STATE OF MICHIGAN
MICHIGAN GAMING CONTROL BOARD

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

Tuesday, June 10, 2008
9:00 A.M.

MINUTES

On Tuesday, June 10, 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
                                                         Mr. Donald Robinson
                                                         Ms. Barbara Rom
                                                         Mr. Michael Watza

                                     Also attending were:

                                                         Richard Kalm
                                                         Tom Barker
                                                         John Page
                                                         Fred Cleland
                                                         Insp. Ellis Stafford
                                                         Jack Cahill
                                                         Laurie Lander

Business: 

Board Chairman Damian Kassab called the staff briefing of the public meeting to order at 9:07 a.m.  There being no preliminary business to discuss, Chairman Kassab noted for the record that Judge Friedman was absence due to a prior commitment.

Chairman Kassab stated that the first order of business was to approve the minutes from the May 13, 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 May 13, 2008 meeting be approved. 

Motion carried.

Next Chairman Kassab paid tribute to Nelson Westrin, MGCB's first Executive Director, who passed away on May 28, 2008.

Upon conclusion of his tribute to Mr. Westrin, Chairman Kassab stated the next item for consideration was the proposed Board Resolution 2008-02 acknowledging the contributions and accomplishments of Jack Cahill, Division Chief of the Alcohol and Gaming Division of the Department of Attorney General and commending him for distinguished and honorable service to the Board and to the people of the State of Michigan.

After comments and accolades from Board members, it was moved by Ms. Rom and seconded by Mr. Robinson that the Board adopt Board Resolution 2008-02.  A voice vote was taken.

Motion carried.

Next Mr. Kalm presented the Executive Director's report.  Mr. Kalm advised the Board that since the last Board meeting, Regulation Office Joseph Hanley had resigned from the Board and Eric Cullum, Alexander Ernst, Kenneth Ford and John Lessnau had been hired as Regulation Officers in the Licensing Division.  He further advised that the interview and selection process was ongoing for the remaining 11 vacant positions.

In regards to the Board's budget, Mr. Kalm reported that for fiscal year 2008, from October 1, 2007 through May 31, 2008, the Board has incurred total expenditures of $10,916,518 leaving the unexpended balance of $9,346,482 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 May 2008, the aggregate revenue in taxes for all three Detroit casinos was up by 16.53 percent and the gaming taxes were 11.09 million compared to 12.78 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 16.53 percent.

In regards to employee licensing, Mr. Kalm advised the Board that the required background investigations for 69 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 May 2008.  He stated that there had been no staffing changes and that during the month of May 2008 the MSP Gaming Section investigated 45 criminal complaints and made 25 arrests.

Upon conclusion of Mr. Kalm's report, the Board considered for approval the recommendations of the Executive Director and the Licensing Division's staff regarding the 69 Level 1 and 2 occupational license applications. 

It was moved by Mr. Robinson and seconded by Ms. Rom to accept the recommendations of the Executive Director and the Licensing Division's staff for the 69 Level 1 and 2 occupational license applications.  A voice vote was taken.

Motion carried.

Next the Board considered the Executive Director's Report and Licensing Division's staff recommendation regarding the pending transfer of interest in Tre' Builders, L.L.C.

There being no questions from Board members, it was moved by Ms. Rom and seconded by Mr. Robinson that the Board enter an order approving the proposed transfer of interest in Tre' Builders, L.L.C. from David Agnello to Steve Hamlin, 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 Executive Director's Reports and Licensing Division's staff recommendations regarding the requests to withdraw the supplier license applications of Networks Group, Inc. and WCI Construction, Inc.

Again, there being no questions from Board members is was moved by Mr. Watza and seconded by Ms. Rom that the Board enter orders granting the requests of Networks Group, Inc. and WCI Construction, Inc. for withdrawal of their supplier license applications, and grant Networks Group, Inc.'s request for a waiver of the one year rule for reapplication, based upon the Board's reports and recommendations.  A roll call vote was taken.

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

Motion carried.

The next agenda item was consideration of the Executive Director's Reports and Licensing Division's staff recommendations regarding the pending supplier license applications of Networks Group, Inc. and Wiltec Technologies, Inc.

Ms. Rom noted in the staffs' recommendation the failure of Steve Fuller, qualifier of Networks Group, Inc., to disclose an arrest.  Ms. Rom wondered if the Board had the discretion to overlook the nondisclosure.

Mr. Cahill requested that the Board table this agenda item until later in the meeting, so he could review the case and recommendation.

Next the Board considered the Executive Director's Report and Licensing Division's staff recommendation regarding the supplier license renewal request of Premier Services Group, Inc.

There being no questions from Board members, it was moved by Mr. Robinson and seconded by Mr. Watza that the Board enter an order finding and concluding that Premier Services Group, Inc., and its qualifiers are eligible and suitable for licensure under the licensing standards and requirements of the Act and Rules of the Board.  And accordingly, granting this request for renewal of its annual supplier license for a new one-year period beginning June 10, 2008.  A voice vote was taken.

Motion carried.

The Board next considered the Executive Director's Report and the Licensing Division's staff recommendation regarding the eligibility and suitability of required key person/qualifier Lorenzo D. Creighton of MGM Grand Detroit Casino.

There again being no questions from Board members, it was moved by Mr. Watza and seconded by Mr. Robinson that the Board enter an order finding and concluding Lorenzo D. Creighton is eligible and suitable as a required qualifier 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.

Next Chairman Kassab asked Mr. Cahill if he had reviewed the report on Networks Group, Inc.

Mr. Cahill advised the Board that Mr. Fuller voluntarily disclosed the misdemeanor during the routine interview and it is his opinion that the Board does have the discretion to overlook the nondisclosure in the application.

Therefore, it was moved by Ms. Rom and seconded by Mr. Watza that the Board enter orders finding and concluding that Networks Group, Inc. and Wiltec Technologies, Inc., 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.

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

Therefore, it was moved by Mr. Watza and seconded by Ms. Rom, that the Board recess and go into closed session 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
                                                      Mr. Robinson:                     Aye
                                                      Ms. Rom:                           Aye
                                                      Mr. Watza:                         Aye

Chairman Kassab recessed the meeting at 9:40 a.m.

Chairman Kassab reconvened the meeting at 10:11 a.m.

Chairman Kassab requested that Mr. Kalm give an overview of Greektown's request for waiver of the enforcement of its 2005 Board Order.

Upon conclusion of Mr. Kalm's overview, Mr. Peter Weipert of Grant Thornton gave a brief summary of the history of the covenants and benchmarks that defined the 2005 Board Order.

After questions from Board members were answered, Chairman Kassab acknowledged for the record the presence of Chuck Moore of Conway MacKenzie & Dunleavy, financial advisors for Greektown Casino. 

Mr. Moore advised the Board that because of the immediate need for cash for construction costs, additional financing was necessary.   He further stated that due to the inability to secure sufficient financing, Greektown Casino's only option was to file bankruptcy.  Mr. Moore further justified the bankruptcy filing by stating that Merrill Lynch was reluctant to provide funding due to the Board's denial of the limited duration waiver.  Mr. Moore also stated that Merrill Lynch would, however, provide financing in the context with bankruptcy.  Bankruptcy would initiate an automatic stay, thereby releasing Greektown from paying interest on a coupon payment on senior notes and the installment payment to Mr. Gatzaros.  It was Mr. Moore's position that the stay would also apply to the 2005 Board Order that would allow the Board to enforce the sale of the casino.

Mr. Moore further explained the advantages of bankruptcy, the financing agreements, payment schedules, and other requirements of the lender and bankruptcy court.

Upon conclusion of Mr. Moore's presentation, there were comments from Mr. Aaron Payment, Chairperson of the Sault Ste. Marie Tribe of Chippewa Indians, Diana Knowles, a tribal member and Mr. Ted Gatzaros.

After questions from Board members were answered and comments from Board members were presented, it was moved by Ms. Rom and seconded by Mr. Watza that the Board enter an order approving the following:  To take under advisement the decision whether to invoke the sale transaction process by notifying Greektown Casino that the sale transaction process will take effect as described in the 2005 debt transaction order.  Nothing in this order waives or otherwise effects any remedies available to the Board for violation of Board Orders concerning the 2005 debt transaction order originally approved in file number GTC-2005-006.

Also requiring Greektown Casino and Greektown Holdings to report to the Board at each of its regular public meetings beginning in August 2008, and continuing until otherwise ordered the status of the following:  A) The Bankruptcy Court proceedings, B) Their plans and the plans of other entities and their ownership structure to satisfy outstanding debts to creditors, C) Operational cost reductions and budgetary savings for the operating company, D) The financial status revenues and projections of the operating company, E)  Their plans for reorganization, F)  Any transfers of interest being contemplated, G)  The construction of the hotel and permanent casino, H)  Casino management Board operations, I)  Compliance with the development agreement with the City of Detroit.  A roll call vote was taken.

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

There being no other business to discuss, Chairman Kassab adjourned the meeting at 12:13 p.m.

________________________________________________
Laurie Lander, Board Secretary