift law firm on behalf of 24 Renee Brown. 25 CHAIR KASSEKERT: Thank you. 13 ITEM NO. 5 1 And, ma'am, could I have your name for 2 the record? 3 MS. BROWN: Renee Brown. 4 CHAIR KASSEKERT: Thank you. And? 5 MS. DEMOSTHENES: Rachelle Demosthenes. 6 CHAIR KASSEKERT: Thank you. 7 In a moment we're going vote on the 8 stipulations which you've agreed to with the 9 Division of Gaming Enforcement. I'm going to 10 ask at this point if any of you wish to be 11 heard on your matter. 12 You don't have to say anything if you 13 don't want to. 14 MS. SWIFT: No, thank you. 15 CHAIR KASSEKERT: Very good. 16 Mr. Biscieglia? 17 MR. BISCIEGLIA: Good morning, Madame 18 Chair, Commissioners. Happy New Year. 19 CHAIR KASSEKERT: Happy New Year. 20 MR. BISCIEGLIA: The Division has 21 nothing further to add and ask that the 22 stipulations be approved as submitted. 23 CHAIR KASSEKERT: Thank you. 24 Any questions? 25 COMMISSIONER SOMMELING: No questions, 14 ITEM NO. 5 1 Madame Chair. 2 Motion to approve the stipulations. 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 Thank you for coming. Good luck. 11 MS. SWIFT: Thank you. 12 MS. BROWN: Thank you. 13 MR. NANCE: I'd like to now call David 14 Ho. 15 MR. LOEFFLAD: Good morning. Robert 16 Loefflad of the office of Grossman & Loefflad 17 for the Applicant David Ho. 18 CHAIR KASSEKERT: Good morning. 19 Mr. Ho? 20 MR. HO: Yes. 21 CHAIR KASSEKERT: Okay. In a moment 22 we're going to vote on your stipulation. Is 23 there anything that you would like to say in 24 this matter? 25 MR. LOEFFLAD: No, Your Honor. 15 ITEM NO. 5 1 CHAIR KASSEKERT: Okay. Mr. Biscieglia? 2 MR. BISCIEGLIA: Thank you, Chair. 3 Once again, the Division has nothing 4 further and ask that the stipulation be 5 approved. 6 Thank you. 7 CHAIR KASSEKERT: Thank you. 8 Any questions?. 9 COMMISSIONER SOMMELING: No questions, 10 Madame Chair. 11 COMMISSIONER EPPS: Madame Chair, I move 12 first that we seal Exhibit B-2 in its entirety 13 and seal portions of Exhibits A, B-3, B-4, and 14 B-5 for reasons of confidentiality. 15 CHAIR KASSEKERT: Is there second? 16 VICE CHAIR HARRINGTON: Second. 17 COMMISSIONER SOMMELING: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. All in favor? 20 (Ayes.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: Motion carries. 24 MR. LOEFFLAD: Thank you. 25 COMMISSIONER EPPS: And now I would move 16 ITEM NO. 6 1 that we approve the stipulation of settlement 2 and grant Mr. Ho's application for renewal of a 3 casino employee license. 4 COMMISSIONER SOMMELING: Second. 5 CHAIR KASSEKERT: The motion has been 6 made and seconded. All in favor? 7 (Ayes.) 8 CHAIR KASSEKERT: Opposed? 9 (No response.) 10 CHAIR KASSEKERT: The motion carries. 11 MR. LOEFFLAD: Thank you. 12 CHAIR KASSEKERT: Thank you for coming. 13 Good luck. 14 MR. NANCE: Item No. 6, petition of 15 Harrah's Entertainment, Inc., Harrah's 16 Operating Company, Inc., Bally's Park Place, 17 Inc., Boardwalk Regency Corporation, Showboat 18 Atlantic City Operating Company, LLC, and 19 Harrah's Atlantic City Operating Company, LLC, 20 for permission to offer non-cashable electronic 21 slot credits; permit employees of Harrah's 22 Entertainment, Inc., to create and load compute 23 code for Harrah's casino licensees; and to 24 advise and consolidate its MIS Help Desk 25 staffing and procedures. 17 ITEM NO. 6 1 Mr. Briliant? 2 MR. BRILIANT: Good morning, Chair and 3 Commissioners. 4 Mr. Daly is here on behalf of Harrah's 5 and the related Petitioners. Mr. Kimmel is 6 here on behalf of the Division. Mr. Casiello 7 is here on behalf of Siemans. 8 Nick, did you want to make an 9 appearance? He may be outside. All right, 10 MR. DALY: Let me add that Miss Hughes 11 will also be seated at the counsel table. 12 MR. BRILIANT: Okay. 13 MR. DALY: Good morning. 14 CHAIR KASSEKERT: Good morning, Mr. 15 Daly. 16 MR. DALY: If you give me just a minute. 17 CHAIR KASSEKERT: Sure. 18 MR. DALY: Has everyone entered their 19 appearance? 20 CHAIR KASSEKERT: I don't think actually 21 anybody has. And here comes Mr. Casiello. 22 MR. KIMMEL: Late. 23 MR. DALY: Dennis Daly and Lynn Hughes 24 on behalf of the Petitioners. 25 CHAIR KASSEKERT: Thank you. 18 ITEM NO. 6 1 Mr. Casiello, do you care to enter an 2 appearance? 3 MR. NANCE: Nick Casiello, law firm of 4 Fox Rothschild, appearing on behalf of Siemans. 5 Thank you. 6 CHAIR KASSEKERT: Thank you. 7 MR. KIMMEL: Charles Kimmel, Deputy 8 Attorney General, appearing on behalf of the 9 Division of Gaming Enforcement. 10 CHAIR KASSEKERT: Thank you. 11 Mr. Daly, you may proceed. 12 MR. DALY: Thank you. 13 Commissioners, we're here today on a 14 matter that has been part of a long process of 15 discussions with members of the Commission's 16 staff and the Division of Gaming Enforcement. 17 When we actually initially started down this 18 road, it was a far more involved matter. It 19 included things that we call CMS bank. There 20 were a lot of issues involved with encryption 21 and e-drop. And those things have been taken 22 off the table now. What we're talking about 23 today is two specific programs that we seek 24 your approval to proceed with, and they relate 25 to something called "code load" and something 19 ITEM NO. 6 1 called the "help desk." You're all familiar 2 with what a help desk is. Code load may need a 3 little bit more explanation. 4 What I propose to do, I'm aware there 5 are some time constraints. And I'm sure 6 Commissioner Harrington will remember that the 7 last time we were here before you happened to 8 be her first inaugural meeting, and we went 9 some four hours, in excess of four hours. I 10 can assure you that we're not going to come 11 anywhere close to that today. But what I would 12 like to do is a bit unorthodox, but the 13 Division has agreed, and if the Commission 14 agrees, if the Chair agrees, what I would like 15 to do is to put two witnesses on the stand at 16 the same time. Much of what we have to -- 17 CHAIR KASSEKERT: Can we do that? 18 MR. DALY: -- talk about is -- 19 MS. FAUNTLEROY: The time -- we've got 20 time to do the normal course. 21 CHAIR KASSEKERT: Yeah. I think we're 22 all right. Because I think it's a little 23 unwieldy to put two witnesses on. 24 MR. DALY: Well, if I may -- 25 CHAIR KASSEKERT: Sure. 20 ITEM NO. 6 1 MR. DALY: Let me try to pursue it a 2 little bit more. What we're about here today 3 is there are certain functions that have to be 4 performed in accordance with the conditions, 5 the proposed conditions that the staff has laid 6 out and we have agreed to, primarily. Certain 7 things are corporate functions, and certain 8 things are functions of the local licensees, 9 the four Atlantic City casino licensees. I 10 think many of the questions are going to be 11 duplicative of both the individuals who can 12 address the corporate aspects of it and Mr. 13 Dillard who can address the local Atlantic City 14 licensees parts of it. 15 I would suggest to you that we can very 16 much simplify things without confusing the 17 record by addressing the questions to Mr. 18 Linville on behalf of the corporate aspect of 19 it, and Mr. Dillard on behalf of the Atlantic 20 City licensees' aspect of it. And it will, I 21 think, greatly enhance the presentation. It's 22 not just the matter of it being quicker, which 23 it would be, but it will also be more effective 24 because taking our cue from the last one, there 25 were many questions that were addressed to both 21 ITEM NO. 6 1 witnesses. They will both be there to answer. 2 Or we can determine on the fly which individual 3 is more better suited to respond to the 4 specific question. 5 CHAIR KASSEKERT: I'm just concerned 6 because, you know, this is a public proceeding. 7 We have a transcriber here. I want to make 8 sure she would be comfortable in handling that, 9 and I would be concerned that she wouldn't. 10 And we want to make sure we have a clear 11 record. So I really think we should proceed 12 with you calling the witnesses separately. 13 MR. DALY: All right. 14 CHAIR KASSEKERT: Mr. Kimmel? Any 15 opening remarks you'd like to make before we 16 hear from the witnesses? 17 MR. KIMMEL: No. I'll just go right to 18 the testimony. 19 CHAIR KASSEKERT: Okay. Thank you very 20 much. 21 Mr. Daly, you can call your first 22 witness. 23 MR. DALY: Would call Mr. Sam Dillard. 24 CHAIR KASSEKERT: Good morning, Mr. 25 Dillard. Mr. Nance will swear you in. 22 ITEM NO. 6 1 SAM DILLARD, was duly sworn to testify 2 in this matter. 3 4 MR. NANCE: Please state your name for 5 the record. 6 MR. DILLARD: Sam Dillard. 7 MR. NANCE: Spell your name for the 8 record.. 9 MR. DILLARD: S-a-m, D-i-l-l-a-r-d. 10 MR. NANCE: Thank you. 11 CHAIR KASSEKERT: Thank you. You may 12 proceed. 13 14 DIRECT EXAMINATION BY MR. DALY: 15 Q. Mr. Dillard, you have briefly outlined 16 what we're asking the Commission to approve today, and 17 I want to just simply drill down to an area where we 18 have some disagreement. Is it your understanding -- 19 you have read, have you not, the draft resolution -- 20 A. I have. 21 Q. -- which includes the proposed 22 conditions? And you're perfectly familiar with them? 23 A. Yes, I am. 24 Q. And with respect to those conditions 25 that impose obligations on the Atlantic City 23 ITEM NO. 6 1 licensees, you're satisfied that you will be able to 2 comply with those conditions? 3 A. Yes, I am. 4 Q. All right. There's no disagreement, as 5 I understand it, with regard to any of the proposed 6 conditions with the exception of one, and that is 7 identified as Item 4f; is that correct? Is that your 8 understanding? 9 A. That's correct. 10 Q. All right. I will read that for the 11 record. 12 MR. DALY: With your -- 13 CHAIR KASSEKERT: Sure. 14 Q. The condition states as follows, the 15 proposed condition: At all times that Siemans is in 16 any way involved with the Help Desk, Harrah's and the 17 AC casino licensees shall, one, preclude any Siemans 18 employee from any physical or logical access to any 19 casino computer system located at any Atlantic City 20 casino licensee. 21 It then continues with this language, 22 which for the record let me identify as alternative A: 23 Or to any Help Desk logs related to any casino 24 computer system, which is located in any New Jersey 25 casino licensee. 24 ITEM NO. 6 1 That's the way the proposal reads from 2 the staff. Do you have any concerns about that 3 language? 4 A. I do. 5 Q. Can you explain exactly -- let's back up 6 just a little bit and tell me what the functions of a 7 help desk are. What is it, and what does it do for 8 you? 9 A. Okay. Our help desk system is a 10 administrative tool that allows us to track requests 11 for technical assistance from the different 12 departments in the user community among our four 13 properties. And so the software itself is a 14 administrative means of tracking those requests, how 15 quickly the IT teams responded to those requests, and 16 producing some reporting and analysis on trends so 17 that we can get better over time at weighting 18 proactively problems that are there or detecting 19 trends or patterns in those applications. So that's 20 what the help desk software does for us. 21 Q. It is an essential part of this proposal 22 that you are seeking approval for a new software to 23 handle the help desk system; is that correct? 24 A. That is correct. 25 Q. Have you had the opportunity to review 25 ITEM NO. 6 1 what available software programs there are out there? 2 A. I've done a measure of that, as have our 3 corporate partners, and Mr. Linville can certainly 4 speak to a more exhaustive analysis that the company 5 performed on the variety of options that are out 6 there. 7 Q. Has the company selected a particular 8 software that it wants to utilize? 9 A. We have. 10 Q. What do you see as the benefits of that 11 software? 12 A. I would say that the new software that 13 has been selected has superior capabilities to the 14 software that we use today, particularly in terms of 15 reporting and analysis, giving us stronger ability to 16 detect if we have a problem or a trend or pattern that 17 we need to follow up on. So my concern with the 18 operations of our properties is always to, one, try to 19 be as proactive as possible. We want to avoid any 20 problems from occurring in the first place. But if a 21 problem does occur, we need to be able to correlate 22 perhaps multiple instances of something being reported 23 as being part of a larger pattern or a trend or a 24 larger issue as quickly as possible so that we can 25 then be reactive as quickly as we can be. So the new 26 ITEM NO. 6 1 software application that we're evaluating simply has 2 superior capabilities to what we have today. 3 Q. Okay. So, now, let me return to that 4 Alternative A, as I've described it before. What is 5 it about that language that causes the company to have 6 any concerns that you cannot meet? 7 A. The way that the software is provided 8 from the vendor does not allow a security mechanism 9 that would preclude someone who has permissions to get 10 into the software package itself from viewing a help 11 desk ticket. And so there has been some discussion 12 back and forth with the staff about this being a 13 concern. We have approached, and Mr. Linville can go 14 into additional detail here, even to the level of 15 going back to the vendor and saying, you know, there 16 must be some way to do this. You know, we're being 17 requested to do this, and we want to be able to, only 18 to be told that it simply does not work that way. 19 That once someone has permission to log into the 20 application itself, that inherent in those abilities 21 is the capability to view a ticket. There are 22 absolutely controls and safeguards that prevent the 23 updating or amending or deleting of a ticket. So, in 24 other words, modifying a record that has already been 25 entered into that administrative log, but not 27 ITEM NO. 6 1 preventing someone from viewing the log. So we -- we 2 are simply in a situation where with the software, we 3 are unable to comply and the vendor is unable to 4 comply with the wishes of the staff. 5 Q. And that results, I take it from your 6 answer, in a situation where the software simply will 7 not allow you to comply with this language because it 8 necessarily would -- would not be able to preclude 9 Siemans personnel from viewing whatever tickets have 10 been created; am I correct? 11 A. That's correct. 12 Q. What -- what level of exposure does that 13 provide to you? Are you concerned at all that 14 personnel at Siemans would have the opportunity to 15 view the tickets that related to a casino computer 16 system? Does that give you any concerns at all? 17 A. I -- it -- and I understand the concerns 18 of the staff. So it doesn't -- it doesn't give me any 19 concern because of my -- I guess my knowledge of how 20 operationally we handle and identify these issues from 21 the offset. The -- 22 Let's just take an example. If we were 23 to encounter an issue on the casino floor with a bank 24 of slot machines, for example, the slot operations 25 department would be responding to that initially when 28 ITEM NO. 6 1 we detected that there was some kind of issue and 2 would physically take action on the floor before they 3 ever reported that incident into the administrative 4 software for the help desk tracking tool. So by the 5 time that someone from Siemans could possibly have the 6 opportunity to read the content of a ticket that says, 7 hey, there's something going wrong with a bank of 8 machines and potentially, you know, try to collude 9 with someone to exploit that situation, that's really 10 an after-the-fact record at that point, and the real 11 work to secure the environment on the casino floor and 12 protect the integrity of the games for the customer 13 and the revenue stream has already been in progress 14 and is being handled by the folks who actually have 15 the permission and the licensing to physically touch 16 whatever the systems are that are being impacted. So 17 I see the risk of someone viewing a record like this 18 after the fact that is administrative information 19 about what went wrong in the past as a very minor 20 risk. 21 Q. But it is a risk, however minor. What 22 would you propose? What does the company propose to 23 deal with that level of risk? 24 A. Recognizing that there is still some 25 risk there, I think we have an agreement with the 29 ITEM NO. 6 1 staff that we would like to propose some additional 2 audit and security measures as part of the internal 3 controls for operating the help desk system. I 4 believe that you've had the opportunity to review 5 those, and we are completely comfortable being able to 6 say that we can implement all of those additional 7 controls. 8 Q. And then that concept would be embraced 9 within what I'll refer to as Alternative B, the 10 language that would apply to this Condition 4f which, 11 again, I'm read for the record: Implement via 12 proposed internal controls submitted by Harrah's 13 additional audit measures with regard to the help desk 14 and Siemans activities concerning technical support 15 requests involving any casino computer system of any 16 AC casino licensee. 17 That's the language that is not -- that 18 you feel would satisfy those -- those concerns, those 19 security concerns that you have, however minor they 20 may be. But you believe that the additional measures 21 that the company is willing to take would, in your 22 opinion, satisfy those concerns? 23 A. Yes. I do. 24 Q. Okay. 25 MR. DALY: That's all I have for this 30 ITEM NO. 6 1 witness. 2 CHAIR KASSEKERT: Mr. Casiello, do you 3 have any questions? 4 MR. CASIELLO: No questions. 5 CHAIR KASSEKERT: Mr. Kimmel? 6 7 CROSS-EXAMINATION BY MR. KIMMEL: 8 Q. Given the economy, I assume you wouldn't 9 be replacing your current system unless there were 10 some tremendous disadvantage to it. In other words, 11 if I'm using Microsoft Word '03, and it's working 12 perfectly well, I'm not going to pay for an upgrade if 13 I don't have to. What is it that makes you want to 14 upgrade right now? 15 A. I think the enterprise that -- Harrah's 16 Entertainment as an enterprise had an opportunity to 17 examine this software, and in terms of the local 18 licensees, the cost leverage of approaching this 19 project from an enterprise perspective being able to 20 include the four Atlantic City properties makes it an 21 attractive price point for us and makes it a cost 22 effective solution. 23 Q. And it's not effective if the four 24 Atlantic City licensees have to be separated out? It 25 only works if you pay for a corporate license? 31 ITEM NO. 6 1 A. That's correct. From a cost 2 perspective. It's pretty much a -- you know, it's a 3 gold standard in terms of the software. There is some 4 cost to it. And it would not be something that would 5 be easily affordable for the four licensees here in 6 terms of our cost structure. 7 Q. I guess my point was, what is it about 8 the current system that says you want to upgrade in 9 the first place? 10 A. The additional capabilities that exist 11 in the system to help us further our ability to 12 diagnose, correlate potential issues that are 13 occurring, and, you know, frankly, just get smarter at 14 our terms in IT to be able to be more proactive to 15 respond to these situations. 16 Q. Okay. You spoke earlier about being 17 able to analyze trends and such, that this Remedy 18 software package gives you. Who is able to view that 19 trend analysis? In other words, just because the 20 software does it doesn't do any good if nobody's 21 actually looking at it and deciding to take action 22 based on those analysis. 23 A. Right. 24 Q. Who is actually going to do that? 25 A. So members of my team would have the 32 ITEM NO. 6 1 ability to access that analysis and reporting. As 2 well as members of Mr. Linville's team in terms of, 3 you know, looking at the entire enterprise. So we're 4 talking high-level matrix, number of incidents, what 5 the trend patterns are. 6 Q. Does anyone from Siemans have access to 7 that analysis? 8 A. Actually, I do not know the answer to 9 that question. 10 Q. Is that something more appropriate for 11 Mr. Linville? 12 A. I believe Mr. Linville will be able to 13 answer that. Yes. 14 Q. You spoke earlier about the risk of 15 Siemans employees being able to view open tickets, and 16 you minimized that. It would seem to me -- and again 17 Mr. Linville will address this -- but it would seem to 18 me that the real risk is that they are able to view 19 that trend analysis. Is that a bigger way -- 20 A. That would not be a concern or worry for 21 me because I think that the trend analysis is 22 aggregated data that is not very specific; right? So 23 I think that the staff concerns that have been 24 expressed to us in the course of this process was that 25 someone at Siemans might learn inappropriately of a 33 ITEM NO. 6 1 particular situation that was occurring at a property, 2 and through some, you know, improper means attempt to 3 take advantage of that. For that, you would need very 4 detailed information off of which to base your 5 actions. And the high-level trend reporting and 6 analysis is going to be so abstracted to the point 7 that it really is just letting us know, you know, what 8 focus areas do we need to have? You know, did we have 9 fewer tickets this quarter than we did last quarter? 10 Are we improving? You know, is one property, for 11 example, among my four here doing a better job of 12 managing the number of incidents that are coming out 13 of a certain application versus another application? 14 So I think at that level of reporting, that sort of 15 headline level of reporting that there would not be 16 the kind of information that someone could take any 17 kind of inappropriate action with. 18 Q. Just bear with me, but I want to make it 19 perfectly crystal clear. You're not concerned that 20 any Siemans employee could be able to view existing 21 tickets and trend analysis, and in some combination of 22 looking at that say, okay, I see that there's a 23 problem with the Keynote system every Tuesday morning. 24 Next Tuesday I'm going to try to take and advantage of 25 that? You're sure that that can't happen? 34 ITEM NO. 6 1 A. I believe the risk of something like 2 that occurring is very small. Because you would have 3 to combine to your point two completely disparate 4 pieces of information so the trending information is 5 going to be aggregated to the level of analysis that 6 does not identify individual tickets. And so then 7 someone would have had to have picked through and also 8 found an individual ticket, which I don't believe they 9 would be able to correlate back to that trend. And 10 then, as I discussed before, if we're experiencing an 11 issue with one of these systems on our property, the 12 team members are taking the appropriate action to 13 manage the system itself that's having the problem as 14 opposed to the administrative application that's 15 really tracking the reported issue after the fact. 16 Q. Okay. Does the system, the Remedy 17 system, have some sort of logging or auditing feature 18 so that if anybody at Siemans was attempting to do 19 that, that would become known to Harrah's personnel? 20 A. There is reporting to understand who has 21 logged into the system. And there is reporting to 22 understand when someone has made changes, amendments 23 or additions to, you know, the diary entries of a 24 particular ticket, so there are measures to deal with 25 that. 35 ITEM NO. 6 1 Q. But I don't mean to make -- actually 2 viewing the ticket? 3 A. Back to the viewing. And that is, 4 frankly, one of the concerns that we have, right. 5 Because the software inherently allows someone with 6 permissions to access it to view. There is no 7 additional logging that says Person A viewed Ticket B. 8 Q. Okay. I just want to be clear on one 9 point you spoke to earlier. The software package 10 itself, the way it's designed, does not allow that 11 view to be cut off. I mean, if Siemans people can 12 create tickets, they can view tickets automatically. 13 You've explored the possibility of precluding that. 14 It can't be done. 15 A. That is correct. We have. 16 MR. KIMMEL: I don't have any further 17 questions for Mr. Dillard. 18 CHAIR KASSEKERT: Questions from the 19 Commissioners? Commissioner Epps? 20 COMMISSIONER EPPS: I have two 21 questions. The first is a pretty broad 22 question. And I think it's a semantics issue 23 that if you clear up may give me more guidance 24 into the situation. 25 When I hear "help desk" -- I'm a novice. 36 ITEM NO. 6 1 When I hear help desk, I'm the kind of guy 2 that's at my computer, I'm stuck. I call the 3 help desk, and they tell me how to fix the 4 problem I'm stuck with. That raises some 5 concern that we hear there's help-desk issues 6 that we're worried about somebody else having 7 access to. But what you seem to suggest in 8 your testimony is this help desk is not that 9 kind of help desk. It's kind of like after a 10 fix. Kind of help us understand what the help 11 was, so it's a help -- understand help desk. 12 THE WITNESS: Right. 13 COMMISSIONER EPPS: Its a couple tiers 14 higher. Is that accurate? I mean, is that 15 what you're telling me? 16 THE WITNESS: Let me try to clarify that 17 for you because you make a good point in terms 18 of that. It may still be someone that calls in 19 and picks up the phone. But the actual 20 situation that was being experienced, right? 21 Occurred obviously before someone had the 22 impetus to pick up the phone and call the help 23 desk. The Siemans role, just to be clear, is 24 not to solve the problem. Their role is to 25 answer the phone, record in the ticket what was 37 ITEM NO. 6 1 requested, and dispatch that ticket to -- one 2 of my teams, certainly in the case when we're 3 dealing with casino computer systems for the 4 resolution of that issue. So they merely 5 facilitate the dispatch of that particular 6 ticket that's going on. 7 All further entries into that ticket in 8 terms of what was done or what is completed is 9 occurring through, you know, appropriately 10 licensed members according to what that 11 function is -- is doing. So the example I gave 12 earlier, if we're experiencing a crisis of some 13 kind with one of our major applications, the 14 folks that are involved in that already are 15 dealing with it directly. And so any data in 16 the help-desk system by its nature is really 17 information about another problem that's 18 happening, you know, in -- in first person, if 19 you will, over in that particular application. 20 COMMISSIONER EPPS: So an open ticket, 21 even after it's dispatched, doesn't float 22 somewhere for immediate access and review? 23 THE WITNESS: Yes. It is assigned to 24 the appropriate members of my team. So let's 25 say that we're dealing with an issue where 38 ITEM NO. 6 1 something is happening on the casino floor with 2 the -- with the slot system. Then that would 3 be forwarded to one of my teams. They would be 4 the ones taking action on the content of that 5 ticket, contacting the department that reported 6 it, in this case likely slot operations, and 7 then working with them to physically correct 8 whatever was occurring, you know, incorrectly 9 inside of the slot system. 10 COMMISSIONER EPPS: And I guess what 11 we're talking about here is access to a log of 12 those tickets. 13 THE WITNESS: That's correct. 14 COMMISSIONER EPPS: But how soon after a 15 ticket is open and dispatched does that ticket 16 then go into the log? Does it go in 17 immediately? 18 THE WITNESS: It's immediately entered 19 into the log. 20 COMMISSIONER EPPS: Which means someone 21 would have immediate access if they wanted to 22 review a ticket. 23 THE WITNESS: If they wanted to view 24 what was in that ticket. Yes. Correct. 25 COMMISSIONER EPPS: So they could 39 ITEM NO. 6 1 actually see a ticket as a problem was being 2 addressed because as soon as it comes in, it's 3 an open ticket, it goes into the log. So I 4 could actually see it, an open ticket, as the 5 problem was being addressed? 6 THE WITNESS: That is correct. One of 7 the -- what typically happens in this case 8 because when someone's calling one of these 9 tickets in, sometimes it's after the fact. 10 They've had an issue. They've solved it; 11 right? But we would still like for them to 12 report it because we can't get trending data to 13 know that something had a problem so it could 14 be completely after the fact that something is 15 entered in. Or if they are experiencing a 16 problem right now, they tend to be busy; right? 17 So they've called up and said, hey, we've got a 18 problem on the slot floor, and we think this is 19 what's wrong, and you get very little 20 information. So when the ticket is initially 21 entered into the system, it has a minimal 22 amount of data at that point. It gets referred 23 over to my team. It's my team's responsibility 24 to contact that department and say, okay, I see 25 that you've reported an issue with the slot 40 ITEM NO. 6 1 system. Can you tell me more information about 2 that? And we're doing that either over the 3 phone or in person as we interact with that 4 individual. And then, again, it's after the 5 fact when someone makes a diary entry log into 6 the ticket that says, okay, here's what we 7 learned additionally. Here are the steps that 8 we took to resolve the problem. 9 COMMISSIONER EPPS: Okay. And then I 10 think your testimony is that there's a 11 mechanism in place to track who's reviewed the 12 open tickets? Or no? 13 THE WITNESS: So I made a distinction 14 between viewing the ticket and then doing 15 something to the ticket that would be more 16 invasive. So there's no logging other than 17 knowing who has access to get into the help 18 desk software itself that would tell you that 19 someone viewed a ticket or looked at the 20 content of a ticket. There is logging 21 capability in the application that tracks where 22 someone created the ticket. If they have 23 updated the ticket in any way or amended, you 24 know, or closed the ticket saying that it was 25 resolved. 41 ITEM NO. 6 1 COMMISSIONER EPPS: Okay. 2 CHAIR KASSEKERT: Commissioner 3 Sommeling? 4 COMMISSIONER SOMMELING: Just out of 5 curiosity, how -- with regard to the help desk 6 and all of Harrah's domains, all of its 7 properties, how many people have access to the 8 help desk under the new scheme at any given 9 time? All of the properties that Harrah's 10 controls? 11 THE WITNESS: Yeah. Everyone would 12 participate in the ability to view those 13 tickets. 14 COMMISSIONER SOMMELING: So everybody 15 would be scrutinized by the company that's 16 handling this for you as calls come in from the 17 help desk to be serviced? 18 THE WITNESS: Siemans would be able to 19 open a ticket for any person that called from 20 any property. 21 COMMISSIONER SOMMELING: And how would 22 you give exclusive attention to the Atlantic 23 City Harrah's properties under that scheme? 24 THE WITNESS: What we are proposing to 25 do is implement some custom security scripting 42 ITEM NO. 6 1 inside of the application that would prevent 2 the Siemans employ from modifying, all right? 3 Or amending the record of a ticket that is 4 created for any casino computer system for the 5 Atlantic City properties. So a little bit 6 earlier to Commissioner Epps question I 7 indicated that prohibiting the viewing was not 8 possible but that prohibiting someone from 9 amending that record, closing that record, or 10 creating that record is something that is 11 within the security capabilities of the 12 software. 13 COMMISSIONER SOMMELING: In regarding 14 the personnel that's going to be working in the 15 system, how -- what kind of training will they 16 have with regard to gaming that would give them 17 a clue that something was wrong with a ticket 18 in the gaming arena? I mean, how would they 19 know that? Are they being specially trained? 20 THE WITNESS: Well, the Siemans team 21 members certainly would not. 22 COMMISSIONER SOMMELING: Who would? 23 THE WITNESS: Their function is to 24 dispatch. So the only team members that would 25 know that would be members of the organizations 43 ITEM NO. 6 1 like mine who are actually responsible for -- 2 COMMISSIONER SOMMELING: But that has to 3 be reported to you. 4 THE WITNESS: In support of the 5 application. 6 COMMISSIONER SOMMELING: Right. That 7 has to be reported to you first. 8 THE WITNESS: That's correct. 9 COMMISSIONER SOMMELING: Yeah. So how 10 would -- how would they know? 11 THE WITNESS: They don't know that. I 12 guess that's the point; right? When someone 13 calls and says they have a problem, the Siemans 14 agent is just literally typing in and what the 15 person calls and reported is the issue. And 16 then they pass that to the team that they know 17 is responsible for working on issues related to 18 that particular system. 19 COMMISSIONER SOMMELING: Okay. And let 20 me ask you this. Is it possible with regard to 21 this staff that is going to be handling this 22 that they have particular access codes that 23 would allow them to handle any of the software 24 dealing with gaming? 25 THE WITNESS: Absolutely not. These 44 ITEM NO. 6 1 team members are not appropriately licensed to 2 access those systems, and they have no 3 profiles. And my security administrators in 4 place at each of the four licensees understand 5 what their duties are in perspective to who can 6 and cannot have access to a particular system. 7 COMMISSIONER SOMMELING: And under the 8 system, how quick would the responses be able 9 to be given to Atlantic City properties from 10 the -- from the company? 11 THE WITNESS: What kind of responses are 12 you referring to? 13 COMMISSIONER SOMMELING: Any responses 14 required with regard to a gaming problem. 15 THE WITNESS: So, okay. Once -- 16 COMMISSIONER SOMMELING: The help 17 desk is -- 18 THE WITNESS: Right. 19 COMMISSIONER SOMMELING: -- giving the 20 information -- excuse me for interrupting. 21 There has to be a resolution of some problem. 22 There has to be some expediency to it. 23 THE WITNESS: Right. Right. 24 COMMISSIONER SOMMELING: Because it's a 25 gaming problem, and it may be after the fact in 45 ITEM NO. 6 1 some cases. 2 THE WITNESS: Right. 3 COMMISSIONER SOMMELING: Some cases it 4 may not be. It may be right now. 5 THE WITNESS: When someone calls to an 6 open help-desk ticket and as soon as the 7 information is recorded, the ticket is created 8 right at that time while the person is on the 9 phone, and the procedures are that the Siemans 10 agent at the help disk gives the team member 11 who called in their ticket number so they have 12 that as a reference point to know that that 13 ticket has been created on their behalf. At 14 that point it's immediately placed into the 15 queue for the appropriate team to work on that 16 issue. And then my teams have service levels 17 for our properties where I have team members in 18 the computer rooms monitoring these screens. 19 As soon as the ticket appears, which is 20 immediately after the number was assigned, they 21 pick that ticket up, and they take possession 22 of it, and they work directly with the 23 department to resolve their problem. So it's 24 instantaneous. 25 COMMISSIONER SOMMELING: And those 46 ITEM NO. 6 1 queues in Atlantic City would be separate and 2 apart from the rest? 3 THE WITNESS: No. The reason it's all 4 instantaneous is because it's all part of -- 5 part of one large enterprise database. 6 COMMISSIONER SOMMELING: I mean in terms 7 of the response? 8 THE WITNESS: In terms of the response, 9 yes. That's correct. 10 COMMISSIONER SOMMELING: Yes. 11 CHAIR KASSEKERT: Commissioner 12 Harrington? 13 VICE CHAIR HARRINGTON: Mine is more of 14 a statement. I just want to be clear that when 15 you say that you're talking with staff, the 16 staff is talking with us. So the concerns that 17 are being expressed or represented are directly 18 as reflected of one of the Commissioners' 19 issues. So it's -- 20 THE WITNESS: I can appreciate that. 21 VICE CHAIR HARRINGTON: Okay. Thank 22 you. 23 CHAIR KASSEKERT: I have two questions. 24 First of all, when you say that you talked to 25 the software provider, and they -- they 47 ITEM NO. 6 1 indicated this can't be done, not that there's 2 a cost to it. They absolutely could not put 3 any kind of mechanism in there that would 4 address, to our satisfaction, Alternative A. 5 THE WITNESS: Mr. Linville was actually 6 the one that had those conversations -- 7 CHAIR KASSEKERT: Okay. 8 THE WITNESS: -- with the software 9 provider. But that is -- that is my 10 understanding, that it would essentially 11 require the complete dismantling of their 12 software application and building it a totally 13 different way that they did not intend to for 14 the marketplace. 15 CHAIR KASSEKERT: Okay. Secondly, what 16 will be the impact upon the Atlantic City IT 17 staff? Will approval of this change your 18 staffing numbers in any way? Have you reduced 19 staff? Tell me about the impact on the people 20 that work here in Atlantic City. 21 THE WITNESS: There will be no changes 22 to the staffing as a result of this particular 23 item with the help desk that we're proposing. 24 The advantages to us is, in my goal, to 25 discontinue to give my team better tools and 48 ITEM NO. 6 1 improved tools to do an increasingly good job 2 as we support our business unit. So that's 3 purely -- purely what I'm after here. 4 CHAIR KASSEKERT: Okay. Any other 5 questions? 6 COMMISSIONER SOMMELING: No other 7 questions, Madame Chair. 8 COMMISSIONER HARRINGTON: Can I -- 9 CHAIR KASSEKERT: Sure. Sure. 10 VICE CHAIR HARRINGTON: When you say 11 that this is a product that any modification or 12 adaptation is not, you know, useful in the 13 marketplace, so this isn't customized in any 14 way, this particular software? 15 THE WITNESS: That's correct. The 16 vendor has done nothing in particular to 17 customize it for our use. It is out of the box 18 configurable and, of course, that involves, you 19 know, we will implement and are planning to 20 implement if given permission the kinds of 21 security that can be configured in the product 22 as delivered. 23 VICE CHAIR HARRINGTON: All right. 24 Thank you. 25 CHAIR KASSEKERT: Okay. You may step 49 ITEM NO. 6 1 down. 2 MR. BRILIANT: Chair? 3 CHAIR KASSEKERT: Yes. 4 MR. BRILIANT: Could we have just a 5 one-minute break? I want to speak with Mr. 6 Daly. 7 CHAIR KASSEKERT: Sure. Absolutely. 8 (A brief pause was taken.) 9 MR. BRILIANT: Okay. Thank you, Chair. 10 I appreciate it. 11 CHAIR KASSEKERT: Okay. 12 MR. BRILIANT: We're ready to proceed. 13 CHAIR KASSEKERT: You may proceed, Mr. 14 Daly. 15 MR. DALY: Call Mr. Blair Linville to 16 the stand, please. 17 CHAIR KASSEKERT: Good morning, Mr. 18 Linville. Mr. Nance will swear you in. 19 20 ALEXANDER BLAIR LINVILLE, was duly sworn 21 to testify in this matter. 22 23 MR. NANCE: Please state you name for 24 the record. 25 MR. LINVILLE: Alexander Blair Linville. 50 ITEM NO. 6 1 MR. NANCE: Please spell your last name 2 for the record. 3 MR. LINVILLE: L-i-n-v-i-l-l-e. 4 MR. NANCE: Thank you. 5 CHAIR KASSEKERT: You may proceed. 6 7 DIRECT EXAMINATION BY MR. DALY: 8 Q. Okay. Mr. Linville, you've testified 9 before the Commission before, too, specifically back 10 on that July 15th date that we referenced earlier, so 11 we needn't go through your academic achievements or 12 prior work history. Let's drill down right to the 13 issues there are involved here. 14 And you heard the testimony and 15 questions that were addressed to Mr. Dillard. Would 16 you respond to some of those questions if you have 17 anything to add to what Mr. Dillard said. 18 A. Great. 19 Q. Respond. 20 A. So there are two key questions that I 21 wanted to follow up on that I think are very germane. 22 First up is in follow up to your question, 23 Commissioner Epps, about the thought process. When I 24 pick up the phone and call the help desk, and I get 25 someone who helps me. When this -- when that will 51 ITEM NO. 6 1 happen in the -- with respect to a new -- a licensee 2 casino -- a casino system, that call goes directly to 3 Mr. Dillard's team for the -- the majority of those 4 calls, which are New Jersey casino control systems 5 like our slot systems, our gaming systems. So it's 6 not like it goes through Siemans to Sam's team in 7 those instances. It goes directly to Sam's team. 8 For Siemans to know that's going on, 9 they would have to go and -- they would have to go and 10 see that in the system and then go and search for the 11 ticket. So it would be -- it would be -- it would 12 be -- have to be a very -- you know, it's why we think 13 the risk is so low, is because the time that they 14 would take, one, to follow up to Commissioner 15 Sommeling's question, they have no knowledge of our -- 16 of the gaming environment or systems here in New 17 Jersey at all nor any access to any of the systems. 18 And they'd be having to go and know that it's there 19 and go and search for it in order to actually take 20 some action on it. And then they have no permissions 21 or ability to do that. So I think that's an important 22 follow up, that is an understanding of when you pick 23 up the phone and call for our gaming systems, it's 24 Sam's teams that are the folks that are doing that 25 work. 52 ITEM NO. 6 1 And I also wanted to follow up on Mr. 2 Kimmel's question, specifically around the access to 3 the trending data and the access to the viewing of the 4 tickets. These teams will not have access to the 5 trending data. We are able to limit their ability to 6 look at the trending data. And it would be completely 7 separate organizations that we use technology like 8 Access Control that allow us to, you know, you don't 9 have a log-in and a password to the trending data if 10 you -- you know, if you are not in that particular 11 role. 12 So those are the two key points that I 13 really wanted to just follow up on as I listened to 14 that. 15 Q. As Mr. Dillard indicated, it was you 16 that had the conversations with the representatives of 17 the software program, now identified as Remedy, with 18 regard to the fact that it's impossible to do exactly 19 what would be required to do to preclude anyone at 20 Siemans from having viewing capability, looking at the 21 tickets; is that correct? 22 A. That's true. 23 Q. What exactly did they tell you? 24 A. So reiterating a bit of what we've 25 heard, it is inherent in the design of the system -- 53 ITEM NO. 6 1 because the goal here is to speed up the 2 troubleshooting and get better analysis. And so 3 they've now designed the systems so that you -- all 4 this underlying data is relatable. And it would 5 change the fundamental structure of the overall 6 application to try to segment off a portion of that 7 data. And that's why it would -- it would basically 8 be a dismantling of the software and changing the core 9 of what they're trying to do, and it's not something 10 that they're -- that they are -- that they will 11 support in any way, shape, or form. Nor do we -- as 12 your comment about a cost issue, it's just not 13 possible to be done in the software. 14 Q. Is that something along the lines that 15 you couldn't afford what it would take to make that 16 kind of change? 17 A. Not even afford. It would be -- there's 18 no -- the software would be changing the whole 19 structure of what you're doing. You're building your 20 own in that instance; right? And part of the value 21 for us, why this is a cost compelling opportunity is 22 that we're able to buy something that has the best of 23 breed of what is available in the industry already 24 built and able to use it, whereas what -- to do what 25 we're being asked to do would require us to basically 54 ITEM NO. 6 1 build our own. And that, obviously, would no longer 2 be cost competitive for us at all. 3 Q. With regard to the enterprise system as 4 it's designed and proposed, can you give us a sense of 5 what the volume of help-desk tickets would be created 6 at any given period of time? And I ask you this 7 question because both you and Mr. Dillard has 8 indicated that it would be very difficult for 9 employees of Siemans who had, for whatever reason, the 10 desire to see what's going on in Atlantic City casino 11 via the help desk, and they would have to go in and 12 look. How many -- give us some sense is of how large 13 that body of help-desk tickets is that they would have 14 to search through in order to find something that 15 might be relevant to New Jersey. 16 A. It would be on the -- I can't speak 17 specifically to the New Jersey licensee. I would 18 have -- Sam would have that data. 19 Q. Okay. 20 A. But for the enterprise wide, we're in 21 excess of a hundred thousand on an annual basis. 22 Q. Thank you. 23 MR. DALY: That's all I have. 24 CHAIR KASSEKERT: Mr. Kimmel? 25 55 ITEM NO. 6 1 CROSS-EXAMINATION BY MR. KIMMEL: 2 Q. I just want to be clear. If the 3 software gives you permission to create a ticket, 4 you -- there's no way to preclude such person who can 5 create a ticket from viewing a ticket? 6 A. Correct. 7 Q. They are one and the same? 8 A. It's by giving them -- yes. You are 9 correct. 10 Q. Now, Mr. Dillard talked about physical 11 security. Is it accurate to say that when somebody 12 calls in a problem with the slot system or the keno 13 system or whatever that, obviously, they know that 14 there's a problem. From your standpoint, Harrah's has 15 physically secured those assets before the help desk 16 is even notified of them. So if there is a problem 17 with them, somebody's on the scene, somebody has made 18 sure that the physical access to that is controlled, 19 and only then is the help-desk ticket created? Is 20 that accurate? 21 A. When we talk specifically about the 22 operational processes with the New Jersey licensees, I 23 really defer to Sam. However, our -- enterprise wide 24 that's absolutely the very first step in 25 troubleshooting any of these problems is to physically 56 ITEM NO. 6 1 secure the -- physically secure access to. So, yes, 2 that's absolutely what we believe. 3 Q. So even if the Siemans people had the 4 ability to view a ticket, they wouldn't be able to 5 call a confederate or something like that because the 6 thing would be physically secured until the problem 7 was resolved. Once the problem is resolved, then 8 whatever vulnerability is there is no longer there? 9 A. That is, again, my understanding of the 10 processes that we have associated with it. 11 Q. I think part of the problem that I'm 12 having conceptually is the idea that, you know, when 13 I'm on my home computer, I'm somewhat paranoid that 14 anything I'm searching, somebody else can come back 15 forensically and find out that I searched it. Is 16 there any way for you to be able to say, we want to 17 know what Siemans people actually looked at? I 18 understand if they create a ticket, they can view it, 19 but why can that not be audited? 20 A. It's a very -- it's a very good 21 question. It is not capable within the system to be 22 able to -- because of how the system is designed, 23 it's -- we're not capable to have an audit of what 24 they're looking at in the particular system. 25 Q. So that's your testimony. That it's not 57 ITEM NO. 6 1 a matter of cost or anything else. It is simply the 2 system you're buying does not permit you to do that. 3 A. Absolutely. 4 Q. Therefore, the language that we talked 5 about in the draft resolution is simply something you 6 cannot comply with. 7 A. That is correct. That's correct. 8 MR. KIMMEL: I don't have any further 9 questions. 10 CHAIR KASSEKERT: Questions from 11 Commissioners? 12 Commissioner Harrington? 13 VICE CHAIR HARRINGTON: Another -- just 14 a statement. It's surprising to me that the 15 gold standard of a software package application 16 isn't adaptable to meet the needs of either 17 your enterprise or our regulations. 18 THE WITNESS: Again, as you can tell, 19 I've -- I've met with the CEO of the company on 20 multiple occasions to discuss it. And it truly 21 is a -- it's what they believe as a step 22 forward in where these software applications 23 need to go and what most of the industry is 24 demanding of them, right? Most of the industry 25 is demanding of them to make the data more -- 58 ITEM NO. 6 1 you know, speed up the time to analyze this 2 data and to react to it. Because at the end of 3 the day, what we're all after, we want to 4 fix -- when they break, we want to fix them 5 absolutely faster. And we want to get a lot 6 more correlating of the information. And it 7 is -- they believe it's the equivalent of a 8 radical leap forward in where the industry is 9 going. 10 VICE CHAIR HARRINGTON: Okay. Thank 11 you. 12 CHAIR KASSEKERT: Commissioner 13 Sommeling? 14 COMMISSIONER SOMMELING: Listening to 15 what you're saying and what Mr. Kimmel's 16 question was with respect to the system a 17 moment ago, when Harrah's decided when the 18 enterprise system and all the input was 19 gathered with respect to how well it would fit 20 the companies, allow the company to reach its 21 goals in terms of having a -- you know, help 22 desk function work throughout -- for the 23 corporation, I mean, were they aloof to the 24 necessity of addressing the issues with the 25 gaming regulations and how that system would be 59 ITEM NO. 6 1 to accommodate what is required in order to be 2 informed as to how the gaming operations are 3 ongoing? And if there are glitches -- I know 4 it's a multiple question -- that those things 5 have to be reported or fixed or whatever, you 6 know, with some expediency, of course, because 7 that's what is expected in the gaming industry, 8 at least here in New Jersey. So I would think 9 this corporate umbrella of a help desk would -- 10 because you are all gaming companies. I mean, 11 that's your pri -- one of your primary 12 operations is gaming. Probably the primary 13 operation, not that you don't get revenue from 14 everything else. But certainly those 15 regulations have to be, at least I would think, 16 in your mindset with regard to how you're going 17 to accommodate what is necessary, particularly 18 here in New Jersey since the properties here 19 we're talking about are separate and apart in 20 terms of being serviced by the help desk in 21 regard to the rest of the whole corporation. 22 THE WITNESS: It's a very good question. 23 I think what was paramount in our mind was this 24 belief that how we were going to radically 25 speed up what, to us, was really important is 60 ITEM NO. 6 1 to be able to fix things faster and be -- get 2 better at doing preventative maintenance 3 because we're going to have a whole lot more 4 information, better correlated in front of us 5 to make those decisions. And I think we -- 6 this idea of, you know -- we've talked about it 7 a bit in other areas, but the idea of Access 8 Control, it does have the ability so that I can 9 set a profile for an individual logging into 10 the system. Here's what you can do within the 11 system. I think that was a -- the nuance of 12 that -- I can set a profile for what you can do 13 in the system. But that everybody who can do 14 something on the system, if they go and search, 15 could pull up a -- could pull up -- know that 16 and view something that's out there was a 17 nuance that I think, you know, we -- we didn't 18 believe. I think in all of our discussions we 19 didn't believe it need -- it was -- it was 20 going to be as much as a show stopper or a 21 problem for us as we faced. 22 COMMISSIONER SOMMELING: Well, in regard 23 to that question, I'm assuming that Harrah's 24 would be amenable to a -- some set of internal 25 controls which might address those issues. 61 ITEM NO. 6 1 THE WITNESS: Yes, sir. 2 COMMISSIONER SOMMELING: As required by 3 the regulations or regulatory agency. 4 THE WITNESS: Yes, sir. That's what, I 5 think, we have also laid out in -- and we are 6 in agreement with the staff, the series of, you 7 know, audit and security procedures that we 8 would put into the internal controls that 9 mitigate this one problem that we face. 10 COMMISSIONER SOMMELING: In concert with 11 our staff as well. 12 CHAIR KASSEKERT: Yes. 13 THE WITNESS: Yes, sir. That's what I 14 mean by -- 15 COMMISSIONER SOMMELING: When you say 16 "staff," I mean, you include staff and staff. 17 Your staff and our staff. 18 THE WITNESS: Yes, sir. 19 COMMISSIONER SOMMELING: I have no 20 further questions. 21 CHAIR KASSEKERT: Commissioner Epps? 22 Any questions? 23 COMMISSIONER EPPS: NO. 24 CHAIR KASSEKERT: You may step down. 25 MR. DALY: Excuse me, Chairman, may -- 62 ITEM NO. 6 1 Chair, may I recall Sam Dillard, please? 2 CHAIR KASSEKERT: Yes, you may. 3 MR. DALY: I just want him to address 4 one narrow point that's of obvious concern. 5 CHAIR KASSEKERT: Certainly. 6 MR. DALY: Sam? 7 CHAIR KASSEKERT: Mr. Dillard, we remind 8 you you're under oath so we don't need to swear 9 you in again. 10 11 DIRECT EXAMINATION BY MR. DALY: 12 Q. Sam, you heard the testimony that's gone 13 before you and the question from Commissioner 14 Harrington. Did you yourself have similar 15 reservations when you first learned that the software 16 would not be -- simply wasn't capable of precluding 17 access? 18 A. I -- 19 Q. What was your reaction? 20 A. I did. Frankly, I didn't believe it 21 when I first heard it. 22 Q. And how -- you, obviously, have come to 23 a different view at this point. You understand that 24 it has to be that way. Is there any analogy that you 25 can give us that suggests that it's not a bad thing, 63 ITEM NO. 6 1 that this situation arises? 2 A. Right. I grappled with this bit myself, 3 because as a career technologist in this discipline, I 4 certainly understand a lot about how to design systems 5 and applications. I've even been a programmer in my 6 past as well. And it just -- it didn't make logical 7 sense to me that this wasn't possible. So I, among 8 others, pressed significantly and asked repeatedly, 9 you know, this must be able to be done. You know, it 10 has to be able to be done. You know, why can't it be 11 done? And then it finally hit me. And I've come up 12 with an analogy that has sort of helped me to 13 understand it that I'd like to share. Because of the 14 vendor kept saying, well, you know, this is the 15 evolution of our technology. This is the way it needs 16 to work now to enable these other processes. And the 17 best -- the best analogy that I can think of is one 18 that involves the automobile industry. As we think 19 about the advancement of some of the technology that 20 we see on cars. And we're all very accustomed to 21 using a key to get into our car and to start the car 22 and as we've done for a long time. But it hadn't been 23 too many years ago that locks started disappearing off 24 of the passenger front door as key fobs and unlockers 25 came into being. And now, certainly not that I have 64 ITEM NO. 6 1 one, but I see them on commercials, there are cars 2 where the key has become obsolete. You no longer get 3 into the car or start the car with a key. There's a 4 sensor on the handle of the door that understands your 5 thumbprint or your handprint. And then once you're in 6 the car, once you've been given access to the 7 perimeter of the vehicle because it identified that 8 you are someone that's authorized to get into the car, 9 you simply start the car by pushing the button. And 10 so, this scenario reminds me a little bit of the case 11 where we're saying, well, you know, it's completely 12 logical that there should be this key to get into the 13 help desk software. And just as the automotive 14 industry believes that it's progress that they're 15 actually designing the key out of the process to enter 16 the vehicle, Remedy believes that they are building a 17 better mousetrap, and that this actually is a 18 advancement in technology with their software. 19 And I just -- it's just an example that 20 I had no come up with myself to sort of get 21 comfortable with the idea and reconcile, you know, 22 what would seem like, on one hand, to be a deficiency 23 of the software, yet on the other hand the vendor is 24 telling us is actually an advancement. 25 Q. At the risk of straining this analogy 65 ITEM NO. 6 1 just a bit too far, let me say with regard to the 2 Siemans people, they are the people who have the 3 ability to get into that car without the key. And, 4 therefore, once they're inside, they can see 5 everything that's on the dashboard of the car. But 6 there could be restrictions on their ability to 7 utilize some of those functions; correct? 8 A. Yes. So if you wanted to say that 9 analogy further, they can get into the vehicle or into 10 the ticket in the help-desk system because they have 11 permission to get into the perimeter. But there may 12 be other things. So, for example, think that the 13 parental controls that you might set on your satellite 14 radio or the programming that you want to do to 15 indicate the position of a seat or mirror or something 16 that requires an access code beyond that. And so 17 those would be things that would correlate to your 18 example of adding to a ticket or being able to close a 19 ticket. But, you know, viewing the ticket, you know, 20 once you're in the car, you can experience what you 21 see around you. 22 Q. Okay. I think we've stretched that 23 analogy as far as it will go. 24 MR. DALY: So with that, that concludes 25 our presentation. 66 ITEM NO. 6 1 CHAIR KASSEKERT: Mr. Kimmel, any 2 further questions? 3 MR. KIMMEL: Nothing further. 4 Thank you. 5 CHAIR KASSEKERT: Let me ask if the 6 commissioners have any further questions? 7 COMMISSIONER SOMMELING: No further 8 questions. 9 CHAIR KASSEKERT: I guess I want to 10 follow Mr. Harrington's lead and make a 11 statement. I think all this stuff is wonderful 12 until somebody figures out a way to hack in, to 13 do -- I mean, you know, all this stuff works 14 until there's a mistake or problem, and then 15 you got to deal with the consequences. 16 So with that, any other witnesses? 17 You may step down. 18 MR. DALY: No further witnesses. 19 THE WITNESS: Thank you. 20 CHAIR KASSEKERT: Mr. Kimmel? 21 MR. KIMMEL: At this point I've heard 22 the testimony of both Mr. Linville and Mr. 23 Dillard, and I'm satisfied that Harrah's 24 absolutely cannot satisfy Condition 4f as it is 25 currently written. And I think we have to 67 ITEM NO. 6 1 accept that the internal controls that they 2 have proposed will give us some sense of 3 security, and at this point the Division is 4 ready to accept those internal controls and to 5 adopt the draft resolution with all of the 6 other conditions with what Mr. Daly has 7 identified as Alternative B. So at this point 8 the Division doesn't object to the draft 9 resolution being adopted with Alternative B and 10 with the understanding that those internal 11 controls are going to be part of the process. 12 CHAIR KASSEKERT: Thank you. 13 Let me ask if there are any questions 14 for either of the parties? No? 15 COMMISSIONER SOMMELING: I have no 16 questions, Madame Chair. 17 VICE CHAIR HARRINGTON: No. 18 CHAIR KASSEKERT: I think we should take 19 a recess. 20 COMMISSION SOMMELING: Yes. 21 (A recess was taken from 10:19 to 10:38 22 a.m.) 23 CHAIR KASSEKERT: Thank you. 24 We'll go back on the record. My 25 understanding is, Mr. Daly, you're going to 68 ITEM NO. 6 1 recall one witness? 2 MR. DALY: Yes. I'd like to recall Sam 3 Dillard to the stand, please. 4 CHAIR KASSEKERT: Thank you. 5 Mr. Dillard, again, I'll remind you 6 you're under oath. 7 THE WITNESS: Yes. 8 MR. DALY: I would like to question Mr. 9 Dillard about a particular document that I know 10 the Commissioners have as part of your 11 materials, but I suggest you probably should 12 have it marked as P-1. 13 CHAIR KASSEKERT: Sure. 14 MR. NANCE: P-1? 15 (Conferring.) 16 MR. DALY: Chair, Commissioners, let me 17 describe briefly what has now been marked as 18 P-1, which I would offer into evidence, is the 19 Harrah's Entertainment help-desk process. It 20 was a chart that was created both -- primarily 21 by your staff in conjunction with a number of 22 the meetings that we had and discussions that 23 were had leading up to this presentation today. 24 Let me show this to Mr. Dillard. 25 69 ITEM NO. 6 1 REDIRECT EXAMINATION BY MR. DALY: 2 Q. Are you familiar with that chart, Mr. 3 Dillard? 4 A. Yes, I am. 5 Q. Can you tell us, specifically just to 6 hone in on how the system is designed to work with 7 respect to these top boxes, that area at the top of 8 the chart that speaks in terms of the 40 percent of 9 help-desk items that go to Siemans and the 60 percent 10 that deal directly with the Harrah's casino licensees? 11 A. All right. 12 Q. What -- talk to us about that. Tell us 13 what the 60/40 percent represents. 14 A. Okay. The -- first off, the 60 percent 15 of the tickets is the portion of the tickets that are 16 routed directly to and are resolved by members of my 17 team locally on behalf of the Atlantic City licensees. 18 The 40 percent of the tickets are tickets that do not 19 relate to casino computer systems and are enterprise- 20 level tickets and go to Siemans. The way that that is 21 facilitated is that when someone picks up their phone 22 and dials the number for the help desk, the first 23 thing they hear is a recorded phone tree message that 24 essentially says, you know, press one if you're having 25 this kind of problem. Press two if you're having this 70 ITEM NO. 6 1 problem, press three, et cetera. So the design that 2 is in place is to route them in that phone tree 3 directly to either the computer room at one of my four 4 properties if they have an issue that is dealing with 5 a casino computer system or to Siemans if they have an 6 issue that is not related to a casino computer system. 7 As an additional failsafe in that 8 process -- so let's say that when someone called in, 9 they accidently pressed the wrong choice, or they 10 didn't know which one to press, so they waited for a 11 Siemans operator to come on the line, Siemans then 12 will be instructed, as I know we've discussed in one 13 of the additional security measures and as is 14 represented on this diagram, if they are inadvertently 15 asked a question related to this, they are not going 16 to open the ticket for that particular system. 17 They're going to route that back to my teams in the 18 computer rooms. 19 And I guess as a further measure for 20 this, we discussed earlier that it is possible in the 21 system to detect who created the ticket; right? So it 22 certainly would be auditable and known after the fact 23 if the Siemans had created a ticket for a casino 24 gaming system for one of the licensees. 25 So, hopefully, that enhances the 71 ITEM NO. 6 1 understanding. I apologize earlier if I created any 2 confusion when I assumed that we were talking about 3 one path, and there's actually multiple paths that you 4 can take to get support. 5 CHAIR KASSEKERT: Thank you. 6 MR. DALY: That's really all I have. 7 CHAIR KASSEKERT: Mr. Kimmel, any 8 questions? 9 10 RECROSS-EXAMINATION BY MR. KIMMEL: 11 Q. Just to clarify, the 60 percent versus 12 the 40 percent, that's based on his historical data, 13 and that's not an absolute going forward; correct? 14 A. That's correct. That was based on our 15 analysis of the percentage of tickets that had dealt 16 with the various systems issues and whether my teams 17 had resolved them or whether enterprise teams had 18 resolved them. 19 Q. So, hopefully, going forward it's going 20 to be -- if it's gaming system, there's going to be no 21 accidents. It's going to be a hundred percent 22 resolved by your team? 23 A. That's correct. 24 Q. Is there any plans to do any sort of 25 audit? You said you couldn't do an audit on who 72 ITEM NO. 6 1 created tickets. Is there any sort of plan to do an 2 audit on that and find out if Siemans people did, in 3 fact, create such a ticket that they would be 4 counseled? 5 A. I believe that's contemplated in the 6 additional audit and security measures that were 7 proposed as ay part of the internal controls. 8 MR. KIMMEL: I have nothing further. 9 CHAIR KASSEKERT: Thank you. 10 Commissioners, any questions? 11 COMMISSIONER SOMMELING: No questions, 12 Madame Chair. 13 CHAIR KASSEKERT: You may step down. 14 Thank you. 15 THE WITNESS: Thank you. 16 CHAIR KASSEKERT: Mr. Daly, let me ask 17 if you have a request to seal any information? 18 MR. DALY: There was -- certainly P-1 19 does not require sealing, but there was an 20 indication from Mr. Briliant that the actual 21 document that we had agreed upon with the staff 22 that spells out in some detail the additional 23 security or audit measures that we would fold 24 into our internal control submissions is in an 25 outline form that would -- the Commission would 73 ITEM NO. 6 1 prefer to attach to the actual resolution of 2 this matter, if indeed you come to the 3 conclusion that the Alternative B, as I've 4 referred to it here, is acceptable. If that is 5 the case and we do proceed in that fashion, I 6 would certainly ask that that document be 7 sealed. 8 CHAIR KASSEKERT: Okay. Very good. 9 Thank you. 10 All right. Let me ask before I make a 11 statement if any of the Commissioners have any 12 other questions or any other statements they'd 13 like to make? 14 COMMISSIONER SOMMELING: No other 15 questions, Madame Chair. 16 CHAIR KASSEKERT: Okay. Thank you. 17 Since it was first adopted in 1977, the 18 Casino Control Act has proven to be remarkably 19 durable yet also flexible and adaptable to many 20 new and unforeseen situations. But since its 21 enactment, the basic structure and premise of 22 the Act has remained the same, one casino 23 license for each casino hotel with all 24 employees and vendors of that licensee also 25 being licensed or registered as necessary. 74 ITEM NO. 6 1 This principle has proven to be 2 eminently workable by helping to ensure that 3 the casino operations are being conducted only 4 on a licensed premises and by licensed persons 5 who can be held accountable should there be any 6 problems or improprieties. 7 However, in the recent years, and 8 especially with the merger and consolidation of 9 many gaming companies, there's been a growing 10 tension between the Act's basic premise of 11 singular on-premise oversight and the 12 industry's desire to achieve efficiency and 13 financial economy through economies of scale. 14 In Harrah's case, it presently owns and 15 operates four Atlantic City casinos, giving it 16 a large share of the market, but also operates 17 many other casinos in many other jurisdictions. 18 From a business perspective, and 19 especially for a multi-national corporation 20 such as Harrah's, the proposed consolidation 21 and standardization of technical support 22 functions makes good economic sense. Of 23 course, given the extent of Harrah's presence 24 here in Atlantic City, it would have been 25 preferable from a regulatory perspective if 75 ITEM NO. 6 1 those functions could be consolidated and 2 managed from a central location here. Of the 3 many regulatory challenges facing the 4 Commission, none is more constant than 5 maintaining the delicate and proper balance 6 between ensuring the integrity of casino 7 operations and the economic viability of the 8 industry. There's an element of inherent 9 tension between those concepts, but they are 10 not always mutually exclusive. In fact, this 11 Commission recently permitted Harrah's to 12 outsource certain nongaming functions such as 13 payroll and accounts payable to Harrah's 14 corporate employees to an off-site, third-party 15 vendor. But the current petition of requesting 16 approval of Harrah's help desk and code load 17 proposal seek to consolidate and outsource 18 certain IT functions in ways that raise 19 appropriate concerns about the control of 20 casino operations as required under the Casino 21 Control Act. These concerns were the subject 22 of innumerable meetings between the staffs of 23 the Commission staff, the Division, and the 24 Petitioners. The regulatory agencies invested 25 a considerable amount of time and resources in 76 ITEM NO. 6 1 attempting to ensure that a proper balance 2 between operational integrity and Harrah's 3 economic goal was reached. 4 The draft resolution, which contains 5 some six pages of conditions relating to the 6 help desk and code load arrangements, reflects 7 that effort in this case. I am confident that 8 the conditions contained in the draft 9 resolution are proper, appropriately limit the 10 risk involved, and thus strike a proper balance 11 between operational integrity and Harrah's 12 economic goals. 13 I must also note that these 14 consolidation and outsourcing proposals do 15 approach what I consider to be the outer limits 16 of what is permissible under the Act. 17 Additionally, it bears noting that 18 efforts towards the centralization of functions 19 and the use of off-site and often out-of-state 20 locations impacts the Atlantic City markets, 21 particularly in the area of job creation and 22 retention, and the industry should remain 23 mindful of its commitment to the City and to 24 the State of New Jersey in this regard. 25 With these thoughts in mind, I would 77 ITEM NO. 6 1 move to approve the proposed help desk and code 2 load arrangements subject to the conditions 3 contained in the draft resolution, which shall 4 specifically include the language in 4fii 5 requiring internal controls with additional 6 audit measures as submitted and incorporated 7 but shall exclude a portion of 4Fii regarding 8 help desk logs. Harrah's request to seal the 9 additional audit measures is also granted. 10 I so move this resolution. And is there 11 a second? 12 COMMISSIONER SOMMELING: Second. 13 CHAIR KASSEKERT: Motion has been made 14 and seconded. 15 Is this a role call vote? 16 MS. FAUNTLEROY: No. 17 CHAIR KASSEKERT: Okay. 18 The motion has been made and seconded. 19 All in favor? 20 (Ayes.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: Motion carries. 24 MR. DALY: Thank you very much, Madame 25 Chair. 78 ITEM NO. 7 1 MR. NANCE: Item No. 7, petition of 2 Harrah's Entertainment, Inc., Harrah's 3 Operating Company, Inc., Harrah's Atlantic City 4 Operating Company, LLC, Showboat Atlantic City 5 Operating Company, LLC, Bally's Park Place 6 Inc., and Boardwalk Regency Corp. for waiver of 7 qualification for HEI and HOC officer 8 positions, A, Vice President Corporate 9 Marketing, and, B, Vice President Lean 10 Enterprise. 11 Miss Wozniak? 12 MS. WOZNIAK: Good morning, Chair, 13 Commissioners. Mr. Magazzu is here for the 14 Petitioners and Dorothy Turi for the Division. 15 CHAIR KASSEKERT: Thank you. Good 16 morning. 17 MR. MAGAZZU: Good morning. We reviewed 18 the draft resolution, Madame Chair, and we have 19 nothing to add other than to request that the 20 Commission grant the petition as presented. 21 Thank you.. 22 CHAIR KASSEKERT: Thank you. 23 Miss Turi? 24 MS. TURI: Good morning, Madame Chair 25 and Commissioners. 79 ITEM NO. 7 1 We have reviewed the two draft 2 resolutions regarding these matters, and we 3 every no objection to the entry. 4 CHAIR KASSEKERT: Thank you. 5 Let me ask if there are any questions? 6 COMMISSIONER SOMMELING: No questions, 7 Madame Chair. 8 CHAIR KASSEKERT: Okay. We'll do these 9 as two separate motions. 10 COMMISSIONER EPPS: Madame Chair, I move 11 that we adopt the draft resolution and waive 12 qualification pursuant to NJSA 5:12-85d(1) as 13 to David Eisendrath in his capacity as Vice 14 President Corporate Marketing. 15 COMMISSIONER SOMMELING: Second. 16 CHAIR KASSEKERT: Motion has been made 17 and seconded. This is a roll call vote. 18 MR. NANCE: Commissioner Sommeling? 19 COMMISSIONER SOMMELING: Yes. 20 MR. NANCE: Commissioner Epps? 21 COMMISSIONER EPPS: Yes. 22 MR. NANCE: Vice Chair Harrington? 23 VICE CHAIR HARRINGTON: Yes. 24 MR. NANCE: Chair Kassekert? 25 CHAIR KASSEKERT: Yes. 80 ITEM NO. 8 1 MR. NANCE: The record will reflect that 2 the motion is unanimous. 3 COMMISSIONER EPPS: I move we adopt the 4 draft resolution and waive qualification 5 pursuant to NJSA 5:12-85d(1) as to Michael Beck 6 in his capacity as Vice President Lean 7 Enterprise. 8 VICE CHAIR HARRINGTON: Second. 9 CHAIR KASSEKERT: Motion has been made 10 and seconded. This is a roll call vote. 11 MR. NANCE: Commissioner Sommeling? 12 COMMISSIONER SOMMELING: Yes. 13 MR. NANCE: Commissioner Epps? 14 COMMISSIONER EPPS: Yes. 15 MR. NANCE: Vice Chair Harrington? 16 VICE CHAIR HARRINGTON: Yes. 17 MR. NANCE: Chair Kassekert? 18 CHAIR KASSEKERT: Yes. 19 MR. NANCE: The record will reflect that 20 the motion is unanimous. 21 CHAIR KASSEKERT: Thank you. 22 MS. TURI: Thank you. 23 MR. MAGAZZU: Thank you. 24 MR. NANCE: Petition No. 8, petition of 25 Marina District Development Company, LLC, for 81 ITEM NO. 8 1 waiver of the qualification requirement for a 2 new officer of its holding company, Boyd Gaming 3 Corporation, pursuant to NJSA 5:12-85d(1). 4 Miss Richardson? 5 MS. RICHARDSON: Good morning, Chair and 6 Commissioners. 7 DAG Jim Fogarty is here for the 8 Division, and for Petitioners Joe Corbo has 9 requested the item be heard on the papers. 10 He's in agreement with the draft resolution 11 that was circulated. 12 CHAIR KASSEKERT: Thank you. 13 Mr. Fogarty? 14 MR. FOGARTY: Yes. Good morning. 15 A petition was filed for a waiver 16 request regarding Ellie Bowdish who will hold 17 an officer position with Boyd Gaming. 18 We filed a response not objecting to the 19 waiver. In fact, the Director will concur in 20 the granting of a waiver if all of you are so 21 inclined. 22 I've seen a copy of the draft 23 resolution, and we have no objection to its 24 entry. 25 CHAIR KASSEKERT: Thank you. 82 ITEM NO. 8 1 Any questions? 2 COMMISSIONER SOMMELING: No questions, 3 Madame Chair. 4 COMMISSIONER EPPS: No questions. 5 VICE CHAIR HARRINGTON: I move that we 6 adopt the draft resolution and waive 7 qualification pursuant to NJSA 5:12-85d(1) as 8 to Ellie Bowdish in her capacity as Vice 9 President and Chief Accounting Officer. 10 CHAIR KASSEKERT: Is there a second? 11 COMMISSIONER EPPS: Second. 12 CHAIR KASSEKERT: The motion is made and 13 seconded. This is a roll call vote. 14 MR. NANCE: Commissioner Sommeling? 15 COMMISSIONER SOMMELING: Yes. 16 MR. NANCE: Commissioner Epps? 17 COMMISSIONER EPPS: Yes. 18 MR. NANCE: Vice Chair Harrington? 19 VICE CHAIR HARRINGTON: Yes. 20 MR. NANCE: Chair Kassekert? 21 CHAIR KASSEKERT: Yes. 22 MR. NANCE: The record will reflect that 23 the motion is unanimous. 24 MR. FOGARTY: Thank you. 25 MS. RICHARDSON: Thank you. 83 ITEM NO. 9 1 MR. NANCE: Item No. 9, petition of 2 TotalUp, Inc., and Trump Marina Associates, 3 LLC, for approval of a "Total Craps" as a 4 variation of the authorized game of craps 5 pursuant to NJSA 5:12-5 and NJAC 19:47-8.4; and 6 proposed publication of amendments to NJAC 7 19:45-1.12, 19:46-1.15, and 1.16A and 8 19:47-1.2; and proposed new rules, NJAC 9 19:46-1.11A and 19:47-1A.1, et seq. 10 Mr. Briliant? 11 MR. BRILIANT: Madame Chair and 12 Commissioners, this is a notice of proposal for 13 a new game called "Total Craps." It is a 14 variation of craps that is played on a 15 blackjack table with an automated dice shaker. 16 Same rules as regular craps. 17 The Commission temporarily adopted 18 regulations back in May of last year. The game 19 has been under tests since late fall and has 20 apparently had some success, and so we have 21 decided to go ahead and publish the regulations 22 for public comment at this time, and that's 23 what's before you now. 24 CHAIR KASSEKERT: Thank you. 25 Any questions for Mr. Briliant? 84 ITEM NO. 10 1 COMMISSIONER SOMMELING: No questions, 2 Madame Chair. 3 COMMISSIONER EPPS: No questions. 4 I move that we approve for publication. 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: The motion carries. 12 MR. NANCE: Item No. 10, petition of 13 Resorts International Hotel, Inc., for an 14 amendment to NJAC 19:47-2.3 pursuant to NJAC 15 19:40-3.6 and NJAC 19:47-8.4, proposed 16 temporary adoption of amendments to NJAC 17 19:46-1.10, 1.15, 19:47-2.1, 2.3, and 8.3. 18 Mr. Briliant? 19 MR. BRILIANT: Ms. Wosniak is -- 20 Wosnack, I'm sorry, is here on behalf of 21 Resorts. Mr. Ficchi on behalf of the Division. 22 CHAIR KASSEKERT: Good morning, Miss 23 Wosnack. 24 MS. WOSNACK: Good morning, Madame 25 Chair, Commissioners. 85 ITEM NO. 10 1 I have nothing to add other than ask 2 that you grant the relief requested. 3 If you have any questions, I do have the 4 Executive Director of Table Games from Resorts 5 here with me as well. 6 CHAIR KASSEKERT: Thank you. 7 Mr. Ficchi? 8 MR. FICCHI: Good morning, Madame Chair, 9 Commissioners. 10 The Division has received a copy of the 11 proposed amendments and has no objection to the 12 amendments or the concept of this proposal. 13 Thank you. 14 CHAIR KASSEKERT: Thank you. 15 Any questions? 16 COMMISSIONER EPPS: Yes. 17 CHAIR KASSEKERT: Commissioner Epps? 18 COMMISSIONER EPPS: And I guess -- 19 MS. WOSNACK: Mr. Brown. Kevin Brown, 20 will be stepping up? 21 CHAIR KASSEKERT: We'll swear you in. 22 MS. WOSNACK: Knew we might get into 23 nuts and bolts. I might not be able to -- 24 CHAIR KASSEKERT: Mr. Nance will swear 25 you in. 86 Kevin Brown 1 KEVIN BROWN, was duly sworn to testify 2 in this matter. 3 4 MR. NANCE: Please state your name for 5 the record. 6 MR. BROWN: Kevin Brown. 7 MR. NANCE: Thank you. 8 CHAIR KASSEKERT: Mr. Brown? 9 Go ahead, Commissioner Epps. 10 COMMISSIONER EPPS: Okay. Now, be my -- 11 I understand that you guys make business 12 decisions, and so long as it's within the 13 bounds, far be it from us to get in your way, 14 but I need to understand how -- like, for 15 example, Atlantic City has always had a $5 16 blackjack table. Folks go. They play $5 17 blackjack. Now what you're telling me is I'm 18 going to have to pay a dollar for every $5 19 blackjack game I'm going to play, and that's 20 going to work? 21 MR. BROWN: The proposal is -- 22 MS. WOSNACK: It's -- I think it's a 23 little different. It's not a dollar per $5 24 hand. It's actually a .25. Kind of a -- 25 COMMISSIONER EPPS: I'm sorry. Not a 87 Kevin Brown 1 dollar. Quarter. 2 MS. WOSNACK: Okay. 3 COMMISSIONER EPPS: I'm sorry. 4 MS. WOSNACK: That's all right. I just 5 want to make sure we're clear on what the -- 6 COMMISSIONER EPPS: A quarter for every 7 hand, $1 every four hands. But so now if I 8 want to play $5 blackjack, I now got a pay 9 quarter, and that quarter goes away, and so I'm 10 going to pay this $5 -- I mean this .25 license 11 for every hand. Why am I going to do that? 12 MR. BROWN: Well, if I can just start 13 with your first statement, Commissioner. The 14 $5 game in Atlantic City is -- is a pretty 15 rare -- you know, in existence. The pressure 16 is always there to increase the minimum on that 17 $5 game based on demand to get it to the 10 to 18 the $15 game. It's just a natural occurrence 19 on a casino floor when there's demand. 20 COMMISSIONER EPPS: Based on demand from 21 the customer? 22 THE WITNESS: Customer demand. 23 COMMISSIONER EPPS: The customers don't 24 want to -- 25 MR. BROWN: I'm sorry. I'm sorry. 88 Kevin Brown 1 Based on the demand for the seat. So the house 2 would make that adjustment based on, you know, 3 what they felt they could do as far as 4 increasing the average bet. 5 So that puts pressure on the -- to me, I 6 see that pressure on the player that now, 7 instead of that $5 game disappears, it's my 8 choice now is only a $10 or $15 or $25 game 9 because of the demand of a -- you know, the 10 public demand for seating on a blackjack table. 11 That's just the natural evolution in the 12 casino. This proposal here allows us to 13 present a game at a much lower minimum, $2, $3, 14 $4, $5 without having that pressure because of 15 the hand fee that we want to apply. 16 MS. WOSNACK: And I think there's also 17 something of an intimidational factor to the 18 player because the less skilled player or the 19 people who don't spend as much time in a casino 20 who want to sit at a blackjack game and maybe 21 take a little time, and I don't know if you 22 play in New Jersey, but if you play blackjack 23 anywhere, I have seen players get a little 24 upset if they think you're making a wrong move. 25 So this is really more of a less pressured game 89 Kevin Brown 1 that would allow players to maybe take a little 2 more time and not have a large minimum bet, 3 that they could get a little more seasoned at 4 the game, and hopefully moved on to the higher 5 skilled areas, if I could use the phrase, 6 because I think it's more just to allow folks 7 to sit and practice more on the game. 8 COMMISSIONER EPPS: But -- I don't want 9 to -- I'm not -- I hope I'm not seeming to 10 argue, but -- 11 MR. BROWN: No. 12 COMMISSIONER EPPS: A $5 game is not 13 available only because you don't make it 14 available. It's not that the demand is for 15 more $10, $15 games. You upped the minimum bet 16 because you can get that. Because if that's 17 the only thing you have out there, if someone 18 walks around the floor and all they have is $10 19 games, well, I have to take $10 because there's 20 no $5 tables. They're not playing $10 games 21 because they want to. They're playing $10 22 games because that's the lowest table you're 23 putting out there. If you put $5 games out 24 there, are you saying folks won't play those 25 because they'd rather go to a $10 game, 90 Kevin Brown 1 MR. BROWN: No. No. I'm saying that 2 from the industry's perspective, the $5 game is 3 not a game that's even a break-even game. 4 MS. WOSNACK: It's difficult to support 5 economically, I think is what he's trying to 6 say. 7 COMMISSIONER EPPS: So five and a 8 quarter does? 9 MR. BROWN: Absolutely. Makes a big 10 difference. 11 COMMISSIONER EPPS: So then why not just 12 a $6 game if you're going to do a quarter per 13 hand -- 14 MR. BROWN: Yeah. I can get into the -- 15 COMMISSIONER EPPS: I'm missing the math 16 or something. 17 MR. BROWN: I can get into the math if 18 you'd like. I mean, it's there at a one 19 percent house advantage on a $5 bet. The house 20 is making five cents. 21 COMMISSIONER EPPS: Okay. 22 THE WITNESS: So that's 60 times an 23 hour, that's a $3 profit for the house per hour 24 on that $5 game. Per seat. Now, when you do 25 the mathematics of that, by the time you have 91 Kevin Brown 1 the personnel, all the things that are involved 2 in operating the game, it's not a -- you know, 3 it's not on the plus side of -- of running the 4 game. So the motivation is there not to have 5 the $5 game as far as the industry is concerned 6 because of the cost involved. This resolves 7 that by having the hand fee. 8 MS. WOSNACK: And just so you know, this 9 is -- this is something we obviously were just 10 going to roll out on a test basis, to see if 11 it's -- 12 MR. BROWN: If there's a demand. 13 MS. WOSNACK: -- popular, then, you know, 14 then we'll keep it available to the public. 15 And if it's something that no one seems to have 16 any interest on, obviously, we would just not 17 offer it anymore. But it was just a creative 18 way to get maybe a new segment of the public 19 playing if they were intimidated by the 20 higher-priced game. 21 MR. BROWN: And possibly lower the 22 point -- the price point on playing blackjack. 23 COMMISSIONER EPPS: And I guess I was 24 missing the point when I originally looked at 25 it. So what you're saying is that extra 92 Kevin Brown 1 quarter is doing the customer a favor. The way 2 you look at it, we're giving you a $5 game. 3 You just have to pay .25 cents a hand, so I'm 4 doing you a favor. Otherwise, the $5 games 5 will go away. 6 MR. BROWN: If you make that choice to 7 play that game. Yes. And even at a lower 8 minimum. I mean, not even at the $5. 9 MS. WOSNACK: It -- right. It starts at 10 $2 -- 11 COMMISSIONER EPPS: I just used $5 as an 12 example. 13 MS. WOSNACK: Sure. 14 COMMISSIONER EPPS: I understand it's a 15 $2 game. 16 MS. WOSNACK: Right. 17 MR. BROWN: And, you know, there was a 18 time in Atlantic City where there was a $3 game 19 available. And we haven't seen that in many 20 years. 21 CHAIR KASSEKERT: Commissioner 22 Sommeling? 23 COMMISSIONER SOMMELING: You know, it's 24 funny. There was a time, as you said, there 25 was more low-limit tables. And I think one of 93 Kevin Brown 1 the calls I get more frequently than others is 2 from people that come to the casinos that want 3 to play on the lower limit tables. And they 4 always mention that $5 game, by the way. And 5 there's not very many of them. Of course, we 6 understand the industry's position. But 7 there's a certain segment of player that comes 8 to play blackjack but not to pay it at the 9 higher premium by-in, you know, like 25 or 15, 10 whatever. 11 MR. BROWN: Absolutely. 12 COMMISSIONER SOMMELING: So, they like 13 to pay the $5 game, because they could afford 14 it, number one, and they also like to play 15 blackjack. So it's just part of your customer 16 base. I mean, I'm not arguing about the .25. 17 MR. BROWN: Absolutely. 18 COMMISSIONER SOMMELING: That is a 19 frequently asked question: Why don't you 20 guys -- meaning us -- make those people have 21 more low-limit games? 22 MS. WOSNACK: Well, that's the segment 23 that we'd be happy to invite to Resorts. 24 CHAIR KASSEKERT: Thank you. 25 MR. BROWN: It is. We have the same 94 Kevin Brown 1 thing on the casino floor. You know, it's -- 2 MS. WOSNACK: I think this is actually 3 the evolution of it. Kevin had heard the same 4 requests as well. So in order to make it work 5 for everyone, this is the solution that we've 6 come up with, and we think it's a good one. 7 COMMISSIONER SOMMELING: Thank you. 8 Nothing further. 9 CHAIR KASSEKERT: Well, I think since 10 this is a test, we'll see how it is goes. I 11 know Mr. Ficchi will be watching it from the 12 Division's end, and we'll see if its successful 13 or not. 14 Is there a motion? 15 COMMISSIONER SOMMELING: Approve for 16 publication. 17 CHAIR KASSEKERT: It's a temporary 18 adoption. 19 COMMISSIONER SOMMELING: I'm sorry. 20 Temporary adoption. 21 CHAIR KASSEKERT: Is there a second? 22 VICE CHAIR HARRINGTON: Second. 23 CHAIR KASSEKERT: The motion has been 24 made and seconded. All in favor? 25 (Ayes.) 95 ITEM NO. 11 1 CHAIR KASSEKERT: Opposed? 2 COMMISSIONER EPPS: No. 3 CHAIR KASSEKERT: Motion carries. 4 MS. WOSNACK: Thank you very much. 5 CHAIR KASSEKERT: Motion carries three 6 to one. 7 COMMISSIONER EPPS: Three to one. 8 CHAIR KASSEKERT: Thank you. 9 MS. WOSNACK: Thank you. 10 MR. BROWN: Thank you. 11 MR. NANCE: Item No. 11, proposed 12 publication and temporary adoption of 13 amendments to NJAC 19:43-7.3 and 7.6. 14 Mr. Briliant? 15 MR. BRILIANT: Okay. Commissioners, the 16 proposed amendments before you, we codified in 17 the Commission's present practice of permitting 18 a casino licensee to include various alternate 19 configurations for a gaming pit when submitting 20 proposed floor plans for its casino, and the 21 maximum of four alternate configurations would 22 be permitted for each pit. 23 We also took the opportunity when we 24 drafted this notice of proposal to include a 25 request from the Casino Association of New 96 ITEM NO. 11 1 Jersey regarding the -- the requirement of 2 sealed architectural plans, and we've cut that 3 down, which should result in an economic 4 savings for the licensees when they submit 5 these floor plans. 6 So the matter is now before you for 7 temporary adoption and publication as well. 8 CHAIR KASSEKERT: I think that was part 9 of the wish-list process; correct? 10 MR. BRILIANT: Yes, it was. 11 CHAIR KASSEKERT: Okay. Thank you. 12 Any questions for Mr. Briliant? 13 COMMISSIONER SOMMELING: No questions, 14 Madame Chair, 15 Move to approve for publication and 16 temporary adoption. 17 COMMISSIONER EPPS: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. All in favor? 20 (Ayes.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: Motion carries. 24 Thank you. 25 MR. BRILIANT: Thank you. 97 ITEM NO. 12 1 MR. NANCE: Item No. 12, petition of 2 Adamar of New Jersey, Inc., for an amendment to 3 its operation certificate to permit a 4 reconfiguration of its gaming floor and delete 5 its simulcast facility. 6 Mr. Moncrief? 7 MR. MONCRIEF: Madame Chair, members of 8 the Commission, before you is a petition filed 9 by Adamar seeking amendment to its certificate 10 of operations seeking to cease operations of 11 its simulcasting facility and then reclassify 12 that current simulcast space as casino floor 13 space. 14 Here for the Petitioner is Miss Hughes, 15 and for the Division Mr. Ficchi. 16 CHAIR KASSEKERT: And Mr. Mack for the 17 Conservator. 18 MR. MONCRIEF: And Mr. Mack is here. I 19 apologize. 20 CHAIR KASSEKERT: Thank you. 21 Ms. Hughes? 22 MS. HUGHES: Good morning, Madame Chair, 23 Commissioners. Tama Hughes on behalf of 24 Adamar. Sean Mack from Pashman Stein also 25 representing Adamar in this matter. 98 ITEM NO. 12 1 Tropicana has filed a petition to roll 2 its simulcast department back into the casino 3 square footage. The estimated square footage 4 that would be rolled back in would be 6,954 5 square feet for a total of 141,377 square feet 6 of gaming area. This would be within 7 Tropicana's statutory allowable gaming space. 8 Also included within this petition, as 9 you are aware, is the application to shut down 10 the simulcast facility and make arrangements to 11 pay for the next six months pursuant to its 12 obligations the outstanding tickets that are 13 out there. 14 At this time Tropicana is still trying 15 to decide what to do with that total area. It 16 will remain a poker room area. It may be 17 reconfigured down the road, but the appropriate 18 application would be filed at that time. 19 I have brought with me today Mario 20 DiGueseppe, who is our Vice President of Table 21 Games if there are any additional questions. 22 Aside from that, Tropicana would rely on 23 the papers and ask that you grant this 24 application. 25 CHAIR KASSEKERT: Thank you. 99 ITEM NO. 12 1 Mr. Mack? 2 MR. MACK: Good morning, Madame Chair, 3 Commissioners. 4 Just on behalf of the Trustees/ 5 Conservator, I would just like to add the 6 Conservator's support to this petition, and 7 consistent with our obligations of the purchase 8 agreement, before filing this petition, it was 9 reviewed with the buyer to ensure no objection. 10 And consistent with our obligations with the 11 bankruptcy code, there's also been a petition 12 filed in the bankruptcy court seeking 13 bankruptcy court approval to reject the 14 simulcast contracts. 15 Thank you. 16 CHAIR KASSEKERT: Thank you. 17 Mr. Ficchi? 18 MR. FICCHI: Good morning, again, Madame 19 Chair, Commissioners. 20 The Division has reviewed this matter, 21 and the draft resolution and has no objection 22 to the relief requested. 23 CHAIR KASSEKERT: Okay. I guess I have 24 some questions, and I don't know if you want to 25 bring Mr. DiGuiseppe up. 100 Mario DiGuiseppe 1 My first question would be, I'd like to 2 know about the economies in the situation. I 3 mean, how much money is simulcast losing? Can 4 you give me an idea of what -- you know, why 5 this is -- you know, why this business decision 6 should be adopted. 7 MS. HUGHES: Absolutely. I can bring up 8 Mr. DiGuiseppe. 9 CHAIR KASSEKERT: Okay. 10 MS. HUGHES: And he can -- 11 CHAIR KASSEKERT: We'll swear you in. 12 13 MARIO DiGUISEPPE, was duly sworn to 14 testify in this matter. 15 16 MR. NANCE: Please state your name for 17 the record. 18 MR. DiGUISEPPE: Mario DiGuiseppe. 19 MR. NANCE: Please spell you last name. 20 MR. DiGUISEPPE: D-i-G-u-i-s-e-p-p-e. 21 MR. NANCE: Thank you. 22 CHAIR KASSEKERT: Thank you. 23 Mr. DiGuiseppe, I'd be interested in 24 knowing the economies here. You know, 25 obviously, simulcast has not been doing well 101 Mario DiGuiseppe 1 across the city, you know, with the exception, 2 I guess, of one -- one casino right now. A lot 3 of casinos have asked to end their simulcast 4 operations. Can you tell me about the 5 situation at Tropicana? 6 MR. DiGUISEPPE: We looked at both here 7 within Atlantic City and our specific simulcast 8 amenity but also within the horseracing 9 industry itself, which has been in a decline. 10 And the overall simulcast market that we -- 11 that we market to here in Atlantic City really 12 hasn't grown at all in almost five or six 13 years. If anything, it's been reduced, and the 14 larger piece of that pie has been going to one 15 particular casino, the newest and the kind of 16 nicest room out there. 17 So we look at our revenues, and our 18 revenues have decreased almost 38 percent in 19 two years, while our expenses are projected to 20 increase with -- with the new contracts that 21 we're proposed by Scientific Gaming who 22 provides our signal, other racetracks that we 23 get signal from. Everyone's costs are going up 24 for 2010. And 2009 was actually a year where 25 we had a negative profit and loss at the end of 102 Mario DiGuiseppe 1 the year in the room. And we projected to go 2 further south for 2010. So it just was not a 3 feasible amenity to continue, so it's one that 4 we want to stop. 5 CHAIR KASSEKERT: Can you tell me -- you 6 know, I received as part of my information 7 packet the signatures of well over a hundred 8 people, who I'm assuming represented that they 9 are customers of Tropicana, which was very 10 surprising and made me wonder then, you know, 11 why -- why the economies still weren't working 12 if you had, you know, a significant number of 13 people who liked to come to the Tropicana to do 14 simulcast. 15 MR. DiGUISEPPE: One of the things we 16 looked at regularly is, we look at the 17 crossover play, people who play simulcast but 18 also play slots and also play tables, and that 19 certainly made a big part in this decision. 20 Because it's an unfortunate decision. No one 21 wants to disappoint anyone, especially our race 22 players. But at some point it just becomes not 23 a good business proposition. And the play that 24 we received from our race writers in other 25 gaming areas, while very valuable, doesn't 103 Mario DiGuiseppe 1 offset where the race venture is going. And so 2 we still trying to stick with that decision and 3 discontinue the race operation. 4 CHAIR KASSEKERT: Now, my understanding 5 is there will be about a nine employees 6 affected. Is that the case? 7 MR. DiGUISEPPE: Yeah. We have three 8 supervisors. We have three full-time race 9 writers, and three part-time race writers. 10 CHAIR KASSEKERT: And are any of their 11 skills transferable to any other parts of the 12 casino? 13 MR. DiGUISEPPE: All nine were offered 14 the opportunity to go to our human resources 15 and see where they might fit in in another 16 area. One of the supervisors at this time is 17 looking to transfer to the slot department as a 18 supervisor. In -- to satisfy the regulations 19 to shut the room down, for six months and in 20 redeeming our tickets and vouchers, we'll 21 probably retain one supervisor and one race 22 writer. And then the remaining individuals 23 have not yet contacted human resources to see 24 if there's something else amenable for them. 25 CHAIR KASSEKERT: Let me ask if any of 104 ITEM NO. 12 1 the other Commissioners have any questions for 2 this witness? 3 COMMISSIONER EPPS: You asked my 4 question. 5 COMMISSIONER SOMMELING: Okay. 6 CHAIR KASSEKERT: Okay. 7 COMMISSIONER SOMMELING: What you just 8 said at the end was, of the other ones can be 9 offered additional positions? 10 MR. DiGUISEPPE: Every one of them is 11 eligible, you know, to -- for another position 12 so long as they qualify. 13 COMMISSIONER SOMMELING: Yeah. 14 MR. DiGUISEPPE: As of yet, those 15 remaining individuals have not, to my 16 knowledge, approached human resources to 17 investigate. 18 COMMISSIONER SOMMELING: So they are on 19 their own? In other words, they're being let 20 go? 21 MR. DiGUISEPPE: That's correct. 22 COMMISSIONER SOMMELING: Right. No 23 further questions. 24 CHAIR KASSEKERT: Okay. You may step 25 down. Thank you. 105 ITEM NO. 12 1 I'm sorry. Mr. Ficchi, did you have any 2 questions? 3 MR. FICCHI: No. I had no question. 4 CHAIR KASSEKERT: Okay. Thank you. 5 Let me ask if there are any other 6 questions from Miss Hughes or Mr. Mack? 7 COMMISSIONER SOMMELING: I have no 8 questions, Madame Chair. 9 VICE CHAIR HARRINGTON: I'll move that 10 we adopt the draft resolution and approve the 11 petition of Adamar of New Jersey, Inc., for an 12 amendment to its certificate of operation and 13 CHAB license to permit the reconfiguration to 14 its gaming floor and cease simulcasting 15 operations subject to the conditions in the 16 resolution. 17 CHAIR KASSEKERT: Is there a second? 18 COMMISSIONER EPPS: Second. 19 CHAIR KASSEKERT: The motion has been 20 made and seconded. All in favor? 21 (Ayes.) 22 CHAIR KASSEKERT: Opposed? 23 (No response.) 24 CHAIR KASSEKERT: Motion carries. 25 Thank you. 106 ITEM NO. 13 1 MS. HUGHES: Thank you. 2 MR. NANCE: Item No. 13, joint petition 3 of Shuffle Master, Inc., Boardwalk Regency 4 Corporation, and Trump Marina Associates, LLC, 5 to permit the game Crazy 4 Poker. 6 Mr. Moncrief? 7 MR. MONCRIEF: Madame Chair and members 8 of the Commission, before you is a petition 9 seeking the authorization of a test for the new 10 game, Crazy 4 Poker. It's actually a variation 11 of the game of four-card poker. It has two 12 supplemental wagers. Basically, the rules of 13 four-card poker apply to this, however, the 14 players receive five cards instead of six 15 cards, and all players receive five cards. 16 They try to form their best four-card poker 17 hands. And there's predetermined pay tables 18 for the bonus wagers. 19 The Petitioner has reviewed a draft of 20 the temporary regulations. They are 21 acceptable, and I believe Mr. Ficchi has also 22 found them acceptable. 23 MR. FICCHI: Yes. 24 CHAIR KASSEKERT: Mr. Ficchi? 25 MR. FICCHI: Good morning again. And 107 ITEM NO. 13 1 we're doing the math analysis for the house 2 advantage, and that will be furnished to you as 3 soon as it's complete. 4 CHAIR KASSEKERT: Thank you. 5 Any questions? 6 COMMISSIONER SOMMELING: No questions, 7 Madame Chair. 8 COMMISSIONER EPPS: Madame Chair, I move 9 that we permit the game of Crazy 4 Poker and, 10 A, preliminarily approve the Crazy 4 Poker 11 variation of four-card poker as a game 12 compatible with the public interest pursuant to 13 Section 5 of the Act; that we, B, authorize a 14 publication of a notice of temporary adoption 15 which will permit a test of Crazy 4 Poker 16 variation of four-card poker to begin on or 17 after February 8, 2010, subject to the 18 conditions listed and continue for a period of 19 time not to exceed 270 days; that we, C, 20 temporarily adopt the amendments contained in 21 the notice of proposal for the purpose of 22 conducting the test; D, delegate to the 23 Director of the Division of Compliance the 24 authority to establish the terms and conditions 25 of a test of Crazy 4 Poker variation of a 108 ITEM NO. 13 1 four-card poker and to approve any gaming 2 equipment necessary to the implementation of 3 the test; and, E, condition any test of Crazy 4 4 Poker variation of four-card poker upon the 5 filing with and approval by the Division of 6 Compliance of all necessary test submissions 7 for a Section 69e test of Crazy 4 Poker 8 variation of four-card poker. 9 COMMISSIONER SOMMELING: 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. MONCRIEF: Thank you. 17 MR. NANCE: In accordance with 18 Resolution No. 09-12-16-20, the next closed 19 session of the Commission shall be held on 20 Wednesday, January 20th, 2010, at 9:15 a.m. in 21 the Commission offices. 22 It is now time for the public 23 participation portion of the meeting. 24 CHAIR KASSEKERT: Is there anyone from 25 the public who wishes to be heard? 109 Elizabeth Jackson 1 Good morning. Could you please state 2 your name for the record? 3 MS. JACKSON: Good morning. My name is 4 Elizabeth Jackson. 5 Madame Chair, members of the Commission, 6 this is in regards to Tropicana closing the 7 simulcast room. I've prepared a statement. 8 I have worked as a racebook teller since 9 Tropicana opened its simulcast room 14 years 10 ago. I have seen the Race Book in it's heyday 11 as an extremely popular and profitable one for 12 casino patrons who wish to wager on 13 horseracing. The closing of Tropicana's Race 14 Book should not be allowed to happen. Solely 15 on the basis of mismanagement, I have seen the 16 Race Book go, and it's so unfortunate that 17 since 2001 it has been allowed to become the 18 dispirited room it is today. 19 Unfortunately, I am one of the ten 20 families who will be adversely affected by its 21 closing. Why is it that just because it has 22 been so poorly mismanaged that everyone has to 23 suffer? It appears to me that very little 24 thought has gone into the actual closing 25 process of the Race Book by the current 110 Elizabeth Jackson 1 management team. Not only will this be a major 2 financial hardship for my family, there has 3 been no regard put towards the simulcast 4 patrons who have remained loyal over the years. 5 Not one person on the management team has 6 bothered to think of the inconvenience this 7 closing will cause the patron who happens to 8 have old tickets that need to be cashed. Some 9 patrons don't visit on a regular basis and will 10 not know where to cash their tickets in two 11 months. How about the credit vouchers that 12 never expire? What other casino in Atlantic 13 City will honor Tropicana's betting voucher? 14 The closing of Tropicana's Race Book 15 should not be allowed to happen. This is an 16 extremely arbitrary and capricious call on 17 Tropicana's management team. The simulcast 18 management that has been in place since 2001 19 has not been in compliance with the rules and 20 regulations set forth by the Casino Control 21 Commission and were in direct violation 22 thereof. 23 This is not a good judgment call to 24 close the simulcast room. Revenues are down in 25 all the casinos in town, not just at Tropicana. 111 Virginia Castro 1 This time of year is notorious for the profit- 2 versus-expense numbers to plummet on the ledger 3 pages. In effect, much more than ten families 4 will be adversely affected by this closing. 5 Tropicana Casino Hotel is one of the 6 largest in Atlantic City. Simulcast wagering 7 is truly an amenity. It adds to the 8 convenience for Tropicana patrons. It is my 9 very strong belief that simulcast wagering at 10 Tropicana should be reinstated immediately. 11 Thank you for your time. 12 CHAIR KASSEKERT: Thank you for your 13 comments. 14 MS. JACKSON: Okay. 15 CHAIR KASSEKERT: Hi, ma'am. Could you 16 state your name for the record? 17 MS. CASTRO: My name is Virginia Castro. 18 I'm one of the supervisors that have been there 19 for over eight years. 20 First off, I would like to start by 21 saying thank you for giving us the opportunity 22 to speak. This is a very sore subject. 23 For the previous four years, our 24 department has lived under the constant specter 25 of our possible disbandment. Time and again we 112 Virginia Castro 1 have been given word that simulcast was on the 2 verge of closing. With what I can only 3 categorize as a total abandonment from upper 4 management, our department has been 5 methodically deprived of even the most basic 6 elements to which operate. Several of the 7 televisions on our main wall are not working. 8 Even though we have been promised new sets 9 several times over the years, our sets simply 10 sit dark. We previously had 36 individual 11 seats for our simulcast players. That number 12 was reduced to 16 in order to make way for the 13 extra poker tables. These poker tables are 14 situated in such a way that they preclude our 15 simulcast customers from any real freedom of 16 movement to. To add insult to injury, over the 17 past three years, these poker tables have sat 18 dormant over 95 percent of the time. As a 19 result, our customers are regulated to sitting 20 at the empty poker tables. The 16 remaining 21 individual seats are equipped with personal 22 televisions. Half of these sets do not work, 23 and the rest are simply obsolete. 24 Whereas over the years we have been 25 operating under the cloud of impending doom, we 113 Virginia Castro 1 have pleaded with management for the just -- 2 just the basics. While other property Race 3 Books in Atlantic City have been immersed with 4 the newest amenities or monetary promotions and 5 various media advertising, we are forced to 6 manage with less and less. Management then 7 informs us they will not invest extra resources 8 in simulcast unless they see an increase in 9 revenue. I ask you. How can any rational 10 person expect to see a positive result when our 11 competition moved forward and we remain 12 stagnant, or worse, go backwards? 13 The real travesty of this situation 14 extends from our immediate supervisor, 15 management, lack of knowledge and experience 16 regarding our department. On countless 17 occasions, we have made efforts to initiate our 18 management team in the basics and intricate 19 nuances of our daily businesses, and n our 20 internal procedures. To our dismay, our 21 efforts fell on deaf ears. When we are faced 22 with a departmental issue and turned to 23 management, they trod out an tired old phrase, 24 this is the gray issue. We are, quite frankly, 25 left to fend for ourselves. 114 Virginia Castro 1 Without a true understanding of 2 department needs or a passion for helping it 3 flourish, how can a department management team 4 hope to tread water, let alone expect a 5 profitable result? Amidst all this concerted 6 effort to bring about our demise, our managers 7 and frontline employees have held their heads 8 up high, pushing forward to maintain the utmost 9 in professional service and provide a uniquely 10 professional experience for each and every one 11 of our clients. Because of this concerted 12 efforts, our customer base has remained 13 unbelievably loyal. Constantly referring to 14 the special feelings and genuine warmth that 15 they receive from our employees, our customers 16 point to the people as the only reason for them 17 to frequent the Tropicana Casino Race Book. 18 On the -- once the final decision was 19 made to proceed with the Race Book's closing, 20 we naturally inquired as to the reasoning of 21 this course of action. It was at this time 22 that the betrayal showed itself. At first we 23 were informed that a closing was predicted on 24 our lack of financial success. Later fell upon 25 contractual reasons. And, finally, as if 115 Samantha Pezzotti 1 another explanation was necessary, we were told 2 that Tropicana was simply no longer interested 3 in the simulcasting industry. 4 Regardless of the multitude of excuses 5 and backtracking, the numbers tell the true 6 tale. Our department is profitable. And to 7 dissolve it, leaving only unused, unprofitable 8 empty space, is ill advised and, bottom line, 9 bad business. Addition through subtraction is 10 not and should not be made the mantra for our 11 organization. 12 And all we humbly request is the 13 opportunity of another year. Given the proper 14 tools, support, and involvement from our upper 15 management and our renewed dedication to our 16 success, we feel, we know Tropicana simulcast 17 would improve itself as a valued keystone in 18 Tropicana's future. 19 On behalf of our staff and all of our 20 families, I thank you for your time. 21 CHAIR KASSEKERT: Thank you. 22 VICE CHAIR HARRINGTON: Thank you. 23 CHAIR KASSEKERT: Ma'am, can you state 24 your name for the record? 25 MS. PEZZOTTI: My name is Samantha 116 Samantha Pezzotti 1 Pezzotti. I actually would like to read this 2 for a person who cannot be here. Georgette 3 Neilson. 4 I am Georgette Neilson. I work in the 5 Race Book as race writer and has been there 6 11-plus years. The Tropicana has not invested 7 any money in our Race Book since it's inception 8 in 1994. In 2006, management reduced the size 9 of our seating capacity by approximately 60 10 percent and allocated that area to poker. The 11 new poker area is only utilized when Race Book 12 patrons have no place to sit. This area is 13 only full for poker about one day a week, and 14 during Christmas and New Years. Otherwise, it 15 is inhibited by Race Book patrons. Further, at 16 the time the seats where removed, we were 17 promised a new Race Book area. This was 18 evidenced by the purchase of many flat screen 19 TVs to go in our area. Subsequently it's been 20 a Race Book area, became a smoking area. The 21 TVs were placed throughout the casino, with one 22 in the escalators area. I'm sure the general 23 public is delighted to be able to watch TV as 24 they ascend from our floor to the next. Also, 25 did the Race Book have to cover the expense 117 Samantha Pezzotti 1 from their income? 2 Recently we were told that the Race Book 3 lost $82,000 this year. Management has 4 systematically reduced our area over the past 5 few years. Our 36 seats are now 16 seats. Did 6 management finally reach their goal of a loss 7 of Race Book by making our space inadequate 8 thereby reducing the number of patrons we can 9 serve? Management has done away with the 10 simulcasting in order to operate a poker-only 11 area. How can this happen? We understand that 12 management was told it must have a ten percent 13 increase in poker income. Their way of 14 obtaining the 10 percent increase is to close 15 the Race Book and fill it with poker tables. 16 Lastly, I am the Race Book employee 17 management has deemed is making 44,000 a year. 18 In reality, my gross salary is 26,908.36. My 19 net salary is 20,435.44. However, any time 20 management would like to give me the difference 21 between what I actually earned and what they 22 say I am grossing, I will gladly accept it, the 23 $17,092, less taxes. 24 That's it. 25 THE COURT REPORTER: I need your name, 118 Eric Knuttel 1 ma'am. Could you spell your name for me? 2 MS. PEZZOTTI: Pezzotti. 3 P-e-z-z-o-t-t-i. 4 CHAIR KASSEKERT: Thank you. 5 Sir, can you state your name? 6 MR. KNUTTEL: Eric Knuttel. 7 THE COURT REPORTER: Could you spell it, 8 please? 9 MR. KNUTTEL: K-n-u-t-t-e-l. 10 I'd just like to say a few things on 11 behalf of the individuals most affected by 12 today's decision. The Trop race writers are a 13 group of loyal, dedicated, long-term employees 14 who have not been treated as such. Someone has 15 not been telling the truth, as usual, and if we 16 are to believe everyone's explanation of how, 17 when, and why the decision was made to close 18 the race room. While I understand certain 19 economic forces may be responsible for the room 20 to be underperforming, one slow year is not 21 indicative of the value of this asset of a 22 first-class, full-service gaming hall. 23 When our bargaining committee was 24 presented with a bare-bones finance statement 25 laid out by management as evidence backing 119 Ed Welenc 1 their decision-making process, we offered to go 2 through it with them and help to trim the 3 budget. At that time, we were told that it's 4 not about the money. He just don't want to be 5 in this business anymore. Again, I stress. 6 Someone's not telling the truth. Since when 7 does the casino turn down gaming-related 8 revenue? 9 While I understand your board is not 10 responsible for creating the debacle that is 11 the Tropicana, please recognize you are 12 responsible for perpetuating its continuation. 13 Pontius Pilate couldn't wash his hands at the 14 end of the day, and neither can anybody else 15 here. 16 CHAIR KASSEKERT: Thank you. 17 Sir, can you state your name for the 18 record? 19 MR. WELENC: My name is Ed Welenc, 20 W-e-l-e-n-c. Good morning, Chairman and 21 Commissioners. 22 The Casino Control Commission has a 23 mandate to create regulations and judge whether 24 or not they are met. I find it hard to believe 25 that a petition was filed by Tropicana on 120 Ernie Grecco 1 December 18th. With -- in lieu of the holidays 2 and made a decision that is reasonable to date. 3 Does it seem viable to close this room rather 4 than promote updated equipment and stay 5 competitive, instead of taking away 6 attractions, turning customers away in an 7 economy that is starting upward? Closing 8 simulcast is unreasonable. We listened to 9 testimony all morning to enhance gaming. In 10 any business, you never want to turn customers 11 away, especially when it means a loss of 12 revenue, jobs and morale. It's something that 13 has been subsidized for many years by the 14 State. 15 We here today represent all employees of 16 Tropicana. That's Tropicana, not Tropicana. 17 Once again, testimony here today has 18 been for Atlantic City casinos to be 19 progressive, but as far as workers are 20 concerned, this treatment -- their treatment 21 over the years has been regressive. 22 Thank you. 23 CHAIR KASSEKERT: Thank you. 24 MR. GRECCO: Good afternoon, Madame 25 Chair, members of the committee. My name is 121 Ernie Grecco 1 Ernie Grecco. I am president of the Baltimore 2 AFL-CIO unions. I'm also a member of the 3 Maryland Racing Commission. I'm here for the 4 customers' perspective, I assume. 5 For 19 years, I have been bringing the 6 labor leaders in the Baltimore area to Atlantic 7 City for a leadership conference. Our 8 conference starts today. We're going to have 9 over 500 members attending our conference at 10 the Tropicana Hotel. I was not aware of this 11 situation of the closing of the simulcasting 12 until I got here. Had I known that, we would 13 have never came to the Tropicana. 14 For 19 years, Madame Chair, we've been 15 bringing a lot of people up here, spending a 16 lot of money. Take into consideration, we may 17 not come back if this is not overruled. My 18 organization represents 189 labor unions in the 19 Baltimore area with a membership of 175 -- 20 approximately 175,000 members. I'm asking you 21 to please reconsider. And have that 22 simulcast -- 23 I don't know what -- what's going to 24 happen when my members come today. We have 25 quite a few that come up here especially for 122 Jerome Cohen 1 the racing. And I can tell you, our labor 2 leaders are not like the sisters of the poor. 3 They spend money, and they spend a lot of 4 money. And this is a big thing. Like I 5 mentioned, we have over -- over 800 room nights 6 for the next two days at the Tropicana. If 7 this is not -- not corrected, we will not come 8 back to the Tropicana and possibly not back to 9 Atlantic City. 10 Thank you very much. 11 CHAIR KASSEKERT: Thank you. 12 Sir? 13 MR. COHEN: Hi. Good morning. My name 14 is Jerome Cohen, C-o-h-e-n. And I believe I'm 15 one of the names on your petition of the 16 hundred people that you said. 17 You questioned, you mentioned to the 18 gentleman who was giving testimony that you 19 realize that there's a lot of people who play 20 the horses, but they also play table games and 21 the slots. And his response to you was 22 something to the effect that the research that 23 they did showed that that didn't offset their 24 losses. I just want you to know that they 25 really don't have a way -- you don't play with 123 Jerome Cohen 1 a player's card when you play the horses. A 2 half a dozen people a day maybe get rated on 3 their play at the horses. If you bet a hundred 4 dollars at a time, you get a point, and I 5 suppose at the end of the day, they put that 6 into the card system. But there are hundreds 7 of players like myself and a lot of people that 8 I know that play a little bit on the horses and 9 a lot on the table games and the slots. And 10 they are making a lot of money on us who are 11 not playing the horses a lot, and they can't 12 tell me that -- how does he know who's playing? 13 How could he make that statement? You're not 14 playing with a card. If he was playing with a 15 card, I could understand that you could -- you 16 could see exactly what they're doing outside of 17 that. But there is no way that you could 18 analyze and determine to close down the 19 simulcasting based upon the fact that these 20 people who you're throwing out, they're now 21 going to go to Bally's and Resorts and all the 22 other venues to make their -- to play their 23 horses, that they're going to make that much 24 money -- not making the money back on the other 25 avenues of gaming that they have there. So I 124 Jerome Cohen 1 believe that his statement was false because 2 you got to analyze half a dozen people, a dozen 3 people, not 400 people. 4 Thank you very much. 5 CHAIR KASSEKERT: Thank you. 6 We appreciate everyone's comments today. 7 And I hope you know that -- that the 8 Commissioners struggled with this decision. It 9 was not an easy decision. 10 I do want to say that, the first lady 11 that spoke about regulatory concerns, if there 12 are issues where you think there are violations 13 of the regulations, we would be interested in 14 hearing from you. Those kind of issues we 15 would turn over to the Division of Gaming 16 Enforcement for investigation, and they would 17 come back to us. So I encourage you to do 18 that. If you -- you know, by letter would be 19 fine if you think that there are violations. 20 And we will ask the Division to look into 21 those. 22 Let me ask if any of the other 23 commissioners have any other comments. 24 COMMISSIONER SOMMELING: No, Madame 25 Chair. 125 1 VICE CHAIR HARRINGTON: No. 2 CHAIR KASSEKERT: But, again, we truly 3 appreciate you coming here today and talking to 4 us. 5 Let me ask if there's anyone else 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 SOMMELING: Motion to 12 adjourn. 13 CHAIR KASSEKERT: Is there a second? 14 VICE CHAIR HARRINGTON: Second. 15 COMMISSIONER 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: The motion carries. 22 (Public Meeting 10-01-06 was adjourned 23 at 11:33 a.m.) 24 25 126 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: January 10, 2010 23 My Notary Commission Expires July 22, 2014 24 ID No 2062871 25