NEW MEXICO GAMING CONTROL BOARD

One-Day Regular Board Meeting

February 13, 2007

MINUTES

The Board of Directors of the New Mexico Gaming Control Board (Board) conducted a one-day Regular Board meeting at Gaming Control Board Headquarters, 4900 Alameda Blvd. NE.  Chair David Norvell called the meeting to order at approximately 9:05 a.m., on Tuesday, February 13, 2007.  Due notice was published in accordance with the Gaming Control Act and the New Mexico Gaming Control Board Open Meetings Resolution and Chair David Norvell  declared a quorum.    Present were:  Commissioner Arnold Rael, Commissioner Don Dutton, Chair David Norvell and Commissioner Carolyn Monroe.  Executive Director John Monforte and General Counsel Frank Baca were also in attendance. 

· Approval of Agenda

Chair David Norvell presented the agenda for approval.  Mr. Monforte requested that the agenda be modified as follows:   1) personnel items be moved to the first item on the agenda and 2) under Issuance of Findings of Suitability on Key and Affiliated Persons table Carmen J. Romero (3b) and a correction on (3c) change Richard D. Jaramillo, Veterans of Foreign Wars #3815 to Richard D. Jaramillo, Fraternal Order of Eagles #3815.  Chairman Norvell entertained a motion to approve the agenda as amended:  A. Rael.  Second:  D. Dutton.   Vote: 4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

1          Closed Executive Session.  Chair David Norvell entertained a motion to go into closed executive session until 1:30 p.m., for the purpose of discussing tribal matters, licensing matters, issuance of finding of suitability on key and affiliated persons, pending administrative and enforcement matters, pending and threatened litigation, limited personnel matters as enumerated in detail on the agenda as amended. (Closed pursuant to section 10-15-1(H), NMSA 1978):  C. Monroe. Second: D. Dutton. Vote: 4-0.  A roll call vote was taken and all voted to go into closed executive session:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

2          On Tuesday February 13, 2007 at approximately 1:35 p.m., a motion was made to go back into open session: C. Monroe.  Second: D. Dutton.   Vote: 4-0.  A roll call vote was taken and all voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.  Chair David Norvell certified the only matters that were discussed in closed executive session tribal matters, licensing matters, issuance of finding of suitability on key and affiliated persons, pending administrative and enforcement matters, pending and threatened litigation, limited personnel matters as detailed on the agenda as it was amended.

3          Approval of Minutes.  Chair David Norvell presented the following minutes for approval:

1. Working Session, January 3, 2007

2. Working Session, January 10, 2007

3. Working Session, January 18, 2007

4. One Day Regular Board Meeting, January 9, 2007

Commissioner Dutton moved to approve the minutes of the four meeting.  Second:  C. Monroe.  Vote:  4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

4          Board Chair Announcements.  Chair David Norvell announced that the scheduled Board Meetings are the second Tuesday of each month.  If a two day meeting is required, the Board will reconvene the next following morning.

· The next regular Board meetings are March 20, 2007 and April 10, 2007.

5 Pending Administrative and Enforcement Actions

· Approval of Recommendation for Dismissal; Gaming Control Board vs. Ray Griego; Cause No. 60-019-EA.   Commissioner Monroe moved to accept the Hearing Officer’s Recommendation for Dismissal.  Second:  A. Rael.  Vote: 4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

· Approval of Settlement Agreement; Gaming Control Board vs. Manuel Rios; Cause No. 06-008-EA.  Commissioner Rael moved to accept the settlement agreement between the Board and Manuel Rios.  Second:  D. Dutton.  Vote:  4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

· Approval of Settlement Agreement; Gaming Control Board vs. Eleanor J. Purvis; Cause No. 06-016-EA.  Commissioner Dutton moved to accept the settlement agreement between the Board and Eleanor J. Purvis.  Second:  C. Monroe.  Vote:  4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

6          Licensing

· Renewals of Gaming Licenses for 2007:

Chairman Norvell noted that this information was presented to the Board in closed executive session. Chairman Norvell read into the record the following Renewals of Gaming Licenses for 2007:

a.  American Legion Post #72 (Albuquerque, NM)

b.  Bally Gaming, Inc. (Las Vegas, NV)

c.  B.P.O. Elks #1119 (Las Cruces, NM)

d.  Fraternal Order of Eagles #3815  (Las Vegas, NM)

            e.  IGT, Inc. (Las Vegas, NV)

            f.   JJ Recreation (Farmington, NM)

            g.  Loyal Order of Moose #2447 (Rio Rancho, NM)

· Commissioner Dutton moved to grant the renewal of the seven licenses as read by Chairman Norvell.    Second:  A. Rael.  Vote: 4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

· Commissioner Dutton amended the motion previously made and passed   to include approval of Loyal Order of Moose #2447, Rio Rancho, NM with the following renewal conditions:

a. An additional key applicant shall be submitted within 90 days of issuance of this nonprofit gaming operator’s license.

b. The individual preparing the check shall not be the individual reconciling the accounts or producing the gaming financials.

c. The lodge must pay, in full, all license, approval, and investigation fees arising out of processing of the gaming license application within 30 days of receipt of a final accounting of such fees and cost from the board or according to the terms of a payment plan approved by the Board or its designee.

Second:  A. Rael.  Vote:  4-0.  All voted in favor of the amendment to the previous motion for the Loyal Order of Moose #2447:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

·       Miscellaneous Matters:

a.     DigiDeal Corporation; 90 day review of financial stability (Spokane, WA). 

Commissioner Monroe moved to require DigiDeal to submit to a review of its ongoing financial stability within 90 days of the date of the issuance of the Decision and Order.  Second:  A. Rael.  Vote:  4-0. All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe

b.    DigiDeal Corporation Request for approval of proposed strategic investment by 3^rd party (Spokane, WA).  Commissioner Monroe moved to table the matter.  Second:  D. Dutton.  Vote:  4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe

7          Issuance of Findings of Suitability on Key and Affiliated Persons. Chairman Norvell noted that during the closed executive session, the staff presented the results of the background investigations on the findings of suitability for key and affiliated persons.  Chairman Norvell read aloud the following list of new key person applications:

New Applications

a.  David Miller – Gaming Accountant – American Legion Post #72 (Albuquerque, NM)

b.  Monte Harmon – Gaming Manager – American Legion Post #72 (Albuquerque, NM)

c.  Prospero Sanchez – Gaming Manager – American Legion Post #72 (Albuquerque, NM)

d.  Gloria Parker – Gaming Manager – B.P.O. Elks #1172 (Tucumcari, NM)

e.  Lanell M. Deitz – Gaming Accountant – Fraternal Order of Eagles #3187 (Roswell, NM)

f.  Antonette D. Martinez – Vice President of Western Region Sales – IGT (Las Vegas, NV)

g.  Flaviano Lucero – Quartermaster/Accountant – Veterans of Foreign Wars Post #401     (Albuquerque, NM)

Renewal Key Persons

a.  Gerald Willett – Assistant Gaming Manager – Fraternal Order of Eagles #3245 (Clovis, NM)

b.  Carol Nygaard – Gaming Accountant – Fraternal Order of Eagles #4101 (Alamogordo, NM)

c.  Richard Burt – Independent Director – IGT (Las Vegas, NV)

d.  David Johnson – Executive Vice President and General Counsel – IGT (Las Vegas, NV)

e.  Johnny J. Oakley – President/Manager – JJ Recreation, LLC (Farmington, NM)

f.  Jimmie Chavez – Quartermaster – Veterans of Foreign Wars Post #1793 (Raton, NM)

Key Person Change of Position

a.  Alma M. Gaston – Gaming Manager – Loyal Order of Moose #2080 (Chaparral, NM)

b.  Carmen J. Romero – Gaming Accountant – Veterans of Foreign Wars Post #1547 (Las Vegas, NM).  TABLED

c.  Richard D. Jaramillo – Gaming Manager – Veterans of Foreign Wars Post #3815 (Las Vegas, NM)

Commissioner Rael moved to approve all Issuance of Findings of Suitability on Key and Affiliated Persons except for Carmen J. Romero (Tabled) and the correction for Richard D. Jaramillo from Veterans of Foreign Wars Post #3815 to Fraternal Order of Eagles #3815. Second:  D. Dutton.  Vote: 4-0.  All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

8          Policy and Rulemaking Matters

· Approval of Hearing Officer’s Recommendation on  15.1.5 NMAC, 15.1.6                         NMAC, 15.1.7 NMAC, 15.1.8 NMAC, 15.1.9 NMAC, 15.1.10 NMAC, 15.1.25 NMAC (Hearing held on November 9, 2006).

· Approval of Hearing Officer’s Recommendation on 15.1.5 NMAC, 15.1.6                         NMAC, 15.1.7 NMAC, 15.1.8 NMAC, 15.1.9 NMAC, 15.1.10 NMAC, 15.1.25 NMAC (Hearing held on February 1, 2007).

General Counsel Frank Baca noted that the first hearing was held on November 9, 2006.  The hearing officer’s report had some minor corrections in terms of dates and addresses.  In Exhibit F only 6 of the items have issue.

15.1.5.16(B) there was discussion at the hearing of a change regarding notification of termination of a key person and it was suggested that the notification be allowed by e-mail or fax and that the period be changed from 48 hours to 96 hours that was something that had not been previously been presented to the Board.

15.1.9.8(A) this relates to a minor suggestion as to the change in language from operator licensees to operations.  I would like to suggest that we table this particular item.  This reference incorporates internal controls which will be on the agenda in March. It would be appropriate to track that rule so that within that rule we can reference the current version of the MIC’s as we are still making some changes.

15.1.10.20 it was recommended that the title be changed from “Additional Payouts; Promotions:” to “Additional Payouts; Promotions; Personal Property Awards:”

            Item (A): There is also question about the ability of licensees to have a compulsive gambling message on a short radio advertisement so the question is  whether or not the radio requirement of a compulsive gambling message should be in place.  There was a radio exemption under the previous rule. 

Item (D):  This was a change in additional payouts and how we addressed that particular issue previously, we had allowed certain deductions of non-cash items to be deductible if they were substantial, and the word substantial is not defined in the rule.  There was considerable testimony at the hearing regarding the $1,200 inserted as a basis for deductibility of personal property. Some believed the amount was too large and did not provide the necessary incentives for continued gaming.  Amounts ranging from $100 to $300 were recommended.  The hearing officer recommended that that cutoff level be $500. 

Item (J) This was a change regarding a rule of the promotion where it should be posted, whether it be adjacent to the machines or whether there should be just notice that the rules are contained someplace in the casino.  We did agree that this was a reasonable suggestion.  At that time we did not recommend specific language but we have come up with some language that we would recommend now and I would like to read for the record. “Rules of the promotion should be made available to any person requesting them.  Any flyer, poster or other advertisement for the promotion shall identify the location where the rules of the promotion are available”.  Staff made that recommendation and the hearing officer also agreed that that type of change would be in order.

In the proposed amendment Rule 15.10.32(A)(1), it was agreed that deleting the language “in any fiscal year” would clarify the amendment, the staff agreed to that and the hearing officer adopted that recommendation.  That was a slight change of the rule made at the hearing that was not previously presented to the Board.

In the proposed amendment Rule 15.1.10.45(A), it was agreed that deleting the amended language of the last sentence in this paragraph would clarify the amendment.   “A nonprofit operator licensee or distributor licensee shall not enter into a contract, written or oral, in which the distributor’s compensation or other payment is based on a percentage of net take after gaming taxes for furnishing gaming machines under a lease or other arrangement until the contract has been submitted in writing and approved by the board or its designated agent”.

Comments from the Public regarding the rule changes:

Mr. Bruce Rimbo:  I had a couple of issues but I met with Mr. Baca on the limit of $1200 vs. $500 and I can accept the hearing officer’s recommendation on the $500.  The one that is really a problem is the radio, the responsible gaming message on the radio advertisement.  Many of us take radio ads, “the weather brought to you by Ruidoso Downs where this Saturday night you can win a car or whatever and that’s about the amount of time you’ve got.  I know the Downs at Albuquerque does a traffic report here in Albuquerque, that type of a thing to say that we have to put it in a radio advertisement there isn’t time, we’re already funding money to the responsible gaming program, we’ve already agreed to put it in our television because we can put it in print, there’s room and time to put it in there to print advertising.  I just think radio is a problem to try and get that message into and I strongly object to it.

Chairman Norvell:  What do you think it should be?

Mr. Rimbo:  I think the exclusion for radio has been there now since we started and it should be maintained.  If you’re running a 60 second spot and  we can get it in.  We actually take spots ourselves that we fund on responsible gaming where the whole ad is about and the number is given several times and we run those on radio but to try and incorporate it into the message that we’re trying to buy is very difficult especially when your time frames are constrained.  I think we’re being responsible partners in responsible gaming and that’s an important issue to all of us but I think taking it that far for all the ads is a mistake.  I think the exemption for radio that has been in effect now for 6-7 years needs to be maintained.

Chairman Norvell:  Mr. Baca what was the rational for taking the exemption?

Mr. Baca:  I think it was simply to make a blanket requirement of any advertising to include a compulsive gambling message.  It was just a general policy.

Commissioner Dutton:  I think one of the things that was discussed that on the tribal spots on the radio they do contain a responsible gaming message, it could be as simple as “game responsibly 1-800-555-666” took less than 2 seconds.

Mr. Rimbo:  I disagree I want my message out there and if I were taxed at 8% maybe I could buy more ads and I could afford to do that but I am not and I think it’s an important issue.  I don’t think we can compare tribes and us on a lot of different issues much less this one.  Let us try to be responsible, we’re doing it in print and in television and direct mail and I think radio in particular a short spot like that is very difficult to do.

Commissioner Dutton:  Frank, in order to go against the recommendation wouldn’t we have had to have read the entire transcript and all the public input?

Frank Baca:  That is generally the requirement.  There was a 138 page transcript that was incorporated into your notebook.

Peggy Hardwick:  It’s under the administrative procedures act.

Commissioner Moore:  Having not read all the transcript and public input I would have to decline on the vote.

Commissioner Rael:  What would we need to do if we were to take Mr. Rimbo’s recommendation?

Chairman Norvell:  We would have to decline the hearing officer’s recommendation on that specific issue.

Frank Baca:  Just to point out that part of the recommendation in 15.1.10.20(A) is a fairly innocuous one of adding the words “and personal property awards”  and striking out promotions so I would ask the Board to accept that part of the recommendation.

Commissioner Dutton moved to accept the hearing officer’s report as amended with the words that General Counsel just used with the exception of finding of fact No. 8 and any conclusions of law relating thereto regarding the exemption of radio from advertising so that the rule currently in effect would provide that radio is in fact exempted from the responsible gaming message but all other parts of the recommendation be adopted and that item number 38 in 15.1.19.8(A) be tabled until the March meeting of the Gaming Control Board meeting.  Second:  A. Rael.  Vote:  3-0. All voted in favor of the motion except for Commissioner Carolyn Monroe who declined to vote:  A. Rael, D. Dutton and D. Norvell.

Peggy Hardwick:  On page 13 of the Hearing Officer’s report it’s an either or, the hearing office gives you two options in the language to adopt and the board will need to have a motion and take a vote on it which of those two to adopt.

Commissioner Dutton moved to accept the hearing officer’s conclusion of law found in conclusion of No. 4 that a hard copy notice to the Board no later than 96 hours after the first day of employment listing date for key and affiliated persons.  Second:  A. Rael.  Vote:  3-0.  All voted in favor of the motion except for Commissioner Monroe who declined to vote:  A. Rael, D. Dutton and D. Norvell.

Frank Baca noted that in the rules from the February 1, 2007 hearing there was no disagreement between the public and the staff, the changes were primarily to some technical things in the 3^rd party progressive rule and they are on pages 8 and 9 of the hearing officer’s report these were some changes made as a result of public input. 

Commissioner Dutton moved to adopt the February 1, 2007 hearing officer’s report.  Second:  A. Rael.  Vote:  3-0.  All voted in favor of the motion except for Commissioner Monroe who declined to vote:  A. Rael, D. Dutton and D. Norvell.

9          Public Comments. 

No public comments.

10        Adjournment.  There being no other business to come before the Board, Chair David Norvell entertained a motion to adjourn. A. Rael   Second: C. Monroe.  Vote:  4-0. All voted in favor of the motion:  A. Rael, D. Dutton, D. Norvell and C. Monroe.

/s/David Norvell, Esq.                    Date Approved:  03-20-07

    Chairman