1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 10-02-17 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, February 17, 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 10:33 a.m. to 11:58 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, VICE CHAIR MICHAEL C. EPPS, COMMISSIONER 4 WILLIAM T. SOMMELING, COMMISSIONER EDWARD J. FANELLE, COMMISSIONER 5 PRESENT FOR THE CASINO CONTROL COMMISSION: 6 DARYL W. NANCE, ADMINISTRATIVE ANALYST DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 7 OFFICE OF THE GENERAL COUNSEL: 8 DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE SECRETARY 9 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL TERESA M. NAGENGAST, SENIOR COUNSEL 10 TRACY E. RICHARDSON, COUNSEL BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 11 DIVISION OF GAMING ENFORCEMENT: 12 DEPUTY ATTORNEYS GENERAL BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL 13 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL 14 DOROTHY TURI, DEPUTY ATTORNEY GENERAL 15 16 17 18 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 ITEM NO. 8 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL DOROTHY TURI, DEPUTY ATTORNEY GENERAL 3 STERNS WEINROTH, PC PAUL M. O'GARA, ESQ. 4 FOR: HARRAH'S ENTITIES 5 ITEM NO. 9 TRACY E. RICHARDSON, COUNSEL JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL 6 JOSEPH A. CORBO, JR., ESQ. FOR: MARINA DISTRICT DEVELOPMENT 7 COMPANY, LLC 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 10-02-17 2 FEBRUARY 17, 2010, 10:33 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 7 7 February 3, 2010, public meeting 4 2 Applications for employee and casino service industry licenses 5 3 initial and/or renewal of casino key 7 8 and casino employee licenses 6 10 initial and/or renewal of casino key 9 9 and casino employee licenses 7 Casino service industry license renewal 8 8 application of Magic Disposal, Inc. 8 3 Stipulations of settlement and consent agreements: a) Camellia O. Jones (07-0617-ER) 9 11 9 b) Scott D. Dorn (09-0520-RC) 9 11 c) Mark S. Houck (09-0077-RC) 9 11 10 d) Jeremy T. Hill (09-0370-ER) 9 11 e) Constance B. Colasanti (09-0541-ER) 9 11 11 4 Petitions for early reapplication: a) Jose R. Crespo (09-0716-RA) 11 13 12 b) Annie K. Ospina (09-0694-RA) 13 16 Sworn 14 13 5 Complaint in State v. Trisha M. Belsky 16 20 (09-0385-VC) 14 6 Motion to vacate suspension order and 20 22 dismiss Complaint in State v. Tuyen V. Hoang 15 (04-0611-RC) 7 Initial decision in State v. Jermaine M. 22 24 16 Baskerville (09-0041-RC) 8 Petition of Harrah's Operating Company, 24 33 17 Inc., Showboat Atlantic City Operating Company, LLC, Boardwalk Regency Corporation 18 and Bally's Park Place, Inc., for approval of issuance of new second lien senior 19 secured notes and other relief (PRN 0271001) 9 Petition of Marina District Development 33 35 20 Company, LLC, (d/b/a Borgata Hotel Casino & Spa) for waiver of the qualification 21 requirement for three new officers of its holding company, Boyd Gaming Corporation 22 pursuant to NJSA 5:12-85d(1) (Vice President of Operational Finance, John Krabiel, 23 PRN 0271006); (Vice President, Research and Business Development, John Lin, PRN 0271006); 24 (Vice President of Legal Affairs and Assistant General Counsel, Michael Mathis, PRN 0271007) 25 5 1 E X H I B I T S : 2 NO. DESCRIPTION EVD 3 4 P-1 Remand for hearings 3 license X 5 P-2 Grant 10 licenses X 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (Exhibits retained by Commission.) 25 6 1 (Public Meeting 10-02-17 was commenced 2 at 10:33 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, 2009, 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. 7 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 enterprise license matters. 6 The Commission approved the February 3, 7 2010, closed-session minutes. 8 And litigation update regarding Edwards 9 versus Adamar of New Jersey, Inc., et al. 10 Item No. 1, ratification of the 11 amendments [sic] of February 3rd, 2010, public 12 meeting. 13 COMMISSIONER SOMMELING: Move to 14 approve. 15 VICE CHAIR HARRINGTON: Second. 16 CHAIR KASSEKERT: The motion has been 17 made and seconded. All in favor? 18 (Ayes.) 19 CHAIR KASSEKERT: Opposed? 20 (No response.) 21 CHAIR KASSEKERT: Motion carries. 22 MR. NANCE: Item No. 2, application for 23 employee and casino service industry licenses. 24 This agenda item will be entered as Exhibit 25 List 1 and 2. Exhibit List 1 consists of three 8 ITEM NO. 2 1 applications for initial and/or renewal of 2 casino key and casino employee licenses. 3 The Division has objected to licensure. 4 COMMISSIONER EPPS: Motion to remand for 5 hearing. 6 COMMISSIONER SOMMELING: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: The motion carries. 13 MR. NANCE: For consideration is the 14 casino service industry license renewal 15 application of Magic Disposal, Inc. 16 The Division has objected to this 17 application. 18 COMMISSIONER EPPS: Move that we remand 19 this 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.) 9 ITEM NO. 3 1 CHAIR KASSEKERT: The motion carries. 2 MR. NANCE: Exhibit List 2 consists of 3 10 applications for initial and/or renewal of 4 casino key and employee licenses. 5 Staff and the Division have recommended 6 that these licenses be granted. 7 VICE CHAIR HARRINGTON: I move -- 8 COMMISSIONER EPPS: Move that we grant 9 the application. 10 VICE CHAIR HARRINGTON: Second. 11 CHAIR KASSEKERT: The motion has been 12 made and seconded. All in favor? 13 (Ayes.) 14 CHAIR KASSEKERT: Opposed? 15 (No response.) 16 CHAIR KASSEKERT: Motion carries. 17 MR. NANCE: Item No. 3, stipulation of 18 settlement and consent agreements. When I call 19 your name, please come forward, standing behind 20 this center table, spreading across the room so 21 that you may be seen: Camellia O. Jones, Scott 22 Dorn, Mark Houck, Jeremy Hill, and Constance 23 Colasanti. 24 Please come forward. 25 CHAIR KASSEKERT: Thank you. 10 ITEM NO. 3 1 Has everyone whose name been called come 2 forward? 3 Okay. I'm going to ask that you each 4 state your name for the record, starting with 5 you, sir. 6 MR. HOUCK: Mark Houck. 7 MR. DORN: Scott Dorn. 8 CHAIR KASSEKERT: Okay. In a moment we 9 are going to vote on the stipulations which 10 you've agreed to with the Division of Gaming 11 Enforcement. I'm going to ask at this point if 12 any of you wish to be heard on your matter. 13 You don't have to say anything if you don't 14 want to. 15 Does anyone wish to be heard? 16 MR. DORN: No, ma'am. 17 MR. HOUCK: No. Thank you. 18 CHAIR KASSEKERT: Mr. Biscieglia? 19 MR. BISCIEGLIA: Thank you. Good 20 morning, Chair and commissioners. 21 The Division has nothing further and ask 22 that the stipulations be approved. 23 Thank you. 24 CHAIR KASSEKERT: Thank you. 25 Any questions? 11 ITEM NO. 4 1 COMMISSIONER SOMMELING: Madame Chair -- 2 Did somebody say something? 3 CHAIR KASSEKERT: No. I was asking any 4 questions. 5 COMMISSIONER SOMMELING: Oh. No 6 questions, Madame Chair. 7 Move to approve the stipulations. 8 CHAIR KASSEKERT: Thank you. 9 Is there a second? 10 VICE CHAIR HARRINGTON: Second. 11 CHAIR KASSEKERT: The motion has been 12 made and seconded. All in favor? 13 (Ayes.) 14 CHAIR KASSEKERT: Opposed? 15 (No response.) 16 CHAIR KASSEKERT: Motion carries. 17 Thank you for coming. Good luck. 18 MR. HOUCK: Thank you. 19 MR. DORN: Thank you. 20 MR. NANCE: Item No. 4, petitions for 21 early reapplication for Jose Crespo and Annie 22 Ospina. 23 Miss Frigen? 24 MS. FRIGEN: Good morning, Madame Chair 25 and commissioners. 12 ITEM NO. 4 1 Mr. Crespo is present. He's having a 2 seat at the table. 3 For your consideration is his petition 4 seeking permission to reapply early for a 5 registration. 6 The Division has interposed no 7 objections to this request. 8 CHAIR KASSEKERT: Thank you. 9 Mr. Crespo, is there anything else you 10 wish to say on this matter? 11 MR. CRESPO: No. Not at the moment. 12 CHAIR KASSEKERT: Okay. 13 Mr. Biscieglia? 14 MR. BISCIEGLIA: Thank you, Chair. 15 The Commission has the Division's letter 16 of January 12th, 2010, in which, as Miss Frigen 17 stated, the Division interposes no objection to 18 the relief requested by the Respondent. 19 CHAIR KASSEKERT: Thank you. 20 Any questions? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 Move to grant Mr. Crespo permission to 24 reapply early for a casino service employee 25 registration. 13 ITEM NO. 4 1 CHAIR KASSEKERT: Is there a second? 2 VICE CHAIR HARRINGTON: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 Thank you for coming. Good luck. 10 MR. CRESPO: Thank you. 11 MS. FRIGEN: Okay. 12 The next case we would have is Annie 13 Ospina. She's also present. I would ask her 14 to come forward. 15 MS. OSPINA: I'm sorry. I bring my 16 baby. 17 MS. FRIGEN: She's adorable. 18 (Laughter.) 19 MS. FRIGEN: For your consideration is 20 Miss Ospina's petition seeking to reapply early 21 for a license, registration, and/or a 22 noncredential hotel employment. 23 Again, we have the Division's position 24 not objecting to this petition. 25 CHAIR KASSEKERT: Thank you. 14 ITEM NO. 4 1 Mrs. Ospina, is there anything you'd 2 like to say? 3 MS. OSPINA: Yes. I would like to -- 4 CHAIR KASSEKERT: Okay. We need to 5 swear you in, then. Mr. Nance will swear you 6 in. 7 8 ANNIE K. OSPINA, was duly sworn to 9 testify in this matter. 10 11 MR. NANCE: Please state your name for 12 the record. 13 MS. OSPINA: Annie Ospina. 14 MR. NANCE: Thank you. 15 MS. OSPINA: I will ask you all to give 16 me the opportunity to get my license back. I 17 was involved in the Borgata case for my fiancee 18 for the only reason that I was -- I was there 19 to push him to plead guilty. I never was 20 involved in any game, in any bet, in anything 21 about that stuff. I was at work every since I 22 came to this country -- I'm from Columbia. So 23 as soon as I come to this country for eight 24 years ago, I was -- I was just plain and clean 25 work. And I been in the casino because that is 15 ITEM NO. 4 1 what I like and what I feel like I do best. 2 So I'm asking you to review my case. 3 And, hopefully, I get the opportunity and the 4 chance to get my license back and clean my 5 name. 6 CHAIR KASSEKERT: Okay. Thank you. 7 MS. OSPINA: Thank you. 8 CHAIR KASSEKERT: Mr. Biscieglia? 9 MR. BISCIEGLIA: Thank you. 10 The Commission has the Division's letter 11 of January 15th, 2010, in which the Division 12 does not interpose an objection to the relief 13 requested by Miss Ospina. As Miss Ospina asked 14 for, that the matter be looked at, that's going 15 to have to happen eventually, and this will 16 happen in the confines of either an application 17 for a licensure or acquiring a casino service 18 registration. But the actual ability to apply 19 for it, the Division is not going to object to 20 at this time, and we will examine this matter 21 in depth once an application is filed, and it 22 comes to the settlement process. 23 Thank you. 24 CHAIR KASSEKERT: Thank you. 25 Any questions? 16 ITEM NO. 5 1 VICE CHAIR HARRINGTON: No questions. 2 I move that we grant Miss Ospina 3 permission to reapply early for a casino 4 employee license, casino service employee 5 registration and/or to obtain employment early 6 as a noncredential hotel employee. 7 COMMISSIONER EPPS: Second. 8 CHAIR KASSEKERT: The motion has been 9 made and seconded. All in favor? 10 (Ayes.) 11 CHAIR KASSEKERT: Opposed? 12 (No response.) 13 CHAIR KASSEKERT: The motion carries. 14 Good luck. Thank you for coming. We 15 have granted permission for you to do that, 16 so -- 17 MS. OSPINA: Thank you so much. 18 CHAIR KASSEKERT: Okay? 19 MR. NANCE: Item No. 5, complaint in 20 State versus Theresa Belsky. 21 Miss Frigen? 22 MS. FRIGEN: Okay. I don't believe so, 23 but let me ask for the record whether Miss 24 Belsky is present or represented here today? 25 (No response.) 17 ITEM NO. 5 1 MS. FRIGEN: Okay. Apparently, she is 2 not here. 3 As indicated, this is a complaint filed 4 by the Division of Gaming Enforcement alleging 5 that Miss Belsky committed an underaged gaming 6 violation. 7 The complaint was filed in June of 2009. 8 Miss Belsky initially did -- initially failed 9 to respond to the complaint at all. The staff 10 made efforts to reach out to her in hope that 11 she could meet with the Division and further 12 discuss this complaint. 13 Ultimately, in September 2009 we heard 14 from Miss Belsky wherein she advised she was 15 living in Virginia. She wasn't able to 16 physically come in for a hearing process, but 17 she asked that the matter set form in her 18 letter be reviewed and that she have an 19 opportunity to have a telephone conference. 20 The staff accommodated that request and 21 scheduled her to participate in a conference 22 October 27th of 2009. 23 When the staff attorneys tried to call 24 her, she was not available at that telephone 25 number, and we also sent a letter that day 18 ITEM NO. 5 1 giving her ten days to provide a written 2 explanation. She failed to respond. 3 Consequently, in the letter meeting 4 notice dated January 11th we advised her that 5 the case was being presented for to the 6 Commission for final action today. I will note 7 that she did call me indicating that, you know, 8 once -- that she had received that meeting 9 notice. I had suggested she, again, reach out 10 to the Division's attorney to see if she could 11 work things through. And I did communicate 12 with Mr. Biscieglia. He advised me that he 13 never heard from her. And I have received no 14 subsequent communications from her. 15 At this juncture, the staff would 16 recommend that the Commission find that Miss 17 Belsky has abandoned her hearing request and 18 constructively admitted the allegations in the 19 complaint. 20 You have before you the Division's 21 letter advising of its recommendation for her 22 proposed sanction. 23 CHAIR KASSEKERT: Thank you. 24 Mr. Biscieglia, anything you'd like to 25 add? 19 ITEM NO. 5 1 MR. BISCIEGLIA: Thank you. 2 As Miss Frigen stated, she set out the 3 procedural history. Clearly, the Division 4 doesn't disagree with any of that. The 5 Division has made its recommendation today as 6 to the civil penalty and the suspension that 7 the Respondent should receive. So the Division 8 has nothing further and leave it to the 9 Commission to decide. 10 Thank you. 11 CHAIR KASSEKERT: Thank you. 12 Any questions? 13 COMMISSIONER SOMMELING: No questions, 14 Madame Chair. 15 VICE CHAIR HARRINGTON: I would move 16 that based upon Miss Belsky's abandonment of 17 the hearing proceedings we impose a civil 18 penalty of $250 and suspend her casino service 19 employee registration for 20 working days for 20 violation of Commission regulations regarding 21 NJSA 5:12-19a, which is underage gambling. 22 CHAIR KASSEKERT: Is there a second? 23 COMMISSIONER EPPS: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 20 ITEM NO. 6 1 (Ayes.) 2 CHAIR KASSEKERT: Opposed? 3 (No response.) 4 CHAIR KASSEKERT: The motion carries. 5 Thank you. 6 MR. NANCE: Item No. 6, motion to vacate 7 suspension order and dismiss complaint in State 8 versus Tuyen Hoang. 9 Miss Frigen? 10 MS. FRIGEN: Thank you. 11 Let me ask whether Mr. Hoang is present 12 or represented? 13 (No response.) 14 MS. FRIGEN: I don't believe that he 15 signed in, but this is a motion brought by the 16 Division of Gaming Enforcement to dismiss the 17 revocation complaint with the expectation that 18 if the Commission grants that request, it would 19 require vacating an earlier suspension order 20 dated September 29th, 2009. 21 CHAIR KASSEKERT: Thank you. 22 Mr. Biscieglia? 23 MR. BISCIEGLIA: Thank you. 24 As Miss Frigen stated, the Division has 25 made this motion. Normally this is not the way 21 ITEM NO. 6 1 we would wrap up these cases. However, due to 2 some -- quite frankly, a lot of difficulties in 3 this case, in the interest of fairness to Mr. 4 Hoang, who has been suspended for almost six 5 years now, I believe, and his period of 6 disqualification has well passed, the Division 7 feels this is the fairest way to end this 8 matter at this point. 9 CHAIR KASSEKERT: Thank you. 10 Any questions? 11 COMMISSIONER SOMMELING: No questions. 12 Madame Chair, move to: A, grant the 13 Division's motion and dismiss its revocation 14 complaint filed on August 26, 2004; and, B, 15 vacate the Commission's suspension order dated 16 September 24th of 2004 for Mr. Hoang. 17 MR. NANCE: Chair, that should be -- 18 that should be September 29th. 19 CHAIR KASSEKERT: September 29th, 2004. 20 MR. NANCE: In regards to the suspension 21 order. 22 CHAIR KASSEKERT: Okay. 23 COMMISSIONER SOMMELING: I correct the 24 motion, Madame Chair. September 29th, 2004. 25 CHAIR KASSEKERT: Thank you. 22 ITEM NO. 7 1 Is there a second? 2 COMMISSIONER EPPS: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: The motion carries. 9 MS. FRIGEN: Thank you. 10 MR. NANCE: Item No. 7, initial decision 11 in State versus Jermaine Baskerville. 12 Miss Nagengast? 13 MS. NAGENGAST: Good morning, Chair, 14 Commissioners. 15 For your consideration is the initial 16 decision of Commissioner Harrington in this 17 matter. If you choose to adopt the initial 18 decision, you will find Mr. Baskerville 19 disqualified and that he failed to demonstrate 20 his rehabilitation. However, Commissioner 21 Harrington recommended that the 22 disqualification be waived and that good cause 23 be found to allow him to hold a casino service 24 employee registration and work in a position 25 that does not require a credential. 23 ITEM NO. 7 1 I note for the record that neither side 2 filed exceptions. 3 CHAIR KASSEKERT: Thank you. 4 Mr. Baskerville, anything you'd like to 5 say? 6 MR. BASKERVILLE: No, ma'am. 7 CHAIR KASSEKERT: Okay. 8 Mr. Biscieglia? 9 MR. BISCIEGLIA: Thank you. 10 The Division has filed no exceptions and 11 really has nothing further. We'll leave this 12 matter for the Commission. 13 Thank you. 14 CHAIR KASSEKERT: Thank you. 15 Any questions? 16 COMMISSIONER SOMMELING: No questions, 17 Madame Chair. 18 COMMISSIONER EPPS: Madame Chair, I move 19 that we adopt the initial decision and find 20 Jermaine Baskerville disqualified but waive the 21 disqualification pursuant to NJSA 5:12-91(e) 22 and find good cause pursuant to NJSA 23 5:12-106(c) to allow Mr. Baskerville to hold a 24 casino service employee license registration 25 and to work in a position that does not require 24 ITEM NO. 8 1 a license. 2 CHAIR KASSEKERT: Is there -- 3 VICE CHAIR HARRINGTON: 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: The motion carries. 10 Thank you. 11 MS. NAGENGAST: Thank you. 12 MR. NANCE: Item No. 8, petition of 13 Harrah's Operating Company, Inc., Showboat 14 Atlantic City Operating Company, LLC, Boardwalk 15 Regency Corporation, and Bally's Park Place, 16 Inc., for approval of issuance of new second 17 lien senior secured notes and other relief. 18 Miss Wozniak? 19 MS. WOZNIAK: Good morning, Chair and 20 commissioners. 21 Mr. O'Gara is here on behalf of the 22 petitioner and Miss Turi for the Division. 23 I have distributed a draft resolution 24 which also addresses the petitioner's sealing 25 request. 25 ITEM NO. 8 1 CHAIR KASSEKERT: Thank you. 2 Mr. O'Gara? 3 MR. O'GARA: Good morning. 4 The petition seeks your approval for the 5 issuance of $750 million in second priority 6 notes. The notes would be issued by an escrow 7 company. That was set up in the event that 8 these notes were priced prior to the time that 9 we could seek your consideration on this so 10 that they could be moved into escrow and 11 nothing would be assumed until and unless there 12 were any approval. And I believe they were 13 being priced last night. I don't believe they 14 were priced as yet this morning, but we've 15 given you the assumed interest rate of 12 and a 16 half percent. 17 CHAIR KASSEKERT: Uh-huh. 18 MR. O'GARA: The proceeds will be used 19 in two fashions. Fashion No. 1 is for some 20 time and on a number of approvals we've dealt 21 with what's called the 2010 to 2011 maturing 22 debt. About 300 and -- between 45 and $60 23 million net of fees. This was deposited with 24 the trustee. And that means that they will be 25 paid in full, every condition satisfied, and 26 ITEM NO. 8 1 they'll be the fees. And they're free to pick 2 up their money or free to wait their time at 3 that point on the '10s and '11s. And that 4 means there will be no debt that matures now 5 until 2013 of the HOC debt that's tied to the 6 operational assets. 7 The balance of it will be used to pay 8 down on the revolver, which is part of the 9 credit facility. And that allows two things. 10 The senior leverage ratio. That way no one 11 bumps against that senior leverage ratio in 12 terms of borrowing on that revolver. And it 13 means that there's approximately 350, or $360 14 million, maybe as high as 390, in that -- it's 15 in that range that's available through this 16 period of time for an operational cushion for 17 Harrah's both here and everywhere else they do 18 business. 19 And with respect to a question which the 20 Division raised, we have a shelf approval for 21 second lien notes. These appear to be 22 identical to those. We viewed it as a square 23 peg in a round hole in the sense that every -- 24 there are several conditions. Most of them 25 fit. Arguably, one did or did not, and that 27 ITEM NO. 8 1 had to do with permanent retirement of debt. 2 And in view of the fact that part of this is 3 used by the revolver, and the very nature of 4 the revolver, we thought it was better to have 5 your approval to do this rather than have a 6 debate about how that worked, whether it was 7 drawn or not drawn. 8 So you have any question I'll be glad to 9 answer. 10 CHAIR KASSEKERT: I guess -- I guess, 11 Mr. O'Gara, the advantage here is you are able 12 to retire some of this debt even in light of 13 having an increased interest rate. 14 MR. O'GARA: Yeah. And I think -- I 15 think that -- I think we've had testimony here 16 before. 17 CHAIR KASSEKERT: Um-hum. 18 MR. O'GARA: I think it was Michael -- 19 Mr. Cohen was here, and I think Mr. Halkyard 20 has met with your people here. I don't think 21 it's any secret that in terms of an overarching 22 game plan, and we talked that in terms of both 23 CMBS and this operating debt, that the 24 maturities are one of the big things. And when 25 one looks at the difference, the spread and the 28 ITEM NO. 8 1 interest, while it's substantial in gross 2 dollars, if it -- God, we should be so lucky, 3 it were our money, in terms of the overall debt 4 service package of Harrah's, which services 5 approximately $19 billion in debt, it is not 6 material. And it's viewed as -- as you look at 7 the continuing state of the economy, the 8 flexibility viewed is more valuable than that 9 marginal increase. That's correct. 10 CHAIR KASSEKERT: Let me ask before we 11 hear from the Division if any of the 12 commissioners have any questions? 13 COMMISSIONER EPPS: I have a couple of 14 questions. 15 This borrowing doesn't impact the ratio, 16 the debt ratio? So you said it takes it down. 17 This is outside of that. 18 MR. O'GARA: What it does is -- what it 19 does is it means we don't bump up against it. 20 There's various -- there's a senior secured 21 debt leverage ratio. If you look at the 22 report, there's times when there's some 23 cushion. This increases the cushion so that at 24 no point in any of the quarters as revenues 25 fluctuate you get close where you would pull 29 ITEM NO. 8 1 that trigger and have to get consents about, 2 you know, use of the revolver or anything. It 3 assures you, assuming you have a base case, 4 which is very reasonable here that that money 5 in the revolver is always available, that in 6 excess of $350 million for operational needs. 7 Because no one can kind of forecast quite when 8 the consumer part of the economy catches up 9 with whatever is going on in terms of just E 10 and T growth. 11 COMMISSIONER EPPS: This money is 12 outside of the ratio scenario? 13 MR. O'GARA: Yes. Right. Right. 14 COMMISSIONER EPPS: So it does -- 15 MR. O'GARA: This is second lien money. 16 Absolutely right. 17 COMMISSIONER EPPS: Right. Doesn't 18 impact -- 19 MR. O'GARA: Absolutely right. Doesn't. 20 VICE CHAIR EPPS: Second question is, 21 the interest rates are significantly higher. 22 But is that just the nature of the state of 23 play right now? 24 MR. O'GARA: Yeah. I think it's the 25 nature of the markets. I mean, that's the 30 ITEM NO. 8 1 half-empty glass. The half-full glass is that 2 they're borrowing 12 percent, and other people 3 in this industry are borrowing higher. 4 COMMISSIONER EPPS: Okay. 5 MR. O'GARA: You know, when we did this, 6 Commissioner, as you well know, for the glory 7 days of six-percent money -- or some of this is 8 five-percent money? That is gone. And they're 9 second liens. But there's an appetite for 10 second lien notes. And you can see with the 11 pricing and with any discount, it's still -- 12 you know, trades reasonably well in the market. 13 COMMISSIONER EPPS: Okay. 14 CHAIR KASSEKERT: Commissioner 15 Sommeling, do you have any questions? 16 COMMISSIONER SOMMELING: I have no 17 questions, Madame Chair. 18 CHAIR KASSEKERT: Miss Turi? 19 MS. TURI: Good morning, Madame Chair, 20 and Commissioners. 21 The Division has had the opportunity to 22 look not only at the figures that were 23 presented currently but also to look at 24 forecasts in trying to look out and see whether 25 this minimal increase in interest is actually 31 ITEM NO. 8 1 going to impact Harrah's in any negative way or 2 whether it would provide some cushion to 3 Harrah's moving forward in an economy that is 4 not the best economy for the casino industry or 5 any other industry at this particular time. 6 We did look at the fact that this second 7 lien note issue would put the -- it would 8 extend the maturity date out in a sense. It 9 would have these notes due in 2018, and it 10 would take out the 2010 and the 2011s, which 11 are near-term debt that everyone is concerned 12 with. We've analyzed in that aspect to make 13 sure that we felt that Harrah's would remain 14 financially stable and be able to meet all of 15 its obligations going forward through the next 16 several years, which is what we are concerned 17 with at this particular time, the near-term 18 debt and the near-term situation that is 19 present throughout the country and throughout 20 the casino industry. 21 We are satisfied that the issuance of 22 this debt at this time is appropriate for 23 Harrah's and that they would maintain their 24 financial stability and integrity in the casino 25 industry in Atlantic City. We've also had an 32 ITEM NO. 8 1 opportunity to look through the petition that 2 has been presented for sealing. We have no 3 objections to the sealing request that has been 4 presented at this time. We do, however, 5 recommend various conditions, and we've had an 6 opportunity to review the draft resolution that 7 contains the conditions that we recommend, one 8 of which is the presentation of all of the 9 actual documents when they are executed so that 10 we can see whether it's a 12 and a half percent 11 or 12.75, or even a 12 percent, whatever it is 12 actually priced out, which I understand at this 13 point it has not yet been priced. At which 14 time we've had an opportunity to review the 15 entire transaction. 16 And under those circumstances, the 17 Division has recommended that the request be 18 granted at this time. 19 CHAIR KASSEKERT: Thank you. 20 Any questions from the Division? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 I move to adopt the draft resolution and 24 approve the issuance the new second lien notes 25 and grant the relief requested to the extent 33 ITEM NO. 9 1 set forth and subject to the conditions stated 2 in the draft resolution. 3 COMMISSIONER EPPS: Second. 4 CHAIR KASSEKERT: Motion has been made 5 and seconded. This is a roll call vote. 6 MR. NANCE: Commissioner Sommeling? 7 COMMISSIONER SOMMELING: Yes. 8 MR. NANCE: Commissioner Epps? 9 COMMISSIONER EPPS: Yes. 10 MR. NANCE: Commissioner Fanelle? 11 COMMISSIONER FANELLE: Yes. 12 MR. NANCE: Vice Chair Harrington? 13 VICE CHAIR HARRINGTON: Yes. 14 MR. NANCE: Chair Kassekert? 15 CHAIR KASSEKERT: Yes. 16 Thank you. 17 MR. NANCE: The record will reflect that 18 the record is unanimous. 19 CHAIR KASSEKERT: Thank you. 20 MR. O'GARA: Thank you. 21 MR. NANCE: Item No. 9, petitions of 22 Marina District Development Company, LLC, for 23 waiver of the qualification requirement for 24 three new officers of its holding company, Boyd 25 Gaming Company pursuant to NJSA 5:12-85d(1). 34 ITEM NO. 9 1 Miss Richardson? 2 MS. RICHARDSON: Good morning, Chair and 3 commissioners. 4 A draft resolution was circulated on 5 these matters, and appearing for the 6 petitioners is Joe Corbo and for the Division 7 is DAG Jim Fogarty. 8 CHAIR KASSEKERT: Thank you. 9 Good morning, Mr. Corbo. 10 MR. CORBO: Good morning, Chair, 11 commissioners. 12 This is a petition where we're seeking 13 the waiver of the qualification of three new 14 Boyd officers. All the pertinent facts are in 15 our petition. 16 We've seen the resolution and are 17 satisfied with it. So I'm here only to answer 18 any questions. 19 CHAIR KASSEKERT: Thank you. 20 Any questions for Mr. Corbo? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 CHAIR KASSEKERT: Mr. Fogarty? 24 MR. FOGARTY: Good morning. 25 CHAIR KASSEKERT: Good morning. 35 ITEM NO. 9 1 MR. FOGARTY: It's actually three 2 petitions to which we responded separately as 3 to each one, as to Mr. Krabiel, Mr. Mathis, and 4 Mr. Lin, indicating that the Director would 5 concur in a waiver of these individuals 6 employed by Boyd Gaming. 7 I've seen the draft resolution which 8 covers all three in the one resolution. We 9 have no objection to its entry. 10 CHAIR KASSEKERT: Thank you. 11 Any questions for Mr. Fogarty? 12 COMMISSIONER SOMMELING: No questions, 13 Madame Chair. 14 COMMISSIONER EPPS: Madame Chair, I move 15 that we adopt the draft resolution and waive 16 the qualification requirement pursuant to NJSA 17 5:12-85d(1) as to Marina District Development 18 Company, LLC, officers identified therein and 19 subject to the conditions in the resolution. 20 VICE CHAIR HARRINGTON: I'll second 21 that. 22 CHAIR KASSEKERT: A motion has been made 23 and seconded. This is a roll call vote. 24 MR. NANCE: Commissioner Sommeling? 25 COMMISSIONER SOMMELING: Yes. 36 ITEM NO. 9 1 MR. NANCE: Commissioner Epps? 2 COMMISSIONER EPPS: Yes. 3 MR. NANCE: Commissioner Fanelle? 4 COMMISSIONER FANELLE: Yes. 5 MR. NANCE: Vice Chair Harrington? 6 VICE CHAIR HARRINGTON: Yes. 7 MR. NANCE: Chair Kassekert? 8 CHAIR KASSEKERT: Yes. 9 MR. NANCE: The record will reflect that 10 the motion is unanimous. 11 MR. CORBO: Thank you. 12 MS. RICHARDSON: Thank you. 13 MR. FOGARTY: Thank you. 14 MR. NANCE: In accordance with 15 Resolution No. 09-12-16-20, the next closed 16 session of the Commission shall be held on 17 Wednesday, March 3rd, 2010, at 9:15 a.m. in the 18 Commission offices. 19 It is now time for the public 20 participation portion of the meeting. 21 CHAIR KASSEKERT: Is there anyone from 22 the public that wishes to be heard? 23 (No response.) 24 CHAIR KASSEKERT: Seeing no one, I'll 25 declare this portion of the meeting closed and 37 1 entertain a motion to adjourn. 2 COMMISSIONER SOMMELING: Motion to 3 adjourn. 4 VICE CHAIR HARRINGTON: 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 Thank you. 12 (Public Meeting 10-02-17 was adjourned 13 at 11:58 a.m.) 14 15 16 17 18 19 20 21 22 23 24 25 38 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: February 18, 2010 23 My Notary Commission Expires July 22, 2014 24 ID No 2062871 25