STATE OF MICHIGAN
MICHIGAN GAMING CONTROL BOARD

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

Wednesday, October 8, 2008

10:00 a.m.

MINUTES

On Wednesday, October 8, 2008, the Michigan Gaming Control Board held a public meeting at the Board office in the Cadillac Place, 3062 W. Grand Boulevard, Suite L-700, Detroit, Michigan.

Present:                       In attendance were the following Board members: 
                                                         Mr. Damian Kassab, Chairman
                                                         Ms. Barbara Rom
                                                         Mr. Michael Watza

                                     Also attending were:  
 
                                                         Richard Kalm
                                                         Tom Barker
                                                         Fred Cleland
                                                         F/D/Lt. Vicki Johnson
                                                         Donald McGehee
                                                         Kara Kabia

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 with the exception of the Honorable Benjamin Friedman and Donald Robinson who recently resigned just prior to his term expiring.

Chairman Kassab stated that the first order of business was to approve the minutes from the August 12, 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 then moved by Ms. Rom and seconded by Mr. Watza that the minutes of the August 12, 2008 meeting be approved.  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 Officer Gary Hough and Financial Analyst Joanne Chamberlain resigned from the Board.  Lauren Falker and Terra Glefke had been hired as the Senior Executive Management Assistants for the Licensing and Enforcement Division, respectfully, Beverly Murray and Jeremy Parise had been hired as Financial Analysts, Ann Poirier and Florence Wells as Departmental Technicians, and Alan Byrd as a Regulation Officer in the Licensing Division, leaving 5 authorized positions to fill.  He further advised that the interview and selection process was ongoing for the remaining vacant positions.

In regards to the Board's budget, Mr. Kalm reported that for fiscal year 2008, from October 1, 2007 through September 30, 2008, the Board has incurred total expenditures of $17,382,834.00 leaving the unexpended balance of $2,880,166.00 in appropriated funding for FY 2008, which includes funds for anticipated expenditures by the Attorney General's Office and the Michigan State Police.  He went on to say that the final book closing for FY 2008 would be completed on November 21, 2008.  Once the final book closing is completed, Chairman Kassab requested that a comparison of surplus for FY 2006, FY 2007 and FY 2008 be completed.  Mr. Kalm confirmed that he would have this information available.

Mr. Kalm next reported that the casinos continue to operate 24/7 and for September 2008, the aggregate revenue in taxes for all three Detroit casinos was up by 4.58 percent, and the gaming taxes were $9.60 million compared to $12.3 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.

In regards to employee licensing, Mr. Kalm advised the Board that the required background investigations for 146 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 September 2008.  He stated that D/Sp. Larissa LaMay transferred from the Gaming Section and D/Spl. Brad Cox remains on active duty with the National Guard.  Efforts are underway to fill the vacancy created by the transfer.  During the month of September 2008 the MSP Gaming Section investigated 117 criminal complaints and made 42 arrests.

Next Mr. Kalm reported on the Vendor Complimentary Program.  He stated that the Licensing Division has completed the preliminary investigation on selected exempt businesses and this investigation will be discussed in more detail later in the meeting.

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 146 Level 1 and 2 occupational license applications.

It was moved by Ms. Rom and seconded by Mr. Watza to accept the recommendations of the Executive Director and the Licensing Division's staff for the 146 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 transfers of interest in Comsource, Inc. and Paltronics, Inc.  Chairman Kassab asked the other members of the Board if they had the opportunity to review the revision to the percentage of ownership amount in Comsource, Inc.  Ms. Rom and Mr. Watza indicated they had.

There being no questions from Board members, it was moved by Mr. Watza and seconded by Ms. Rom that the Board enter orders approving the proposed transfers of interest in Comsource, Inc. and Paltronics, Inc., 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 consideration of the Executive Director's Report and Licensing Division's staff recommendation regarding the eligibility and suitability of required key person/qualifier Darwin J. McCoy of Greektown Casino, L.L.C.

Ms. Rom noted that the Executive Director's Report and Licensing Division Staff's recommendation regarding the eligibility and suitability of required key person/qualifier Mr. McCoy did not include a recommendation to grant or deny the request.   Other members of the Board noted that the copy they received did include a recommendation to grant the request.  Mr. Kalm confirmed that the recommendation should find that Mr. McCoy be found eligible and suitable as a key person/qualifier.

There being no other questions from Board members, it was moved by Ms. Rom and seconded by Mr. Watza that the Board enter an order finding and concluding that Darwin J. McCoy be found eligible, suitable and qualified for licensure under the licensing standards and requirements of the Act and Rules of the Board.  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 Hammes Company Sports Development, Inc., Paltronics, Inc., and Terry's Enchanted Gardens, Inc.

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 Hammes Company Sports Development, Inc., Paltronics, Inc. and Terry's Enchanted Gardens, Inc. 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 the Board considered the Executive Director's Reports and Licensing Division's staff recommendations regarding the pending supplier license renewal requests of C. Louise Imports, Inc. and Resource Data Systems Corporation.

There being no questions from Board members, it was moved by Ms. Rom and seconded by Mr. Watza that the Board enter orders finding and concluding that C. Louise Imports, Inc. and Resource Data Systems Corporation, 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, grant the requests for renewal for a one-year period beginning October 8, 2008.  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 supplier license applications of 18^th Street Deli, Dixon Incorporated, Euclid Fish Company, Fantasee Lighting, Inc., and Telecom Technicians, Inc.

Again, there being no questions from Board members it was moved by Mr. Watza and seconded by Ms. Rom that the Board enter orders granting the requests of 18^th Street Deli, Dixon Incorporated, Euclid Fish Company, Fantasee Lighting, Inc., and Telecom Technicians, Inc. for withdrawal of their supplier license applications, based upon the Board's staff reports and recommendations.  A voice vote was taken.

Motion carried.

The Board next considered the Executive Director's Report and Licensing Division's Staff recommendation regarding the denial of the supplier application of Giesecke & Devrient America, Inc.

Chairman Kassab noted for the record the presence of Executive Director Richard Kalm.  Chairman Kassab asked Mr. Kalm if he or another staff person was to give an overview of the case.  Mr. Kalm deferred the recommendation regarding the denial to the Assistant Attorney General's office.  Assistant Attorney General Melinda Leonard identified herself for the record, and gave an overview of the case.  Ms. Leondard stated that the recommendation for denial was based on the owner failing to submit required financial documentation.

Upon conclusion of Ms. Leonard's summary, Mr. Robert Stocker of Dickinson Wright, PLLC, informed the Board that he was appearing on behalf of Giesecke & Devrient America, Inc. and requested permission to address the Board.

Chairman Kassab suggested that Board staff find out what types of documents other gaming jurisdictions or governments, which require Giesecke & Devrient America, Inc. to submit to public authorities that regulate them.  Mr. Stocker agreed to contact Giesecke & Devrient America, Inc. to explain what is needed, give them an opportunity to disclose and find out whether or not the financial information already exists in some public form that would be satisfactory to the Board.

Upon conclusion of Mr. Stocker's comments, additional comments by Ms. Leonard, and Board members' questions, it was moved by Chairman Kassab and seconded by Mr. Watza to table the recommendation regarding the denial of the supplier application of Giesecke & Devrient America, Inc. to the December 2008 Regular Public Meeting and that Mr. Stocker contact his client immediately, and have an answer to Board staff within 30 days as to how the client is going to proceed.  A voice vote was taken.

Motion carried.

Next the Board considered the Executive Director's Report and Licensing Division's Staff recommendation regarding the denial of the supplier license renewal application of Harvard Consulting Engineering and Construction Group, Inc.

Chairman Kassab asked if there were any representatives in attendance from the Harvard Consulting Engineering and Construction Group, Inc.  Chairman Kassab further noted that there were no representatives for the licensee present at the meeting.

There being no questions from Board members it was moved by Ms. Rom and seconded by Mr. Watza that the Board enter an order denying the supplier license renewal application of Harvard Consulting Engineering and Construction Group, Inc.  A voice vote was taken.

Motion carried.

The next order of business was a report on the Complimentary (Comp) Program.  Chairman Kassab noted for the record the presence of Executive Director Richard Kalm.  Chairman Kassab asked Mr. Kalm to give an overview of the case.

Mr. Kalm stated that at the August 12, 2008 Board meeting there were concerns expressed regarding the Comp Program, which allows vendor exemptions and waivers from the supplier licensing requirements of the Rules of the Board.  Mr. Kalm also stated that the Licensing Division completed a preliminary investigation on the selected exempt businesses in the Comp Program.  Mr. Kalm went on to say that of the twenty-eight exempt businesses, three neither complied with Board staff requests nor submitted a response.  These exempt businesses are Bahn Thai Café, Laikon Café and Sweet Georgia Brown.  Of the twenty-eight exempt businesses, one, Holiday Inn Express Hotel and Suites was granted an extension that was not met, and requested an additional extension, which was denied.  These issues will be addressed through administrative proceedings currently in process.

Mr. Kalm also reported that the preliminary analysis revealed that several exempt businesses have generated a material proportion of their revenue from Comp relationships with the casinos and operate under the Comp exemption.  Additionally, the analysis revealed these amounts in many cases are considerable.

Licensing Deputy Director Fred Cleland and Financial Analyst Sheila Marshall came forward and identified themselves for the record.  Mr. Cleland and Ms. Marshall answered Board members' questions.

Upon conclusion of Board staff comments and Board members' questions, the Board requested that a comparison of the comps be completed on the 28 exempt businesses for review and discussion at the November 2008 public meeting.

The next order of business was a report on the Greektown Casino, L.L.C. supplemental report concerning bankruptcy issues.

Chairman Kassab noted for the record the presence of Gaming Lab Auditor Erik Pedersen and Regulation Officer Celeste Clarkson.  Mr. Pedersen and Ms. Clarkson summarized the supplemental report.  Attorney General In Charge Donald McGehee and Assistant Attorney General Melinda Leonard also identified themselves for the record and explained the Executive Director's Orders (File No. GTC-2008-006 and GTC-2008-009) Granting Requests to Execute Amendments to Senior Secured Superpriority Debtor-In-Possession Credit Agreement and Waiver Agreement.

Upon conclusion of staff comments and Board members' questions, the next order of business was the Greektown Casino, L.L.C. monthly status report pursuant to the show cause board order of June 10, 2008.

Upon Chairman Kassab's request Mr. Charles Moore of Conway MacKenzie & Dunleavy, financial advisors for Greektown Casino, gave a status report pursuant to the Boards June 10, 2008 show cause order.

Mr. Moore reported on the items that have been completed since August 2008 related to bankruptcy administration, which included the extension of exclusivity to December 15, 2008, retaining an investment banker, Moelis & Company LLC, and construction update.

Chairman Kassab recessed the meeting at 12:05 p.m.

Chairman Kassab reconvened the meeting at 12:30 p.m.

Upon Chairman Kassab's request, Mr. Moore continued with the Greektown Casino status report, which included an update on the Debtor-In-Possession credit agreement, the development agreement with the City of Detroit and the EIG purchase agreement.

Chairman Kassab interrupted Mr. Moore's report to ask if there were representatives present at the meeting that would like to comment pertaining to the matter of Greektown Casino.

Mr. Robert Stocker with the law firm of Dickson Wright, PLLC identified himself for the record.  Mr. Stocker expressed the position of the bondholders relating to the current Chapter 11 bankruptcy proceedings, the Debtor-In-Possession financing currently in place and the proposed plan of action presented by the representatives of Greektown Casino, LLC.  After additional comments by Mr. Stocker and Board member's questions, Mr. Robert Stoll with the law firm of Mayer Brown identified himself for the record.  Mr. Stoll expressed the position of Merrill Lynch's agent and the lenders on both the Debtor-In-Possession and the pre-petition facility.  After additional comments by Mr. Stoll and Board member's questions, Mr. Cezar Froelich with the law firm of Shefsky & Froelich identified himself for the record.  Mr. Froelich expressed the position of the City of Detroit.

Upon Chairman Kassab's request Mr. Chuck Moore continued with his status report.  He stated that the composition of the board changed from 12 to five members, at least three of which would be professionals with knowledge and expertise in the area of gaming, restructuring and general business management and Greektown Casino Chief Executive Officer Craig Ghelfi will retire effective October 31, 2008, a new Chief Executive Officer will be identified by October 31, 2008.

Next Chairman Kassab asked Mr. Charles Jaskolski of Wolinski & Company to address the Board regarding a question related to whether or not Greektown Casino will meet the EBITDAR financial covenant without a reduction in the coming months.  Mr. Jaskolski reported that the way the section of the original Debtor-In-Possession credit agreement was worded there was a consolidated EBITDAR requirement on a monthly basis, which began in July 2008, and a cumulative EBITDAR requirement in September 2008.  Mr. Jaskolski stated that since Greektown Casino missed the requirement in August 2008, the conclusion is that Greektown Casino will likely miss the requirement in the next few months.

Upon conclusion of Mr. Moore's report and Mr. Jaskolski's comments, the Board considered to change the regular public meeting scheduled for Wednesday, November 5, 2008 at 10:00 a.m. to Monday, November 3, 2008 at 9:00 a.m.

After Board discussion, it was moved by Ms. Rom seconded by Mr. Watza to change the regular public meeting scheduled for Wednesday, November 5, 2008 at 10:00 a.m. to Monday, November 3, 2008 at 9:00 a.m.  A voice vote was taken.

Motion carried.

The Board also considered to change the regular public meeting scheduled on Tuesday, December 9, 2008 at 10:00 a.m. to Wednesday, December 17, 2008 at 9:00 a.m.

After Board discussion, it was moved by Ms. Rom seconded by Mr. Watza to change the regular public meeting scheduled for Tuesday, December 9, 2008 at 10:00 a.m. to Wednesday, December 17, 2008 at 9:00 a.m.  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 Ms. Rom and seconded by Mr. Watza, 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
                                              Ms. Rom:                                 Aye
                                              Mr. Watza:                               Aye

There being no other business to discuss, Chairman Kassab adjourned the meeting at 1:40 p.m.

____________________________  
Kara Kabia, Board Secretary