STATE OF MICHIGAN
MICHIGAN GAMING CONTROL BOARD  

PUBLIC MEETING
Cadillac Place
3062 W. Grand Blvd., Suite L-700
  Detroit, Michigan

Tuesday, May 13, 2008
1 0:00 A.M.

.

MINUTES

On Tuesday, May 13, 2008, the Michigan Gaming Control Board held a public meeting at the Board office in the Cadillac Place, 3062 W. Grand Blvd., Suite L-700, Detroit, MI.

Present:         In attendance were the following Board members:

                                                Mr. Damian Kassab, Chairman
                                                Judge Benjamin Friedman
                                                Mr. Donald Robinson
                                                Ms. Barbara Rom
                                                Mr. Michael Watza

                        Also attending were:

                                                Richard Kalm
                                                Tom Barker
                                                John Page
                                                Fred Cleland
                                                D/F/Lt. Vicki Johnson
                                                Jack Cahill
                                                Laurie Lander

Business:        

Board Chairman Damian Kassab called the staff briefing of the public meeting to order at 10:05 a.m.  There being no preliminary business to discuss, Chairman Kassab noted for the record that all Board members were present at today's meeting.

Chairman Kassab stated that the first order of business was to approve the minutes from the April 8, 2008 regular public meeting.  Chairman Kassab noted that all Board members had previously received the minutes, and asked if there were any questions or concerns.

It was moved and seconded that the minutes of the April 8, 2008 meeting be approved. 

Motion carried.

Next Mr. Kalm presented the Executive Director's report.  Mr. Kalm advised the Board that since the last board meeting, Technician Craig Goerge and Secretary Melody Duwe had resigned from the Board and Sheila Marshall had been hired as a Financial Analyst.  He further advised that the interview and selection process was ongoing for the remaining 14 vacant positions.

In regards to the Board's budget, Mr. Kalm reported that for fiscal year 2008, from October 1, 2007 through April 30, 2008, the Board has incurred total expenditures of $9,129,439 leaving the unexpended balance of $11,133,561 in appropriated funding for FY 2008, which includes funds for anticipated expenditures by the Attorney General's Office and the Michigan State Police.

Mr. Kalm next reported that the casinos continue to operate 24/7 and for April 2008, the aggregate revenue in taxes for all three Detroit casinos was up by 5.15 percent and the gaming taxes were 10.55 million compared to 13.36 million for the same period last year.  Mr. Kalm explained that due to the tax rollback for MGM Grand Detroit Casino and MotorCity Casino, the taxes were lower compared to the same period last year even though the aggregate revenue was up by 5.15 percent.

In regards to employee licensing, Mr. Kalm advised the Board that the required background investigations for 56 pending Level 1 and 2 licenses had been completed and would be considered for approval by the Board at today's meeting. 

Next Mr. Kalm reported on the MSP Board related activity for the month of April 2008.  He stated that there have been no staffing changes and that during the month of April 2008 the MSP Gaming Section investigated 43 criminal complaints and made 24 arrests.

Upon conclusion of Mr. Kalm's report, the Board considered approval to adopt the new and amended Administrative Rules. 

Chairman Kassab noted for the record the presence of First Assistant Attorney General Don McGehee and requested a brief overview.

Upon conclusion of Mr. McGehee's overview, it was moved by Ms. Rom and seconded by Judge Friedman that the Board adopt the amended and new Administrative Rules and the Certificate of Adoption be filed along with the adopted Rules with the Michigan Department of State, Office of the Great Seal.  A voice vote was taken:

Motion carried.

Next the Board considered the recommendations of the Executive Director and the Licensing Division's staff regarding the 56 Level 1 and 2 occupational license applications. 

It was moved by Judge Friedman and seconded by Mr. Watza to accept the recommendations of the Executive Director and the Licensing Division's staff for the 56 Level 1 and 2 occupational license applications.  A voice vote was taken.

Motion carried.

Next the Board considered the Executive Director's Reports and Licensing Division's staff recommendations regarding the pending supplier license applications of Bank Supplies, Inc., Edward Don & Company, LR Linens, L.L.C., Miceli & Oldfield, Inc., and Pinpoint Systems Corporation.

There being no questions from Board members, it was moved by Mr. Watza and seconded by Ms. Rom that the Board enter orders finding and concluding that Bank Supplies, Inc., Edward Don & Company, LR Linens, L.L.C., Miceli & Oldfield, Inc. and Pinpoint Systems Corporation, and their qualifiers are eligible and suitable for licensure under the licensing standards and requirements of the Act and Rules of the Board.  A voice vote was taken.

Motion carried.

The next agenda item was the Board's consideration of the Executive Director's Reports and Licensing Division's staff recommendations regarding the pending supplier license renewal applications of Lavdas Enterprises, Inc. and M Limousine, Inc.

Chairman Kassab recused himself from voting due to his acquaintance with Mr. and Mrs. Lavdas.

There being no questions from the Board, it was moved by Mr. Robinson and seconded by Judge Friedman that the Board enter orders finding and concluding that Lavdas Enterprises, Inc. and M Limousine, Inc., and their qualifiers are eligible and suitable for licensure under the licensing standards and requirements of the Act and Administrative Rules of the Board; and, accordingly, granting these requests for renewal of their annual supplier licenses for a new one year period beginning May 13, 2008, based upon the background investigation reports and recommendations of the Executive Director and the Board's Licensing Division staff.  A voice vote was taken.

Motion carried.

The Board next considered the Board's staff report regarding the request to withdraw the supplier license application of Kaskel Construction Company, Inc.

After questions from Board members were answered, it was moved by Ms. Rom and seconded by Judge Friedman that the Board enter an order granting the request of Kaskel Construction Company, Inc., for withdrawal of its supplier license application based upon the Board's report and recommendation, and that the granting of this request is subject to the following conditions: 

·                   Kaskel Construction Company, Inc. may not conduct any business, in any capacity, with any of the Detroit casinos without leave from the Board for a period of one year from the effective date of this order.

·                   Waiver of Rule 324(2)(k), which requires the payment of all investigative costs prior to Board approval of a withdrawal, and in the case of Kaskel Construction Company, Inc., conditioned upon the outstanding debt totaling $1913.81 being referred to the Michigan Department of Treasury for collection of a state agency debt.

·                   That the Board refrains from issuing any future vendor exemption, supplier exemption, temporary or permanent license to Kaskel Construction Company, Inc. until the $1913.81 debt to the state is repaid in full or otherwise resolved.

A voice vote was taken.

Motion carried.

Next the Board considered the Executive Director's Report and Licensing Division's staff recommendation regarding the eligibility and suitability of required key persons/qualifiers of MGM Grand Detroit, L.L.C.

It was noted for the record that Mr. Robinson recused himself from the vote, due to his acquaintance with Ms. Okotie-Eboh.

Therefore, it was moved by Judge Friedman and seconded by Mr. Watza that the Board enter an order finding and concluding that Juliette Anita Okotie-Eboh, Daniel John D'Arrigo, Aldo Manzini, Cathryn Jane Santoro, Robert Colcord Selwood, Kenny Carroll Guinn and Daniel Joseph Taylor are eligible and suitable as required qualifiers of casino licensee MGM Grand Detroit, L.L.C., under the licensing standards and requirements of the Act and Rules of the Board.  A voice vote was taken.

Motion carried.

The Board next considered the Proposal for Decision in the matter of the disciplinary action of occupational licensee LaKisha Marie Johnson. 

Chairman Kassab noted for the record that neither Ms. Johnson nor her representative was present at the meeting.  Chairman Kassab invited Assistant Attorney General Jessica Hodgson to give a brief overview of the case.

There being no questions from Board members, it was moved by Mr. Watza and seconded by Ms. Rom that the Board enter an order accepting, adopting and incorporating the Administrative Law Judge's Proposal for Decision in the matter in its entirety, and revoking LaKisha Marie Johnson's occupational license.  A voice vote was taken.

Motion carried.

Next Chairman Kassab asked First Assistant Attorney General Don McGehee to advise the Board on what the Board's position was regarding the pending smoking ban legislation.

Mr. McGehee advised the Board that if the legislation passes, it would become state law and the casinos would have to comply with the law.  Mr. McGehee further advised that there would be no need to modify the MGCB's regulations.

The next order of business was the Board's consideration of the request from Greektown Casino, L.L.C. for a Limited Duration Waiver of Enforcement of the Sale Transaction Provisions of the November 2005 Order

Chairman Kassab noted for the record the presence of Executive Director Richard Kalm.  Chairman Kassab asked Mr. Kalm to give a brief overview of the case.

Mr. Kalm stated that at the April 8, 2008 Board meeting the Board denied a similar request from Greektown Casino.  Mr. Kalm also stated that Greektown Casino had until April 29, 2008 to secure an equity infusion before the Board could enforce any provisions of the November 2005 Board Order.  It was noted that the required certified audit showed that Greektown Holdings did not satisfy one of the financial benchmarks required as a condition on approval of the debt transaction.  Further, on April 30^th and May 2^nd, the Board notified Greektown Casino that it was in violation of the financial benchmarks required by the 2005 debt transaction order.  However, on April 30, 2008 Greektown Casino submitted a letter of intent for an impending sale, thereby initiating another request for Board approval of a limited duration waiver.

After questions from Board members were answered, Chairman Kassab noted for the record the presence of Mike Dubay, counsel for Greektown Casino.  Mr. Dubay advised the Board that representatives for Conway MacKenzie, financial consultants for Greektown Casino, Merrill Lynch and Entertainment Interest Group, L.L.C., the prospective buyer, were also present.

After comments from Mr. Dubay, Chairman Kassab announced that there were a few public comment requests pertaining to this matter and that he would like to interject the public comment portion of the meeting at this time.  Chairman Kassab acknowledged for the record the presence of Lori Hall, a tribal member, and Michael Alan Schwartz, counsel for Gray and Gray Productions.

After comments from Ms. Hall and Mr. Schwartz, Chairman Kassab acknowledged for the record the presence of Charles Jaskolski, a financial consultant contracted by the MGCB.

After comments from Mr. Jaskolski and questions from Board members were answered, Chairman Kassab acknowledged for the record the presence of Diana Knowles, a tribal member, Aaron Payment, Chairperson of the Sault Ste. Marie Tribe and Richard Zussman, counsel for Entertainment Interest Group.

After comments from Ms. Knowles, Mr. Payment and Mr. Zussman and Board members' questions were answered, Judge Friedman recused himself, due to the fact his daughter is a partner in Mr. Zussman's law firm. 

Therefore, it was moved by Chairman Kassab and seconded by Mr. Robinson that the Board adopt the findings and recommendations of the Board's staff and its Executive Director's Report and deny the request for Board approval of a limited duration waiver of enforcement of the 2005 debt transaction order, and that the Greektown entities be order to show cause at the Board's next meeting on June 10, 2008 why the Board should not invoke the sale transaction process described in the 2005 debt transaction order.  A roll call vote was taken.

                        Chairman Kassab:                        Aye
                        Judge Friedman:                           Recused
                        Donald Robinson:                         Aye
                        Barbara Rom:                              Aye
                        Michael Watza:                           Aye

Motion carried.

The Board next agreed to convene the June 10, 2008 meeting at 9:00 a.m.   Mr. Cahill suggested a motion be made to adopt the change.  Chairman Kassab acknowledged the suggestion and advised a motion would be made before adjournment.

Next Chairman Kassab requested a motion to go into closed session.

Therefore, it was moved by Ms. Rom and seconded by Mr. Watza, that the Board go into closed session immediately following the conclusion of the public meeting for the purpose of receiving legal advice and counsel from the Board's attorney regarding pending Board litigation, and receiving confidential notification regarding the names of the individuals placed on the Board's Dissociated Persons List since the Board's last public meeting as required by the Act.  A roll call vote was taken.

                                                Chairman Kassab:                        Aye
                                                Judge Friedman:                          Aye
                                                Mr. Robinson:                              Aye
                                                Ms. Rom:                                   Aye
                                                Mr. Watza:                                 Aye

There being no further public comments, it was moved by Mr. Watza and seconded by Ms. Rom that the time for the next scheduled meeting of June 10, 2008 be changed from 10:00 a.m. to 9:00 a.m.  A voice vote was taken.

Motion carried.

Chairman Kassab adjourned the meeting at 11:54 a.m.

________________________________________________
Laurie Lander, Board Secretary