1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 10-11-10 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, November 10, 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 10:34 a.m. to 12:22 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 TERESA M. NAGENGAST, SENIOR COUNSEL 10 SETH H. BRILLIANT, SENIOR COUNSEL LON E. MAMOLEN, SENIOR COUNSEL 11 ROBERT A. MONCRIEF, JR., COUNSEL TRACY E. RICHARDSON, COUNSEL 12 CLAIRE FRANK, PROGRAM MANAGER BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 13 SANDRA DeLIA, LEGAL SUPPORT SPECIALIST 14 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 15 JOHN E. ADAMS, JR., DEPUTY ATTORNEY GENERAL BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL 16 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 17 JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL 18 DOROTHY TURI, DEPUTY ATTORNEY GENERAL 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 ITEM NO. 3 DOROTHY TURI, DEPUTY ATTORNEY GENERAL N. LYNNE HUGHES, ESQ. 3 FOR: HARRAH'S ATLANTIC CITY OPERATING COMPANY, LLC 4 ITEM NO. 4 DOROTHY TURI, DEPUTY ATTORNEY GENERAL 5 KAREN M. WOSNACK, ESQ. FOR: RIH ACQUISITIONS, NJ. LLC 6 ITEM NO. 12 TERESA M. NAGENGAST, SENIOR COUNSEL 7 LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 8 MARIEL J. GILETTO, ESQ. FOR: WESTERN MONEY SYSTEMS 9 ITEM NO. 13 CLAIRE FRANK, PROGRAM SUPERVISOR 10 JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 11 NICOLAS CASIELLO, JR., ESQ. FOR: TRUMP ENTERTAINMENT RESORTS, INC. 12 TRUMP ENTERTAIMENT RESORTS HOLDINGS, LP 13 ITEM NO. 14 CLAIRE FRANK, PROGRAM SUPERVISOR DOROTHY TURI, DEPUTY ATTORNEY GENERAL 14 N. LYNNE HUGHES, ESQ. FOR: HARRAH'S ENTITIES 15 ITEM NO. 15 CLAIRE FRANK, PROGRAM SUPERVISOR 16 DOROTHY TURI, DEPUTY ATTORNEY GENERAL N. LYNNE HUGHES, ESQ. 17 FOR: HARRAH'S ENTITIES 18 ITEM NO. 16 ROBERT A. MONCRIEF, JR., COUNSEL TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL 19 FREDERICK CUNNINGHAM, ESQ. FOR: TRUMP TAJ MAHAL ASSOCIATES, LLC 20 ITEM NO. 21 TRACY E. RICHARDSON, COUNSEL 21 JOHN E. ADAMS, JR., DEPUTY ATTORNEY GENERAL 22 STERNS & WEINROTH, PC DENNIS DALY, ESQ. 23 FOR: TROPICANA ENTERTAINMENT, INC. AND: TROPICANA ATLANTIC CITY CORP. 24 25 4 1 AGENDA PUBLIC MEETING NO. 10-11-10 2 November 10, 2010, 10:34 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 9 9 October 27, 2010, public meeting 4 November Values Award, Bernadette Frigen 9 2 Applications for employee and casino 5 service industry licenses 11 initial and/or renewal of casino key 12 13 6 and casino employee licenses 14 initial and/or renewal of casino key 14 14 7 and casino employee licenses Consideration are the casino service 13 13 8 Industry license initial and/or renewal applications pursuant to NJSA 5:12-92(c) 9 for: Flat Earth Networking, Inc., Regional Scaffolding and Hoisting, Co., Inc.; and 10 China Antique Furniture, Inc. Consideration is the renewal application 14 15 11 of Christopher J. Foster for a casino key employee license and for qualification as 12 Vice President of Hotel Operations for Harrah's Atlantic City Operating 13 Company, LLC 3 Petition of Harrah's Atlantic City 15 17 14 Operating Company, LLC, for the issuance of a temporary casino key employee license 15 to John D. Smith pursuant to NJSA 5:12-89(e) and to permit him pursuant to NJAC 19:43-2.6 16 to assume the duties and exercise the powers of Senior Vice President and General Manager 17 Associate without first having been qualified (PRN 2991002) 18 4 Petition of RIH Acquisitions NJ, LLC, 17 19 (d/b/a Atlantic City Hilton) for the 19 issuance of a temporary casino key employee license to Scott Rhoad 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 Director, Information Technology (regional) without first having 22 been qualified (PRN 3011002) 5 Stipulations of settlement and consent 23 agreements: a) Phillip Palmucci (10-0229-RC) 19 20 24 b) Edgardo L. Cruz (a/k/a Cruz-Cortes 19 20 (09-0657-RC) 25 c) Jorge Rosa (10-0141-RC) 19 20 5 1 CONTINUED AGENDA PUBLIC MEETING NO. 10-11-10 2 November 10, 2010, 10:34 a.m. ITEM PAGE VOTE 3 6 State v. Trump Taj Mahal Associates and adj. Letoya Coleman (10-0096-VC) 4 7 Petition of Olympia M. Rodriquez for 21 23 early reapplication (10-0267-RA) 5 Sworn 22 8 Consideration of the renewal application 24 30 6 Of Donald P. Webb, Jr. (09-0589-ER) Sworn 25 7 9 Reconsideration of Commission final order adj. Granting William J. Salerno his casino 8 Key employee license (09-0671-NC) 10 Application for suspension in State v. 30 32 9 Rey F. Benitez (10-0318-RC) 11 Consideration of forfeiture orders in: 32 35 10 a) Trump Plaza Associates, et al. (10-0254-VC) 11 b) Resorts International Hotel, Inc., et al. (10-0255-VC) 12 c) Marina District Development Company, LLC, et al. (10-0253-VC) 13 12 Petition of Western Money Systems for 36 39 waiver of the qualification requirement of 14 Wells Capital Management, Inc., (PRN 1981008) 13 Petition of Trump Entertainment Resorts, 39 42 15 Inc., and Trump Entertainment Resorts Holdings, LP, for the temporary qualification 16 of David Hughes as Chief Financial Officer, Executive Vice President and Corporate 17 Treasurer of Trump Entertainment Resorts, Inc., and Trump Entertainment Resorts Holdings, 18 LP (PRN 2921002) 14 Petition of Harrah's Entertainment, 43 45 19 Inc., Harrah's Operating Company, Inc., Harrah's Atlantic City Operating Company, 20 LLC, Showboat Atlantic City Operating Company, LLC, Bally's Park Place, Inc., 21 and Boardwalk Regency Corporation, Requesting permission for Jinlong Wang to 22 perform the duties and exercise the powers of a member of the board of directors for 23 Harrah's Entertainment, Inc., prior to qualification (PRN 2991003) 24 15 Petition of Harrah's Entertainment, 46 48 Inc., Harrah's Operating Company, Inc., 25 6 1 CONTINUED AGENDA PUBLIC MEETING NO. 10-11-10 2 November 10, 2010, 10:34 a.m. ITEM PAGE VOTE 3 15 Harrah's Atlantic City Operating Company, 46 48 LLC, Showboat Atlantic City Operating 4 Company, LLC, Bally's Park Place, Inc., and Boardwalk Regency Corporation, 5 Requesting permission for David Sambur to perform the duties and exercise the powers 6 of a member of the board of directors for Harrah's Entertainment, Inc., prior to 7 qualification (PRN 2991005) 16 Petition of Trump Taj Mahal Associates, 48 50 8 LLC, (d/b/a Trump Taj Mahal Casino Resort) to amend its certificate of operation 9 (PRN 2931001) 17 Proposed adoption of amendments to NJAC adj. 10 19:40-1.2 and 19:45-1.37A (Pin sharing) 18 Proposed publication and temporary 51 51 11 Adoption of amendments to NJAC 19:45.1.1, 1.9B, 1.15, l.16, 1.20, 1.25, 1.26, 1.28 12 and 1.33 and proposed new rule NJAC 19:45-1.26B (Pit redemption of counter checks) 13 19 Proposed publication of amendments of 52 53 "In Between Wager" in blackjack 14 20 Proposed adoption of amendments to NJAC 53 54 19:45-1.43 (Procedure for counting and 15 recording contents of slot drop buckets and slot drop boxes) 1.54 (Gaming vouchers; 16 physical characteristics; procedures for issuance and redemption) and new rule NJAC 17 19:45-1.37D (Testing of slot machines and related equipment on the casino floor) 18 21 Application for interim casino 55 107 authorization and ultimately plenary 19 qualification for Tropicana Entertainment, Inc., and casino licensure for Tropicana 20 Atlantic City Corp., in connection with the consummation of an amended and restated 21 purchase agreement dated November 20, 2009 (Referenced - PRN 0111001); and 22 Petition of Tropicana Atlantic city Corp., for waiver of the qualification requirement 23 for certain officers of its holing or intermediary companies (PRN 2801001) 24 Scott C. Butera, sworn 64 Marc Rubinstein, sworn 91 25 Public Participation: Franklin Omar Johnson 108 7 1 E X H I B I T S : 2 NO. DESCRIPTION ID EVD 3 4 P-1 Remand for hearings 11 license X 5 P-2 Grant 14 licenses X 6 No. 21 7 C-1 Casino Hotel Alcoholic Beverage X 8 License Report, 11-10-10, Christopher Storcella, Director, License Division 9 C-2 Draft Resolution X 10 D-1 Report, 11-1-10, Application of X 11 Tropicana Atlantic City Corp., for a casino and CHAB license, DAG John Adams 12 (Redacted) D-2 Report, 11-1-10, Plenary qualification X 13 Of Icahn Partners, LP, and other Icahn Related entities as holding companies 14 and/or entity qualifiers of Tropicana Atlantic City Corp., DAG John Adams 15 D-3 Financial report, 11-1-10, Application X of Tropicana Atlantic City Corp, for a 16 casino license and the plenary qualification of its holding companies, 17 DAG John Adams (Redacted) 18 D-4 Letter report, 10-29-10, to Christopher X Storcella, Director, Division of 19 Licensing, from DAG Timothy C. Ficchi Re: Tropicana CHAB license 20 21 22 23 24 (Exhibits retained by Commission.) 25 8 1 (Public Meeting 10-11-10 was commenced 2 at 10:34 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. 9 ITEM NO. 1 1 (The flag salute was recited.) 2 CHAIR KASSEKERT: Good morning. 3 MR. NANCE: Good morning. 4 The matters discussed in closed session 5 were: Employee and enterprise license matters. 6 The Commissioners approved the October 7 27, 2010, closed-session minutes. 8 Item No. 1, ratification of the minutes 9 of October 29 -- 27, 2010, public meeting. 10 COMMISSIONER SOMMELING: Move to 11 approve, Madame Chair. 12 VICE CHAIR HARRINGTON: Second. 13 CHAIR KASSEKERT: The motion has been 14 made and seconded. All in favor? 15 (Ayes.) 16 CHAIR KASSEKERT: Opposed? 17 (No response.) 18 CHAIR KASSEKERT: The motion carries. 19 MR. NANCE: Commissioner Fanelle? 20 I have the distinct honor in presenting 21 the Value Awards recipient award today to 22 Bernadette. 23 Bernadette, come on up here, please. 24 (Applause.) 25 COMMISSIONER FANELLE: On behalf of the 10 VALUES AWARD 1 Commission, I'd like to congratulate you as the 2 nominee for the 2010 Values Award. Bernadette, 3 as I'm sure most people know, is a 32-year 4 employee of the Casino Control Commission. 5 (Laughter.) 6 MS. FRIGEN: Twenty-nine. Twenty-nine. 7 And I served when I was ten. 8 (Laughter.) 9 COMMISSIONER FANELLE: I kind of figured 10 that. 11 MS. FRIGEN: Yeah. 12 COMMISSIONER FANELLE: But where 13 Bernadette works is in the contested case area 14 and the resolution of the cases. That caseload 15 is sometimes over 200 a month. So they used to 16 have a department of four to five people. Now 17 she basically is the only person left in the 18 department. So through her -- 19 CHAIR KASSEKERT: Not quite. But -- 20 (Laughter.) 21 COMMISSIONER FANELLE: Through her 22 efficiencies, you know, we've maintained the 23 integrity of what we do here, and I'd just like 24 to congratulate her. 25 MS. FRIGEN: Thank you. 11 VALUES AWARD 1 COMMISSIONER FANELLE: And, you know, 2 being acknowledged by your superiors as an 3 employee of super achiever. We congratulate 4 you on behalf of the Commission. 5 MS. FRIGEN: Oh, thank you so very much. 6 (Applause.) 7 CHAIR KASSEKERT: Oh, take a picture, 8 first. 9 MR. HENEGHAN: Yup. 10 MR. NANCE: Smile, Bern. 11 CHAIR KASSEKERT: Okay. Let me just say 12 I always enjoy working with Bernadette. I can 13 tell exactly how she feels when a case comes 14 up. By looking in her eyes, I can tell when 15 somebody might not be as forthcoming as they 16 they should. 17 (Laughter.) 18 CHAIR KASSEKERT: Bernadette, you are a 19 great employee. It's been a pleasure working 20 for -- working with you over the past years. 21 (Applause.) 22 MS. FRIGEN: Thank you. 23 CHAIR KASSEKERT: Oh, you know, here 24 comes trouble. Here comes trouble. 25 Mr. Frulio? Nice to see you. 12 ITEM NO. 2 1 MR. FRULIO: As they say when somebody 2 dies, I'm in a better place. 3 (Laughter.) 4 CHAIR KASSEKERT: Very good. 5 You know, let me just note before we 6 start that we're going to have a celebration 7 after our meeting today in honor of 8 Commissioner Sommeling who will be leaving us 9 soon after making it through two terms and ten 10 years. Congratulations on reaching the 11 statutory limit. 12 (Laughter.) 13 CHAIR KASSEKERT: And we will greatly 14 miss you, and you just have a great and healthy 15 and happy retirement. 16 COMMISSIONER SOMMELING: Thank you, 17 Chair. I appreciate that. 18 (Applause.) 19 MR. NANCE: Item No. 2, application for 20 employee and casino service industry licenses. 21 This agenda item will be entered as Exhibit 22 List 1 and 2. 23 Exhibit List 1 exists of 11 applications 24 for initial and/or renewal of casino key and 25 casino employee licenses. 13 ITEM NO. 2 1 The Division as objected to licensure. 2 COMMISSIONER EPPS: Move that these 3 items be remanded for hearing. 4 COMMISSIONER SOMMELING: Seconded. 5 CHAIR KASSEKERT: The motion has been 6 made and seconded. All in favor? 7 (Ayes.) 8 CHAIR KASSEKERT: Opposed? 9 (No response.) 10 CHAIR KASSEKERT: The motion carries. 11 MR. NANCE: For consideration are the 12 casino service industry license initial and/or 13 renewal applications pursuant in NJSA 14 5:12-92(c) for Flat Earth Networking, Inc., 15 Regional Scaffolding and Hoisting Company, 16 Inc., and China Antique Furniture, Inc. 17 The Division has objected to these 18 applications. 19 COMMISSIONER EPPS: Move that these 20 matters be remanded for hearings. 21 COMMISSIONER SOMMELING: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Ayes.) 25 CHAIR KASSEKERT: Opposed? 14 ITEM NO. 2 1 (No response.) 2 CHAIR KASSEKERT: The motion carries. 3 MR. NANCE: Exhibit List 2 consists of 4 14 applications for initial and/or renewal of 5 casino key and casino employee licenses. 6 Staff and the Division have recommended 7 that these licenses be granted. 8 COMMISSIONER EPPS: Move that we grant 9 the license applications. 10 COMMISSIONER FANELLE: 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: The motion carries. 17 MR. NANCE: For consideration is the 18 renewal application of Christopher J. Foster 19 for a casino key employee license for 20 qualification as Vice President of hotel 21 operations for Harrah's Atlantic City Operating 22 Company, LLC. 23 Staff and the Division have recommended 24 that this application be granted. 25 COMMISSIONER EPPS: Move that we grant 15 ITEM NO. 3 1 the initial key license and for qualification. 2 VICE CHAIR HARRINGTON: Second. 3 CHAIR KASSEKERT: Motion has been made 4 and seconded. This a roll call vote. 5 MR. NANCE: Commissioner Sommeling? 6 COMMISSIONER SOMMELING: Yes. 7 MR. NANCE: Commissioner Epps? 8 COMMISSIONER EPPS: Yes. 9 MR. NANCE: Commissioner Fanelle? 10 COMMISSIONER FANELLE: Yes. 11 MR. NANCE: Vice Chair Harrington? 12 VICE CHAIR HARRINGTON: Yes. 13 MR. NANCE: Chair Kassekert? 14 CHAIR KASSEKERT: Yes. 15 MR. NANCE: The record will reflect that 16 the motion is unanimous. 17 Item No. 3, Petition No. 2991002 of 18 Harrah's Atlantic City Operating Company, LLC, 19 is requesting the issuance of a temporary 20 casino key employee license to John D. Smith 21 pursuant to NJSA 5:12-89(e) and to permit him 22 pursuant to NJAC 19:43-2.6 to assume the duties 23 and exercise the powers of Senior Vice 24 President and General Manager Associate without 25 been found qualified. 16 ITEM NO. 3 1 CHAIR KASSEKERT: Good morning, Miss 2 Hughes. 3 MS. HUGHES: Good morning. 4 Mr. Smith is in the process of 5 relocating, but I will make sure to bring him 6 around and introduce him to all of you. But 7 I'd ask at this point if you would grant our 8 petition. 9 Thank you. 10 CHAIR KASSEKERT: Thank you. 11 Miss Turi? 12 MS. TURI: The Division has no objection 13 to the relief requested. 14 CHAIR KASSEKERT: Thank you. Are there 15 any questions? 16 COMMISSIONER SOMMELING: No questions, 17 Madame Chair. 18 COMMISSIONER FANELLE: Madame Chair, I 19 move to approve the petition and issue a 20 temporary casino key employee license to John 21 D. Smith and permit him to assume the duties 22 and exercise the powers of Senior Vice 23 President and General Manager Associate without 24 having first been found qualified. 25 VICE CHAIR HARRINGTON: Second. 17 ITEM NO. 4 1 CHAIR KASSEKERT: Motion is made and 2 seconded. This is a roll call vote. 3 MR. NANCE: Commissioner Sommeling? 4 COMMISSIONER SOMMELING: Yes. 5 MR. NANCE: Commissioner Epps? 6 COMMISSIONER EPPS: Yes. 7 MR. NANCE: Commissioner Fanelle? 8 COMMISSIONER FANELLE: Yes. 9 MR. NANCE: Vice Chair Harrington? 10 VICE CHAIR HARRINGTON: Yes. 11 MR. NANCE: Chair Kassekert? 12 CHAIR KASSEKERT: Yes. 13 MR. NANCE: The record will reflect that 14 the motion is unanimous. 15 CHAIR KASSEKERT: Thank you. 16 MS. TURI: Thank you. 17 MR. NANCE: Item No. 4, Petition No. 18 3011002 of Harrah's Atlantic City Operating 19 Company, LLC, is requesting the issuance of a 20 temporary casino employee license to Scott 21 Rhoad, pursuant to NJSA 5:12-89(e) and to 22 permit him pursuant to NJAC 19:43-2.6 to assume 23 the duties and exercise the powers of Director, 24 Information Technology, Regional, without first 25 having been found qualified. 18 ITEM NO. 4 1 CHAIR KASSEKERT: Good morning, Miss 2 Wosnack. 3 MS. WOSNACK: Good morning, Madame Chair 4 and Commissioners. 5 I have nothing to add. I do have Mr. 6 Rhoad here in the event you have any questions. 7 CHAIR KASSEKERT: Welcome. 8 MR. RHOAD: Thank you. 9 MS. WOSNACK: But we just ask that you 10 grant the relief. 11 Thank you. 12 CHAIR KASSEKERT: Thank you. 13 Good morning, Miss Flaherty. 14 MS. FLAHERTY: Yes. Good morning, Chair 15 and Commissioners. 16 The Division has conducted the requisite 17 preliminary review, and based on that, there's 18 no reason to object to Mr. Rhoad temporarily 19 having a key license and qualification. 20 Thank you. 21 CHAIR KASSEKERT: Thank you. 22 Any questions? 23 COMMISSIONER SOMMELING: No questions, 24 Madame Chair. 25 Madame Chair, I move to approve the 19 ITEM NO. 5 1 petition, issue a temporary casino key employee 2 license to Scott Rhoad and permit him to assume 3 the duties and exercise the powers of Director, 4 Information Technology, Regional, without first 5 having been found qualified. 6 COMMISSIONER EPPS: Second. 7 CHAIR KASSEKERT: Motion is made and 8 seconded. This is a roll call vote. 9 MR. NANCE: Commissioner Sommeling? 10 COMMISSIONER SOMMELING: Yes. 11 MR. NANCE: Commissioner Epps? 12 COMMISSIONER EPPS: Yes. 13 MR. NANCE: Commissioner Fanelle? 14 COMMISSIONER FANELLE: Yes. 15 MR. NANCE: Vice Chair Harrington? 16 VICE CHAIR HARRINGTON: Yes. 17 MR. NANCE: Chair Kassekert? 18 CHAIR KASSEKERT: Yes. 19 MR. NANCE: The record will reflect that 20 the motion is unanimous. 21 MS. WOSNACK: Thank you very much. 22 CHAIR KASSEKERT: Thank you. 23 Congratulations. 24 MR. NANCE: Item No. 5, stipulation of 25 settlement and consent agreement. When I call 20 ITEM NO. 5 1 your name, please come forward, standing behind 2 this table, spreading across the room so that 3 you may be seen: Phillip Palmucci, Edgardo 4 Cruz, and Jorge Rosa. 5 CHAIR KASSEKERT: Are any of these 6 individuals here this morning? 7 (No response.) 8 CHAIR KASSEKERT: Seeing none, Mr. 9 Biscieglia? 10 MR. BISCIEGLIA: Thank you. Good 11 morning, Chair, Commissioners. 12 The Division has nothing further and ask 13 that the stipulations be approved as submitted. 14 Thank you. 15 CHAIR KASSEKERT: Thank you. 16 Any questions? 17 COMMISSIONER SOMMELING: No questions, 18 Madame Chair. 19 COMMISSIONER EPPS: Move to approve the 20 stipulations. 21 COMMISSIONER FANELLE: Second. 22 CHAIR KASSEKERT: The motion has been 23 made and seconded. All in favor? 24 (Ayes.) 25 CHAIR KASSEKERT: Opposed? 21 ITEM NO. 7 1 (No response.) 2 CHAIR KASSEKERT: The motion carries. 3 Thank you. 4 MR. NANCE: Item No. 6 has been 5 adjourned to the December 1st, 2010, public 6 meeting. 7 Item No. 7, Petition of Olympia M. 8 Rodriquez for early reapplication. 9 Miss Frigen? 10 MS. FRIGEN: Good morning again, Madame 11 Chair, Commissioners. 12 For your consideration is Miss 13 Rodriquez's petition wherein she seeks 14 permission to reapply early for a license, a 15 registration, and/or a noncredential hotel 16 employment. 17 The Division has interposed no objection 18 to this petition. 19 CHAIR KASSEKERT: Thank you. 20 Good morning, Miss Rodriquez. 21 MS. RODRIQUEZ: Good morning. How are 22 you? 23 CHAIR KASSEKERT: Good. 24 Is there anything you'd like to say? 25 MS. RODRIQUEZ: I would like to get back 22 ITEM NO. 7 1 into the casino. I -- 2 MR. NANCE: Excuse me. Please stand and 3 be sworn. 4 CHAIR KASSEKERT: We have to swear you. 5 Because we want to make sure you're telling the 6 truth when you say you want to get back to a 7 casino. 8 (Laughter.) 9 10 OLYMPIA M. RODRIQUEZ, was duly sworn to 11 testify in this matter. 12 13 MR. NANCE: Please state your name for 14 the record. 15 MS. RODRIQUEZ: Olympia M. Rodriquez. 16 MR. NANCE: Thank you. 17 CHAIR KASSEKERT: Thank you. 18 Go ahead, Miss Rodriquez. 19 MS. RODRIQUEZ: Start again. 20 CHAIR KASSEKERT: That's okay. 21 MS. RODRIQUEZ: I would like to be back 22 in the casino. I'm mature now. I'm married. 23 I have kids. I have more responsibility. And 24 I'm ready to take on the task at hand, so. 25 CHAIR KASSEKERT: Thank you. 23 ITEM NO. 7 1 Mr. Biscieglia? 2 MR. BISCIEGLIA: Thank you. 3 The Commission has the Division's letter 4 of September 17th, 2010, in which we do not 5 interpose an objection to the relief requested. 6 And we'll answer questions that you may 7 have. 8 CHAIR KASSEKERT: Thank you. 9 Are there any questions? 10 COMMISSIONER SOMMELING: I have no 11 questions, Madame Chair. 12 COMMISSIONER FANELLE: Madame Chair, I 13 move that we grant Miss Rodriquez permission to 14 reapply early for a casino employee license, a 15 casino service employee registration, and/or to 16 obtain employment early as a noncredential 17 hotel employee. 18 VICE CHAIR HARRINGTON: Second. 19 CHAIR KASSEKERT: The motion has been 20 made and seconded. All in favor? 21 (Ayes.) 22 CHAIR KASSEKERT: Opposed? 23 (No response.) 24 CHAIR KASSEKERT: The motion carries. 25 Thank you for coming. Good luck. 24 ITEM NO. 8 1 MS. RODRIQUEZ: Thank you. God bless. 2 MR. NANCE: Item No. 8, consideration of 3 the renewal application of Donald P. Webb, Jr. 4 MS. FRIGEN: Mr. Webb is also present 5 this morning. I would also ask him to have a 6 seat at the table. 7 MR. NANCE: Miss Frigen? 8 MS. FRIGEN: Chair, Commissioners, this 9 matter comes before you because back in the 10 summer of 2009, the Division objected to Mr. 11 Webb's license renewal application in part 12 because they were having difficulty getting 13 some documentation they needed from him. Mr. 14 Webb, upon receipt of the Division's objection, 15 requested a hearing, but then has failed to -- 16 he only came in for one out of five 17 conferences. 18 And he subsequently each time has 19 provided an explanation for the nonappearance, 20 but at this point we felt it was important to 21 bring the matter for the Commission's 22 consideration today. 23 CHAIR KASSEKERT: Thank you. 24 Mr. Webb, is there something you'd like 25 to tell us today? 25 ITEM NO. 8 1 MR. WEBB: Uh -- 2 CHAIR KASSEKERT: Could you please rise, 3 and we'll swear you in. 4 CHAIR KASSEKERT: Right where you are is 5 fine. 6 MR. NANCE: Just stand and raise your 7 right hand, please. 8 9 DONALD P. WEBB, JR., was duly sworn to 10 testify in this matter. 11 12 MR. NANCE: Please state your name for 13 the record. 14 MR. WEBB: Donald Paul Webb, Jr. 15 MR. NANCE: Thank you. You may be 16 seated. 17 MR. WEBB: Thank you. 18 CHAIR KASSEKERT: Thank you, Mr. Webb. 19 You may proceed. 20 MR. WEBB: Mrs. Bernadette is correct 21 about my failure to appear. I was going 22 through some personal issues where I was 23 removed from my home, and I had to go to Ocean 24 City. And then I had to go to -- I moved to 25 Ventnor eventually. But I have been hard to 26 ITEM NO. 8 1 get in touch with. But I did -- the last time 2 I did talk to this lawyer, they asked me to 3 fill out two sheets that they needed for 4 release. And that seems to be all that they 5 needed. When I was there, I did sign them. 6 When I did come to that hearing. And I didn't 7 miss the meetings on purpose. And it was -- I 8 live in a condo building now. There's two 9 separate addresses, one is 4 and one is 6 North 10 Newport. We wouldn't get it if they sent it to 11 6, but it is the address. And even with our 12 utilities bills, it's the same thing. They 13 only go to 4 North Newport even for the 14 utilities. 15 I would just like to chance to sign the 16 paper again. I did two over a couple of years. 17 You know, but I did make the last appointment 18 with the -- not the last one, but I did make an 19 appointment with this gentleman, and they made 20 me fill out two release forms, and they made 21 sure I signed them, and that seemed to be all 22 that they needed. 23 CHAIR KASSEKERT: Okay. Let me ask 24 before we hear from the Division if there is 25 any questions from any of the Commissioners? 27 ITEM NO. 8 1 COMMISSIONER SOMMELING: Not at this 2 point, Madame Chair. 3 CHAIR KASSEKERT: Commissioner Epps? 4 COMMISSIONER EPPS: No. I'll wait. 5 CHAIR KASSEKERT: Okay. Mr. Biscieglia, 6 let me start by asking with respect to the 7 status of these forms if they've been received 8 and -- 9 MR. BISCIEGLIA: The forms have been 10 received. The problem is Mr. Webb attended the 11 first of the five conferences. 12 CHAIR KASSEKERT: Uh-hum. 13 MR. BISCIEGLIA: And, as he stated, he 14 did sign the release forms. However, there was 15 never any contact with the Division 16 investigator and the release forms have only a 17 certain time they were valid. 18 MR. WEBB: Oh. 19 MR. BISCIEGLIA: I have brought new 20 release forms that could be signed. I'm going 21 to leave this mat -- the Division will leave 22 this matter to the Commission's discretion in 23 this case. 24 I would just like to say that if the 25 Commission comes to a resolution that will 28 ITEM NO. 8 1 allow Mr. Webb to go back in the system, I do 2 have the release authorization forms today. I 3 would ask that Mr. Webb be required to resign 4 them today immediately after my matter -- my 5 matters before the Commission. And to get 6 in -- you know, receive the contact from the 7 Division regarding his interview. Because it 8 wasn't just these documents. The interview 9 wasn't -- the entire interview and 10 investigation was not completed. 11 So if -- I will not object to a finding 12 that Mr. Webb can try to provide this 13 information. However, I think he has to be 14 strongly cautioned, once this goes back to the 15 conference procedure, he needs to attend or 16 we'll wind up right back in this exact 17 situation. 18 CHAIR KASSEKERT: Did you hear what the 19 Deputy Attorney General said? 20 MR. WEBB: Absolutely. Absolutely. 21 CHAIR KASSEKERT: Okay. And, you know, 22 if that's the feeling of this Commission, 23 please understand that, you know, you need to 24 get your address situation completely 25 straightened out. You need to comply. And, 29 ITEM NO. 8 1 obviously, you'll need to sign those forms 2 today before you leave. 3 MR. WEBB: Absolutely. Absolutely. 4 CHAIR KASSEKERT: Let me ask if any of 5 the Commissioners have any questions, or if 6 there is a motion? 7 COMMISSIONER EPPS: I have no questions. 8 I'll move the motion -- I move that we 9 remand Mr. Webb's case for further proceedings 10 subject to compliance with the conditions on 11 the record. 12 COMMISSIONER SOMMELING: Second. 13 COMMISSIONER EPPS: But Mr. Webb -- 14 MR. WEBB: Yes. 15 COMMISSIONER EPPS: You got to -- you 16 got to follow up with this stuff even if you 17 have to call them. 18 MR. WEBB: Okay. 19 COMMISSIONER EPPS: Because it's your 20 livelihood. 21 MR. WEBB: Right. 22 COMMISSIONER EPPS: It's your job. If 23 you want to maintain that, so if you don't get 24 mail, call and say that I missed something. 25 MR. WEBB: Right. 30 ITEM NO. 8-10 1 COMMISSIONER EPPS: You got to that take 2 proactive steps, just not do it and say I 3 didn't hear from them. 4 MR. WEBB: Right. Right. 5 COMMISSIONER EPPS: You can't let this 6 kind of thing keep from you working. 7 MR. WEBB: You're right. Thank you. 8 CHAIR KASSEKERT: All right. And I 9 think we heard a second? 10 COMMISSIONER SOMMELING: 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: The motion carries. 17 MR. WEBB: Thank you. 18 CHAIR KASSEKERT: Thank you. And you'll 19 make arrangements to sign the papers and -- 20 MR. WEBB: All right. Thank you very 21 much. Thank you. 22 MR. NANCE: Item No. 9 has been 23 adjourned without date. 24 Item No. 10, application for suspension 25 in State versus Rey F. Benitez. 31 ITEM NO. 10 1 MS. DeLIA: Good morning. 2 Staff received a phone call from 3 attorney Mario Persiano, who is representing 4 Mr. Benitez. Originally he requested an 5 adjournment of the matter, but after speaking 6 with Mr. Biscieglia, he consented to the 7 suspension of Mr. Benitez's credentials but 8 reserved his right to defer the final hearing. 9 And I spoke with him again this morning, and he 10 is okay with the suspension. 11 Mr. Biscieglia is here on behalf of the 12 Division. 13 CHAIR KASSEKERT: Thank you. 14 Mr. Biscieglia? You can proceed. 15 MR. BISCIEGLIA: Thank you. 16 I would just echo what Miss DeLia just 17 said. I did speak with Mario Persiano. He 18 indicated to me he was going to acquiesce with 19 the suspension. He was he planning on getting 20 his client in PTI. 21 But as for the immediate suspension 22 application, he did not indicate any 23 opposition. 24 Thank you. 25 CHAIR KASSEKERT: Thank you. 32 ITEM NO. 11 1 Any questions? 2 COMMISSIONER SOMMELING: Move -- 3 COMMISSIONER EPPS: Move to suspend 4 credentials. 5 COMMISSIONER SOMMELING: Seconded. 6 CHAIR KASSEKERT: Motion made and 7 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 CHAIR KASSEKERT: Thank you. 15 MR. NANCE: Item -- Item No. 10, 16 consideration of forfeiture orders in Trump 17 Plaza Associates, et al., and -- 18 MS. FAUNTLEROY: Eleven. 19 CHAIR KASSEKERT: Eleven. 20 MR. NANCE: I'm sorry. Let me recall 21 that. 22 (Laughter.) 23 MR. NANCE: Item No. 11, consideration 24 of forfeiture orders in Trump Plaza Associates, 25 et al., Resorts International Hotel, Inc., et 33 ITEM NO. 11 1 al., Marina District Development Company, LLC, 2 et al. 3 Miss DeLia? 4 MS. DeLIA: For the Commission's 5 consideration are three forfeiture orders 6 seeking money confiscated from underage 7 gamblers in Trump Plaza, Resorts, and Borgata 8 to be turned over to the Commission for 9 disposition. 10 Several of the actions were dismissed 11 and the final forfeiture orders were adjusted. 12 Respective counsel for the three 13 licensees have advised they have no objection 14 to the entry of the forfeiture order. 15 Each patron was provided with notice and 16 opportunity to be heard. They either have not 17 responded or stated they were not contesting 18 the action. 19 Mr. Ficchi is here on behalf of the 20 Division. 21 CHAIR KASSEKERT: Good morning, Mr. 22 Ficchi. 23 MR. FICCHI: Good morning, Madame Chair, 24 Commissioners. 25 The Division has the e-mail sent by Miss 34 ITEM NO. 11 1 DeLia on October 21st giving the modified 2 numbers on the forfeiture amounts, and the 3 Division is in concurrence with those figures. 4 So we have nothing further. 5 CHAIR KASSEKERT: Thank you. 6 Any questions? 7 COMMISSIONER SOMMELING: I have no 8 questions, Madame Chair. 9 VICE CHAIR HARRINGTON: I will move 10 that: A, with respect to the Marina District 11 Development Company, LLC, complaint, Agency 12 Docket No. 10-0253-VC, one, dismiss the 13 forfeiture action with respect to patron ZC 14 based upon the patron providing identifying 15 documentation verifying that he was over 21 16 years of age on the date of his gaming 17 activity; two, dismiss the forfeiture action 18 with respect to patient -- patron RG based upon 19 lack of proof that the amount of money secured 20 by Marina District Development Company, LLC, in 21 any way constituted winnings; and, three, 22 adjust the amount of money secured from BM to 23 $5. 24 B, dismiss without prejudice the 25 forfeiture actions with respect to patrons AF 35 ITEM NO. 11 1 and MF in the Trump Plaza Associates, LLC, 2 complaint, Agency Docket No. 10-0254-VC, and 3 patron MZ in the Resorts International Hotel, 4 Inc., complaint, Agency Docket No. 10-0255-VC 5 based upon the Commission's inability to 6 effectuate proper notice as required by Section 7 71.3c of the Act. 8 C, with respect to the Resorts 9 International Hotel, Inc., complaint, Agency 10 Docket No. 10-0255-VC, dismiss duplicate 11 forfeiture action with respect to patron CMM. 12 But, otherwise, D, order that the 13 remaining money seized from the other patrons 14 in these three complaints be forfeited due to 15 their having gambled while underage, and the 16 respective casinos are directed to remit the 17 forfeited funds to the Commission with 18 appropriate disposition in accordance with NJSA 19 5:12-71.3(c). 20 COMMISSIONER FANELLE: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 36 ITEM NO. 12 1 CHAIR KASSEKERT: The motion carries. 2 MR. FICCHI: Thank you. 3 MR. NANCE: Item No. 12, petition of 4 Western Money Systems for waiver of a 5 qualification requirement of Wells Capital 6 Management, Inc. 7 Miss Nagengast? 8 CHAIR KASSEKERT: Good morning. 9 MS. NAGENGAST: Good morning, Chair, 10 Commissioners. 11 For your consideration is the petition 12 of Western Money Systems is seeking waiver of 13 qualifications for certain of its investors. 14 Mariel Giletto is here on behalf of the 15 Petitioner and Lou Rogacki on behalf of the 16 Division. 17 CHAIR KASSEKERT: Good morning. 18 MS. GILETTO: Good morning, Madame 19 Chair, Commissioners. Mariel Giletto, Fox 20 Rothschild, on behalf of the Petitioner, 21 Western Money Systems. 22 You have before you the petition for 23 waiver of the qualification of Wells Capital 24 Management. We have nothing further to add 25 than what is already stated in the petition. 37 ITEM NO. 12 1 I just would to like to reiterate that 2 you have the certification of Wells Capital 3 Management and Wells Fargo regarding the fact 4 that they have no intention of controlling 5 Global Cash Access or Western Money System. 6 Thank you. 7 CHAIR KASSEKERT: Thank you. 8 Any questions before we hear from Mr. 9 Rogacki? 10 COMMISSIONER SOMMELING: No questions, 11 Madame Chair 12 CHAIR KASSEKERT: Mr. Rogacki? 13 MR. ROGACKI: Madame Chair, 14 Commissioners, you have the Division's letter 15 August 16th, 2010, indicating that we've 16 reviewed the petition and that recommend that 17 you grant it. 18 I would answer any questions that you 19 have. 20 CHAIR KASSEKERT: Thank you. 21 Any questions? 22 COMMISSIONER SOMMELING: No questions, 23 Madame Chair. 24 COMMISSIONER FANELLE: Madame Chair, I 25 move that we grant the petition of Western 38 ITEM NO. 12 1 Money Systems and, one, find that Wells Fargo 2 and Company does not have the ability to 3 control Western Money Systems and/or Global 4 Cash Access Holdings, Inc.; 5 Two, find that Wells Capital Management 6 is an institutional investor as defined by NJSA 7 5:12-27.1 and; 8 Three, waive the qualification 9 requirements for Wells Capital Management as 10 allowed by NJAC 19:51-1.14(b)(3) and NJSA 11 52:12-85(f) and Wells Fargo and Company as 12 allowed by NJAC 19:51-1.14(b)(4) in connection 13 with Western Money Systems' pending application 14 for a gaming-related casino service industry 15 license, subject to the condition that Wells 16 Capital Management and Wells Fargo and Company, 17 comply with the Commission's notice and filing 18 requirements should either subsequently 19 determine the influence or affect the affairs 20 of Western Money Systems or Global Cash Access 21 Holdings, Incorporated. 22 CHAIR KASSEKERT: Is there a second? 23 COMMISSIONER SOMMELING: Second. 24 CHAIR KASSEKERT: Motion is made and 25 seconded. This is a roll call vote. 39 ITEM NO. 13 1 MR. NANCE: Commissioner Sommeling? 2 COMMISSIONER SOMMELING: Yes. 3 MR. NANCE: Commissioner Epps? 4 COMMISSIONER EPPS: Yes. 5 MR. NANCE: Commissioner Fanelle? 6 COMMISSIONER FANELLE: Yes. 7 MR. NANCE: Vice Chair Harrington? 8 VICE CHAIR HARRINGTON: Yes. 9 MR. NANCE: Chair Kassekert? 10 CHAIR KASSEKERT: Yes. 11 MR. NANCE: The record will reflect that 12 the motion is unanimous. 13 CHAIR KASSEKERT: Thank you. 14 MS. GILETTO: Thank you. 15 MR. NANCE: Item No. 13, petition of 16 Trump Entertainment Resorts, Inc., and Trump 17 Entertainment Resorts Holding, LP, for 18 temporary qualification of David Hughes as 19 Chief Financial Officer, Executive Vice 20 President, and Corporate Treasurer of Trump 21 Entertainment Resorts, Inc., and Trump 22 Entertainment Resorts Holdings, LP. 23 Miss Frank? 24 MS. FRANK: Good morning -- 25 CHAIR KASSEKERT: Good morning. 40 ITEM NO. 13 1 MS. FRANK: -- Chair and commissioners. 2 A draft resolution of Mr. Hughes' 3 temporary qualification has been circulated to 4 the parties. 5 We have Nick Casiello here for Trump 6 Entertainment and Jim Fogarty for the Division. 7 CHAIR KASSEKERT: Thank you. 8 Good morning, Mr. Casiello. 9 MR. CASIELLO: Good morning, Madame 10 Chair and Commissioners. 11 I have nothing to add to the petition 12 other than we have reviewed the draft 13 resolution, and it is acceptable to us in form 14 and substance. 15 I do want to note that if this petition 16 is approved today, Mr. Hughes will commence his 17 employment today as Executive VP and Treasurer. 18 He will assume the duties of CFO on Monday 19 after the 10-Q for the quarter ending September 20 31st is filed. 21 I also just wanted to inform you that 22 Mr. Griffin, the new CEO of the company, 23 commenced his employment today as GM of the 24 Taj. He also will assume his position as CEO 25 on Monday after the 10-Q is filed. 41 ITEM NO. 13 1 Thank you. 2 CHAIR KASSEKERT: Thank you, Mr. 3 Casiello. 4 Any questions? 5 COMMISSIONER SOMMELING: I have no 6 questions. 7 CHAIR KASSEKERT: Mr. Fogarty? 8 MR. FOGARTY: Madame Chair, 9 Commissioners. Yes. 10 Mr. Hughes is seeking your approval -- 11 David Hughes is seeking your approval to work 12 as a CFO of the holding company Trump 13 Entertainment Resorts as well as the other 14 positions Mr. Casiello has noted. Mr. Hughes 15 will be replacing, essentially, John Burke if 16 you recall -- 17 CHAIR KASSEKERT: Uh-hum. 18 MR. FOGARTY: -- who was for a long time 19 the point person financially for the Trump 20 companies. 21 And as you've heard, apparently Mr. 22 Hughes is waiting by the phone to hear your 23 result today, so we can call him and tell him 24 get to work. 25 I've seen the draft resolution prepared 42 ITEM NO. 13 1 by Ms. Frank, and we have no objection to its 2 entry. 3 CHAIR KASSEKERT: Thank you. 4 Any questions? 5 COMMISSIONER SOMMELING: No questions, 6 Madame Chair. 7 COMMISSIONER FANELLE: Madame Chair, I 8 move that we adopt the draft resolution and 9 authorize David Hughes on a temporary basis and 10 prior to his plenary qualification to assume 11 the duties and exercise powers of Chief 12 Financial Officer, Executive Vice President, 13 and Corporate Treasurer for Trump Entertainment 14 Resorts, Inc., and Trump Entertainment 15 Holdings, LP, subject to the conditions 16 contained in NJAC 19:43-2.7. 17 CHAIR KASSEKERT: Is there a second? 18 COMMISSIONER SOMMELING: Second. 19 VICE CHAIR HARRINGTON: Second. 20 CHAIR KASSEKERT: Motion has been made 21 and seconded. This is a roll call vote. 22 MR. NANCE: Commissioner Sommeling? 23 COMMISSIONER SOMMELING: Yes. 24 MR. NANCE: Commissioner Epps? 25 COMMISSIONER EPPS: Yes. 43 ITEM NO. 14 1 MR. NANCE: Commissioner Fanelle? 2 COMMISSIONER FANELLE: Yes. 3 MR. NANCE: Vice Chair Harrington? 4 VICE CHAIR HARRINGTON: Yes. 5 MR. NANCE: Chair Kassekert? 6 CHAIR KASSEKERT: Yes. 7 MR. NANCE: The record will reflect that 8 the motion is unanimous. 9 MR. CASIELLO: Thank you. 10 CHAIR KASSEKERT: Thank you. 11 MR. FOGARTY: Thank you. 12 COMMISSIONER EPPS: Mr. Casiello, are 13 you going to call from here or wait until you 14 get back to the office? 15 (Laughter.) 16 MR. CASIELLO: I'm going to wait until I 17 get in the hallway. 18 (Laughter.) 19 CHAIR KASSEKERT: Right. 20 MR. NANCE: Item No. 14, petition of 21 Harrah's Entertainment, Inc., Harrah's 22 Operating Company, Inc., Harrah's Atlantic City 23 Operating Company, LLC, Showboat Atlantic City 24 Operating Company, LLC, Bally's Park Place, 25 Inc., and Boardwalk Regency Corporation 44 ITEM NO. 14 1 requesting permission to Jinlong Wang to 2 perform the duties and exercise the powers of 3 the member of the board of directors for 4 Harrah's Entrainment, Inc., prior to 5 qualification. 6 Miss Frank? 7 MS. FRANK: Chair and Commissioners, a 8 draft resolution on the temporary qualification 9 of Mr. Wang has been circulated to the parties. 10 We have Ms. Lynne Hughes here for 11 Harrah's and Miss Dot Turi for the Division. 12 CHAIR KASSEKERT: Good morning again, 13 Miss Hughes. 14 MS. HUGHES: Thank you. Good morning, 15 Chair and Commissioners. 16 I would like to personally thank both 17 the Division and the Commission for handling 18 this application, petition as well as the next 19 petition on an expedited fashion. 20 I have nothing further to add, and ask 21 that you grant the petition. 22 CHAIR KASSEKERT: Thank you. 23 Miss Turi? 24 MS. TURI: Good morning, Madame Chair 25 and Commissioners. You have the letter that 45 ITEM NO. 14 1 the Division has filed in regards to this 2 application. 3 We've also reviewed the draft 4 resolution, and we have no objection to its 5 entry. 6 CHAIR KASSEKERT: Thank you. 7 Any questions? 8 COMMISSIONER SOMMELING: No questions, 9 Madame Chair. 10 VICE CHAIR HARRINGTON: I will move that 11 we adopt the draft resolution and authorize 12 Jinlong Wang on a temporary basis and prior to 13 his plenary qualification to assume the duties 14 and exercise powers of a member of the board of 15 directors for Harrah's Entertainment, Inc., 16 subject to the conditions contained in NJAC 17 19:43-2.7 which, among other things, require 18 that a personal history disclosure form MJ and 19 NJ supplemental form by November 25th, 2010. 20 COMMISSIONER FANELLE: Second. 21 CHAIR KASSEKERT: Motion is made and 22 seconded. This is a roll call vote. 23 MR. NANCE: Commissioner Sommeling? 24 COMMISSIONER SOMMELING: Yes. 25 MR. NANCE: Commissioner Epps? 46 ITEM NO. 15 1 COMMISSIONER EPPS: Yes. 2 MR. NANCE: Commissioner Fanelle? 3 COMMISSIONER FANELLE: Yes. 4 MR. NANCE: Vice Chair Harrington? 5 VICE CHAIR HARRINGTON: Yes. 6 MR. NANCE: Chair Kassekert? 7 CHAIR KASSEKERT: Yes. 8 MR. NANCE: The record will reflect that 9 the motion is unanimous. 10 Item No. 15, petition of Harrah's 11 Entertainment, Inc., Harrah's Operating 12 Company, Inc., Harrah's Atlantic City Operating 13 Company, LLC, Showboat Atlantic City Operating 14 Company, LLC, Bally's Park Place, Inc., and 15 Boardwalk Regency Corporation requesting 16 permission for David Sambur to perform the 17 duties and exercise the powers of the board of 18 directors for Harrah's Entertainment, Inc., 19 prior to qualification. 20 Miss Frank? 21 MS. FRANK: A draft resolution on Mr. 22 Sambur's temporary qualification as a member of 23 the board of directors with Harrah's 24 Entertainment has been circulated to the 25 parties as well. 47 ITEM NO. 15 1 And we have Ms. Hughes again and Miss 2 Turi. 3 CHAIR KASSEKERT: Thank you. 4 Miss Hughes? 5 MS. HUGHES: I have reviewed over the 6 draft resolution, and I have no objection to 7 asking that you approve it. 8 Thanks. 9 CHAIR KASSEKERT: Thank you. 10 Miss Turi? 11 MS. TURI: Yes. Once again, we've also 12 reviewed the draft resolution, and we have no 13 objection to its entry at this time. 14 CHAIR KASSEKERT: Thank you. 15 Any questions? 16 COMMISSIONER SOMMELING: No questions, 17 Madame Chair. 18 VICE CHAIR HARRINGTON: I move that we 19 adopt the draft resolution and authorize David 20 Sambur on a temporary basis and prior to his 21 plenary qualification to assume the duties and 22 exercise powers of a member of the board of 23 direction -- directors for Harrah's 24 Entertainment, Inc., subject to the conditions 25 contained in NJAC 19:43-2.7 which, among other 48 ITEM NO. 16 1 things, require that he file a personal history 2 disclosure form MJ and NJ supplemental form by 3 November 25th, 2010. 4 COMMISSIONER FANELLE: Second. 5 CHAIR KASSEKERT: Motion is made and 6 seconded. This is a roll call vote. 7 MR. NANCE: Commissioner Sommeling? 8 COMMISSIONER SOMMELING: Yes. 9 MR. NANCE: Commissioner Epps? 10 COMMISSIONER EPPS: Yes. 11 MR. NANCE: Commissioner Fanelle? 12 COMMISSIONER FANELLE: Yes. 13 MR. NANCE: Vice Chair Harrington? 14 VICE CHAIR HARRINGTON: Yes. 15 MR. NANCE: Chair Kassekert? 16 CHAIR KASSEKERT: Yes. 17 MR. NANCE: The record will reflect that 18 the motion is unanimous. 19 MS. HUGHES: Thank you. 20 MS. FRANK: Thank you. 21 MS. TURI: Thank you. 22 MR. NANCE: Item No. 16, petition of 23 Trump Taj Mahal Associates, LLC, to amend its 24 certificate of operation. 25 MR. MONCRIEF: Madame Chair, 49 ITEM NO. 16 1 Commissioners, before you is a petition filed 2 by Taj Mahal seeking approval to amend its 3 certificate of operation. 4 A draft resolution has been circulated 5 to the parties, and there appears to be no 6 objection. 7 Here on behalf of the Petitioner is Mr. 8 Cunningham and on behalf of the Division is Mr. 9 Ficchi. 10 CHAIR KASSEKERT: Thank you. 11 Good morning, Mr. Cunningham. 12 MR. CUNNINGHAM: Good morning. For the 13 record, Fred Cunningham for Trump Taj Mahal. 14 This is a relatively minor certificate 15 of operation amendment petition, and unless 16 there are any questions, I would simply rely on 17 the papers submitted and ask that the draft 18 resolution be adopted. 19 CHAIR KASSEKERT: Thank you. 20 Any questions? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 CHAIR KASSEKERT: Mr. Ficchi? 24 MR. FICCHI: Good morning, Madame Chair. 25 As Mr. Moncrief has stated, the Division 50 ITEM NO. 17 1 has reviewed this matter and has no objection 2 to the adoption of the draft resolution. 3 CHAIR KASSEKERT: Thank you. 4 Any questions for the Division? 5 COMMISSIONER EPPS: No questions. 6 COMMISSIONER FANELLE: Madame Chair, I 7 move that we adopt the draft resolution and 8 approve the petition of Trump Taj Mahal 9 Associates, LLC, for an amendment to its 10 certificate of operation and permit the 11 reconfiguration of its casino floor subject to 12 the conditions in the resolution. 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 Thank you. 21 MR. MONCRIEF: Thank you. 22 MR. CUNNINGHAM: Thank you. 23 MR. NANCE: Item No. 17 has been 24 adjourned to the December 1st, 2010, public 25 meeting. 51 ITEM NO. 18 1 Item No. 18, proposed publication and 2 temporary adoption of amendments and proposed 3 new rule concerning pit redemption of counter 4 checks. 5 Mr. Briliant? 6 MR. BRILIANT: Good morning Madame 7 Chair, and Commissioners. 8 These regulatory amendments were 9 requested by the Casino Association of New 10 Jersey, on its wish list. The amendments would 11 permit a casino licensee at its option to 12 redeem a counter check with gaming chips at a 13 gaming pit if a patron so desires. 14 And the matter is now before you for 15 publication and temporary adoption. 16 CHAIR KASSEKERT: Thank you. 17 Any questions? 18 COMMISSIONER SOMMELING: I have no 19 questions, Madame Chair. 20 COMMISSIONER EPPS: Move to approve for 21 publication and temporary adoption. 22 COMMISSIONER SOMMELING: Second. 23 CHAIR KASSEKERT: The motion has been 24 made and seconded. All in favor? 25 (Ayes.) 52 ITEM NO. 19 1 CHAIR KASSEKERT: Opposed? 2 (No response.) 3 CHAIR KASSEKERT: The motion carries. 4 MR. BRILIANT: Thank you. 5 MR. NANCE: Item No. 19, proposed 6 publication of amendments of "In between wager" 7 in blackjack. 8 Mr. Mamolen? 9 MR. MAMOLEN: Good morning, Madame 10 Chair, Commissioners. 11 Before you is a matter for publication 12 having been temporarily adopted back in earlier 13 summer and has undergone a couple months of 14 testing at the Borgata blackjack tables. In 15 essence, it's a side wager in blackjack with 16 pay-outs based upon the spread or the number of 17 ranks between players' two up cards. 18 Again, it's before you for publication. 19 CHAIR KASSEKERT: Thank you. 20 Any questions? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 COMMISSIONER EPPS: Move to approve 24 publication. 25 COMMISSIONER SOMMELING: Second. 53 ITEM NO. 20 1 CHAIR KASSEKERT: The motion has been 2 made and seconded. All in favor? 3 (Ayes.) 4 CHAIR KASSEKERT: Opposed? 5 (No response.) 6 CHAIR KASSEKERT: The motion carries. 7 Thank you. 8 MR. NANCE: Item No. 20, proposed 9 adoption of amendments to NJAC 19:45-1.43, 1.54 10 and new rule NJAC 19:45-1.37D. 11 Mr. Moncrief? 12 MR. MONCRIEF: Madame Chair, 13 Commissioners. 14 Before you is to consider adopting 15 amendments that were highlighted by Mr. Nance. 16 The amendments were published for public 17 comment on June 7th. Public comment period 18 ended on August 6th. There were minor 19 substantive changes to the proposal and in 20 response to the public comments that were 21 received. 22 What these regulations -- what the 23 amendments and new rule will do is set forth 24 the procedure of testing slot machines and 25 related equipment on the casino floor. 54 ITEM NO. 20 1 Also, if you have any questions, I'll 2 leave it to you to consider for adoption. 3 CHAIR KASSEKERT: Thank you. 4 Any questions? 5 COMMISSIONER SOMMELING: No questions, 6 Madame Chair. 7 Move to adopt the substantive changes 8 not requiring a republication. 9 COMMISSIONER EPPS: 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. MONCRIEF: Thank you. 17 CHAIR KASSEKERT: Thank you. 18 We'll take a brief recess or allow the 19 parties to come in? Prior to 21? 20 Thank you. 21 MS. FAUNTLEROY: Maybe five minutes at 22 most? 23 CHAIR KASSEKERT: Five. Yeah. 24 Actually, I'm fine with continuing 25 through. 55 ITEM NO. 21 1 MS. FAUNTLEROY: Are you guys ready? 2 You need anything? 3 MR. DALY: We're ready. 4 MR. NANCE: Item No. 21, application for 5 interim casino authorization and ultimately 6 plenary qualification for Tropicana 7 Entertainment, Inc., and casino license renewal 8 for Tropicana Atlantic City Corp. in connection 9 with the consummation of an amended and 10 restated purchase agreement and dated November 11 20th, 2009. 12 I would just like to note that that 13 caption has been updated, and we're going to 14 use in the matter of application of Tropicana 15 Atlantic City Corp. and Tropicana 16 Entertainment, Inc., for an initial casino 17 license and plenary qualification and petition 18 of Tropicana Atlantic City Corp. for waiver of 19 the qualification requirement for certain 20 offices of its holding or intermediary 21 companies. 22 Miss Frank? 23 Miss Richardson, I'm sorry. 24 MS. RICHARDSON: Good morning, Chair and 25 Commissioners. 56 ITEM NO. 21 1 Would counsel please enter their 2 appearances? 3 MR. DALY: Dennis Daly on behalf of the 4 Petitioners. 5 MR. ADAMS: Jack Adams, Deputy Attorney 6 General, for the Division of Gaming 7 Enforcement. 8 CHAIR KASSEKERT: Thank you. Good 9 morning. 10 The Commission is considering today the 11 issuance of a initial casino license of 12 Tropicana Atlantic City Corp. which we will 13 refer to as "Trop AC," and the plenary 14 consideration of Tropicana Entertainment, Inc., 15 which we will refer to as "TEI." 16 In March 2010 we granted interim casino 17 authorizations to both entities to acquire and 18 operate the Tropicana Casino and Resort. 19 Petitioner's ICA is due to expire December 3rd, 20 2010, and we are required by the statute to 21 hold a hearing on plenary qualification and 22 render a decision prior to that date absent the 23 grant of a three-month extension. 24 To obtain a casino license pursuant to 25 Section 84 of the Act, an Applicant must 57 ITEM NO. 21 1 establish by clear and convincing evidence its 2 financial stability, integrity, and 3 responsibility, the integrity of all financial 4 backers and investors, its good character, 5 honesty, and integrity, and that it has 6 sufficient business ability and casino 7 experience. Section 84 as well as Section 85 8 of the Act direct the plenary qualification of 9 a holding company is evaluated similarly as if 10 the holding company itself were seeking a 11 casino license. 12 In order to assist in evaluating the 13 statutory licensing and qualification criteria, 14 the Commission will hear testimony today. 15 And there are also a number of exhibits 16 that have been premarked. 17 Mr. Nance? 18 MR. NANCE: Chair, Commissioners, the 19 premarked exhibits are listed on Exhibit List 20 as follows: 21 Casino Control Commission has two 22 exhibits, C-1 and C-2. 23 C-1 is CHAB report dated November 10th, 24 2010. 25 And for identification only, C-2 is a 58 ITEM NO. 21 1 draft resolution. 2 The Division of Gaming Enforcement 3 submitted four exhibits, D-1 through D-4. 4 D-1 is a DGE report dated November 1st, 5 2010, on the application of Tropicana Atlantic 6 City Corp. for a casino and CHAB license. 7 D-2 is a report dated November 1st, 8 2010, in the matter of plenary qualification of 9 Icahn Partners, LP, and other Icahn related 10 entities as holding companies and/or entity 11 qualifiers of Tropicana Atlantic City Corp. 12 D-3 is a DGE report dated November 1st, 13 2010, in the matter of the plenary 14 qualification of Icahn Partners, LP, and other 15 Icahn related entities as holding companies 16 and/or entity qualifiers of Tropicana Atlantic 17 City Corp. 18 And D-4 is a DGE letter report dated 19 April 20, 2010, regarding Tropicana CHAB 20 license. 21 CHAIR KASSEKERT: Thank you. 22 Are there any objections to the 23 admission of these exhibits? And are there any 24 sealing requests? 25 MR. DALY: No objection, Madame Chair. 59 ITEM NO. 21 1 But we do have a sealing request pending, and I 2 believe we've discussed it with both your staff 3 and the Division of Gaming Enforcement. And 4 everyone, I believe, is quite satisfied with 5 it. 6 CHAIR KASSEKERT: Mr. Adams? 7 MR. ADAMS: Chair, no objection to any 8 of the exhibits going into evidence and no 9 objection to the sealing request. 10 CHAIR KASSEKERT: Thank you. 11 Accordingly, I will therefore move 12 Exhibits D-1 through D-4 and Exhibit C-1 into 13 evidence and grant the Petitioners' sealing 14 request. 15 With those exhibits in the record, we 16 are now prepared to hear testimony concerning 17 Petitioners' application for an initial casino 18 license for Trop AC and plenary qualification 19 for TEI. 20 Let me just ask, are there any other 21 procedural matters that need to be brought to 22 our attention at this time? 23 MR. DALY: None. 24 CHAIR KASSEKERT: Very good. 25 Mr. Adams? Sorry. 60 ITEM NO. 21 1 MR. ADAMS: I don't think so. 2 CHAIR KASSEKERT: We are now set for 3 opening statements which the parties may waive 4 and elect instead to proceed directly to 5 testimony. 6 Counsel, what's your preference? 7 MR. DALY: Just a brief opening. 8 CHAIR KASSEKERT: Sure, Mr. Daly. 9 MR. DALY: Thank you. 10 Well, it certainly has been a long and 11 winding road that we have all been through, but 12 I think we are finally at the end, and it's a 13 good end. 14 Trop Atlantic City and TEI are presently 15 at the point where they anticipate the granting 16 of the casino license in the first instance and 17 the finding of qualification with respect to 18 the holding company in the second. 19 You and we have been through quite a bit 20 over the last three years, almost three 21 complete years. There was the denial of the 22 license renewal and plenary qualification of 23 the previous owners and licensees that -- that 24 decision pretty much shocked and rocked a good 25 part of Atlantic City. Following that, we went 61 ITEM NO. 21 1 through the conservatorship that was 2 complicated and protracted beyond any measure 3 that could have reasonably been anticipated. 4 Following that -- or actually at the 5 same time as that was going on -- there were 6 the two bankruptcies, one for each company, 7 one -- two different states. From those 8 bankruptcies emerged the slimmed down and 9 cleaned up casino license applicant and a 10 spanking new holding company that is run by 11 vetted veteran casino operators and funded by 12 stockholders who are fully familiar with the 13 regulatory process in New Jersey. 14 Lastly, was the ICA. And, hopefully, 15 today, always an arduous process, but as I 16 indicated, we're at the end. 17 The transformation of these companies is 18 reflected in the resolution that you have 19 before you. Comparatively speaking, it is a 20 simple resolution that belies the efforts that 21 went into creating it. 22 I want to take a moment to thank the 23 staff of the Commission, in particular Tracy 24 Richardson, and the Division of Gaming 25 Enforcement, in particular Jack Adams. Their 62 ITEM NO. 21 1 efforts were truly extraordinary. I mean, it 2 becomes commonplace for attorneys who appear 3 before you to thank the staff and the Division 4 for their efforts in bringing their matters to 5 a conclusion, but this one is truly 6 spectacular. The efforts that were made here 7 by Miss Richardson and before her and also 8 along with her by Len DiGiacomo, who I note is 9 in the audience today, were nothing short of 10 outstanding. 11 The same is true of the efforts of the 12 Division of Gaming Enforcement, Mr. Adams. 13 I -- the draft resolution establishes 14 that there are no issues in need of elaboration 15 today. It grants, assuming that you adopt it, 16 all of the applications, finds all the 17 requisite qualifications, approves the 18 requested waivers, and transfers the one 19 question with respect to the CRDA for 20 determination by that body which we have all 21 agreed is the appropriate body to resolve that 22 issue. 23 I have one witness who will highlight 24 the evolution of the companies, that being the 25 CEO of Tropicana Entertainment, Scott Butera. 63 ITEM NO. 21 1 Mr. Butera will simply go through the process 2 that he oversaw starting a few months after 3 that day in December of '07 to the present. 4 And Tropicana today is no longer a ward of the 5 State and relieved of the overwhelming debt 6 that it had suffered under and is now ready to 7 join its tenant sister licensees as a fully 8 licensed casino in Atlantic City. 9 That's all I have. 10 CHAIR KASSEKERT: Thank you. 11 And are we also going to be hearing from 12 Mr. Rubinstein today as well or not? 13 MR. DALY: If the Commission would like 14 to. We have no prepared presentation with 15 respect to him. He, of course, is available to 16 answer any questions that you the Commission 17 might have. 18 CHAIR KASSEKERT: Thank you. 19 Mr. Adams? 20 MR. ADAMS: Chair, the Division would 21 waive any opening statement at this point. 22 CHAIR KASSEKERT: Thank you. 23 Mr. Daly, you may call your first 24 witness. 25 MR. DALY: Mr. Butera, please. 64 ITEM NO. 21 1 SCOTT C. BUTERA, was duly sworn to 2 testify in this matter. 3 4 MR. NANCE: Please state your name for 5 the record. 6 MR. BUTERA: Scott Charles Butera. 7 MR. NANCE: Thank you. 8 MR. BUTERA: Thank you. 9 CHAIR KASSEKERT: You may proceed, Mr. 10 Daly. 11 12 DIRECT EXAMINATION BY MR. DALY: 13 Q. Okay. Mr. Butera, good morning. 14 Would you please state your position and 15 the date you started in that position? 16 A. I am currently the President and Chief 17 Executive Officer of Tropicana Entertainment, LLC. 18 I'm also a member of its board of directors. And I 19 obtained that position in June of 2008. 20 Q. We've all heard of your reason 21 announcement to take on a new challenge. No need to 22 go into great detail about that, but would you please 23 just advise the Commission of your plans in that 24 respect. 25 A. Sure. And it's a pleasure to be in 65 Butera - direct - Daly 1 front of you once again, Chair Kassekert, and 2 Commissioners. 3 It is a bittersweet decision for me. I 4 really enjoy Tropicana Entertainment. I think it has 5 a great future. And, obviously, I've spent a lot of 6 my time putting it into the position that it's in. I 7 do think the company is well positioned to succeed 8 with or without Scott Butera. So I guess that's a 9 good thing. But as life sometimes has, an opportunity 10 presented itself that was financially very different 11 for me and my family, and I opted to pursue it. You 12 know, but like I say, it wasn't without a lot of 13 thought and consternation because I do think Tropicana 14 also presents a great opportunity, but just one of 15 those things that personally was something that was 16 very good for me and my wife and three kids who I care 17 a lot about. 18 Q. Are you aware of the process that the 19 company will go through with regard to the selection 20 of your successor? 21 A. I am. I am. 22 Q. Would you describe that, please. 23 A. Sure. The company's board of directors 24 is in the process of conducting a search for my 25 replacement. I am not involved in that search other 66 Butera - direct - Daly 1 than to perhaps advise on certain candidates names. 2 We do believe that will happen fairly quickly. My 3 leaving has been, you know, very friendly with the 4 board and with Mr. Icahn. So I'll assist them in any 5 way, and I've agreed to stay on through whatever 6 period they would need to make sure there's a smooth 7 transition and that new candidate of quality can be 8 identified. 9 Q. In my opening I briefly alluded to the 10 transformation that the companies have undergone since 11 you took on your responsibilities with Tropicana 12 Entertainment. Can you briefly take us through the 13 highlights of those as well. 14 A. Sure. Well, I guess when I came here in 15 March of 2008, we were a company that was in about as 16 dire a condition as I've ever seen. In addition to 17 not been able to obtain our license here in New 18 Jersey, we had, you know, many problems. We were 19 facing insurmountable liabilities. We had unstable 20 management throughout the rest of the company. 21 Obviously, we had unstable ownership. And many of our 22 business practices were fundamentally unsound. 23 Between that point and the time in which 24 we emerged from Chapter 11, we were involved in about 25 as comprehensive a transformation as you can imagine, 67 Butera - direct - Daly 1 both financially and operationally. And as we sit 2 here today, we now operate ten properties in five 3 states and the Caribbean, having just bought a 4 property in Aruba recently. Our company, you know, 5 has trailing revenues of just under $700 million and 6 just under $100,000 million on EBITDA or cash flow 7 line at the property level. We have talented 8 professionals throughout the organization, both in our 9 corporate headquarters in Las Vegas and at each of our 10 properties. And we have one of what, I think, is if 11 not the strongest, the strongest balance sheet in 12 gaming, having zero net debt, meaning that we have 13 more cash on our balance sheet than we have 14 indebtedness on our books, which puts -- gives us the 15 best credit rating of any company in the gaming 16 industry. Best credit stats, I should say, in the 17 gaming industry. 18 Obviously, we have very stable ownership 19 that has a history of success in the industry. In 20 addition to Mr. Icahn's position, we have 20 to 30 21 other funds, all of which are deep-pocketed investors 22 that are very savvy and also achieved success in this 23 business. So we have an ownership that's very 24 supportive of our current operations and also 25 interested in using our company as a platform for 68 Butera - direct - Daly 1 growth. And we are now in a position, as we see the 2 economy hopefully starting to turn a little bit, to 3 start investing some of the money that we've compiled 4 in each of our assets, including right here in 5 Atlantic City. 6 I know I've testified many times as to 7 the steps that it took us to get here, so I think 8 you're all very familiar with that. Obviously, 9 removing prior ownership from every aspect of our 10 business was the key to really starting our 11 transformation. And that happened, as you may 12 remember, with a trustee motion which was early on in 13 our bankruptcy process. Putting in a new board 14 initially to get us through the restructuring. 15 Seasoned professionals, including Brad Smith, was a 16 great help in helping us restore our position in each 17 of our regulatory environments. You know, because, 18 obviously, the issues that took place from a 19 regulatory standpoint here in Jersey, New Jersey, were 20 also taking place in our other markets. So we had to 21 make sure had we put in, you know, compliance 22 mechanisms that got us in good standing in areas we 23 were operating in. We were able to do that. 24 Moving our headquarters to Las Vegas was 25 also a plus for us at the time, having a number of our 69 Butera - direct - Daly 1 properties in that area. And being able to plug in 2 with the rest of the gaming community, you know, was 3 very strong as opposed to being lost somewhere in 4 Kentucky where it was hard to access good people. 5 Recruiting great staff. I guess one of 6 the positives of a bad market is people who otherwise 7 wouldn't have been available became available to us, 8 and we were able to recruit, you know, very good 9 staff. 10 Being judicious in our capital spend. 11 You know, we like to spend money responsibly. I don't 12 think that we did things that, you know, cost us along 13 the way. I think we were very smart in where we put 14 our capital, and I think that, while the markets were 15 more difficult, we held back on some things. And now 16 that the market's getting better, we'll be able to be 17 a little more aggressive. But that obviously helped 18 us. 19 And then securing, you know, solid 20 ownership with stability -- with licensability and 21 stability. Also with significant capital and desire 22 to grow the company was certainly the last piece to 23 the puzzle. 24 So as we sit here, you know, for the 25 first time in many months, I actually sleep at 70 Butera - direct - Daly 1 night -- 2 (Laughter.) 3 A. -- when I think about Tropicana. And, 4 you know, why I'm going back into another situation 5 is, you know, kind of tough on that front, too, but I 6 feel like we're finally there. But -- but despite, 7 you know, all the thoughts about what's going to 8 happen to Atlantic City and competition from other 9 jurisdictions and the like, I feel very strongly that 10 this is going to be a great market going forward, and 11 it's just going to get better. 12 I think that the steps that are being 13 taken here to make Atlantic City a true destination 14 resort are going to work. It's still one of the 15 largest gaming markets in the country and always will 16 be. It still has a beautiful boardwalk and beach and 17 is now highlighted in movies like "Boardwalk Empire" 18 and things. But they wouldn't be making a movie about 19 it if there wasn't something special about it, is the 20 way I look at it. So there is a star quality to 21 Atlantic City. 22 And the Tropicana is going to be a great 23 competitor in this market. Already we've started to 24 do things operationally which have been a little bit 25 more aggressive to address some new competition, and 71 Butera - direct - Daly 1 early results are it's working. And now I think what 2 you'll see is us start to spend money and start to 3 make the Tropicana into the great property that I know 4 it can be and in this great market. 5 And all I can say is I know I'll be 6 leaving shortly, but I really hope I can come back 7 sometime in the near future and be a part of this 8 environment once more. 9 CHAIR KASSEKERT: Thank you. 10 Q. You alluded to the financial stability 11 of the corporations. Could you drill down just a 12 little bit deeper in terms of its financing 13 arrangements and also address the revenue covenants? 14 A. Sure. We currently have $130 million 15 term loan which provides us cash to invest in our 16 operations. Like I say, we have more than that amount 17 on our balance sheet in cash. So, you know, if you 18 were to talk about net debt, we have what I'll call 19 zero net debt. If we had to pay off that line 20 tomorrow, we could write a check and do that. We also 21 have another $20 million credit line available to us 22 beyond the 130. 23 There are a couple of financial 24 covenants in there which we easily meet. There's a 25 total debt to EBITDA covenant which we're well within. 72 Butera - direct - Daly 1 There's a cappex covenant, total cappex covenant. We 2 can't spend more than 50 million a year. We are well 3 below that. And there's also a fixed charge coverage 4 ratio which, again, we exceed by a fairly wide margin 5 because our cash flows are very strong compared to our 6 ongoing liabilities. So all those covenants are 7 easily met. 8 A couple of things beyond that, though. 9 The Icahn enterprise owns a significant amount of that 10 debt. So if we were to want to exceed a covenant, you 11 know, I think getting a waiver from that group would 12 be attainable as long as it made good business sense. 13 And, also, as you maybe reading, the capital markets 14 have been quite strong. You know, and I think at some 15 point the company may consider, you know, obtaining 16 something, you know, even bigger and with more 17 flexibility. 18 But we have, you know, a very stable 19 situation with our current covenants and plenty of 20 cash to do the types of things that we want to do in 21 the immediate future. 22 Q. Very good. I think that covers the 23 ground. 24 MR. DALY: That's all I have. 25 CHAIR KASSEKERT: Thank you. 73 Butera - cross - Adams 1 Mr. Adams? 2 MR. ADAMS: Thank you, Chair. I just 3 have a couple question. 4 5 CROSS-EXAMINATION BY MR. ADAMS: 6 Q. So your immediate situation with 7 Tropicana is you don't have any -- an end date at this 8 point; is that correct? 9 A. Well, under the terms of my employment 10 agreement, I owe 30 days to the company. But because 11 of my relationship with Mr. Icahn and our other owners 12 and our board, I've agreed to, you know, stay beyond 13 that if necessary to make sure there can be a smooth 14 transition. I've only put three years of my life into 15 this thing, and I want to make sure things work out 16 okay. 17 That having been said, we have a great 18 bench. So the team that we have in place both at the 19 corporate level and at each of our properties are very 20 capable of operating the properties. I've spent a lot 21 of time with all of them. They understand the 22 business philosophies and the strategies we're trying 23 to invoke. So I have great confidence that, you know, 24 the existing team can operate this company well. I 25 also have great confidence that we'll be able to 74 Butera - cross - Adams 1 attract, you know, a good -- good a good candidate to 2 fill my spot very quickly. 3 Q. But as long as you're there, you're 4 still the CEO; is that correct? 5 A. That's correct. That is correct. 6 Right. 7 Q. Just one other question. You mentioned 8 the possibility of investment in AC, capitalized. Is 9 there anything specific that is on the table at this 10 time? 11 A. There are a few things. We are working 12 on plans. So, you know, obviously, those are things 13 that Mark Giannantonio, you know, our CEO of the 14 property, can inform people as we go along the way. 15 But I think it's -- you know, clear to say that we 16 want to do some things to improve certain areas 17 throughout the casino floor. As you know, we've done 18 some things with our food and beverage product. You 19 know, we just upgraded our restaurant Fin, which 20 appears to be off to a great start and is very 21 successful. Many more things like that. 22 We think we have some opportunity in 23 some of our rooms to, you know, do suite product at a 24 fairly efficient construction cost and get back into 25 that game a little bit. So I think it's -- you know, 75 Butera - cross - Adams 1 I think what we're going to do is look at cappex 2 projects in areas where we think we can get a return. 3 And, hopefully, you know, try to 4 integrate the property better. You know, obviously, 5 we think the Quarter is a great facility. I think it 6 is the fun-est place in Atlantic City. But I'm 7 biased. So if we can integrate, you know, what's 8 happening with the energy of the Quarter with the rest 9 of the property, by maybe expanding our gaming 10 footprint little bit. You know, that might be an 11 avenue. We're looking at retail opportunities. I 12 think you'll see some new storefronts in our property 13 that will be much more in tune with the market and 14 will be interesting to people. 15 So it's a lot of things, Mr. Adams. 16 But, and I think you'll enjoy seeing it progress, and 17 I think our customers will like it as well. 18 Q. Thank you. 19 MR. ADAMS: That's all. 20 CHAIR KASSEKERT: Thank you. 21 Mr. Butera, you know, in addition to the 22 cappex discussion, what other things do you 23 think Tropican AC will need to adapt to the 24 challenging market conditions here in Atlantic 25 City? And what are your views on the future of 76 Butera 1 the market? 2 THE WITNESS: Yeah. My views on the 3 future of the market is, you know, every time 4 there's new competition, there's a little bit 5 of a hit, but then you get past it. So I think 6 long-term, you know, this market will grow, you 7 know, in line with how the economy grows. I 8 mean, the biggest thing for our country is job 9 growth. 10 CHAIR KASSEKERT: Uh-hum. 11 THE WITNESS: You know, in gaming it's 12 the ultimate, you know, discretionary spend; 13 right? And in many cases it's 14 unfortunately many people are proud of the fact 15 they're no longer spending money gaming. So I 16 think we have to realize we have more than just 17 that. We have to be a destination 18 entertainment resort and, you know, what we do 19 at Tropicana is we don't rely on gaming so much 20 as we rely on all the other things our resort 21 can do. So having great room, having great, 22 you know, restaurants, nightclubs. You know, 23 we run a very good convention business. 24 Entertainment. So you can't be a one-trick 25 pony. You know, I think there are a lot of 77 Butera 1 great destinations that people go to that don't 2 have slot machines. I mean, I guess people 3 like to go to, you know, the French Riviera or 4 places like that; right? And there's -- so 5 there are other reasons why people will come, 6 and I think that's what we have to do. We have 7 to say the world's changed a little bit. I 8 think gaming is going to be very different 9 across the country. 10 You know, I think the proliferation of 11 gaming is going to continue. I think that, you 12 know, when you look at where your areas of 13 customer base is, they're going to get narrower 14 and narrower and narrower. So I think you have 15 to learn to get more people that are closer to 16 home. I think there's going to be, you know, a 17 little bit more of, you know, people looking 18 for a drive to cheaper entertainment until the 19 economy recovers. And, hopefully, we can take 20 advantage at this point of that. It's hard to 21 get around convenience. So, you know, if I'm a 22 customer, and I'm living in Philadelphia and 23 you can go ten minutes down the street as 24 opposed to two-hour drive, I probably will do 25 that Monday through Thursday. But if there's 78 Butera 1 something really fun and exciting for me to do 2 on the weekend and see the beach and boardwalk, 3 I think I'm going to do that. So I think we to 4 look at ourselves not just a gaming town but as 5 destination resort town that happens to be 6 among other things, gaming, and also great food 7 beverage, great entertainment, great rooms, and 8 great overall experience. And that's really 9 where I see Atlantic City going. 10 And the beauty of it is, is that we have 11 the natural resources to do that. You know, if 12 we were sitting, you know, in a cornfield 13 somewhere in Iowa, what we wouldn't have that 14 same opportunity. But we've got a beautiful 15 beach and beautiful boardwalk. And we've got, 16 you know, 30 million very affluent people that 17 live within a two-hour drive. And that's 18 really going to be the key to our victory. 19 And I think the other operators and 20 people in the -- in the, you know, political 21 environment understand that and are going to 22 support that. And I feel very confident it's 23 going to work. 24 CHAIR KASSEKERT: Precisely. 25 Let me ask if the any of the 79 Butera 1 Commissioners have any additional questions? 2 COMMISSIONER EPPS: I have a question. 3 CHAIR KASSEKERT: Commissioner Epps? 4 Sure. 5 COMMISSIONER EPPS: The first is, you 6 suggested that Tropicana has ten properties? 7 THE WITNESS: Yes. 8 COMMISSIONER EPPS: What position, if 9 you will, does Trop AC hold in that 10 ten-property family? 11 THE WITNESS: Yeah. 12 COMMISSIONER EPPS: And what weight does 13 it have to -- 14 THE WITNESS: Sure. About as heavy as 15 it gets. Basically there are three properties 16 that make up right now about 95 percent of our 17 cash flow. Tropicana is about a third of that. 18 You know, we have 7,000 employees, 3,000 of 19 which are here in Atlantic City. Of our 6200 20 room, 2,000 are here. You know, we have 21 425,000 square feet of gaming space, 150,000 is 22 here. So clearly this is the, you know, the 23 largest asset. And as I've said in the past, 24 not only large in terms of what it's currently 25 doing for us, but I think it's the one that has 80 Butera 1 the most up side. So as I think about where we 2 want to focus our attention, you know, clearly 3 this is one of the big three, but I think the 4 one with the most up side. 5 COMMISSIONER EPPS: Okay. The other 6 thing, going back to the point you were making 7 earlier, there's -- there's competition and 8 there's the state of the market in general, and 9 then there's market share. What were the 10 plans, at least that you can discuss, going 11 forward for Tropicana to improve its position 12 in the Atlantic City market share -- 13 THE WITNESS: Yeah. 14 COMMISSIONER EPPS: -- as it comes out 15 of its dark period and starts to try to 16 progress? 17 THE WITNESS: Sure. You know, market 18 share is important, Commissioner Epps. But 19 it's one of many things that I look at. And 20 one of the -- one of the disciplines that we 21 install in our company is we try to look at 22 what's your EBITDA less your cappex. You know, 23 because you could go out and buy a lot of 24 revenue and you can buy EBITDA and you can lose 25 a lot of money in your bottom line, and that 81 Butera 1 doesn't create a good situation for you. 2 That having been said, we've been able 3 to maintain our market share over the last 4 three years as a company throughout our 5 restructuring, which I think has been fairly 6 impressive, even though we've tried to be a 7 little bit more judicious. And I think here 8 we've been making great strides in the last few 9 months through operational changes we've made 10 to be a little bit aggressive to build that 11 share. One of the things that I think is going 12 to be a big help to us is you will see us 13 invest a lot in our slot product and in our -- 14 some of our other gaming venues, which I think 15 will help build that share. 16 So I look at market share, but, you know 17 it's one of many measures to me. I don't want 18 to chase market share at the expense of our 19 financial condition. And I think, you know, if 20 we can exist with the other properties just 21 fine and there's enough to go around, you know, 22 for everybody. And I know there's been a lot 23 of people talking about, hey, you know, what's 24 the new boutique, you know, rule going to mean 25 for the other operators? You know, what's 82 Butera 1 going to happen if Revel gets financed? 2 Anything that makes Atlantic City a more 3 desirable place to come is ultimately going to 4 be good for all of us. So, you know, we're 5 fine with our market share. Hopefully, we'll 6 grow market share. But, like I say, it's one 7 of the -- one of many things we look at. 8 And my first and foremost desire is to 9 make sure that we're doing things, you know, 10 profitably. And also providing great service 11 and a great product to our customer. And my 12 view is so long as we do that, our market share 13 will be just fine. 14 COMMISSIONER EPPS: Okay. And, lastly, 15 you just spoke it to just briefly there. You 16 referred to the testimony as having zero net 17 debt, and we always talk about capital expenses 18 and projects. 19 THE WITNESS: Yeah. 20 COMMISSIONER EPPS: Probably going from 21 that you don't want to look at leverage, but do 22 you have room or flexibility to go out and 23 maybe do some things? Or is that -- 24 THE WITNESS: Oh, absolutely. You know, 25 we have -- like I said, we have over $150 83 Butera 1 million that we can spend, you know, right now. 2 So we have plenty of capital to invest, you 3 know, currently. And in addition to that, our 4 company, because it's so strong financially, 5 could go out in the capital markets and raise 6 much more if it desired. If was never my 7 desire because if you don't have a need for the 8 cash, why incur that cost? And I always said 9 the debt markets will put you out of business. 10 The equity markets won't. So there's nothing 11 wrong with only have a little bit of debt, not 12 a lot. We have plenty of cash, Commissioner 13 Epps, to execute our plans near term. 14 In addition to the capital markets. We 15 have solid ownership. Not only with Icahn, but 16 our other owners, who I'm comfortable would 17 invest in the products. So I think from in a 18 financial condition, we're into great shape. 19 We designed it that way. Because I think we 20 figured we'd be in a position to be aggressive 21 when others maybe wouldn't be, and that might 22 help us grow market share or get into new 23 markets, even. So it was somewhat by design. 24 But I think we're in very good condition right 25 now to spend the money that we need to spend. 84 Butera 1 COMMISSIONER EPPS: Okay. That's all I 2 have. 3 CHAIR KASSEKERT: Any other questions? 4 COMMISSIONER SOMMELING: Yes. 5 CHAIR KASSEKERT: Commissioner 6 Sommeling? 7 COMMISSIONER SOMMELING: Mr. Butera, 8 what kind of promos are you anticipating that 9 Tropicana will engage in to grow its business 10 further in the near future? 11 THE WITNESS: Right. Well, we have our 12 marketing experts here and spend a little bit 13 on -- on that further if you want. But, you 14 know, we obviously promote our properties very 15 traditionally through, you know, direct mail, 16 advertising. We are offering some competitive 17 rules with regard to our table games. You 18 know, hopefully, we'll have new slot product. 19 We've been promoting our restaurant product. 20 You know, as you may see, we just did some 21 billboards to highlight, you know, some of the 22 feature restaurants in our properties. 23 So I think, you know, when we look at 24 promotions, it's an area where you got to be 25 very smart. You know, we look at a lot of pro 85 Butera 1 forms and post forms so you don't waste a lot 2 money, throw a lot of good money after bad 3 overpromoting. So we're very smart about how 4 we do it. But, obviously, we offer -- you 5 know, we have a great player's club. We have 6 promotions through our player's club. And, 7 like I said, you know, direct mail, coupons, 8 advertising, and highlighting some changes that 9 is we've made at the property in certain, you 10 know, venues and advertising venues now. 11 COMMISSIONER SOMMELING: I know you're 12 comfortable with where the company is at the 13 present time and you see an optimistic future 14 for the company. How do you see your employee 15 workforce being sustained during this period of 16 time while waiting for the economy to slowly 17 come back? 18 THE WITNESS: I think we've been very 19 good about sustaining an appropriate workforce. 20 You know, as you may know, we recently just 21 settled our -- our contract with the United 22 Auto Workers, I think very successfully. That 23 was an event we're all very proud of. I think, 24 you know, we obviously have the right 25 incentives in place. We offer a competitive 86 Butera 1 work environment. We have a very stable 2 company. And I think when workers look at a 3 company they want to work for, you know, they 4 look at our balance sheet and ability to stick 5 around and invest and grow. I think we shape 6 up very well. So I think we've done a lot of, 7 you know, good things to communicate with our 8 employees and let them know the direction and 9 let them know that we want to grow and make 10 this a great company. 11 That having been said, we need to be 12 efficient. You know, so we do look for ways to 13 be efficient with our labor. And if you are a 14 hard-working team player who's smart, there's 15 no chance that -- you're not going to have 16 anything but a great experience. If you're not 17 that, then you're at risk. You know, so I 18 think for the people who, you know, get into 19 work every day and get after it and want to be 20 part of this, they're going to have a very, 21 very rewarding employment opportunity. And I 22 think for others who don't have that attitude, 23 then we'll be efficient with those. But I 24 think it will be overall better. And what I 25 tell our employees is everybody's going to work 87 Butera 1 a little bit harder, but it's going to feel a 2 lot better. You know, almost like getting off 3 a treadmill or something like that. So I think 4 we have a great environment, and then we'll 5 take a lot of care in taking care of our 6 people. They're our most important asset, as 7 I've always said. 8 COMMISSIONER SOMMELING: Mr. Butera, 9 along those same lines, you just happened to 10 mention, alluded to a little bit. Your rewards 11 program. Now, I'm assuming that Trop's rewards 12 program can be utilized in all of its 13 properties? Is that a correct assumption? 14 THE WITNESS: We have a rewards program 15 at each of our properties. We are working on 16 ways to integrate the properties a little bit. 17 But for us it doesn't really at this point make 18 economic sense, for example, to have a system 19 like Harrah's where you can use your card at 20 multiple properties. We just don't set up that 21 well, you know, logistically. So, you know, 22 you don't get that much interaction between 23 Atlantic City and Baton Rouge and Evansville 24 and Laughlin, Nevada, to justify the expense of 25 putting that in place. So rather than spend, 88 Butera 1 you know, five, six, seven, $8 million on that, 2 I'd rather spend it on a room renovation or 3 something that I think would be more important 4 to our company. 5 COMMISSIONER SOMMELING: It's still the 6 Diamond Rewards. Diamond Club? 7 THE WITNESS: We actually rolled out in 8 other properties, not here, something called 9 the Trop Advantage card. It's a five-layered 10 system that we're starting to use in some of 11 our other properties that appears to be 12 successful. Whether or not we bring that to 13 Atlantic City is something that we're 14 discussing with Mark and his team. I would say 15 there's a pretty good chance that ultimately 16 happens. It's gotten off to a great start. So 17 we are -- we are, you know, even though you 18 won't get be able to use your card at each of 19 our properties, we will have the same program, 20 and it will be consistent across each of our 21 properties. But right now we have the existing 22 program that Trop has been using for a number 23 of years, and we're evaluating whether to bring 24 the Trop Advantage in to replace that. But if 25 we do that, it will be something that will be 89 Butera 1 great for our customers. Obviously, we'll -- 2 people will not lose anything. We'll be able 3 to transfer their build-up points to that new 4 card if we go there and probably get some 5 additional folks along the way. 6 COMMISSIONER SOMMELING: Mr. Butera, 7 thank you for your hard work and dedication to 8 Atlantic City the last three years. I think we 9 are very fortunate to have you here. And I 10 want wish you the best on your new employment 11 and endeavor in Connecticut and -- 12 THE WITNESS: Thank you. 13 COMMISSIONER SOMMELING: And best to you 14 and your family over the holidays. 15 THE WITNESS: Thank you, Commissioner 16 Sommeling. And like I said, it will be a happy 17 day when I come back so -- 18 COMMISSIONER SOMMELING: Thank you. 19 THE WITNESS: Hopefully, I can do it 20 again. 21 CHAIR KASSEKERT: Any other questions? 22 Anything on redirect? 23 MR. DALY: No follow-up. 24 CHAIR KASSEKERT: Anything on recross? 25 MR. ADAMS: Nothing. 90 Butera 1 CHAIR KASSEKERT: Thank you. 2 Scott, let me just echo what 3 Commissioner Sommeling said. You and I 4 started, as Mr. Daly aptly noted, down a long 5 and winding road over two years ago. And you 6 were a pleasure to work with as we went through 7 this process. 8 And let me also personally wish you good 9 success on your future endeavors, and we hope 10 to seep see you back in Atlantic City one day. 11 Thank you. 12 THE WITNESS: Thank you, Chair 13 Kassekert. Coming from you, that means a lot 14 for. I've also had a great admiration for you 15 and what the Commission has done. I'll miss 16 you. 17 CHAIR KASSEKERT: Thank you. You may 18 step down. 19 THE WITNESS: Thank you. 20 MR. DALY: Chair? 21 CHAIR KASSEKERT: Let me ask, Mr. Adams, 22 would you like to hear from Mr. Rubinstein? 23 MR. ADAMS: I don't have anything in 24 particular for Mr. Rubinstein at this point. 25 CHAIR KASSEKERT: I guess -- yeah. I 91 1 guess my only certain concern, Mr. Daly, would 2 be to ask him what plans and I know that Mr. 3 Butera will be staying for part of this 4 process. But just to ask them what -- ask him 5 what his plans are for Trop Entertainment in 6 the interim after Mr. Butera leaves. If we 7 could maybe perhaps -- 8 MR. DALY: Certainly. If that's the 9 Commission wish, we'll -- 10 CHAIR KASSEKERT: Sure. Yup. 11 MR. DALY: Call Marc to the stand. 12 CHAIR KASSEKERT: And maybe you can 13 elicit that in direct what the process will be. 14 Mr. Nance will swear you in. 15 16 MARC RUBINSTEIN, was duly sworn to 17 testify in this matter. 18 19 MR. NANCE: Please state your name for 20 the record. 21 MR. RUBINSTEIN: Marc Howard Rubinstein. 22 MR. NANCE: Thank you. 23 CHAIR KASSEKERT: Thank you. 24 Mr. Daly? 25 92 Runbinstein - direct - Daly 1 DIRECT EXAMINATION BY MR. DALY: 2 Q. Good morning, Mark. 3 Can you address the Chair's questions 4 with regard to where the company is going from here? 5 A. Well, it's a little bit -- to be frank, 6 it's a little bit of an unknown. 7 CHAIR KASSEKERT: Uh-hum. 8 A. You know, as far as we are aware, there 9 will not be a transition period without Scott -- 10 CHAIR KASSEKERT: Okay. 11 A. -- present. Should that change, I know 12 we've got capable management, as Scott alluded to, 13 pretty much in all facets of the operation in 14 corporate, as well as each of our properties, our 15 general managers. I believe at the nine or ten -- ten 16 properties, including Aruba now, average about 18 and 17 a half years of experience per -- per person which is 18 pretty -- pretty considerable. And we've changed GM's 19 in several locations. 20 But -- and I also am comforted to know 21 that two of the six board members are veteran gaming 22 executives, Dan Casella and Dan Scott. And it would 23 be speculation on my part to say that they might step 24 in, but we know we have them in the bullpen available 25 to the board should there be an interim period without 93 Runbinstein - cross - Adams 1 Scott there. Because at some point Scott's got to 2 move on and assume his new responsibilities. 3 CHAIR KASSEKERT: Mr. Adams, anything? 4 MR. ADAMS: Yeah. I just think it's 5 consistent with what I asked Mr. Butera at this 6 point. 7 8 CROSS-EXAMINATION BY MR. ADAMS: 9 Q. From your knowledge, you know, 10 hopefully, there will be no interim period without 11 either Scott as the CEO or at least someone designated 12 to be the new CEO, and I would assume you would 13 obviously bring that to our attention as soon as 14 you're in a position to tell us what the situation is 15 going to be. 16 A. Absolutely. We have obligations, you 17 know, not only to the State of New Jersey but the 18 other five jurisdictions where we operate as well as 19 the SEC. So as soon as the board makes a decision, 20 even if it's an interim decision, it will be 21 announced. 22 Q. And Mr. Butera also mentioned that 23 apparently the process is already under way. And from 24 your knowledge, do you anticipate it to be a long 25 process? 94 Runbinstein - cross - Adams 1 A. You know, it's really difficult to say. 2 It would be pure speculation. And, you know, I know 3 it's a board process. Inevitably there will be an 4 employment agreement with the new CEO which will have 5 to be addressed by our compensation committee, by 6 which point I'll probably be more intimately involved. 7 But right now the board is acting, you know, without 8 management involvement at the moment. 9 CHAIR KASSEKERT: Thank you, Mr. Adams. 10 That was the question I was going to ask. 11 Let me ask if any of the Commissioners 12 have any questions? 13 COMMISSIONER EPPS: I mean, my question 14 would only be purely parochial from a New 15 Jersey perspective, is that I'm assuming that 16 whoever is chosen, the process would naturally 17 have in its design an effort to try to maintain 18 stability, and the primary focus the company's 19 been going in so there wouldn't be significant 20 disruption, for particularly the New Jersey 21 market? 22 THE WITNESS: Yeah. I think that goes 23 for all the markets. I understand your 24 parochial interest, but no. Yeah. We have a 25 vested interest in doing this quickly and 95 Runbinstein 1 efficiently so there's no -- no down time and 2 so that, you know, that the new CEO can keep 3 things -- keep the momentum going within the 4 company. 5 CHAIR KASSEKERT: And the good news is 6 that you have a strong manager here in Mark 7 Giannantonio. 8 THE WITNESS: Absolutely. 9 CHAIR KASSEKERT: So that's helpful. 10 Thank you. 11 I have no further questions. 12 Thank you, Mark. You may step down. 13 THE WITNESS: Thank you. 14 CHAIR KASSEKERT: Let me ask if the 15 parties wish to make closing statements? 16 Mr. Adams? 17 MR. ADAMS: Yes, Chair. I would. 18 Obviously, you have the various 19 exhibits, including our four reports which, I 20 believe, are fairly detailed, as well as all 21 the individual qualifier reports. Hopefully, 22 everybody and every entity has been accounted 23 for. That's been a long process, as you 24 obviously can appreciate. 25 But in summary, taking some of what Mr. 96 ITEM NO. 21 1 Butera said, we believe that this company is 2 financially healthy and regulatorily healthy. 3 And, as he had mentioned and it's been 4 referenced a couple of times, to be in a 5 position have what's called zero net debt and 6 the cash position that they're in is a big plus 7 from the Division's viewpoint. I'm sure it's a 8 big plus from your viewpoint, and it has to be 9 a big plus for Atlantic City. 10 Having said that, we believe that 11 everything that's been presented to you in all 12 the reports and the testimony establishes that 13 this applicant and its holding companies have 14 met their burden by a clear and convincing 15 evidence with all the statutory criteria 16 sufficient that you can issue a casino license 17 in the initial instance to Trop AC and find all 18 the individuals and all the entities and the 19 holding companies plenary qualified. 20 Having said that, I also echo what Mr. 21 Daly said in his first remarks. The draft 22 resolution is one of the best draft resolutions 23 I've ever seen. Now, if that's a kudo to Tracy 24 and Dianna, so be it. It is succinct. It is 25 complete, and it covers everybody and anybody. 97 ITEM NO. 21 1 And I am very pleased about that draft 2 resolution. And obviously -- 3 (Laughter.) 4 MR. ADAMS: -- the Division is, and I 5 would encourage that you adopt it. 6 And most importantly, finally, if I've 7 not already done it, I do want to thank the 8 Applicant. I want to thank a lot of those 9 individuals and the various holding companies. 10 God knows, they may have had enough of me and 11 all our investigators. 12 (Laughter.) 13 MR. ADAMS: But in any event, I had to 14 pinch myself coming in here on the way in, that 15 it's been three years almost since the whole 16 process started. But we're here, and you're 17 where I think you want to be when it comes to 18 this particular case. 19 Again, I want to thank, also, Commission 20 and the Commission staff. Again, particularly 21 Tracy. I know Len's in the back someplace. I 22 guess I got to throw him a kudo. And Chris and 23 Dianna, everybody. It took a lot of effort. 24 It took a lot of work. You know, the various 25 issues we had to deal with down the road to get 98 ITEM NO. 21 1 here. 2 CHAIR KASSEKERT: Uh-hum. 3 MR. ADAMS: And sometimes they were -- 4 they seemed almost insurmountable. But I think 5 we're here now. And so based on all that, the 6 Director concurs in the necessary waivers, and 7 we believe that you can issue the casino 8 license as asked for by the Applicant. 9 CHAIR KASSEKERT: Thank you, Mr. Adams. 10 We -- I appreciate your comments, and the 11 strong working relationship that we had with 12 the Division throughout this process. 13 It is amazing when I think of where we 14 were and what we have all been through 15 together. And in terms -- you know, even up to 16 the Supreme Court. So this has been a good 17 process with the -- a great outcome, not to 18 sort of preempt my vote, but with a great 19 outcome. 20 MR. ADAMS: And with that connection, I 21 better thank everybody at the Division 22 before -- 23 (Laughter.) 24 MR. ADAMS: Because there are a host of 25 people. Some are here, some are not here. 99 ITEM NO. 21 1 But, boy, there are a host of people who all 2 had input in all that. 3 CHAIR KASSEKERT: Yup. Thank you. 4 Mr. Daly, see if you can top that. 5 (Laughter.) 6 MR. DALY: No. I can't top that, and 7 anything I would say would be redundant. And 8 superfluous and unnecessary and all those. 9 (Laughter.) 10 MR. DALY: I simply urge that you adopt 11 this resolution, and I certainly agree with 12 Jack that this is a remarkable resolution. 13 Much shorter than any that Lenny would have 14 produced. 15 (Laughter.) 16 CHAIR KASSEKERT: And clear English. 17 MR. DALY: It's very good. Very. 18 Iurge you to adopt it. 19 CHAIR KASSEKERT: Thank you. Well, we 20 will take a brief recess. 21 (A recess was taken from 11:55 to 12:10 22 p.m.) 23 CHAIR KASSEKERT: Thank you. We'll go 24 back on the record. 25 Let me just ask if there are no comments 100 ITEM NO. 21 1 on the draft resolution, do the parties consent 2 to its adoption? 3 MR. DALY: Certainly the Petitioners do. 4 MR. ADAMS: Yes, Chair. 5 CHAIR KASSEKERT: Thank you. 6 And are there any other matters that 7 need to be brought to our attention at this 8 time? 9 MR. DALY: None from the Petitioner. 10 MR. ADAMS: None from the Division. 11 CHAIR KASSEKERT: Very good. 12 Today we reach the final step in a 13 process which started in December of 2007 with 14 the denial of the plenary qualification to the 15 Tropicana Casino and Resorts, Inc., and 16 Tropicana Entertainment LLC, and the denial of 17 the casino license renewal to Adamar of New 18 Jersey, Inc., which required the appointment of 19 a conservator. While this process has taken 20 longer than any of us could have anticipated, 21 the time that has elapsed included an appellate 22 process ultimately resulting in an opinion of 23 the New Jersey Supreme Court affirming our 24 decision followed by an unprecedented economic 25 downturn which greatly impacted the sale 101 ITEM NO. 21 1 process conducted by Justice Stein. 2 While the sequence of events over these 3 last almost threes years was unforeseen, I'm 4 sure I speak for my fellow commissioners when I 5 say that we welcome today the consideration of 6 Trop AC's casino license and the plenary 7 qualification of TEI to complete the ownership 8 transition of the Tropicana Casino. The 9 completion of this transition yields optimism 10 for what we hope is continued investment in 11 Atlantic City. 12 As noted earlier, Section 84 of the Act 13 sets forth the necessary findings we must make 14 by clear and convincing evidence in order to 15 grant a casino license to Trop AC and plenary 16 qualifications to TEI. Section 82 also 17 specifies additional rulings that are technical 18 in nature and, therefore, not necessary for us 19 to discuss here, but each requirement under the 20 statute will be detailed in our resolution and 21 entered in this matter. 22 As shown by the reports filed by the 23 Division and supplemented by the testimony we 24 have heard today, for my part, Petitioners have 25 shown by clear and convincing evidence the 102 ITEM NO. 21 1 requisite good character, honesty, and 2 integrity necessary for granting a casino 3 license to Trop AC and plenary qualification 4 for TEI. 5 In order to evaluate the good character, 6 honesty, and integrity of Trop AC and TEI, the 7 qualifications of the relevant entities and 8 individuals associated with both must 9 necessarily be reviewed. The Division has also 10 reported that each such entity and individual 11 meets the necessary standards to qualify under 12 Sections 84 and 85 of the Act. 13 Similarly, a review of the qualified 14 individuals associated with Trop AC and TEI, as 15 well as the reports of the Division and the 16 testimony we heard today, supports a finding 17 that Trop AC and TEI have established by clear 18 and convincing evidence that they have 19 sufficient business ability and casino 20 experience to continue operations. 21 While under these difficult economic 22 conditions, financial stability, integrity, and 23 a responsibility are one of the most important 24 licensing and qualification criteria, in my 25 view, the Commission can properly find the 103 ITEM NO. 21 1 Petitioners have also demonstrated such 2 stability, integrity, and responsibility by 3 clear and convincing evidence. 4 And as the Division notes in its 5 financial report, according to forecasts 6 through December 2011, both Trop AC and TEI 7 expect to generate sufficient cash flow to 8 satisfy their obligations, including TEI's debt 9 service of its $130 million credit facility 10 obtained upon its exit from Chapter 11 11 bankruptcy. 12 In connection with the $130 million 13 credit facility, Petitioners have also 14 submitted information to establish by clear and 15 convincing evidence the integrity of its 16 financial sources, and the Division has 17 reported favorably on the qualification of each 18 lender not otherwise eligible for waiver under 19 Section 85. 20 Petitioners have sought waiver of 21 certain -- of the -- have sought waiver of the 22 qualification requirements as to certain 23 officers of Trop AC's holdings companies since 24 they will not be significantly involved in the 25 activities of Trop AC. The Division concurs in 104 ITEM NO. 21 1 the grant of waiver for those individuals, and 2 for my part, those waivers are appropriate. 3 Petitioners also request similar waivers 4 for various entities, individual and limited 5 partner investors, and stockholders pursuant to 6 Section 85 as lacking the ability to control 7 any of the designated holding companies or 8 elect any of their directors. The Division 9 also concurs in the grant of those waivers and, 10 again, for my part, the waivers are 11 appropriate. 12 One item still pending from the time of 13 the ICA hearing is the Petitioners' request for 14 a declaratory ruling concerning investment 15 alternative tax obligations owed to the CRDA. 16 Specifically, Petitioners' sought rulings 17 concerning whether Trop AC, upon being granted 18 ICA, would be a licensee required to pay the 19 investment alternative tax, whether Trop AC is 20 a new licensee or a successor licensee, and 21 whether Trop AC must assume Adamar's CRDA 22 contractual obligations. 23 When we granted ICA, the Commission 24 determined that Trop AC would be subject to the 25 investment alternative tax but in all other 105 ITEM NO. 21 1 respects deferred Petitioners' requests for 2 relief. It was anticipated at that time that 3 Petitioners might resolve these open issues 4 during the ICA period. 5 Petitioners did resolve the issue of 6 assumption of Adamar's contractual CRDA 7 obligations by entering into a consent order in 8 Adamar's bankruptcy case. And that order 9 provides a list of CRDA contracts that would be 10 assumed and assigned to Trop AC. 11 The issue that remains to be determined 12 is, for the purposes of the investment 13 alternative tax statute which is administered 14 by the CRDA, whether Trop AC a new licensee or 15 a successor licensee. The Trop AC's new or 16 successor licensee status affects the 17 allocation of Trop AC's investment alternative 18 tax payments. 19 For the purposes of the casino licensing 20 statute, Trop AC is without question a new 21 licensee since we are considering today a grant 22 of an initial one-year license to it. However, 23 Trop's status -- Trop AC's status under the 24 casino licensee statute does not necessarily 25 compel the same conclusion as to licensing 106 ITEM NO. 21 1 status under the investment tax -- alternative 2 tax statute. 3 Because the considerations necessary 4 under the investment alternative tax statute, 5 which is NJSA 5:12-144.1, are appropriately 6 reviewed by the CRDA which administers that 7 statute, I would move that we deny Petitioners' 8 request for relief on the issue of whether or 9 not Trop AC is a new or successor licensee and 10 refer the matter to the CRDA for review and 11 determination. I would further move that this 12 referral be subject to Petitioners providing 13 the Commission with a copy of the CRDA's final 14 determination within 10 days of entry of such a 15 decision. 16 In conjunction with considering Trop 17 AC's initial casino license and TEI's 18 qualification, I would also move that the 19 Commission dissolve the ICA Trust with respect 20 to Trop AC and discharge the ICA Trustee, 21 Howard [sic] First. And we thank Mr. First 22 here for his service. 23 Based upon the entire record of this 24 proceeding, including the testimony today and 25 the documents filed, I am satisfied that the 107 ITEM NO. 21 1 Petitioners have met the standards for initial 2 casino licensure for Trop AC and plenary 3 qualification of TEI. 4 I, therefore, move that the Commission 5 adopt the proposed resolution and grant an 6 initial one-year license and CHAB license to 7 Trop AC and grant plenary qualification to TEI 8 as set forth in the findings and rulings and 9 subject to the conditions in the resolution. I 10 so move. 11 Is there a second? 12 COMMISSIONER SOMMELING: Second. 13 CHAIR KASSEKERT: A motion has been made 14 and seconded. This is a roll call vote. 15 MR. NANCE: Commissioner Sommeling? 16 COMMISSIONER SOMMELING: Yes. 17 MR. NANCE: Commissioner Epps? 18 COMMISSIONER EPPS: Yes. 19 MR. NANCE: Commissioner Fanelle? 20 COMMISSIONER FANELLE: Yes. 21 MR. NANCE: Vice Chair Harrington? 22 VICE CHAIR HARRINGTON: Yes. 23 MR. NANCE: Chair Kassekert? 24 CHAIR KASSEKERT: Yes. 25 MR. NANCE: The record will reflect that 108 PUBLIC COMMENT 1 the motion is unanimous. 2 CHAIR KASSEKERT: Thank you, and 3 congratulations. 4 And thank you again to the staffs of 5 both of Commission, the Division, and the 6 Applicants' attorney for -- for a very smooth 7 process. 8 MR. DALY: Thank you. 9 MR. ADAMS: Thank you, Chair. 10 MR. NANCE: In accordance with 11 Resolution No. 09-12-16-20, the next closed 12 session of the Commission shall be held on 13 Wednesday, December 1st, 2010 at 9:15 a.m. in 14 the Commission offices. 15 It is now time for the public 16 participation portion of the meeting. 17 CHAIR KASSEKERT: Is there anyone from 18 the public that wishes to be heard? 19 Yes, Mr. Johnson. 20 Mr. Johnson, would you state your name 21 for the record? 22 MR. FRANKLIN: Franklin Omar Johnson. 23 CHAIR KASSEKERT: Thank you. What would 24 you like to say today? 25 MR. FRANKLIN: Oh, I'd like to say first 109 PUBLIC COMMENT 1 off that I congratulate the Governor and the 2 Commissioners for allowing me this opportunity 3 to speak once again in front of this 4 Commission. 5 Secondly, I'd like to also state that 6 concerning those particular issues that I 7 brought forth to the Commission, I also 8 congratulate you on that particular time and 9 investigation concerning those issues. 10 Unfortunately, I'm still confused about certain 11 complications of due process in regards to 12 exclusion and barrment from certain casinos in 13 Atlantic City. 14 I have already contacted the Federal 15 Bureau of Investigation on this matter, and 16 they are also in agreement with that, that 17 that's not the correct due process of 18 procedures concerning barring or excluding a 19 person from a casino. I have -- this matter 20 has been in municipal court. And it's also in 21 the Appellate Division. 22 I'd further like to add that the owners 23 of these casinos really need to look into the 24 problems of their security department 25 concerning this matter and to establish the 110 PUBLIC COMMENT 1 correctness according to the regulations and 2 the statutes of laws concerning excluding and 3 barring a person from a casino. 4 CHAIR KASSEKERT: Thank you. 5 MR. FRANKLIN: One other thing before I 6 end my conversation here, is that I plan to 7 subpoena members of the Commission and hope 8 that's not an offense concerning this. 9 I have talked with my attorney 10 concerning this matter because I want to verify 11 certain records in regards to what I have 12 already stated to the Commission about those 13 particular organized conductions and organized 14 crimes around these particular security 15 departments. 16 Is that fine with you all? 17 CHAIR KASSEKERT: Sure. 18 MR. FRANKLIN: All right. Thank you. 19 CHAIR KASSEKERT: It's your right as a 20 citizen, Mr. Johnson. 21 MR. JOHNSON: Thank you very much. 22 CHAIR KASSEKERT: Miss Fauntleroy? 23 MS. FAUNTLEROY: We would have to 24 address that when it's received. 25 CHAIR KASSEKERT: Sure. Obviously. 111 1 Yeah. Obviously. 2 That's why we have counsel. 3 MR. FRANKLIN: Okay. 4 CHAIR KASSEKERT: Thank you. 5 Is there anyone else from the public 6 that wishes to be heard? 7 (No response.) 8 CHAIR KASSEKERT: Seeing no one, I 9 declare this portion of the meeting closed and 10 entertain a motion to adjourn. 11 COMMISSIONER SOMMELING: Motion to 12 adjourn. 13 COMMISSIONER FANELLE: Motion is made 14 and seconded. All in favor? 15 (Ayes.) 16 CHAIR KASSEKERT: Opposed? 17 (No response.) 18 CHAIR KASSEKERT: The motion carries. 19 (Public Meeting 10-11-10 was adjourned 20 at 12:22 p.m.) 21 22 23 24 25 112 1 2 C E R T I F I C A T E 3 4 5 I, DARLENE SILLITOE, a Certified Court 6 Reporter and Notary Public of the State of New 7 Jersey, certify that the foregoing is a true 8 and accurate transcript of the proceedings. 9 10 11 I further certify that I am neither 12 attorney, of counsel for, nor related to or 13 employed by any of the parties to the action; 14 further that I am not a relative or employee of 15 any attorney or counsel employed in this case; 16 nor am I financially interested in the action. 17 18 19 DARLENE SILLITOE CCR 20 License No XI01023 21 22 Dated: November 14, 2010 23 My Notary Commission Expires July 22, 2014 24 ID No 2062871 25