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COMMONWEALTH OF PENNSYLVANIA GAMING CONTROL BOARD IN RE: HOLDINGS ACQUISITION CO., LP (RIVERS CASINO) * * * * * * * * PUBLIC HEARING * * * * * * * * BEFORE: Gregory C. Fajt, Chairman Raymond S. Angeli, Jeffrey W. Coy, James B. Ginty, Kenneth T. McCabe, Gary A. Sojka, Kenneth I. Trujillo; Members HEARING: January 26, 2011, 10:30 a.m. LOCATION: Keystone Building 400 North & Commonwealth Hearing Room #1 Harrisburg, PA WITNESSES: Corey Plummer Reporter: Cynthia Piro Simpson Any reproduction of this transcript is prohibited without authorization by the certifying agency. Sargent's Court Reporting Service, Inc. (814) 536-8908 2 1 A P P E A R A N C E S 2 3 CYRUS PITRE, ESQUIRE 4 BETH MANIFESTO, ESQUIRE 5 Office of Enforcement Counsel 6 PA Gaming Control Board 7 P.O. Box 69060 8 Harrisburg, PA 9 17106-9060 Counsel for Pennsylvania Gaming Control Board 10 11 MICHAEL D. SKLAR, ESQUIRE 12 Levine Staller 13 3030 Atlantic Avenue 14 Atlantic City, NJ 08401-6380 15 Counsel for Holdings Acquisition Co., LP 16 (Rivers Casino) 17 18 19 20 21 22 23 24 25 Sargent's Court Reporting Service, Inc. (814) 536-8908 3 1 I N D E X 2 3 OPENING REMARKS 4 By Chairman 4 5 PRESENTATION 6 By Attorney Sklar 4 - 5 7 By Mr. Plummer 5 - 9 8 QUESTIONS 9 By Attorney Manifesto 9 - 10 10 By Board 11 - 22 11 By Mr. McCord 22 - 26 12 DISCUSSION AMONG PARTIES 26 - 34 13 STATEMENT 14 By Mr. Coy 34 - 37 15 CONCLUDING REMARKS 16 By Chairman 17 18 19 20 21 22 23 24 25 Sargent's Court Reporting Service, Inc. (814) 536-8908 37 4 1 P R O C E E D I N G S 2 -----------------------------------------------------3 CHAIRMAN: 4 We'll now call the matter of Holding 5 Acquisition's Petition for Approval of OP5 Gaming 6 Floor Plan. And again, I would advise any witnesses 7 that you are still under oath. And with that, 8 Holdings Acquisition, you may begin the second 9 hearing. 10 ATTORNEY SKLAR: 11 Thank you. 12 behalf of Rivers Casino. Michael Sklar, S-K-L-A-R, on This petition is for a 13 modification of the gaming floor. Currently, the 14 Rivers has 2,954 slot machines and 88 table games. 15 The request that's before you today is at 19 table 16 games, which would bring the total up to 107 tables. 17 There is no reduction in slot machines. And this --- 18 the addition of the 19 tables will create 100 new 19 jobs. And with that --- with me, Corey Plummer, who's 20 the Vice President of Gaming for the Rivers Casino, 21 and he'll walk you through the modification. 22 -----------------------------------------------------23 COREY PLUMMER, HAVING BEEN PREVIOUSLY SWORN, TESTIFIED 24 AS FOLLOWS: 25 ------------------------------------------------------ Sargent's Court Reporting Service, Inc. (814) 536-8908 5 1 MR. PLUMMER: 2 Corey Plummer, P-L-U-M-M-E-R. 3 Thank you. C-O-R-E-Y. Good morning, everyone. 4 CHAIRMAN: 5 Good morning. 6 MR. PLUMMER: 7 As we discussed in Michael's part of the 8 presentation, what we are seeking to do is to add to 9 our table game unit count. 10 slot machines. There's no reduction in There's some reconfiguration of the 11 slot floor, obviously, to do that. We started a new 12 dealer school on January 19th, taking in approximately 13 160 students. Our expectation is to add approximately 14 a hundred dealers to our roll in full-time and part15 time positions and a handful of supervisory positions 16 to add to this. 17 Those increases are two-fold. A, it continues to add to the job 18 opportunities. I think, as we all know, these jobs 19 that we provide at the Rivers are very good-paying 20 jobs of local residents, and internally it allows for, 21 you know, half a dozen promotion opportunities for 22 those who went through our original dealer school. On 23 this map here, if you look in the center of the 24 casino, to orient you on this map, north, south, east, 25 west, in the center location here, where we have our Sargent's Court Reporting Service, Inc. (814) 536-8908 6 1 tables currently, the proposal is to add this area 2 here, which is to the east. 3 there. I have slot machines So, we need to reorient the floor to add 4 essentially a new pit. And that pit, contiguous, 5 adjacent to our main gaming area in here, would allow 6 us to become a little more efficient during our 7 weekday scheduling. 8 These tables here, our craps tables, 9 would allow us to manage that more effectively through 10 our proposal of what we'd like to do on supervision 11 makes better sense for us there. 12 tables are here. There's a craps table down here, 13 outside the Wheelhouse. 14 product for us. So, this makes for a better It makes it more efficient for us to 15 operate on a daily basis. 16 room. Currently, those To the west is the poker We opened with 24 tables. This would give us 17 the opportunity to expand to 30 and meet the demand 18 for poker there. Essentially that construction space 19 is right in here, adding the six additional tables to 20 take us to 30. 21 And the movement of slot machines from 22 this area, we've created some new spaces down here and 23 back in this non-smoking area to blend some of the 24 product that was here, which is currently a 25 non-smoking space, into the floor and keep some of Sargent's Court Reporting Service, Inc. (814) 536-8908 7 1 those more popular products still in non-smoking for 2 our customers. 3 at. So, really, that's kind of where we're And it's not a complicated project for us from a 4 construction standpoint. We've asked for 45 days to 5 complete the entire project, but I don't see us taking 6 more than 30 days in order to have the project 7 completed with your approval. 8 ATTORNEY SKLAR: 9 Corey, can you just explain for the Board 10 some of the games --- the table games that you're 11 going to add are the iTable version. Can you explain 12 just what an iTable is and what the rationale is for 13 including them in the mix? 14 MR. PLUMMER: 15 Sure. What we'd like to do is continue 16 to increase the availability of technology to our 17 operation. I think it's something that we should 18 strive to do in terms of gaming in not only 19 Pennsylvania but certainly within the North American 20 gaming industry. The iTable represents that 21 opportunity on a very large scale because it allows 22 for a hybrid experience where you have a live dealer, 23 you have live cards, but the actual playing space and 24 the exchange of table games chips is electronic. 25 you have the opportunity to create a different Sargent's Court Reporting Service, Inc. (814) 536-8908 So, 8 1 environment for players, where they can interact with 2 a live person, still get the face-to-face customer 3 experience. You still have the randomness, so to 4 speak, of live cards, and it's very transparent and 5 visible, but the actual game play and exchange of 6 monies from us to them is pretty straightforward and 7 easy. It eliminates a lot of errors for them and 8 potentially for us. So, I think that's a tremendous 9 opportunity. 10 We're also looking to add Rapid Roulette, 11 which is a similar hybrid product, live dealer, live 12 roulette wheel, but it encompasses individual betting 13 terminals that are electronic that allows people to do 14 different things from a play perspective, for those 15 that like exotic betting or just like the comfort of 16 having their own space instead of battling other 17 people over live tables. Again, it's an opportunity 18 to streamline the play process of placing wagers, but 19 also allows the streamlining and efficiency of cash 20 transactions between us and the customer. So, these 21 are two of the main things that we're proposing to do. 22 And again, I think there are many opportunities from a 23 technological standpoint on table games operations 24 that we ought to be trying to bring into the market. 25 And if Pennsylvania and Rivers specifically can lead Sargent's Court Reporting Service, Inc. (814) 536-8908 9 1 in that area, that's what we're attempting to do. 2 ATTORNEY SKLAR: 3 And Corey, these iTables, they're 4 approved by the Gaming Lab? 5 MR. PLUMMER: 6 Yes. 7 ATTORNEY SKLAR: 8 Thank you. 9 CHAIRMAN: 10 Thank you. That's all we have. Office of Enforcement 11 Counsel, do you have questions for the Holdings 12 Acquisition folks? 13 ATTORNEY MANIFESTO: 14 Good morning. Beth Manifesto from the 15 Office of Enforcement Counsel. 16 CHAIRMAN: 17 Beth, I'm sorry, could you please repeat 18 your name for the stenographer? 19 ATTORNEY MANIFESTO: 20 Yes. 21 in Frank, E-S-T-O. It's Beth Manifesto, M-A-N-I, F as And I do have a request, if I may 22 put it on the record, to amend one of the paragraphs 23 in the petition that was filed. This would be on 24 page --- it is in OEC's answer. It's on page three. 25 It's paragraph five, and it will be the first Sargent's Court Reporting Service, Inc. (814) 536-8908 10 1 sentence. The first sentence I'm requesting to amend 2 to read, the Rivers shall move any ATM offering credit 3 card advances from the gaming floor area to a 4 non-gaming classified area. And I did speak with Mr. 5 Sklar about that, and there is no objection. 6 I do have one question and that is 7 regarding, in the presentation as well as in the 8 petition on page two filed by Holdings Acquisition it 9 states the addition of 19 table games. And when you 10 elaborated on that in --- on page two of your 11 petition, it states that that would be 12 Blackjack 12 tables, one Rapid Roulette and four live poker tables 13 would be converted from tournament-only poker tables. 14 But that only comes to 17, and I wanted to know if you 15 could just confirm what the other two tables would be? 16 MR. PLUMMER: 17 The other tables are live roulette 18 tables. 19 ATTORNEY MANIFESTO: 20 Okay. I thought that that was the case, 21 but I wanted to make sure. 22 CHAIRMAN: 23 Great. That is all we have. Thank you. Do you have a 24 separate presentation? 25 ATTORNEY MANIFESTO: Sargent's Court Reporting Service, Inc. (814) 536-8908 11 1 We do not. 2 ATTORNEY PITRE: 3 No. We fully support them adding jobs 4 and tables. 5 CHAIRMAN: 6 Thank you. Questions from the Board? 7 Commissioner McCabe? 8 MR. MCCABE: 9 Yes. Corey, you brought up about how 10 this will eliminate errors on people's part, but also 11 this eliminates possible cheating by the players; is 12 that correct? 13 MR. PLUMMER: 14 Yes, it does. It eliminates some of the 15 various ways of chip manipulation and bet swapping and 16 even in the case of iTables because of the proximity 17 to the cards, any opportunity that customers would 18 have to handle the cards. 19 MR. MCCABE: 20 Now, this also --- these iTables will 21 also help with the accounting, where they're going to 22 be hooked up to the centralized computer system? 23 MR. PLUMMER: 24 Yes, that's correct. 25 MR. MCCABE: Sargent's Court Reporting Service, Inc. (814) 536-8908 12 1 So, then revenue --- the State would know 2 exactly what is being bet and what revenues are 3 instantly if we wanted to? 4 MR. PLUMMER: 5 That's correct. Yeah, that aspect of it 6 is a benefit for a regulatory and revenue 7 accountability standpoint, but also for us in terms of 8 monitoring something that's very difficult to monitor 9 in table games, which is the actual amount of wagers 10 being placed. These give us the opportunity to see by 11 individual what the actual wagers are being placed on 12 a daily basis up to the minute through the reporting 13 of these products. 14 MR. MCCABE: 15 Thank you. 16 CHAIRMAN: 17 Commissioner Sojka? 18 MR. SOJKA: 19 First of all, just to continue with that, 20 we've talked in the past about this connectivity 21 between the eTables and G-Tech and the Department of 22 Revenue. You're saying in your answer to Commissioner 23 McCabe that it's not a potential, but that these 24 tables, when they come online, will be connected to 25 G-Tech and Revenue will know the volume of play on the Sargent's Court Reporting Service, Inc. (814) 536-8908 13 1 tables? 2 MR. PLUMMER: 3 No. These tables will not be connected 4 to G-Tech, but they are connected to --5 MR. SOJKA: 6 To your system. 7 MR. PLUMMER: 8 --- our system. 9 MR. SOJKA: 10 Okay. 11 I think. That's an important clarification, Also then it's my constant question to you, 12 do you, down the line, see this as a possibility to 13 connect those tables to the Department of Revenue in 14 the way that slot machines are so that the State is 15 absolutely certain of the amount of tax due before we 16 go to a count room, before we do anything? 17 MR. PLUMMER: 18 There's always that opportunity down the 19 road. If the vendors either are required or so see 20 fit to spin that R&D expense to do that, because in 21 its electronic platform, the opportunity does exist 22 down the road. 23 MR. SOJKA: 24 Okay. And at least we're not losing any 25 ground doing this. Sargent's Court Reporting Service, Inc. (814) 536-8908 14 1 MR. PLUMMER: 2 We're not losing any ground, no. 3 MR. SOJKA: 4 Can I change the direction a little bit? 5 You mentioned the dealer school, and we have seen 6 every, I think, imaginable configuration of dealer 7 schools in this Commonwealth. 8 schools add programs. 9 people tuition. We've seen two-year We've seen licensees charge And we've seen licensees give away 10 the instruction. What are you going to do for the 160 11 students you have? 12 MR. PLUMMER: 13 Our instruction is free to the students. 14 MR. SOJKA: 15 It is free. So, it's free to, in this 16 case, 160 persons who have prequalified? 17 MR. PLUMMER: 18 Yes. 19 MR. SOJKA: 20 But you're only going to hire a max of 21 100? 22 MR. PLUMMER: 23 That's correct. So, in a sense, you're 24 providing, if you will, a public service of educating 25 or providing a skill to people who then may export Sargent's Court Reporting Service, Inc. (814) 536-8908 15 1 that. They may take it to another licensee and try to 2 get a job. 3 MR. PLUMMER: 4 Now, what actually happens, a lot of the 5 students, for a variety of reasons, actually don't 6 graduate. So, some students get into the class and 7 they realize dealing is not for them, once they start 8 going through the motions, for a variety of reasons. 9 Sometimes it's the dexterity of the procedure. 10 Sometimes it's standing on their feet. Sometimes it's 11 the ability to maintain the mathematics mentally. 12 Some people don't --- some people have a hard time 13 developing the mental dexterity to be able to deal, so 14 they opt out of the class. 15 Other students, through the audition 16 testing process, are unable to pass an examination of 17 their abilities at that time. So, it's really an 18 opportunity, a free opportunity, for people to come in 19 and give it a go. Some people take it more seriously 20 than others in terms of home practice and availing 21 themselves of the instruction of the people that we 22 have on hand teaching the school. 23 that's pretty normal. But ultimately, People go into a school. 24 opt out or they're selected out because of 25 performance. So, we expect that number to be Sargent's Court Reporting Service, Inc. (814) 536-8908 They 16 1 somewhere around 80 or 90 students. And there's a 2 little bit of carryover from a previous school to get 3 us to the 100 number. 4 MR. SOJKA: 5 So, that 160 that you have at the moment 6 that got through your audition you think will produce 7 close to the number you need? 8 MR. PLUMMER: 9 Yes. 10 MR. SOJKA: 11 Do you have a minimum age for taking that 12 audition and taking a class? 13 MR. PLUMMER: 14 Well, the minimum age is 18. The first 15 school, I believe we had three that were under 21, and 16 I believe we have one in this school. 17 MR. SOJKA: 18 Okay. Because we're aware that there are 19 some dealers in the Commonwealth that are under 21. 20 wondered if --- so you're saying that's still a small 21 number, that the majority of people ---? 22 MR. PLUMMER: 23 Very --- yeah, very small. 24 MR. SOJKA: 25 The 100 jobs, headcount or FTE? Sargent's Court Reporting Service, Inc. (814) 536-8908 I 17 1 MR. PLUMMER: 2 Headcount. 3 MR. SOJKA: 4 What would that add up to in terms of 5 full-time equivalents? 6 MR. PLUMMER: 7 Somewhere between 60 and 65. 8 MR. SOJKA: 9 Okay. So, they're working a little over 10 half time, each of them? 11 MR. PLUMMER: 12 Yes. This school will provide 13 opportunities going forward for those that graduate 14 and are hired to be part time. They obviously will 15 have more opportunities down the road to become full 16 time as people either move on to other positions or 17 out of the industry or just out of the Rivers. 18 it's backfill opportunities for them. So, But also if we 19 get into April, May, June and it's even busier than we 20 expect it to be now, and we do expect it to --- we do 21 expect to see demand increase further at that time, 22 then it's an opportunity for them to pick up extra 23 hours as well. 24 MR. SOJKA: 25 What about benefits packages with Sargent's Court Reporting Service, Inc. (814) 536-8908 18 1 part-time folks? Do they carry a benefits package or 2 do they --- do you have some cut-of before they 3 qualify for your benefits package? 4 MR. PLUMMER: 5 There's a minimum threshold of hours to 6 qualify for benefits. Most of the part-time employees 7 won't qualify for benefits in this go. But again, 8 there will be opportunities for these people to move 9 into full-time positions or either meet that 10 threshold. 11 MR. SOJKA: 12 So, we're looking at an increase in 13 essentially part-time jobs but not necessary increase 14 in benefits packages as a result of this addition? 15 MR. PLUMMER: 16 No. There will be a reasonable amount of 17 people, and I would say close to half of the graduates 18 that will be full time. 19 MR. SOJKA: 20 Okay. And then they would, of course, 21 qualify? 22 MR. PLUMMER: 23 Yes, they would qualify. 24 MR. SOJKA: 25 And then finally, we've seen figures from Sargent's Court Reporting Service, Inc. (814) 536-8908 19 1 virtually all of our operators that are beginning to 2 answer a question that we asked early on and that is, 3 will the appearance of tables reduce slots revenue? 4 And we've seen the favorable answer, and that is that 5 as table play goes up, slots play goes up. 6 least --- I know you can't know this. Do you at Do you 7 anticipate that that will continue; that you'll 8 actually see an uptick in slots play as a result of 9 this? 10 MR. PLUMMER: 11 I think as the business grows, we will 12 continue to see that. I don't --- in our case, our 13 numbers are pretty big in terms of year-over-year 14 growth, so I don't think you'll see 30-percent growth 15 every month in 2011, but I do expect to see continuous 16 growth on both sides. 17 MR. SOJKA: 18 But you can't necessarily attribute that 19 to the addition of tables. You're just saying there's 20 going to be growth? 21 MR. PLUMMER: 22 I think there will be a combination of 23 factors that lead to growth. Some of those will be 24 through our marketing and product management efforts. 25 Some of those will be through the addition of table Sargent's Court Reporting Service, Inc. (814) 536-8908 20 1 games and from the marketing that we're able to do on 2 that side. Every time we increase our supply of table 3 game positions, it encourages people to come to the 4 property. So, some of those things where you've seen 5 companion play or just interest in coming out and 6 playing tables, whether it's poker or Blackjack, quite 7 often that leads into slot play. 8 MR. SOJKA: 9 So, you can ease the anxiety of those who 10 felt that the addition of tables would erode slots 11 revenue? 12 MR. PLUMMER: 13 Yes. 14 MR. SOJKA: 15 That's it for me. 16 CHAIRMAN: 17 Thank you. 18 MR. TRUJILLO: 19 Well, just following up on that, I Commissioner Trujillo? 20 understand OP5 doesn't contemplate the reduction of 21 any slot machines. Can you confirm that you don't 22 have any --- that you do not anticipate coming back to 23 us in the next few months and asking for any reduction 24 of slot machines? 25 MR. PLUMMER: Sargent's Court Reporting Service, Inc. (814) 536-8908 21 1 I will not reduce slot machines. 2 MR. TRUJILLO: 3 I'm sorry? 4 MR. PLUMMER: 5 I will not reduce slot machines. 6 MR. TRUJILLO: 7 Thank you. 8 CHAIRMAN: 9 Commissioner Ginty? 10 MR. GINTY: 11 One of the most definitive statements 12 we've heard. It's good news. I'm interested, what is 13 the breakdown between your iTables and your 14 non-iTables? 15 MR. PLUMMER: 16 We're going to start with six iTables, 17 and there's one Rapid Roulette station that has eight 18 seats. 19 MR. GINTY: 20 So, of all the tables you have now, only 21 six will be --22 MR. PLUMMER: 23 Yes. 24 MR. GINTY: 25 --- iTables? Is this a --- is there a Sargent's Court Reporting Service, Inc. (814) 536-8908 22 1 noticeable trend in the industry towards iTables or is 2 it too early to tell? 3 MR. PLUMMER: 4 This product in particular, I would say 5 no. The technology is fairly new, being just a couple 6 years old and different versions of it, but there are 7 a few casinos around the country that have some 8 version of this product, either in California or, you 9 know, in Nevada. 10 have it. So, there are a few properties that It's something that's continuing to be 11 advanced by the manufacturer. And there are similar 12 products in the market being advanced by other vendors 13 and, you know, at the end of the day it's going to be 14 up to operators and regulators to decide which of them 15 actually function properly and then customers play 16 them or they don't. 17 MR. GINTY: 18 That's all I have. 19 ATTORNEY SKLAR: 20 Other questions? 21 MR. MCCORD: 22 Just following up on the good questions Treasurer? 23 there, have you done any sort of market research to 24 test the popularity of iGames and iTables? 25 new to me. This is I'm curious. Sargent's Court Reporting Service, Inc. (814) 536-8908 23 1 MR. PLUMMER: 2 No, no formal research, per se, but when 3 you speak to the manufacturer, you know where the 4 product is, and again, you're capable of seeing the 5 numbers from these tables. Earlier --- I guess late 6 last year an opportunity to go to an east coast casino 7 where they have iTables, and as we often do in the 8 industry, share information, I was able to see the 9 table in operation and see their numbers to confirm 10 what the vendor was saying about their product. And 11 that helped form some of my confidence about going 12 forward with it. It's something we've looked at since 13 the opening of table games. 14 MR. MCCORD: 15 And then a basic revenue question about 16 --- assuming these modifications are improved, do you 17 have an estimate of, you know, additional gaming 18 revenues, both slots and table games? 19 MR. PLUMMER: 20 I do not have a number for you on the 21 slots. I do think our slot numbers will grow for a 22 variety of reasons. Some of those I mentioned before, 23 marketing and product and things. The addition of 24 these tables will certainly increase our volume of 25 drop. And revenue is always a moving --- or target on Sargent's Court Reporting Service, Inc. (814) 536-8908 24 1 table games. Sometimes we win. Sometimes they do. 2 But in terms of volume, I would expect the volume to 3 increase somewhere between five and ten percent. But 4 it's entirely possible that it could be higher once we 5 get into summer months. 6 MR. MCCORD: 7 And then just following up on the good 8 questions about jobs, what are the pre-qualifications 9 that you look for in those --- is it 160 people who 10 would be going to the dealer's school? What do they 11 need to have to qualify for that? 12 MR. PLUMMER: 13 Well, first and foremost, they have to 14 have the customer service skills we're looking for, a 15 personality that we're looking for. You have to like 16 people to be a dealer, first off; otherwise it's a 17 miserable experience. You have to have the 18 mathematics ability, which again is sort of a basic 19 level, but you have to have the mathematical ability 20 to be able to count and to properly exchange currency. 21 So, those things we test for. We do job fairs, and so 22 we have a series of interview points where we're able 23 to gauge their interaction with other people and 24 ourselves. They take a mathematics exam, and then 25 there's further interviews about what they would like Sargent's Court Reporting Service, Inc. (814) 536-8908 25 1 to do and sort of what we think they could add to the 2 dealer school and ultimately add to the business upon 3 graduation. So, we look at all those things. 4 You know, some people you can assess this 5 as a future supervisory candidate. 6 that come from all walks of life. We have candidates We have some 7 attorneys, fire and policemen, nurses, bankers, 8 looking for a change in career direction or just an 9 opportunity to do something different on a part-time 10 basis. So, you take all those things into 11 consideration. When you go into a job fair, it's not 12 just looking for the basic entry-level position, but 13 sometimes you're in a position to look at and identify 14 people that going down the road, building the business 15 and the culture, people that you want to be a part of 16 that. 17 MR. MCCORD: 18 In terms of that basic entry level, 19 though, it's just sort of a high school degree, GED, 20 plus the people skills; is that right? 21 MR. PLUMMER: 22 That would probably get most people 23 through the mathematics exam. 24 MR. MCCORD: 25 Okay. And then in terms of sort of the Sargent's Court Reporting Service, Inc. (814) 536-8908 26 1 value chain for a career, you have people who kind of 2 enter there. If they were to leave the gaming 3 industry, do you have any sort of observations about 4 other careers people seem to get into more easily 5 after their job experience working for you? 6 MR. PLUMMER: 7 In my experience, people that leave the 8 gaming industry early on tend to go back to the 9 industry that they came from. 10 come up in those areas. Opportunities sometimes But most people that stay in 11 the gaming industry, it all depends on what you want 12 to do. The further you go along --- just like in 13 every industry, the opportunities at the supervisory 14 or management level decrease under the pool of people 15 as you go along and people's motivations for seeking 16 those positions also change. But as a front-line 17 position, a dealer in our casino is doing quite well. 18 The salary that we pay along with the tokes that we've 19 been generating the first six months would put them in 20 the mid 40s range, so it's a pretty decent paying 21 opportunity that people may want to stay in for a long 22 time. 23 MR. MCCORD: 24 Thank you. 25 CHAIRMAN: Sargent's Court Reporting Service, Inc. (814) 536-8908 27 1 A couple questions. 2 the gaming floor plan? Can we go back to My concern is --- or my 3 questioning is on the square footage of the gaming 4 floor. I think, and I may have confused it with 5 another floor plan we were looking at, that --- did I 6 hear right that you're reducing the size of the gaming 7 floor in square footage? 8 MR. PLUMMER: 9 Yes. It's a really minimal amount of 10 space here in the front. 11 CHAIRMAN: 12 Okay. 13 MR. PLUMMER: 14 This is currently gaming --- gaming space 15 at the porte-cochere. 16 CHAIRMAN: 17 At the porte-cochere? 18 MR. PLUMMER: 19 Yeah. It's this space in here. 20 Actually, it's white on the map. 21 non-gaming space. That would become There's no gaming in that space. 22 It's a front entrance. 23 CHAIRMAN: 24 I see. Okay. So, my concern really is 25 we're adding 19 tables and not --- we're not Sargent's Court Reporting Service, Inc. (814) 536-8908 28 1 increasing the gaming floor space. And I'll take you 2 at your comment that there's no gaming in that space 3 there, so we have, in essence, 19 more table games in 4 an area where they weren't before. So, we're 5 condensing the gaming --- or the gaming facilities, 6 either slot machines or tables. So, my question is 7 the Fire Marshall --- are there any issues with the 8 Fire Marshall signing off on this plan, and do you 9 have to get approval for that? 10 Again, one of the great things about the 11 Rivers is, you know, it's pretty easy to get around 12 there. There are wide aisles. The room between the 13 machines are pretty spacious, and that helps for 14 people flow. My concern is we're now putting, again, 15 19 machines --- or 19 tables in with no additional 16 gaming floor space, which obviously is going to 17 condense the ability for people to move around the 18 floor. 19 MR. PLUMMER: 20 To address the Fire Marshall issue, there 21 should be no issue in terms of that. We're operating 22 essentially in the same space that we've operated 23 gaming in before since the reduction is in a non --24 it's in a space that's never been used for gaming. 25 So, it's still the same footprint. But when you get Sargent's Court Reporting Service, Inc. (814) 536-8908 29 1 out to the main floor, where we're adding tables here, 2 the slot machines that are coming out of here are 3 being added to spaces essentially that I've set aside 4 for this opportunity. When we manipulated the floor 5 during the summer months, these spaces down here were 6 left intentionally empty, so that could expand or move 7 later spaces down here, as well as up here. I have no 8 intention of changing any of the walk paths or 9 assessability to our floor. 10 One of the things that you often see in 11 our casinos is the opportunities for all types of 12 people to get around, whether they're moving quickly 13 or moving slowly. So, it's not something that I 14 intend to take away. It's part of the design factors 15 I take into consideration. 16 CHAIRMAN: 17 Let me ask Enforcement Counsel, is that 18 something that you look at? 19 ATTORNEY PITRE: 20 We did look at it, and it's not an issue. 21 It actually gives them a little extra opportunity to 22 catch underage individuals. 23 CHAIRMAN: 24 I’m sorry. 25 ATTORNEY PITRE: I missed the last part. Sargent's Court Reporting Service, Inc. (814) 536-8908 30 1 It gives them an extra opportunity to 2 catch underage individuals. By expanding that 3 non-gaming space, it allows more of an area where they 4 can card individuals. 5 CHAIRMAN: 6 Okay. Thank you. One last question. 7 And Mr. Sklar, this is probably more a statement than 8 a question. And this is just me, personally. Could 9 you relate to the management of the Rivers Casino --10 I have concerns about the number of general managers 11 that have now passed through the Rivers. 12 count, your client is on the fourth GM. 13 open 18 months. And as I They've been I am a big believer in stability. I 14 think stability breeds peace in the workforce and just 15 a general calming of, you know, the facility itself. 16 And when you have upheaval at the top of the food 17 chain, I have to tell you I have some concerns. And 18 again, four general managers in 18 months is a 19 revolving door in the best case scenario. 20 And I'm not telling them how to hire, who 21 to hire, I just would ask that you would express my 22 personal concern. 23 Board. I'm not speaking on behalf of the I'm speaking for me personally, that this is 24 something that I pay attention to. There have been 25 other casinos in Pennsylvania who maybe have gone Sargent's Court Reporting Service, Inc. (814) 536-8908 31 1 through, you know, two or three that have been open 2 much longer than the Rivers, but it seems to be a 3 problem there and it's something that I am paying 4 attention to. 5 ATTORNEY SKLAR: 6 Just let me say, Mike Bowman, who is the 7 most recent GM who left last week ---- or a week-and8 a-half ago, he --- the management, the owners, were 9 incredibly happy with him. 10 Rivers. He was very happy at the Unfortunately, he had some personal family 11 issues that he needed to be back in the Philadelphia 12 area. So, that's what precipitated his departure. 13 But, you know, we certainly want to have stability 14 and, you know, we had anticipated that Mr. Bowman was 15 going to be the general manager for the foreseeable 16 future but, you know, this unfortunate circumstance 17 came up. But they're actively looking for a permanent 18 replacement, you know, with the goal that this would 19 be a long-term hire. 20 CHAIRMAN: 21 Thank you. 22 comments. 23 session. And I appreciate those In a moment we will recess into executive But before we do that, I want to take a 24 moment to acknowledge my fellow Board member, Jeff 25 Coy. This may very well be Jeff's last public Sargent's Court Reporting Service, Inc. (814) 536-8908 32 1 meeting. And before we give him a comment to --- or a 2 time to make some comments, I just want to read a 3 resolution that I have here. And I'll paraphrase it. 4 Jeff was appointed to the Board in 2004 by the House 5 Minority Leader, and was reappointed after that for 6 two additional two-year terms by the Speaker of the 7 Pennsylvania House. 8 He was a leader in establishing the first 9 stage agency in 30 years, along with a comprehensive 10 body of regulations to ensure the integrity of gaming 11 and approval of thousands of individuals for 12 licensure. Jeff and Commissioner McCabe, as you well 13 know, are the two remaining original Board members. 14 These two, along with the other original Board, as 15 I've said very often, they took a lot of bullets, a 16 lot of arrows from a lot of people. And what they did 17 was just keep their nose to the grindstone, got 18 through all of the noise, as we call it, and started 19 an industry in Pennsylvania and a regulatory Board 20 that's generated over $4 billion, that's with a B, 21 billion dollars of tax revenue for this Commonwealth 22 and created over 13,000 jobs for Pennsylvanians. And 23 that's an issue that I know that they're very, very 24 proud of. 25 But back to Jeff. He has served with Sargent's Court Reporting Service, Inc. (814) 536-8908 33 1 great distinction as a public servant in this 2 Commonwealth for 35 years. 3 those folks left. And there aren't many of I think he started when he was ten, 4 looking at him, to have 35 years of service. But he's 5 been a personal friend of mine since 1988, when I 6 first ran for the State House. 7 you on this Board. And Jeff, we will miss Your temperament and your insight 8 and your history of not only the Gaming Board but also 9 the legislative process and just government in general 10 will be a great, great loss to this Board. But before 11 I turn it over to Jeff, I would just like to ask if I 12 could have a motion from the Board to adopt this 13 resolution? 14 MR. MCCABE: 15 I'd like to move that --- so moved. 16 CHAIRMAN: 17 So moved. 18 MR. SOJKA: 19 Second. 20 CHAIRMAN: 21 All those in favor, aye? Second? 22 AYES RESPOND 23 CHAIRMAN: 24 Opposed? 25 NO RESPONSE Sargent's Court Reporting Service, Inc. (814) 536-8908 34 1 CHAIRMAN: 2 Motion passes. 3 over to you. Jeff, I'll turn the mic But again, on behalf of the Board and on 4 behalf of the citizens of the Commonwealth, thank you 5 for your 35 years of service. 6 MR. COY: 7 Thank you very much. 8 Chairman. Thank you, Mr. I recall on many events when I presented 9 citations like that from the Pennsylvania House of 10 Representatives --- there are, of course, 203 members 11 in the House of Representatives, I used to say that I 12 got this past 102 to 101. But I noticed the vote on 13 this was unanimous, so I do appreciate it. 14 I have just a few remarks, Mr. Chairman. 15 Life is about opportunities and challenges, and I'm 16 finishing the latest opportunity that has not --17 surprisingly, also has been one of the great 18 challenges. At the same time I leave this Board today 19 with a tremendous amount of pride and satisfaction on 20 what has been accomplished. 21 When I first became a member of the 22 Gaming Control Board late in 2004, there were no 23 employees of this agency, no officers, no regulations. 24 There was just a law that served as the blueprint on 25 how to launch a multi-billion-dollar industry in Sargent's Court Reporting Service, Inc. (814) 536-8908 35 1 Pennsylvania. 2 Today, through hard work and good 3 decisions, there is clearly a staff of professionals 4 who are as good, if not better, than any staff in 5 State government. There is strong enforcement of this 6 industry that has been --- that has seen us react 7 quickly and ensure that widespread crime and cheating 8 has no foothold at casinos in Pennsylvania. There has 9 been 14 --- nearly 14,000 persons working in 10 Pennsylvania's casino gaming industry, along with 11 other jobs retained within the horse racing industry. 12 And in terms of property tax reduction, I must relate 13 to you that during my 22 years in the legislature, 14 helping homeowners meet their property tax burdens was 15 a goal of me and my colleagues year after year with 16 many, many ideas on how to accomplish that. Only on 17 passage of the Gaming Act have homeowners in 18 Pennsylvania witnessed the flow of reduction of tax 19 dollars. 20 21 easy. Success of this magnitude does not come We have been a target, and I would be less than 22 truthful if I told you that sometimes what has been 23 written in the press or stated by others with varying 24 intentions has been hurtful and unfair. That is 25 especially true when you have the great fortune to Sargent's Court Reporting Service, Inc. (814) 536-8908 36 1 serve with good people of the highest integrity who 2 came from all walks of life on a common mission to 3 serve this Board. Not every decision may have been 4 perfect, but it should be noted that every decision on 5 who should be granted the privilege of a license and 6 have been challenged in court have been upheld by the 7 Pennsylvania Supreme Court, as well as Federal 8 Appellate Courts to date. 9 I want to thank each of my colleagues, 10 including those who have served previously who are not 11 here today. But especially I want to thank the two 12 Kens, McCabe and Trujillo, Gary and Ray and Jim. I 13 address them by their first names not only because the 14 more formal title --- but because we have worked 15 collegiately together in making important decisions, 16 but also because these men have become my friends. 17 Thank you, gentlemen. 18 In particular, my congratulations to Greg 19 Fajt, with whom I served in the Pennsylvania House of 20 Representatives and watched his career progress as the 21 Secretary of Revenue and the Governor's Chief of 22 Staff, and for the last few years as a very excellent 23 and fair Chairman of the Gaming Control Board. A job 24 well done, my friend. 25 Finally, to everyone of the current and Sargent's Court Reporting Service, Inc. (814) 536-8908 37 1 past staff of hard-working professionals of this 2 Board, led by an excellent executive director in Kevin 3 O'Toole. I say to you that it has been my privilege 4 to work with you, and I look forward to you all 5 continuing to meet the challenge and the great 6 satisfaction of regulating an industry, which means so 7 much to the Commonwealth. Thank you all. 8 APPLAUSE 9 10 CHAIRMAN: Okay. Having got that difficult task, 11 and it is difficult to say goodbye to our good friend 12 and colleague, out of the way, we're now going to 13 break for executive session to review the two matters 14 that the Board heard earlier today. We will break 15 for, I'm thinking, approximately 30 minutes, so we 16 should be back --- it's about 11:15 or so right now, 17 so I'm thinking maybe 11:45 we'll be back here. Thank 18 you. 19 * * * * * * * * 20 HEARING CONCLUDED AT 11:15 A.M. 21 * * * * * * * * 22 23 24 CERTIFICATE I hereby certify that the foregoing 25 proceedings, hearing held before Chairman Fajt, was Sargent's Court Reporting Service, Inc. (814) 536-8908 38 1 reported by me on 01/26/2011 and that I Cynthia Piro 2 Simpson read this transcript and that I attest that 3 this transcript is a true and accurate record of the 4 proceeding. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Sargent's Court Reporting Service, Inc. (814) 536-8908

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