1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 10-06-16 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, June 16, 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 10:38 a.m. to 12:44 p.m. 15 16 17 Certified Court Reporter: Darlene Sillitoe 18 - - - - - - - - - - - - - - - - - - - - - - - - - - - 19 20 ATLANTIC CITY COURT REPORTING, LLC 21 CERTIFIED COURT REPORTERS AND VIDEOGRAPHERS 22 1125 ATLANTIC AVENUE, SUITE 700 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 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 DENIS J. CORBETT, SENIOR COUNSEL 10 TERESA M. NAGENGAST, SENIOR COUNSEL SETH H. BRILLIANT, SENIOR COUNSEL 11 LON E. MAMOLEN, SENIOR COUNSEL BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 12 SANDRA DeLIA, LEGAL SUPPORT SPECIALIST 13 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 14 BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 15 LOUIS ROGACKI, 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. 3b BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY 3 GENERAL LEVINE, STALLER, SKLAR, CHAN, BROWN 4 & DONNELLY, PA JOHN M. DONNELLY, ESQ. 5 FOR: JOHN P. CONKLIN 6 ITEM NO. 7 DOROTHY TURI, DEPUTY ATTORNEY GENERAL LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL 7 FOX ROTHSCHILD, LLP MARIE JONES, ESQ. 8 ANDREW A. ELMAN, ESQ. FOR: ZENITH MEDIA SERVICES, INC. 9 ITEM NO. 8 DIANNA W. FAUNTLEROY, GENERAL COUNSEL 10 LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 11 MARIE JONES, ESQ. ANDREW A. ELMAN, ESQ. 12 FOR: ZENITH MEDIA SERVICES, INC. 13 ITEM NO. 16 DARYL W. NANCE, ADMINISTRATIVE ANALYST MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 14 N. LYNNE HUGHES, ESQ. FOR: HARRAH'S ATLANTIC CITY OPERATING 15 COMPANY, LLC 16 17 18 19 20 21 22 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 10-06-16 2 June 16, 2010, 10:38 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 8 8 June 2, 2010, public meeting 4 2 Applications for employee and casino service industry licenses 5 1 initial and/or renewal of casino key 8 9 and casino employee licenses 6 4 initial and/or renewal of casino key 9 10 and casino employee licenses 7 Application of renewal for a casino key 10 10 employee license and for qualification of 8 Cheryl E. Wilson, Vice President of Marketing for Trump Marina Associates, LLC 9 3 Stipulations of settlement and consent agreements: a) Adam P. McFarland (08-0551-ER) 13 14 10 b) John P. Conklin (08-0456-RC) 13 14 c) David P. Marshall (09-0560-ER) 13 14 11 d) Peter J. Borush (10-0025-EA) 13 14 e) Hugo D. Espinal-Zuleta (10-0058-ER) 13 14 12 f) Charles Evans (09-0530-EA) 13 14 g) Evelyn M. Barnett (10-0066-EA) 13 14 13 4 Petition of Robert M. Dagrossa for 16 17 early reapplication (10-0157-RA) 14 5 Initial decision in Motion For Summary 17 19 Judgement in application of Bond Mortgage 15 New Jersey and qualification of Donald G. Stelzner (07-0283-SI) 16 6 Applications for suspension: a) Juan G. Cruz (10-0193-RC) 20 22 17 b) Jose L. Delarosa (10-0194-RC) 20 22 c) Jodi Muraczewski (10-0174-RC) 20 22 18 d) Jun Zhang (10-0173-RC) 20 22 7 Petition of Wright Express Corporation 22 25 19 and its affiliated entity, Wright Express Financial Services Corporation for exemption 20 from casino service industry licensure (PRN 0551001) 21 8 Petition of Zenith Media Services, Inc., 25,72 85 For exemption from casino service industry 22 licensure (PRN 1700910) 9 Proposed temporary adoption of amendments 60 63 23 for "in between wager" in blackjack; Authorization of rulemaking experiment 24 for "in between wager" for blackjack pursuant to NJSA 5:12-69(e) 25 5 1 CONTINUED AGENDA PUBLIC MEETING NO. 10-06-16 2 June 16, 2010, 10:38 a.m. ITEM PAGE VOTE 3 10 Proposed temporary adoption of 64 65 Amendments to NJAC 19:40-1.2, 19:43-7.3, 4 and 7.4; 19:45-1.1, 1.2, 1.16, 1.17, 1.21, 1.31, and 1.33; NJAC 19:47-8.3; and new 5 Rule NJAC 19:46-5.2 (multi-game table) 11 Proposed temporary adoption of 65 66 6 amendments to NJAC 19:45-1.9B and 1.37A (Conversion of cash complimentaries into 7 electronic credits) 12 Petition of Shuffle Master, Inc., 66 67 8 Customized Casino Games, Ltd., and Bally's Park Place, Inc., (d/b/a Bally's Atlantic 9 City) for approval of "Blackjack Switch" as an authorized game pursuant to NJSA 10 5:12-5 and NJSA 5:12-69(e) (PRN 0501006) 13 Proposed publication of amendments to 11 NJAC 19:45-1.1, 1.11, 1.33, 1.43, 1.46, 67 68 1.46B, 1.54 and 1.55 (validation of coupons 12 by a gaming voucher system) 14 Proposed temporary adoption of 68 69 13 amendments to NJAC 19:40-1.2 19:45-1.1, 1.8, 1.9B, 1.16, 1.18, 1.46; NJAC 19:45-1.5; 14 NJAC 19:47-1.3, 1.9, 2.3, 2.17, 2.23, 2.24, 3.2, 5.1, 6.5, 7.2, 19.5, 11.7, 11.13, 13.4, 15 16.6, 17.6, 18.6, 19.5, 19.6, 20.6, 22.26, 23.6, 24.6, 25.6, 26.5, 26.6, 27.6, 28.6, 16 29.6, 39.6, 31.7, 32.6, 33.6 and 34.7; NJAC 19:5101.1 and 1.2A (table game wager coupon) 17 15 Proposed temporary adoption of new rule 69 70 NJAC 19:46-3.3 (adjoining gaming tables) 18 16 Petition of Harrah's Atlantic City 11 12 Operating Company, LLC, for the issuance 19 of a temporary casino key employee license to Christopher Foster pursuant to NJSA 20 5:12-89(e) and to permit him pursuant to NJAC 19:43-2.6 to assume the duties and 21 exercise the powers of Vice President of Hotel Operations without first having been 22 qualified (PRN 1551014) 23 24 25 6 1 E X H I B I T S : 2 ITEM NO. 2 DESCRIPTION EVD 3 4 P-1 Remand for hearings 1 license X 5 P-2 Grant 4 licenses X 6 7 ITEM NO. 8 8 P-1 Undated Certification of Frank Voris X 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (Exhibits retained by Commission.) 25 7 1 (Public Meeting 10-06-16 was commenced 2 at 10:38 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, an annual meeting schedule. On 12 October 16th, copies were mailed to 13 subscribers. 14 Members of the press will be permitted 15 to take photographs. We ask that this be done 16 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 June 2nd, 7 2010, closed-session minutes. 8 Personnel matters were discussed as 9 follows: The Commission approved the Casino 10 Control Commission's Leave of Absence Policy 11 within the Commission's Personnel Policy and 12 Procedure Manual. 13 Item No. 1, ratification of the minutes 14 of the June 2nd, 2010, public meeting. 15 COMMISSIONER SOMMELING: Move to approve 16 the minutes. 17 COMMISSIONER FANELLE: 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: The motion carries. 24 MR. NANCE: Item No. 2, application for 25 employee and casino service industry licenses. 9 ITEM NO. 2 1 This agenda item will be entered as 2 Exhibit List 1 and 2. 3 Exhibit List 1 consists of one 4 application for initial and/or renewal of 5 casino key and casino employee license. 6 The Division has objected to licensure. 7 COMMISSIONER EPPS: Move that we remand 8 this matter for hearing. 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: Exhibit List 2 consists of 17 four applications for initial and/or renewal of 18 casino key and casino employee licenses. 19 Staff and the Division have recommended 20 that these licenses be granted. 21 COMMISSIONER EPPS: Move that we grant 22 the applications. 23 COMMISSIONER SOMMELING: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 10 ITEM NO. 2 1 (Ayes.) 2 CHAIR KASSEKERT: Opposed? 3 (No response.) 4 CHAIR KASSEKERT: The motion carries. 5 MR. NANCE: For consideration is the 6 renewal application of Cheryl E. Wilson for a 7 casino key employee license and for 8 qualification as Vice President of Marketing 9 for Trump Marina Associates, LLC. 10 Staff and the Division have recommended 11 that this application be granted. 12 COMMISSIONER EPPS: I move that we grant 13 the initial key license and for qualification. 14 VICE CHAIR HARRINGTON: Second. 15 CHAIR KASSEKERT: Motion is made and 16 seconded. This is a roll call vote. 17 MR. NANCE: Commissioner Sommeling? 18 COMMISSIONER SOMMELING: Yes. 19 MR. NANCE: Commissioner Epps? 20 COMMISSIONER EPPS: Yes. 21 MR. NANCE: Commissioner Fanelle? 22 COMMISSIONER FANELLE: Yes. 23 MR. NANCE: Vice Chair Harrington? 24 VICE CHAIR HARRINGTON: Yes. 25 MR. NANCE: Chair Kassekert? 11 ITEM NO. 16 1 CHAIR KASSEKERT: Yes. 2 MR. NANCE: The record will reflect that 3 the motion is unanimous. 4 For your consideration, Item No. 16, 5 Petition No. 1551014 of Harrah's Atlantic City 6 Operating Company, LLC, is requesting the 7 issuance of a temporary casino key employee 8 license to Christopher Foster pursuant to NJSA 9 5:12-89(e) and to permit him pursuant to NJAC 10 19:43-2.6 to assume the duties and exercise the 11 powers of the Vice President of Hotel 12 Operations without first having been found 13 qualified. 14 CHAIR KASSEKERT: Miss Hughes? 15 MS. HUGHES: Thank you. 16 On behalf of Harrah's, we've submitted a 17 petition. I certainly will, once Mr. Foster 18 comes to Atlantic City, bring him around to 19 introduce you. Right now he's in the process 20 of moving. 21 But would ask that you approve our 22 petition. 23 CHAIR KASSEKERT: Thank you. 24 Miss Flaherty? 25 MS. FLAHERTY: Yes. Good morning, Chair 12 ITEM NO. 16 1 and Commissioners. 2 The Division has conducted its initial 3 investigation. Based on that, we have no 4 objection to the issuance of a temporary 5 qualification and temporary key license. 6 Thank you. 7 CHAIR KASSEKERT: Thank you. 8 Any questions? 9 COMMISSIONER SOMMELING: No questions, 10 Madame Chair. 11 COMMISSIONER EPPS: Move that we grant 12 the temporary key license and for 13 qualification. 14 COMMISSIONER FANELLE: Second. 15 CHAIR KASSEKERT: Motion is made and 16 seconded. This is a roll call vote. 17 MR. NANCE: Commissioner Sommeling? 18 COMMISSIONER SOMMELING: Yes. 19 MR. NANCE: Commissioner Epps? 20 COMMISSIONER EPPS: Yes. 21 MR. NANCE: Commissioner Fanelle? 22 COMMISSIONER FANELLE: Yes. 23 MR. NANCE: Vice Chair Harrington? 24 VICE CHAIR HARRINGTON: Yes. 25 MR. NANCE: Chair Kassekert? 13 ITEM NO. 3 1 CHAIR KASSEKERT: Yes. 2 MR. NANCE: The record will reflect that 3 the motion is unanimous. 4 Item No. 3, stipulations and consent 5 agreements. When I call your name, please come 6 forward, standing behind this center table, 7 spreading across the room so that you may be 8 seen: Adam McFarland, John Conklin, David 9 Marshall, Peter Boruch, Hugo Espinal-Zuleta, 10 Charles Evans, and Evelyn Barnett. 11 CHAIR KASSEKERT: Has everyone whose 12 name come forward? 13 MR. DONNELLY: John Donnelly on behalf 14 of Mr. Conklin. 15 CHAIR KASSEKERT: Thank you. Mr. 16 Donnelly. 17 And I think we have two other 18 individuals. 19 Good morning. Could I ask that you 20 state your name for record, please? 21 MS. BARNETT: Evelyn Barnett. 22 MR. EVANS: Charles Evans. 23 CHAIR KASSEKERT: Okay. In a moment we 24 are going to vote on the stipulations which 25 you've agreed to with the Division of Gaming 14 ITEM NO. 3 1 Enforcement. I'm going to ask at this point if 2 any of you wish to be heard on your matter. 3 You do not have to say anything if you do not 4 want to. 5 Does anyone anybody wish to be heard? 6 Mr. Donnelly? 7 MR. DONNELLY: No. 8 CHAIR KASSEKERT: No? Thank you. 9 Mr. Biscieglia? 10 MR. BISCIEGLIA: Good morning, Chair 11 Commissioner. 12 The Division has nothing further and ask 13 the stipulations be approved as adopted. 14 Excuse me. Submitted. 15 CHAIR KASSEKERT: Submitted. Thank you. 16 Any questions? 17 COMMISSIONER SOMMELING: Madame Chair, 18 move to approve the stipulations as seconded. 19 COMMISSIONER FANELLE: Second. 20 VICE CHAIR HARRINGTON: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 15 ITEM NO. 3 1 CHAIR KASSEKERT: The motion carries. 2 Thank you for coming. 3 MR. DONNELLY: Thank you. 4 CHAIR KASSEKERT: Good luck. 5 MS. BARNETT: Thank you. 6 MR. EVANS: Thank you. 7 MS. FAUNTLEROY: If I may interrupt the 8 Commission -- 9 CHAIR KASSEKERT: Sure. 10 MS. FAUNTLEROY: Just for clarification 11 on Item F, a representation from the Division, 12 I believe that there was a computer 13 transmission issue from Word Perfect to Word 14 to -- 15 MR. BISCIEGLIA: Oh, yeah. 16 MS. FAUNTLEROY: -- clarify that it was, 17 in fact, a weekly -- 18 MR. BISCIEGLIA: Yes. It was. I 19 believe I submitted a corrected -- 20 MS. FAUNTLEROY: Revision. 21 MR. BISCIEGLIA: It's been revised. 22 MS. FAUNTLEROY: Okay. 23 MR. BISCIEGLIA: The language has been 24 corrected. 25 CHAIR KASSEKERT: Thank you. 16 ITEM NO. 4 1 MR. NANCE: Item No. 4, petition of 2 Robert L. Dagrossa for early reapplication. 3 Miss Frigen? 4 CHAIR KASSEKERT: You can have a seat. 5 MS. FRIGEN: Madame Chair and 6 Commissioners, Mr. Dagrossa is present. 7 For your consideration is his petition 8 seeking permission to obtain noncredential 9 hotel employment early. 10 The Division has interposed no objection 11 to his request. 12 CHAIR KASSEKERT: Thank you. 13 Mr. Dagrossa, is there anything you'd 14 like to say today? 15 MR. DAGROSSA: No, ma'am. 16 CHAIR KASSEKERT: Okay. 17 Mr. Biscieglia? 18 MR. BISCIEGLIA: Thank you. 19 The Commission has the Division's letter 20 of June 7, 2010, in which we interposed no 21 objection to the relief sought by the 22 Petitioner. 23 CHAIR KASSEKERT: Thank you. 24 Any questions? 25 COMMISSIONER SOMMELING: No questions, 17 ITEM NO. 5 1 Madame Chair. 2 VICE CHAIR HARRINGTON: I'll move that 3 we grant Mr. Delarosa permission to obtain 4 employment early as a noncredential hotel 5 employee. 6 COMMISSIONER FANELLE: 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 Thank you for coming. Good luck. 14 MR. DAGROSSA: Thank you. 15 MR. NANCE: Item No. 5, initial decision 16 and Motion For Summary Judgment and application 17 of Bond Mortgage New Jersey, and qualification 18 of Donald G. Seltzer. 19 Mr. Corbett? 20 MR. CORBETT: Good morning, Chair, 21 Commissioners. 22 Let me ask for the record is Mr. Donald 23 Seltzer or anyone representing Bond Mortgage 24 New Jersey, in the hearing room this morning? 25 (No response.) 18 ITEM NO. 5 1 MR. CORBETT: I know Mr. Seltzer is not 2 here. 3 CHAIR KASSEKERT: Thank you. 4 MR. CORBETT: Chair, Commissioners, you 5 have for your consideration the initial 6 decision of Commissioner Epps' finding that the 7 Applicant and Qualifier are not qualified 8 resulting in the denial of the application for 9 qualification and the denial of the application 10 for casino service industry licensure. 11 Mr. Rogacki is here for the Division. 12 CHAIR KASSEKERT: Thank you. 13 Mr. Rogacki? Good morning. 14 MR. ROGACKI: Good morning Chair, 15 Commissioners. 16 I would just request or renew my request 17 from May that you adopt the initial decision 18 from April 8th of Commissioner Epps. 19 CHAIR KASSEKERT: Thank you. 20 Any questions? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 But I move to adopt the initial decision 24 and find Bond Mortgage New Jersey and Donald G. 25 Seltzer disqualified; B, deny the casino 19 ITEM NO. 5 1 service industry license application of Bond 2 Mortgage New Jersey, and the application of the 3 qualification of Donald G. Seltzer; and, C, 4 prohibit Bond New Jersey New Jersey, Bond 5 Mortgage Financial Services, LLC, and Donald G. 6 Seltzer from conducting any direct or indirect 7 business with casino licensees or applicants. 8 CHAIR KASSEKERT: Is there a second? 9 VICE CHAIR HARRINGTON: 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 Thank you. 17 Now, before you stand up, Mr. Corbett, 18 as you end your career here on your last item, 19 which was a well-founded initial decision that 20 you worked with Commissioner Epps, just want to 21 congratulate you. 22 How many years of State service do you 23 have? 24 MR. CORBETT: All told, 20. 25 CHAIR KASSEKERT: Twenty? But you get 20 ITEM NO. 6 1 the Veteran's. 2 MR. CORBETT: Eighteen years actual work 3 and two years for the Army time. 4 CHAIR KASSEKERT: Two years for the Army 5 time. Well, I want -- 6 MR. CORBETT: I'm glad I brought that 7 back. 8 (Laughter.) 9 CHAIR KASSEKERT: You know, let me just 10 on behalf of the Commissioners congratulate 11 you. And we're glad to see you're back healthy 12 after your last -- your last episode. And we 13 think now that you have the pacemaker, you 14 really probably have another good ten years in 15 you. 16 MR. CORBETT: That's what Dianna said, 17 but you're not going to be here. 18 (Laughter.) 19 CHAIR KASSEKERT: Well, again, 20 congratulations and best wishes for a happy and 21 healthy retirement. 22 MR. CORBETT: Thank you very much. 23 (Applause.) 24 MR. NANCE: Item No. 6, application for 25 suspension: Juan Cruz, Jose Delarosa, Jodi 21 ITEM NO. 6 1 Muraczewski, and Jun Zhang. 2 MS. DeLIA: Good morning, Chair and 3 Commissioners. 4 CHAIR KASSEKERT: Good morning. 5 MS. DeLIA: For the record, I would just 6 like to ask if the Respondents or a 7 representative are here? 8 (No response.) 9 MS. DeLIA: Apparently not. 10 Brian Biscieglia is here on behalf of 11 the Division. 12 CHAIR KASSEKERT: Mr. Biscieglia? 13 MR. BISCIEGLIA: Thank you. 14 The Commission has our suspension 15 applications. I would just like to add that in 16 regards to A-1, Cruz, Mr. Cruz failed to appear 17 in Atlantic City Municipal Court on May 6th of 18 2010. He now has an active warrant issued for 19 his arrest. 20 In regards to letters B, C, and D, all 21 are pending grand jury with no date set. 22 CHAIR KASSEKERT: Thank you. 23 MR. BISCIEGLIA: Thank you. 24 CHAIR KASSEKERT: Any questions? 25 COMMISSIONER SOMMELING: No questions, 22 ITEM NO. 7 1 Madame Chair. 2 VICE CHAIR HARRINGTON: I will move that 3 we grant the Division's applications for 4 suspension. 5 COMMISSIONER EPPS: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: The motion carries. 12 Thank you, 13 MR. BISCIEGLIA: Thank you. 14 MR. NANCE: Item No. 7, petition of 15 Wright Express Corporation and its affiliated 16 entities and Wright Express Financial Services 17 Corporation for exemption from casino service 18 industry licensure. 19 Miss Nagengast? 20 MS. NAGENGAST: Good morning, Chair 21 Commissioners. 22 For your consideration is the petition 23 of Wright Express Corporation and Wright 24 Express Financial Services Corporation. Both 25 are seeking an exemption from nongaming CSI 23 ITEM NO. 7 1 licensure. 2 I note for the record that counsel for 3 Petitioners is not present today but has asked 4 that the matter be considered on the papers. 5 Mr. Rogacki is here on behalf of the 6 Division. 7 CHAIR KASSEKERT: Thank you. 8 Mr. Rogacki? 9 MR. ROGACKI: Chair, Commissioners, got 10 our letter asking that the petition be granted. 11 I would just note that the one twist to 12 this petition was the method of accounting. 13 CHAIR KASSEKERT: Uh-hum. 14 MR. ROGACKI: The Division was -- 15 initially looked into that. And the thing that 16 swayed us in that regard was the fact that this 17 Applicant or the Petitioner does explain its 18 method of accounting in its 10K that it files 19 with the SEC so that the SEC does have the 20 ability to look into the method of accounting 21 and raise any issues it wants pursuant to the 22 rationale that the Commission expressed when it 23 passed this regulation. So the Division was 24 comfortable going along with this petition. 25 CHAIR KASSEKERT: Thank you. 24 ITEM NO. 7 1 MR. ROGACKI: So I would ask that you 2 grant the exemption. 3 CHAIR KASSEKERT: Thank you. 4 Any questions? 5 COMMISSIONER SOMMELING: No questions, 6 Madame Chair. 7 COMMISSIONER EPPS: I have a question. 8 CHAIR KASSEKERT: Uh-hum. 9 COMMISSIONER EPPS: The two different 10 companies, are we granting them both the same 11 relief? 12 MS. NAGENGAST: You mean Wright Express 13 and Wright Express Financial Services 14 Corporation? Yes. 15 COMMISSIONER EPPS: We're both granting 16 them one-tenth of one percent? 17 MS. NAGENGAST: Correct. 18 COMMISSIONER EPPS: Okay. 19 Well, I move that we grant this petition 20 of Wright Express Corporation and Wright 21 Express Financial Service Corporation for an 22 exemption from nongaming casino service 23 industry licensure pursuant to NJSA 24 5:12-92(c)(3)(ii) and NJAC 19:51-1.13(a)(2) 25 subject to the conditions in the order. 25 ITEM NO. 8 1 COMMISSIONER SOMMELING: Second. 2 CHAIR KASSEKERT: The motion has been 3 made and seconded. All in favor? 4 (Ayes.) 5 CHAIR KASSEKERT: Opposed? 6 (No response.) 7 CHAIR KASSEKERT: The motion carries. 8 Thank you. 9 MR. NANCE: Item No. 8, petition of 10 Zenith Media Services, Inc., for an exemption 11 from casino service industry licensure. 12 Miss Nagengast? 13 MS. NAGENGAST: Chair, commissioners, 14 another petition seeking an exemption from 15 nongaming CSI licensure. This time for Zenith 16 Media Services. 17 Marie Jones is here on behalf of 18 Petitioner and Lou Rogacki on behalf of the 19 Division. 20 CHAIR KASSEKERT: Good morning, Miss 21 Jones. 22 MS. JONES: Good morning, Chair and 23 Commissioners. Marie Jones here on behalf of 24 Zenith Services, Inc. With me is Andrew Elman. 25 He is General Counsel of Zenith, and he is also 26 ITEM NO. 8 1 licensed in New Jersey, so we'll both be able 2 to answer any questions that you may. 3 Before you is the petition for 4 exemption. This is a type of company that the 5 statute was amended to consider exempt from 6 licensure. It is owned by a large publicly 7 indicated company, Publicis Groupe. It does a 8 very small amount of business with the New 9 Jersey casinos compared to what the entire 10 company does. 11 And, in fact, the matter is extremely 12 similar to the matter that you just approved, 13 that exemption, in that there is some 14 differences between what is reported on the 15 Commission screens as to what is paid by the 16 casinos and what is actually considered 17 revenue. And Zenith has provided, in addition 18 to their petition, certifications from their 19 chief accounting officer, chief financial 20 officer, and information concerning that this 21 is a generally accepted accounting principle as 22 well as how other entities and similarly 23 situated businesses are -- treat their media 24 billings and revenue. 25 We'd be happy to address any questions 27 ITEM NO. 8 1 you have. Thank you. 2 CHAIR KASSEKERT: Thank you. 3 Let me ask before we hear from Mr. 4 Rogacki if there are any questions? Or you 5 want to wait until -- 6 COMMISSIONER SOMMELING: Not at this 7 time. 8 CHAIR KASSEKERT: Okay. Mr. Rogacki? 9 MR. ROGACKI: Chair, Commissioners, we 10 review this petition completely different than 11 the last one. In its April 14th response to 12 our objection, the Petitioner contended that 13 the Division had misperceived the law and was 14 confused by the facts of this case. The 15 response alleged that the Division had 16 completely disregarded the applicable 17 accounting standards, failed to address the 18 core arguments made, and had otherwise failed 19 to supply any expert reason or basis for 20 rejecting Petitioner's position other than the 21 Division's own unsupported, seemingly gut 22 belief that the Publicis Groupe should report 23 revenue differently. 24 Seemed to be pretty persuasive stuff 25 other than the fact that we viewed this 28 ITEM NO. 8 1 petition as trying to fit a round peg into a 2 square hole. The reason being, they argue 3 everything, and they supplied a lot of 4 documents, certifications except they failed to 5 comply with what the regulation requires. 6 When this Commission adopted NJAC 7 19:51-1.13(a)(2) in September -- on September 8 8th, 2009, they published the following in 9 the -- you published the following in the New 10 Jersey "Register": Accordingly, proposed NJAC 11 19:51-1.13(a)(2)(ii), would clarify the new 12 exemption by requiring that the amount of 13 revenue received from all casino applicants and 14 licensees during the most recent 12-month 15 period must be less than one-tenth of one 16 percent of all revenues received by the person 17 and its holding and intermediary companies 18 during that person's most recently completed 19 fiscal year, during the period covered by the 20 person's most recently completed four quarterly 21 financial earnings reports, whichever is most 22 recent. 23 And this is the sticking point right 24 here: This will provide convenient benchmarks 25 to use when the financial information required 29 ITEM NO. 8 1 for the exemption is submitted. It also 2 creates a equitable comparison formula for 3 administration of the exemption. So the 4 guidance comes right from there. Look at the 5 public filing. And that's what we're left 6 with. 7 So in this case, we take the public 8 filing of Publicis. Of the Publicis Groupe. 9 They're a public company, and they give no 10 explanation in its public filings of how it 11 treats the media billings in its calculation of 12 revenue. And that's exactly the revenue that 13 it does business with the Atlantic -- Atlantic 14 City casinos. And your screens show it does 15 $14 million worth of business. And the only 16 explanation the Petitioner can give is that 17 it's less than 14 million based on some 18 third-party group, that there's an estimate of 19 what the revenue really is with regard to the 20 media bills. There's no public filing with the 21 French version of the SEC, or the AMF for 22 short, with regard to how they treat the media 23 billings in their revenue. So we have no way 24 to evaluate it for purposes of this petition. 25 And that's the essence of why we've objected. 30 ITEM NO. 8 1 And based on that, I'd ask you to deny 2 this petition for an exemption. I'll be happy 3 to answer any questions. 4 CHAIR KASSEKERT: Thank you. 5 Let me ask -- Miss Jones, I'd like you 6 to respond. 7 MS. JONES: Yes. First off, the SEC 8 filings filed by Publicis Groupe do not include 9 media billings because that the generally 10 accepted accounting principle, and we've 11 provided the Division as well as the Commission 12 with the that standard procedures. Our 13 auditors, Ernst & Young, agree that that is how 14 we should report revenue. 15 In the Division's report, they come up 16 with questions about and point to sections of 17 our SEC filings that they believe indicate that 18 revenue should include media billings. But 19 they missed the basic point that that is just 20 standard business practice, that they're not 21 included. All numerous publicly traded 22 companies in the same business don't include 23 media billings. It's accepted principle. It's 24 also approved by our auditors, again. 25 Second, we did provide them with the 31 ITEM NO. 8 1 certification indicating the amount of business 2 that the -- Zenith had done with the casinos. 3 And it is based on the amount of revenue 4 received excluding revenue billings. It's not 5 $14 million, and it is significantly lower than 6 one-tenth of one percent of $6.4 billion. 7 That is -- we have to compare apples to 8 apples here. We can't be saying media billings 9 need to be included on one item but shouldn't 10 be included on the other. We need to look at 11 this as the accountants look at it and accept 12 the principle that, you know, media billings 13 should be excluded. 14 And, again, this is -- this is extremely 15 similar to what you just approved with Wright. 16 Wright had different billings that were passed 17 through, and they did not include that in the 18 amount that they reported as revenue from 19 Atlantic City casinos. 20 We did provide a certification which did 21 have the billings amount for 2009. At first, 22 our certification did not include that because 23 we included a forecasted amount because we were 24 in the middle or late 2009. And we want to 25 give the Commission, Division what we believe 32 ITEM NO. 8 1 the whole amount would be not just to date. 2 And this was our, sort of, first full year of 3 dealing with this contract. So that's where 4 the differences are. And we think that this is 5 consistent with precedent. And, again, this is 6 the type of company that should be granted an 7 exemption. 8 CHAIR KASSEKERT: Let me ask. Are there 9 any questions at this point? 10 COMMISSIONER SOMMELING: Not at this 11 point, Madame Chair. 12 CHAIR KASSEKERT: Commissioner Epps? 13 COMMISSIONER EPPS: I do. 14 Mr. Rogacki, I understand your position 15 to be what you normally expect to see -- or 16 what we've said in our reg we would like to see 17 which would establish the -- that you fit 18 within the exemption, and we're going to go to 19 this source, and that's where we're going to 20 get our information. If we see it there, then 21 it works, and you fit. But what I seem to be 22 hearing is we're dealing with a unique company 23 with a different set of GAAP, which is 24 generally accepted reporting -- accounting 25 principles. That there's -- there's -- you 33 ITEM NO. 8 1 know, the accounting world and the audit world 2 accept the way that they're booking these 3 transactions. And if their accountants and 4 their auditors tell them that they're booking 5 at it properly, and this is the way to book it, 6 because it doesn't absolutely match up with our 7 report, should we -- should we not allow them 8 the benefit of the exemption if otherwise it 9 fits? 10 I mean, maybe -- and I understand. 11 Maybe we need to go back and recognize where we 12 missed -- maybe this accounting principle. 13 Because it's something that maybe we didn't 14 anticipate or foresee. But if they otherwise 15 fit, do we need to absolutely say they're out 16 of the hole because, although otherwise it 17 would fit, we got a certification. We've got 18 reputable companies that certify that they're 19 doing things properly, and they're not hiding 20 something or doing something maliciously or 21 doing any malfeasance. It's just not simply 22 enumerated in the standards we use. Although 23 the previous company, kind of, was in the same 24 situation. Isn't this one of those cases where 25 you begin to be forward thinking and say this 34 ITEM NO. 8 1 fits, also? 2 MR. ROGACKI: Well, let me answer that a 3 couple different ways. We can only go by the 4 regulation we have before us. 5 COMMISSIONER EPPS: I understand that. 6 MR. ROGACKI: In evaluating that. The 7 previous company -- and Miss Jones keeps trying 8 to shoehorn this company in with the previous 9 company. The previous company told the SEC how 10 they account for their billings and their 11 bookings. So this company is nothing like the 12 previous company. The previous company, when 13 we looked at what they bill with the casinos 14 and what they report to the SEC, everything was 15 right there. There were charts. There were -- 16 their accounting method was right there. In 17 fact, Miss Jones in her response to the 18 Division's request for an objection cited four 19 other companies and how they bill and that 20 they're accounting method is the same. And 21 when we looked at their -- those four 22 companies' public filings, they all tell the 23 SEC or in their public filings how they account 24 for media revenue. This company doesn't. 25 So all I can say to you is, we're left 35 ITEM NO. 8 1 with what the regulation tells us to look at, 2 and this company doesn't meet that standard. 3 COMMISSIONER EPPS: Okay. Miss Jones? 4 MS. JONES: Yes. 5 COMMISSIONER EPPS: What -- what, then, 6 is the difference? And why is it that other 7 companies -- if that it's true that other 8 companies report media billings and your 9 company doesn't -- 10 MS. JONES: Well, first of all, our SEC 11 counsel and our auditors feel it is sufficient 12 the way we explain it because it is in the 13 normal course of business. I mean, that would 14 be obvious or they wouldn't have signed off on 15 it. And, again, this is -- once it's a 16 generally accepted accounting principle -- I 17 mean, the way it's reported is just how the 18 wording is done and other companies describe 19 things. You could take two of your gaming 20 casino owners and look at their SEC filings, 21 and they're going to word things differently. 22 And if there was anything that anybody thought 23 was wrong with our SEC filings, their counsel 24 would pick it up. Their auditors would pick it 25 up. Our, you know, CFO before he signed off on 36 ITEM NO. 8 1 the information would say, no. This is 2 inappropriate. But it is such standard in this 3 industry that it just is not even an issue to 4 this company. 5 Mr. Elman would also like to say 6 something. 7 MR. NANCE: Excuse me. Are you an 8 attorney? 9 MR. ELMAN: I am an attorney. 10 MR. NANCE: Okay. 11 COMMISSIONER EPPS: In New Jersey? 12 MR. ELMAN: In New Jersey and in other 13 jurisdictions as well. 14 So thank you, first of all, for hearing 15 us this morning. We do appreciate it. 16 And I do want to let the Commission know 17 that what we have tried to do in our 18 submissions is to be as completely transparent 19 as we possibly can be submitting, you know, 20 documentary evidence to show what the standard 21 is, submitting the EITF standard, submitting 22 everything possible to try and give comfort to 23 the Commission for the standard that was 24 promulgated, which is a revenue-to-revenue 25 basis and to understand what the word "revenue" 37 ITEM NO. 8 1 means versus revenues versus billings. 2 To Miss Jones' point, to the extent it 3 is such a generally accepted practice within 4 the industry to have media billings not 5 considered part of revenue, you wouldn't think 6 necessarily that it would come up as an issue 7 here. To the extent other companies through a 8 one line in within their filings saying, just, 9 you know, in accordance within the standards, 10 we haven't included media billings, the 11 Division appears to give weight to that to the 12 extent there was that type of filing in the 13 prior Wright Express application. The Division 14 has now had the opportunity to see it in all of 15 the other filings, to have these supporting 16 certifications saying the way the other 17 entities within the industry have treated it is 18 the same way that we have treated it, to put 19 billing numbers, which would be very large -- I 20 suppose similar to the way of the check cashing 21 or other processing of Wright Express into a 22 filing as compared to the actual revenues 23 earned. 24 I'm not an SEC -- I did not sign off on 25 the SEC filing. That is done by the CFO. That 38 ITEM NO. 8 1 is done by Ernst & Young. But it seems to me 2 that the reporting revenues in this way gives, 3 I guess, to the accountants that are the 4 experts in this a better way of addressing what 5 revenue is for a company like this. 6 So I did want to really impress upon the 7 Commission that we stand before you ready to 8 give whatever information is required, and we 9 would rely upon the papers that we've already 10 submitted as well as the prior decision in the 11 Wright case. 12 And I do thank you for your time. And 13 if you do have any questions, either of myself 14 and Miss Jones, please. I'm here today, and we 15 stand here ready to answer questions for the 16 Commission. 17 COMMISSIONER SOMMELING: Sir, would 18 there be any compelling reason why, knowing the 19 position of the Division before coming here 20 today, that the corporation might have had 21 dialog and conversation with the Division in 22 terms of an attempt to resolve the difference 23 of opinion -- of opinion, mind you -- with 24 regard to how your filing was filed and whether 25 or not it's acceptable under the Act in the way 39 ITEM NO. 8 1 the Division is interpreting it and applying it 2 to the other companies? 3 MR. ELMAN: I'll let Miss Jones answer 4 that. 5 MS. JONES: We did, in fact, reach out 6 to the Division to have them included in 7 conferences. I actually had discussed this 8 with DAG Wendy Way. And I had, after the one 9 conference, wanted the Division again to meet 10 with us if they so chose. And I -- I did 11 not have a response from them. 12 COMMISSIONER SOMMELING: You did not 13 have a response from the Division of Gaming 14 Enforcement? 15 MS. JONES: Correct. I mean, they did 16 not indicate any willingness to discuss it 17 further with us. 18 COMMISSIONER SOMMELING: Not a 19 willingness or not a response? 20 MS. JONES: Not a -- I'm not sure of the 21 difference. Not a response. I mean, once the 22 papers were filed, we did not receive any other 23 type of response. And there was correspondence 24 and contacts regarding this. 25 COMMISSIONER SOMMELING: Thank you. 40 ITEM NO. 8 1 MR. ROGACKI: Commissioner, if I could 2 respond to your question. The first contact 3 with regard to that was after we filed our 4 objection. Before we filed objection, we had 5 several contacts with Miss Jones as early as 6 December indicating to Ms. Jones that we had an 7 issue with the fact that there was nothing in 8 the public filings and to please point us to 9 where in the public filings Publicis Groupe 10 laid out how they deal with their media 11 billings and to please lay that out for us 12 because it was going to be a major sticking 13 point for us. And I've got a stack of e-mails 14 and correspondence back and forth between Ms. 15 Way and Ms. Jones. 16 COMMISSIONER SOMMELING: All right. 17 MS. JONES: I'm sorry, sir. 18 COMMISSIONER SOMMELING: Well, it just 19 seems to me that if all this information was 20 known that early on that that issue might have 21 been attempted to be resolved consistent with 22 what the Division was ask -- not your 23 interpretation now, but consistent with what 24 the Division was asking you to do in order to 25 resolve their concern. 41 ITEM NO. 8 1 And let's put it in that frame of 2 reference. Their concern about your filings in 3 terms of meeting the criteria that they were 4 asking you to adhere to in order to satisfy 5 them with respect to whether or not you should 6 be granted an exemption. 7 MS. JONES: We did provide 8 certifications and information. And as to -- I 9 mean, I'm not sure what would be asked at that 10 point, for us to an amendment our SEC filings? 11 To add something? 12 COMMISSIONER SOMMELING: Well, I'm 13 asking. 14 MS. JONES: I'm not sure. 15 COMMISSIONER SOMMELING: Well, 16 everything that you did, obviously, was done 17 the way it was supposed to be in the manner of 18 which you did it consistent with what the SEC 19 requires and what have you, but the Division 20 had a problem with the filings. You were made 21 aware of that. They wanted you to give them 22 information in the manner that they require, to 23 satisfy them with regard to their application 24 of the statute or the rule. 25 MS. JONES: And we did. We did believe 42 ITEM NO. 8 1 provide them with supplemental information 2 regarding -- 3 COMMISSIONER SOMMELING: Well, then, 4 there's a difference of opinion here. 5 MS. JONES: I mean, I'll accept there 6 was a difference of opinion, but we provided 7 them with information. I had a number of 8 discussions with Ms. Way about this specific 9 information that she provided in her report. 10 And we -- at one point she said I disagree with 11 your interpretation of it, but this is how it 12 was to be interpreted. This is what was 13 included in that, and media billings were not 14 included in it. If it's a matter of 15 interpretation, we -- after seeing her report, 16 and getting that that was her position, we then 17 provided additional supplemental information. 18 And we, after that point, did reach out to them 19 again. 20 As to what else could have been provided 21 or done? I believe that we've provided all the 22 appropriate certifications and information that 23 support our position. 24 COMMISSIONER SOMMELING: So did I just 25 understand you correctly you did give them 43 ITEM NO. 8 1 additional information subsequent to Ms. Way's 2 outlying correspondence to what she was 3 requesting? 4 MS. JONES: In the response -- in 5 response to the February 16th, 2010, report, we 6 provided a reply that included additional 7 information and including the GAAP standard, 8 included the publicly traded company SEC 9 filings for similarly situated companies so 10 they could see and compare them, and after 11 which time we did reach out to them again. 12 COMMISSIONER SOMMELING: Very well. 13 Thank you. 14 CHAIR KASSEKERT: Commissioner Epps? 15 COMMISSIONER EPPS: Again, Mr. 16 Rogacki -- and I'm not arguing with you. I'm 17 just trying to understand this, that you kept 18 slamming papers and stuff, and I don't 19 understand why you're upset. 20 But the question I have now is, we're 21 not suggesting that -- or the Division is not 22 suggesting that Zenith did anything improper or 23 untoward in their filings. 24 MR. ROGACKI: Not at all. 25 COMMISSIONER EPPS: And you're not even 44 ITEM NO. 8 1 suggesting that their file is unacceptable to 2 the SEC. What you seem to be saying is, if one 3 company chose to do it this way, and you 4 chose -- Way A. You chose Way B. Way A and B 5 are both acceptable by the SEC. The only issue 6 is Way B doesn't fit the Commission's 7 regulation and, therefore, you can't get it. 8 MR. ROGACKI: Correct. Our opinion is 9 they keep saying it's apples to apples. In 10 their response, when they provided the other 11 four companies that are similar media 12 companies, and they said, here. Look how these 13 four companies reported it. They all do it the 14 same way we do. Here is their public filings. 15 We looked at their four -- those four companies 16 and those public filings that Miss Jones 17 attached. Those four companies disclosed how 18 they treat media billings in the public 19 filings. So we're not dealing with apples and 20 apples. We're dealing with apples and oranges, 21 as far as we're concerned. 22 COMMISSIONER EPPS: But in this 23 scenario, the only orange is Zenith. 24 MR. ROGACKI: Correct. 25 COMMISSIONER EPPS: Okay. Miss Jones? 45 ITEM NO. 8 1 You seem -- you don't agree. 2 MS. JONES: I -- no. I don't agree 3 because I think we're getting confused on the 4 basic principle here, and that is Zenith and 5 Publicis Groupe, as well as the other media 6 billing companies, provide in their SEC filings 7 revenue that does not include media billings. 8 The media billings are on lines that are 9 immediately passed through to the media 10 companies. If we were to include that in our 11 revenue amounts, we would be, you know, 12 basically telling the public we make a lot more 13 revenue that we actually make. What we want to 14 compare is the revenue reported in the public 15 filing with the actual amount of revenue 16 received from the Atlantic City casinos. 17 The -- when you look at the Commission's 18 computer screen, it reports what the casinos 19 pay Zenith, which includes the media billings 20 and the revenue Zenith receives. So what we're 21 saying is, let's take the amount that's in the 22 SEC filings, which is 6.4 billion and does not 23 include media billings. And let's take the 24 actual revenue received from Atlantic City 25 casinos by Zenith, which is not the 15 million 46 ITEM NO. 8 1 approximately that's reported on the Commission 2 screen. It's significantly less than that. 3 And we have provided certifications as to that 4 amount. That's what we should be comparing, 5 and that's what should be apples to apples. 6 It's not whether our SEC filings are the same 7 as other media billing companies. That's not 8 where we're saying apples to apples. How we 9 report revenue in our SEC filings are the same 10 as the other companies. They exclude media 11 billing. That's a separate issue. What we 12 really immediate need to look at here and 13 concentrate on is looking at the numbers. And 14 the numbers clearly say we receive less than 15 one-tenth of one percent from New Jersey casino 16 licensees. 17 COMMISSIONER EPPS: So does the issue 18 turn on spreadsheets or narratives? 19 MS. JONES: In my opinion, spreadsheets. 20 And it should be -- and that's been provided. 21 The SEC filing shows 6.4 billion, and the 22 certification says the amount that we've 23 received from Atlantic City casinos. 24 COMMISSIONER EPPS: But, Mr. Rogacki, 25 what I'm hearing from you is their spreadsheets 47 ITEM NO. 8 1 may match up, but because their narrative 2 doesn't address it, that knocks them out of the 3 box? 4 MR. ROGACKI: We haven't seen anything 5 definitive. Let's forget the public filings, 6 then, with regard to your questions. The 7 spreadsheets we've seen, we've got a 8 certification from the individual called -- an 9 individual named Bob Bastian. That 10 certification said that the New Jersey 11 casino-related billings and revenue were under 12 the 14 million that this -- the casino 13 Commission screen showed. And that was based 14 on a -- not on a public filing but on a report 15 based -- but on a report issued by a 16 third-party entity known as the Research 17 Company, evaluating the media agency industry. 18 That's not the SEC. That's not the French 19 version of the SEC, and that's what they're 20 looking for us to rely on. That's where we're 21 a little uncomfortable. 22 COMMISSIONER EPPS: Okay. 23 COMMISSIONER SOMMELING: That goes back 24 to my questions as to why -- 25 MS. JONES: May I respond first, because 48 ITEM NO. 8 1 I think it may clear it up. 2 I'm looking at the certification, 3 Paragraph 20 of it. Actually, at the end of it 4 has the amounts. And, again, it's relying on 5 what was paid in 2009, and then it has the 6.4 6 billion, and it does the calculation. So the 7 certification of December 18th has up until 8 that part what was paid and then actually 9 calculates the anticipated, you know, for the 10 rest of the year because we weren't through the 11 end of the year. So it's of the December 18th, 12 the Paragraph 20. 13 MR. ELMAN: And further -- I'm sorry for 14 tag-teaming, and I thank the Commission. 15 There are also, within certifications, 16 the numbers with respect to billings that are 17 not reported stating emphatically that the 18 billings, if we were to do a billings-to- 19 billings comparison, that it would meet the 20 criteria as well. So, again, the wording of 21 the regulation is "revenue." If you're 22 comparing revenue to revenue, it supported it. 23 If you're comparing billings to billings, we 24 support that as well. And I just wanted you to 25 realize that that was -- that was in there. So 49 ITEM NO. 8 1 I'm not sure where -- what else was being 2 alleged here. We did submit information from 3 RECMA, which is a public -- publicly available 4 document that shows an estimate. So we've 5 submitted more than that. 6 But, again, it's -- it's really the 7 comparison of revenue to revenue, billings to 8 billings and doing so in a way that, you know, 9 again, has the certification of appropriate 10 people from the organization with knowledge of 11 this -- with knowledge. 12 COMMISSIONER SOMMELING: This is back in 13 December is the time frame you're speaking 14 about. Was that prior to Miss Way's last 15 correspondence with you? 16 MS. JONES: Yeah. 17 COMMISSIONER SOMMELING: -- wherein she 18 asked you to give certain informations to the 19 Division in order that they might clarify what 20 it is that they were concerned about? 21 MS. JONES: Yes. That was prior -- that 22 was their response to the additional request to 23 the Division. 24 COMMISSIONER SOMMELING: Miss Way -- 25 MS. JONES: At that point, I think it 50 ITEM NO. 8 1 was Mr. Rogacki that handled the matter because 2 he asked for additional certifications with 3 respect to the numbers. 4 COMMISSIONER SOMMELING: And all that 5 was provided? 6 MS. JONES: Yes. 7 CHAIR KASSEKERT: Commissioner 8 Harrington? Any question? 9 VICE CHAIR HARRINGTON: No. It's fine 10 now. 11 COMMISSIONER SOMMELING: I'd like to 12 hear from Mr. Rogacki again with respect to my 13 last question. 14 Did -- the company is claiming that they 15 gave all the information that the Division 16 required after the Division expressed its 17 concern by correspondence. I'm assuming 18 through Ms. Way or someone subsequent to Ms. 19 Way, and was the Division then satisfied or 20 then not satisfied that they weren't getting 21 the exact information to clear the matter up or 22 to give you the information you were looking 23 for? 24 MR. ROGACKI: Well, Commissioner -- and 25 it's the same answer that I've -- or the same 51 ITEM NO. 8 1 theme that I gave to Commissioner Epps. Our 2 feeling was that the information that was 3 provided did not point us to where this was 4 reported in a public document. These 5 certifications were all well and good, but this 6 information was not reported, and the 7 accounting method was not reported to the 8 French version of the SEC. Just like all the 9 other 12 to 15 other petitions that we've had 10 before us with regard to this exemption that we 11 could easily look at an SEC document and see 12 how revenue was determined in that document. 13 And we believe that -- that as the New Jersey 14 "Register" when this regulation was adopted 15 requires us to do. 16 COMMISSIONER EPPS: So I hear what 17 you're saying now. What you're saying is 18 you -- it doesn't matter if you supplement it 19 because unless you supplement it in some public 20 document, just giving to us doesn't satisfy the 21 day either. 22 MR. ROGACKI: That's the guidance that 23 we were -- and the many discussion I was privy 24 to when this regulation was adopted. 25 COMMISSIONER EPPS: All right. I just 52 ITEM NO. 8 1 want to understand. 2 MR. ROGACKI: Absolutely. Yes. 3 COMMISSIONER EPPS: All right. So 4 you're saying even if you supplement it, 5 supplementing it now doesn't meet the -- 6 doesn't satisfy the day because you didn't -- 7 it's never been presented in a public document. 8 MR. ROGACKI: And that's what the 9 recurring request to Petitioners were. Please 10 show us where these -- where this information 11 was in the public filing. 12 MS. JONES: But -- but, again, I have to 13 say that it is in the public filing. The 6.4 14 billion revenue is in the public filing as well 15 as how revenue is calculated in the general 16 manner. I mean, what is included, when it is 17 included. It does not discuss media billings 18 because our SEC counsel, our CFO, everybody at 19 Ernst & Young doesn't feeling it is necessary 20 in our case. I mean, that's -- 21 And, in addition, we provided -- the 22 first request was to provide, you know, 23 certifications with respect to the numbers. 24 The numbers -- and we provided that. The 25 second request -- the second, I guess, comment 53 ITEM NO. 8 1 was, well, we don't like how revenue is 2 reported in here. We can't see that media 3 billings is excluded. And we said that is 4 because it is such a normal practice in the 5 business. This is how we report it. And then 6 we received the report, and we provided our 7 reply to same. So, in our opinion, the 8 information is clearly there in the SEC 9 filings. And what you really need to look at 10 is the 6.4 billion in the SEC filings reported 11 as revenue and what is actual revenue from the 12 casinos, which is in our certifications and, 13 you know, what is typically relied on by both 14 the Commission and the Division in review of 15 petitions. 16 COMMISSIONER EPPS: Okay. Do you 17 acknowledge the 6.14 is in their SEC filing; 18 right? 19 MR. ROGACKI: I have to look at it 20 again. I mean, I'll go out on a limb here and 21 say what Miss Jones just said now isn't even in 22 her -- that's the first time I'm hearing that. 23 That's not even in her reply to our objection. 24 That's the first time I'm hearing what she just 25 said now. 54 ITEM NO. 8 1 COMMISSIONER EPPS: Okay. I thought I 2 had you, but -- 3 (Laughter.) 4 COMMISSIONER EPPS: Here's what I was 5 going. Because what I seem to hear from her is 6 that the amount is in the -- the revenue is in 7 their SEC filing, which is -- that's what you 8 said; right? 9 MS. JONES: But the 6.4 billion -- 10 COMMISSIONER EPPS: But the amount from 11 the casinos is not specifically broken out in 12 the SEC filing. 13 MS. JONES: Oh, no. That would not. 14 Because the SEC -- 15 MR. ROGACKI: They don't include that. 16 MS. JONES: Well, because it's at the 17 Publicis Groupe. It's not -- Zenith Media is 18 not the parent company. 19 MR. ROGACKI: That's in front of the 20 certifications, and if you give me a minute, 21 I'll find it, where it says that the media 22 billings are private and that information isn't 23 included in the revenue that's reported to the 24 French SEC. So that -- that number wouldn't be 25 in the revenue that's included with the AMF. 55 ITEM NO. 8 1 COMMISSIONER EPPS: Okay. Hold on for a 2 second. Here's my problem. I'm trying to 3 understand all this, but maybe it would help if 4 we all looked at the same piece of paper. 5 CHAIR KASSEKERT: Yeah. 6 COMMISSIONER EPPS: So if you're going 7 to refer to documents, why don't we all look at 8 the same document so we can all talk about the 9 same thing? Because I'm a little bit lost. 10 MS. JONES: Okay. 11 COMMISSIONER SOMMELING: Can I just ask, 12 impose a question before we get on to that 13 point, Madame Chair? 14 CHAIR KASSEKERT: Yeah. Sure. 15 COMMISSIONER SOMMELING: Mr. -- 16 corporate Counsel, you had stated prior -- and 17 I apologize. I had forgotten your name. 18 MR. ELMAN: Andrew, Your Honor -- 19 Commissioner. 20 COMMISSIONER SOMMELING: You had said 21 before in your explanation to the Commission 22 that figures were estimated, and when you said 23 "estimated," just exactly what figures were you 24 making reference to? 25 MR. ELMAN: So -- that may have been 56 ITEM NO. 8 1 Miss Jones. So at is some point during the 2 year -- 3 COMMISSIONER SOMMELING: It was you. 4 MR. ELMAN: If it was me. At some point 5 during the year when we were submitting a 6 certification as to how much we were earning, 7 we would know at that point in time what was 8 bought what was purchased. And if part of the 9 income is based upon commission, which it is, 10 we would know what we're anticipating to earn 11 based upon a plan of media purchasing that is 12 going to be done by a company. So you would 13 have an estimate, but until it's actually 14 purchased -- and then even beyond purchasing, 15 there's then a process relating to clearing of 16 media. Just because you purchase, it doesn't 17 mean it ran. So then you have to make sure it 18 ran, and then you would actually have your 19 numbers based on that. 20 COMMISSIONER SOMMELING: So -- 21 MR. ELMAN: But if we could look to the 22 billings, because there was a question raised 23 by the Division whether this was anywhere in 24 any of the certifications ever, and what I 25 would refer the Commission to is Paragraph 9 of 57 ITEM NO. 8 1 the certification of Mr. Voris. 2 MS. FAUNTLEROY: Want to mark it? 3 MR. ELMAN: Well, it's -- if it's 4 already part the record, I don't know that it 5 would be necessary to mark it. 6 MS. FAUNTLEROY: But it's not. 7 MS. JONES: The supplemental. 8 MR. ELMAN: The certification, 9 supplemental -- 10 MS. FAUNTLEROY: It needs to be 11 identified for the record and marked. 12 MS. JONES: That's fine. 13 MS. FAUNTLEROY: For this record. 14 CHAIR KASSEKERT: This record. 15 MR. ELMAN: Okay. 16 CHAIR KASSEKERT: This would be under B, 17 calculation of USA media billings of Publicis. 18 Is that -- no? 19 MS. JONES: Have this marked. 20 MS. FAUNTLEROY: Yes. And if there's 21 any sealing requests, you could address those 22 as well. I know that -- 23 MS. JONES: We've made that -- 24 MR. ELMAN: Yeah. He would like the 25 number -- we would certainly like this sealed. 58 ITEM NO. 8 1 And certainly with any redactions to any of the 2 dollars in there. 3 CHAIR KASSEKERT: Yeah. 4 MR. NANCE: Mark it as P-1? 5 MS. JONES: That's fine. 6 COMMISSIONER SOMMELING: We're not clear 7 on which exhibit we're trying to make reference 8 to. 9 CHAIR KASSEKERT: Yeah. 10 MR. NANCE: I have -- I'll have copies 11 made. 12 MS. NAGENGAST: I believe it's Exhibit B 13 of the material that was presented to the 14 Commission. 15 MS. JONES: Oh, okay. 16 COMMISSIONER EPPS: I have an A and a 17 bunch of numbers. 18 CHAIR KASSEKERT: Yeah. Right. The B 19 follows. 20 COMMISSIONER SOMMELING: B follows the 21 numbers, Teresa? 22 MS. NAGENGAST: Yes. 23 CHAIR KASSEKERT: Okay. Yeah. You got 24 it? Yes. You have it, Commissioner Fanelle. 25 Commissioner Epps, you're right there. 59 ITEM NO. 8 1 MS. JONES: And now we're the only one 2 without it because he's they're making a copy 3 of it. 4 MS. FAUNTLEROY: Yeah. Dale went to 5 make a copy. 6 MR. NANCE: Was there a sealing request 7 on that document? 8 MR. ELMAN: Yes. 9 MS. JONES: Yes. There's a sealing 10 request because -- 11 COMMISSIONER EPPS: Oh, that's why. I 12 couldn't see the -- 13 CHAIR KASSEKERT: Right. It's on the 14 back of the -- yeah. It's because we need to 15 conserve paper and that's the truth. So it's 16 all back to back. That wasn't -- 17 MS. FAUNTLEROY: If I may suggest, with 18 the Chair's consideration, that we briefly 19 adjourn this matter to allow for the copying 20 and dissemination -- 21 CHAIR KASSEKERT: I think that's 22 appropriate. 23 MS. FAUNTLEROY: -- of materials, move 24 through the regulation items, and then resume. 25 CHAIR KASSEKERT: I think that's a good 60 ITEM NO. 9 1 idea. Yup. That's fine. 2 MS. JONES: Thank you. 3 MS. FAUNTLEROY: You can leave your 4 stuff right there. 5 CHAIR KASSEKERT: We're going to move 6 on, Bill. We're going to do the regs and 7 then -- there you go. Keep going. 8 MR. NANCE: Item No. -- 9 CHAIR KASSEKERT: We're going to copy it 10 separately, Bill. 11 COMMISSIONER SOMMELING: Okay. Okay. 12 MR. NANCE: -- 9, proposed temporary 13 adoption of amendment for "in between wager" in 14 blackjack, authorization of rulemaking 15 experiment -- 16 COMMISSIONER SOMMELING: I'm sorry, 17 Chair. 18 CHAIR KASSEKERT: That's okay. 19 MR. NANCE: -- for "in between wager" in 20 blackjack pursuant to NJSA 5:12-69(e). 21 Mr. Mamolen? 22 CHAIR KASSEKERT: Now you're really to 23 going to confuse us. 24 MR. MAMOLEN: Very briefly -- 25 CHAIR KASSEKERT: In between wagers; 61 ITEM NO. 9 1 right, Mr. Mamolen? 2 MR. MAMOLEN: Very briefly, Madame 3 Chair. This is a side wager in the game of 4 blackjack. As you know, there are many of them 5 out there. And it's a wager based on the 6 players two up cards, initial two up cards, and 7 the dealer's up card, and it's as simple as it 8 sounds. 9 (Laughter.) 10 VICE CHAIR HARRINGTON: Really? 11 MR. MAMOLEN: The dealer's up card has 12 to be in between the two player's up cards, and 13 the pay-outs are based upon the amount of 14 spread or the number of cards ranks that are 15 reflected in the player's two up cards. Or 16 different pay-out tables that a casino licensee 17 has to preselect. There's a big pay out for 18 the -- the biggest pay out is for the so-called 19 triple match, which is the identical rank of 20 the player's two up cards and the dealer's up 21 card. 22 And, again, it's before you for 23 temporary adoption at this time. 24 CHAIR KASSEKERT: Thank you. 25 Any questions? Commissioner Epps? 62 ITEM NO. 9 1 COMMISSIONER EPPS: No. 2 VICE CHAIR HARRINGTON: Is it really the 3 exciting new side bet? 4 COMMISSIONER EPPS: I know. I already 5 got it. I know how to do it. 6 CHAIR KASSEKERT: Very good. 7 Any questions? 8 COMMISSIONER SOMMELING: No questions, 9 Madame Chair. 10 CHAIR KASSEKERT: Is there a motion? 11 VICE CHAIR HARRINGTON: All right. I 12 will move that we: A, preliminarily approve 13 the new -- approve the "in between wager" for 14 blackjack as a new wager compatible with the 15 public interest pursuant to Section 5 of the 16 Act; B, authorize the publication of the notice 17 of temporary adoption which will permit a test 18 of the new wager to begin on or after July 19 26th, 2010, subject to the conditions listed 20 and continue for a period of time not to exceed 21 270 days; C, temporarily adopt the amendments 22 contained in the notice of proposal for the 23 purpose of conducting the test; D, delegate to 24 the Director of the Division of Compliance the 25 authority to establish the terms and conditions 63 ITEM NO. 9 1 of the test of the new wager; E, condition any 2 test of the "in between wager" for blackjack 3 upon the filing with and approval by the 4 Division of Compliance of all necessary test 5 submissions for a Section 69(e) test of the new 6 wager; and, F, further condition preliminary 7 approval and any test of the "in between wager" 8 upon the supplementation of the new wager 9 petition with the filing by each sponsoring 10 casino licensee of appropriate release and 11 indemnification agreement as required under 12 NJAC 19:47-8.4. 13 COMMISSIONER EPPS: Second. 14 CHAIR KASSEKERT: The motion has been 15 made and seconded. All in favor? 16 (Ayes.) 17 CHAIR KASSEKERT: Opposed? 18 (No response.) 19 CHAIR KASSEKERT: The motion carries. 20 COMMISSIONER EPPS: Well done. 21 (Laughter.) 22 MR. NANCE: Item No. -- 23 COMMISSIONER EPPS: The rookie was 24 supposed to do it. 25 VICE CHAIR HARRINGTON: Oh. I didn't 64 ITEM NO. 10 1 know. 2 MR. NANCE: Item No. 10, proposed 3 temporary adoption of amendment and new rule 4 regarding multi-game table. 5 Mr. Briliant? 6 MR. BRILIANT: Good morning, Madame 7 Chair and Commissioners. 8 These proposed regulatory amendments 9 were requested by Bally's Park Place, would 10 permit several different table games to be 11 conducted at alternate times on the specially 12 constructed table known as a "multi-game" 13 table. The table can hold up to three stacked 14 inserts where a single layout would ordinarily 15 be located. Each insert has one complete 16 layout on it. 17 The matter is now before you for 18 temporary adoption. 19 CHAIR KASSEKERT: Thank you. 20 Any questions? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 Move to approve the temporary adoption. 24 COMMISSIONER EPPS: Second. 25 CHAIR KASSEKERT: The motion has been 65 ITEM NO. 11 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. 11, proposed 7 temporary adoption of amendments to NJAC 8 19:45-1.9B and 1.37A. 9 Mr. Briliant? 10 MR. BRILIANT: These proposed amendments 11 were requested by casino licensee Trump Plaza. 12 They would permit a cash complimentary to be 13 credited to an electronic transferred credit 14 account to a patron in the form of electronic 15 credit for a complimentary that is issued to a 16 patron pursuant to NJAC 19:45-1.9D. 17 CHAIR KASSEKERT: Thank you. 18 Any questions? 19 COMMISSIONER SOMMELING: No questions, 20 Madame Chair. 21 COMMISSIONER EPPS: Move to approve for 22 temporary adoption. 23 COMMISSIONER SOMMELING: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 66 ITEM NO. 12 1 (Ayes.) 2 CHAIR KASSEKERT: Opposed? 3 (No response.) 4 CHAIR KASSEKERT: The motion carries. 5 MR. NANCE: Item No. 12, petition of 6 Shuffle Master, Inc., Customized Casino Games, 7 Ltd., and Bally's Park Place, Inc., for 8 approval of "Blackjack Switch" as an authorized 9 game pursuant to NJSA 5:12-5 and NJSA 10 5:12-69(e). 11 Mr. Briliant? 12 MR. BRILIANT: The initial 60-day review 13 period for this petition will expire on June 14 18th, and presently we are circulating a final 15 draft of the proposed regs. 16 The Division is reviewing the math 17 calculations submitted by the Petitioners for 18 the house advantage. 19 We expect to list the matter for the 20 July 14th meeting, and so at this time we're 21 asking that the Commission table the matter for 22 up to 90 days as permitted under Office of 23 Administrative Law regs. 24 CHAIR KASSEKERT: Any questions? 25 COMMISSIONER SOMMELING: No questions, 67 ITEM NO. 13 1 Madame Chair. 2 Move to table the petition for up to 90 3 days, authorize publication of a notice of 4 action to that effect. 5 COMMISSIONER EPPS: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: The motion carries. 12 MR. NANCE: Item No. 13, proposed 13 publication of amendments concerning validation 14 of coupons by a gaming voucher system. 15 Mr. Briliant? 16 MR. BRILIANT: Okay. Commission 17 regulations currently permit the bill changer 18 of a slot machine to accept promotional coupons 19 and provide slot credits to the player. These 20 coupons are then validated by a coupon 21 acceptance system that is connected to the bill 22 changer. The proposed amendments would 23 alternatively permit such coupons to be 24 validated by a gaming voucher system if certain 25 conditions are met. 68 ITEM NO. 14 1 CHAIR KASSEKERT: Thank you. 2 Any questions? 3 COMMISSIONER SOMMELING: No questions, 4 Madame Chair. 5 COMMISSIONER EPPS: I move to approve 6 for publication. 7 COMMISSIONER SOMMELING: 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 MR. NANCE: Item No. 14, proposed 15 temporary adoption of amendments concerning 16 table game wager coupons. 17 Mr. Briliant? 18 MR. BRILIANT: Okay. This proposal was 19 requested by casino licensee Trump Plaza. It 20 would permit a casino licensee to issue a 21 coupon known as a "table game wager" coupon. 22 Such a coupon would have no cash value and 23 could be redeemed only by wagering at a table 24 game. 25 And I just wanted to put on the record 69 ITEM NO. 15 1 that you have the revised draft before you 2 which clarifies that one half of the value of 3 such a coupon would be includable in the gross 4 revenue. 5 CHAIR KASSEKERT: Thank you. 6 MR. BRILIANT: I also wanted to thank 7 Dave Mismer and Mary Beth Butler for helping 8 out in this matter. I haven't had this much 9 fun since my college course in calculus and 10 statistics. 11 (Laughter.) 12 CHAIR KASSEKERT: Thank you. 13 Any questions? 14 COMMISSIONER SOMMELING: Move that we -- 15 COMMISSIONER EPPS: Move that we approve 16 for temporary adoption. 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: The motion carries. 24 MR. NANCE: Item No. 15, proposed 25 temporary adoption of new rule NJAC 19:46-3.1. 70 ITEM NO. 15 1 Mr. Briliant? 2 MR. BRILIANT: All right. This proposed 3 new rule would permit a casino licensee to 4 adjoin up to six table games in one group. It 5 was requested by Bally's Park Place, and it 6 would allow certain table games to be conducted 7 at a smaller footprint than previously 8 utilized, possibly making more efficient use of 9 a casino floor space. 10 CHAIR KASSEKERT: Any questions? 11 COMMISSIONER SOMMELING: No questions, 12 Madame Chair. 13 COMMISSIONER EPPS: Move to approve for 14 temporary adoption. 15 COMMISSIONER SOMMELING: 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 Thank you. 23 MR. BRILIANT: Thank you. 24 CHAIR KASSEKERT: We'll return to Item 8 25 once we get all the parties back in. 71 ITEM NO. 8 1 Let me just ask if any of the 2 Commissioners want a recess? 3 COMMISSIONER EPPS: Yes. 4 CHAIR KASSEKERT: Okay. Why don't we 5 take a brief recess to get all the parties back 6 and make sure we're all looking at the same 7 exhibits. 8 (A recess was taken from 11:35 a.m. to 9 12:28 p.m.) 10 CHAIR KASSEKERT: Thank you. We'll go 11 back on the record. 12 Let me ask if anyone has any additional 13 questions? 14 Miss Jones, do you have -- 15 MR. ELMAN: I think when we left -- but 16 if you've already gone through the 17 certifications, unless you have any questions 18 more about the numbers that were in there and 19 the billings versus revenue numbers, you know, 20 we could certainly speak to that. 21 CHAIR KASSEKERT: Okay. 22 MR. ELMAN: Separately, I did want to 23 point out that even within the SEC filings, 24 there is an explicit reference that the 25 Division even points to that talks to the fact 72 ITEM NO. 8 1 that the revenue recognition rules, and then it 2 goes underneath, it says "with respect to 3 commission clients," and then it has a rule 4 underneath it. If -- if what the Division was 5 suggesting was that somehow that was not 6 reflected, it's even reflected there where it 7 says "revenue commission," and then it talks 8 about recognizing the revenue with respect to 9 that commission. 10 And, again, if the Commission has any 11 questions beyond, now that the break has 12 occurred, I'm -- I stand ready. 13 CHAIR KASSEKERT: Okay. Mr. Rogacki 14 anything else to add? 15 (No response.) 16 CHAIR KASSEKERT: Let me ask if there 17 are any other questions? 18 Commissioner Epps? 19 COMMISSIONER EPPS: I don't know that 20 we've yet resolved the question, though. When 21 we -- when we left, didn't we make a copy of 22 the certification for you to point something 23 out -- weren't you about to -- 24 MR. ELMAN: Yes. That's why I was 25 asking whether that was still outstanding or 73 ITEM NO. 8 1 whether you had already discussed that. 2 COMMISSIONER EPPS: I'd like you to do 3 that. I thought that's what you were about to 4 do. 5 MR. ELMAN: So, Commissioner Epps, 6 within Paragraph 9 the comment I believe that 7 was made by the Division was that they did not 8 recall seeing before any reflection of media 9 billings not being reported. And just to put 10 things into time line, there was the initial 11 application -- there was the initial 12 application made which was when we submitted 13 the certification, the prior certification of 14 Mr. Bastian. Then there was a call, I believe, 15 or some communication with the Division. And 16 then this December certification was submitted 17 after that communication to answer the 18 questions of the -- that were raised by the 19 Division prior to them even submitting their 20 opposition in February. 21 So in this particular paragraph, it 22 says, it goes further saying, media billings 23 are not publicly reported and are confidential 24 to Publicis. And above that, he does attest to 25 very limited information -- 74 ITEM NO. 8 1 CHAIR KASSEKERT: Uh-hum. 2 MR. ELMAN: -- that met the one-tenth of 3 one percent threshold in disclosing the 4 billings of the three entities listed within 5 the chart immediately above it in Paragraph 8. 6 So on the billings-to-billings 7 comparison, which has been a tested to, you 8 have a less than one-tenth of one percent 9 threshold being met. And on the revenue to 10 revenue threshold, which is what the 11 regulations speak to -- and I certainly believe 12 that we've met the spirit of the regulations 13 within -- within our filings, and I would hope 14 that a finding would be accorded. So that's 15 where it does -- it does talk to that, and 16 these numbers were explicit. They were 17 submitted in this certification. 18 And, again, similar to the case 19 immediately prior to this, in the Wright case, 20 where there was a submission there of the 21 amount of revenues that were earned, and the 22 Division accepted that certification. 23 So I think that was the outstanding 24 question, Commissioner. And I think that's the 25 way we address it. 75 ITEM NO. 8 1 And then I would also point out just in 2 terms of the overall -- of the overall record 3 and the communications and what we try to do to 4 assuage the concerns is we have the initial 5 filings. Then there were communications. So 6 we had the subsequent filings where we not only 7 explained the difference between billings and 8 revenue but explained why those differences 9 exist and why one was chosen over another, and 10 that's in the certification that's been marked 11 as P-1. 12 (Conferring.) 13 MS. JONES: No. 14 MR. ELMAN: That's then -- that's 15 already been reflected within P-1. Then we 16 received opposition that was somewhat 17 surprising and appeared to be inflammatory, at 18 least to me, and a further reply was submitted 19 to lend further comfort to say that, look, 20 we're -- we've already attested to the 21 methodology. The other companies use the same 22 methodology. We're showing you the numbers for 23 apples to apples. And it is apples to apples, 24 whether you're talking revenue to revenue, 25 billings to billings. And it just does not 76 ITEM NO. 8 1 seem -- and I don't understand -- we don't 2 understand why it doesn't seem to be satisfying 3 the Division in this particular case where the 4 language of revenue to revenue and the billings 5 are disclosed and really been making the effort 6 for a substantial company to really deal with 7 the issues and even suggesting meetings. And I 8 don't want to get into a whole sidetrack on 9 that, but that was raised earlier by -- I don't 10 recall whether it was Commissioner Sommeling 11 or -- I believe it was. There were all of 12 these continued attempts to meet, discuss, 13 confer to help arrange. Indications were made. 14 And that's pretty much -- pretty much where we 15 stand unless you have further questions. 16 COMMISSIONER EPPS: Mr. Rogacki, if -- 17 correct me if I'm wrong, what I'm hearing from 18 you is certifications and supplements and those 19 things don't matter because if it wasn't in the 20 public document, it doesn't matter what you 21 give me after the fact. 22 MR. ROGACKI: Yes. And specifically 23 with this certification of a Mr. Voris, going 24 beyond Paragraph 9 which talks about the media 25 billings are not publicly reported, which we've 77 ITEM NO. 8 1 talked about over and over this morning. And 2 it's confidential to Publicis. When you look 3 at No. 10, and I made reference to Mr. Bastian, 4 Mr. Voris says: I continue to certify that the 5 estimated relevant New Jersey casino-related 6 billings and revenue were as of the date of the 7 certification of Bob Bastian. Which rely on 8 the third-party numbers of this other group. 9 So, again, even with the supplemental 10 certifications, the Division was left with this 11 feeling that the Commission was being asked to 12 grant an exemption on business with the 13 Atlantic City casinos which it can only 14 estimate, and which it didn't -- which this 15 Petitioner didn't include in its public 16 filings. I understand the accounting 17 principles that are advanced by Petitioner. 18 What it came done to, from our 19 perspective, was did this petition comply with 20 the regulation? And we didn't think it did. 21 COMMISSIONER EPPS: But didn't the 22 estimate issue turn on the fact that the time 23 of the filing there could couldn't be complete 24 numbers? 25 MR. ROGACKI: Our -- they're telling us 78 ITEM NO. 8 1 from this -- even this certification -- 2 MR. ELMAN: No. 3 MR. ROGACKI: I provide this -- only 4 this limited information that media billings 5 are not publicly reported. 6 MR. ELMAN: I'm sorry. As to the 14 -- 7 as to that other number listed there, the -- 8 what's listed as the estimated numbers, that is 9 not from a third party. That was estimated in 10 particular as to these properties based upon 11 what was planned. Nothing to do with a 12 third-party estimating the USA billing -- media 13 billings of Publicis. So these were as of that 14 date. 15 So now we flash forward to another time, 16 and we say, look, he's certifying to the fact 17 that at the time Mr. Bastian made a 18 certification that those numbers were correct. 19 He's now saying we're now a few months later. 20 The numbers that we've actually incurred with 21 respect to the billings for these particular 22 properties has increased because we've gone 23 further in the year. Media was placed. Media 24 was cleared. The numbers are now updated to 25 reflect -- to reflect what was the billings for 79 ITEM NO. 8 1 these properties. Nothing to do with the 2 third-party reference by the Division. So I 3 just wanted to clarify that for the record. 4 COMMISSIONER EPPS: That's what I 5 understand. The estimate was based on what was 6 yet unknown, not estimate based on someone 7 else's numbers. 8 MS. JONES: Correct. 9 MR. ELMAN: Correct. That's what the 10 certifications reflect. 11 COMMISSIONER EPPS: That's the way I 12 understood. 13 You still disagree with that? 14 MR. ROGACKI: Right. I mean, we're 15 still dealing with estimates and unknowns. 16 COMMISSIONER EPPS: Well, I thought they 17 were later clar -- there were estimates when it 18 was in the middle of the year and yet earned, 19 and it was later clarified when it was more 20 accurate. 21 MR. ROGACKI: Understood. And that's 22 still a departure from how we have dealt with 23 these petitions in the 12 to 15 that we have 24 dealt with them at -- and if you so choose 25 to -- 80 ITEM NO. 8 1 COMMISSIONER EPPS: Hold on. Let me -- 2 just hear it out. 3 MR. ROGACKI: Okay. 4 COMMISSIONER EPPS: I understand the 12 5 to 15 that we've dealt with because this is a 6 relatively new provision. But aren't these the 7 two first two that are being uniquely like 8 this, being the pass through -- 9 MR. ROGACKI: Yes. 10 COMMISSIONER EPPS: -- if you will, 11 organization. So the other 12, we've dealt 12 with them, but they are slightly different 13 because the way these two do business is unique 14 to even of the ones we've done under this 15 provision. 16 MR. ROGACKI: Yes. 17 COMMISSIONER EPPS: So these are the 18 first two that we've dealt with in this 19 particular -- uniquely situated companies. 20 MR. ROGACKI: Yes. 21 COMMISSIONER EPPS: Okay. I just wanted 22 to be clear with respect to -- even though it 23 was compared to other companies, these are 24 different because the how the -- the type of 25 business that they do and how the revenue is 81 ITEM NO. 8 1 generated or calculated. 2 MR. ROGACKI: Yes. Yes. 3 COMMISSIONER EPPS: Okay. 4 CHAIR KASSEKERT: Commissioner 5 Harrington? Do you have anything? 6 VICE CHAIR HARRINGTON: I'm just 7 wondering. So this was, you know -- your 8 opposition was based on forecasted numbers that 9 ultimately when 2009 closed were different 10 numbers, but we now have hard-and-fast numbers 11 of revenue that came in that is on our system 12 but doesn't accurately reflect your revenues 13 because it comes in, but it is money that's 14 collected to be redistributed, and you work on 15 a commission basis. 16 MS. JONES: That's -- that is correct. 17 VICE CHAIR HARRINGTON: That's that. 18 So what would the Division want to see 19 to be able to satisfy this and have comfort 20 that the numbers are accurate going forward? 21 MR. ROGACKI: It's what we believe the 22 regulation tells us to look for. And that's -- 23 and that's what are -- what is the French SEC 24 told them their filings, about how the revenue 25 is earned? And that's what -- that's the 82 ITEM NO. 8 1 guidance we're given in the regulation and in 2 the New Jersey "Register." 3 VICE CHAIR HARRINGTON: Right. But I 4 believe Mr. Andrew justv -- 5 MR. ELMAN: Mr. Elman or Andrew. 6 VICE CHAIR HARRINGTON: Mr. Elman. 7 MR. ELMAN: We're very formal. I'm used 8 to calling myself Andy not Mr. Elman or -- 9 (Laughter.) 10 VICE CHAIR HARRINGTON: Hey, Andy. 11 MR. ELMAN: That's fine, too. 12 VICE CHAIR HARRINGTON: But didn't you 13 as we reconvened cite the provision in the SEC 14 filing that makes reference to that? 15 MR. ELMAN: Correct. So -- and, 16 actually, so does the Division. I just think 17 it's a mis -- it's something that requires 18 further clarification and putting it into 19 context. So in the submission of the Division, 20 they say, quoting from the SEC filings: A 21 written agreement with clients, purchase 22 orders, letters, et cetera, indicating the 23 nature and amounts of work to be performed is 24 required for the recognition of revenue. 25 Revenue recognition and policies are summarized 83 ITEM NO. 8 1 below. Then the first bullet point -- now I'm 2 referring to Page 3 of this -- of the argument 3 of couns -- of Division -- for commission-based 4 customer arrangements. So if commission had 5 nothing to do with revenue, then if it was -- 6 if revenue had nothing to do with Commission 7 and was only talking about billings, that 8 language wouldn't be there. Because revenue 9 would be billings. Here they're saying for 10 commission based under the recognition 11 policies, they're talking about revenue. 12 They're talking about commission related to it. 13 And what they're saying is, you don't count 14 that revenue related to your commissions until 15 it's published, until the publication date, 16 until date of publication or broadcast. 17 So it's kind of -- it's there. It's one 18 of those things where, you know, if you see 19 that the ground's wet and you don't have any 20 sprinklers on, you know that it's been raining. 21 It's kind of one of those things where, yes, 22 you need to infer a little bit here. But you 23 have the certifications explaining it. You see 24 that the other companies cull it out even not 25 so, you know, pretty -- again, pretty kind of 84 ITEM NO. 8 1 like, hey, this is what we do. To say -- you 2 know, because it's known and accepted. And, 3 again, the standards that are -- that relate to 4 this have been submitted to the Commission for 5 its consideration in addition to supplying 6 these certifications attesting to that's the 7 way that it's done. So -- so, kind of, 8 that's -- that's where I saw it in the filings. 9 VICE CHAIR HARRINGTON: Thank you. 10 MR. ROGACKI: My response is that that's 11 the first time I've heard since this petition 12 is filed that I was supposed to have infer it 13 from the SEC filing with the French. 14 MS. JONES: And may I just say, Mr. 15 Rogacki, I had that same exact conversation 16 with DAG Wendy Way in relation to this. 17 MR. ROGACKI: Okay. 18 VICE CHAIR HARRINGTON: Thank you. 19 CHAIR KASSEKERT: Thank you. 20 VICE CHAIR HARRINGTON: No further. 21 CHAIR KASSEKERT: No further questions? 22 COMMISSIONER SOMMELING: No further 23 questions, Madame Chair. 24 CHAIR KASSEKERT: Do we have a motion? 25 COMMISSIONER EPPS: Well, I will move 85 ITEM NO. 8 1 that we grant the petition of Zenith Media 2 Services, Inc., for an exemption from service 3 industry license pursuant to NJSA 5:12-92(c)(3) 4 (ii) and NJAC 19:51-51.13(a)(2) subject to the 5 conditions in the order. 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 MS. NAGENGAST: Before we dismiss on 14 this -- 15 MR. ELMAN: Thank you. 16 MS. NAGENGAST: I just want to clarify 17 with Counsel. Do you have any sealing requests 18 with any of the exhibits? 19 MS. JONES: Yes. We do. Exhibit P-1, 20 we'd like the information regarding media 21 billings and revenues sealed. 22 CHAIR KASSEKERT: Thank you. 23 MR. ELMAN: Anything with respect to 24 dollars in there. 25 CHAIR KASSEKERT: Numbers. Right. 86 1 Right. 2 MR. ELMAN: To be redacted. 3 COMMISSIONER EPPS: I'll move it. 4 CHAIR KASSEKERT: Is there a second? 5 COMMISSIONER SOMMELING: Second. 6 VICE CHAIR HARRINGTON: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: The sealing request is 13 granted. 14 Thank you. 15 MS. JONES: Thank you. 16 MR. ELMAN: 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, July 14th, 2010, at 9:15 a.m. in the 21 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 that wishes to be heard? 87 1 (No response.) 2 CHAIR KASSEKERT: Seeing no one, I'll 3 declare this portion of the meeting closed and 4 entertain a motion to adjourn. 5 COMMISSIONER SOMMELING: Motion to 6 adjourn. 7 COMMISSION 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 (Public Meeting 10-06-16 was adjourned 15 at 12:44 p.m.) 16 17 18 19 20 21 22 23 24 25 88 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: June 20, 2010 23 My Notary Commission Expires July 22, 2014 24 ID No 2062871 25