A. LICENSING
Statutory directives require the IGC to issue riverboat owner's licenses (IC 3-44-6), supplier licenses (IC 4-33-7), occupational licenses (IC 4-33-8), and to license electronic or mechanical gambling games. The IGC is also to administer and regulate the persons and games outlined above. During calendar year 1997, the IGC has carried out its statutory requirements as follows:
- Riverboat Owner's Licensing. During calendar year 1997, the IGC worked with Showboat Marina Casino Partnership and Blue Chip Casino, Inc. to conduct test cruises and issue permanent riverboat owner's licenses. In each instance, the IGC worked diligently and cooperatively with the certificate holder and the local governmental entities to accomplish the issuance of the license. Each certificate holder had obtained the necessary permits and certificates required under 68 IAC 2-1-5, posted the appropriate bond under IC 4-33-6-9, and complied with all other requirements mandated by the Act and 68 IAC. Specifically, the IGC issued a riverboat owner's license to Showboat Marina Partnership, East Chicago, Indiana on April 15, 1997. The IGC issued a riverboat owner's license to Blue Chip Casino, Inc., Michigan City, Indiana on August 19, 1997.
The IGC also considered whether or not it would issue the final certificate of suitability, the precursor to a riverboat owner's license, to a riverboat to be docked on the Ohio River. On October 23, 1997, the IGC heard presentations from companies who had submitted an application for a riverboat owner's license for a riverboat to be docked in Switzerland and Crawford counties. As of December 31, 1997, three riverboats were operating on the Ohio River.1 Additionally, as of December 31, 1997, RDI/Caesar's Riverboat Casino, LLC holds a certificate of suitability for a riverboat to be located in Harrison County, Indiana. On December 15, 1997, the IGC voted to abstain from issuing a fifth certificate of suitability for a riverboat to be docked on the Ohio River. The IGC determined that it needed more information on the performance of all riverboats from permanent sites and vessels before it could make a determination as to whether and where a fifth riverboat should be docked on the Ohio River.
- Supplier's Licenses. A temporary supplier's license is issued after the Gaming Division of the Indiana State Police (Gaming Division) has conducted a preliminary background investigation of the supplier. Once a temporary supplier's license has been issued, the supplier may supply gaming equipment or services to riverboats located within Indiana. The IGC issued eleven (11) temporary supplier's licenses during the calendar year 1997. The Gaming Division continues the thorough background investigation for suitability for permanent supplier's status and when the investigation is complete the IGC can grant a permanent license. The IGC granted eight (8) permanent supplier's licenses during the calendar year 1997.
1The following riverboats were operational as of December 31, 1997: Casino Aztar in Evansville, Indiana; Grand Victoria Casino & Resort in Rising Sun, Indiana; and Indiana Gaming Company, L.P. (Argosy) in Lawrenceburg, Indiana.
- Occupational Licenses. During calendar year 1997, the IGC issued Seven Thousand Six Hundred and Thirty-two (7,632) temporary occupational licenses to individuals who work on the riverboats. Once a temporary occupational license has been issued, the individual may work on the riverboat. The Gaming Division will conduct a thorough background investigation on the individual to ensure that the individual meets all the necessary criteria for suitability for permanent licensure. The IGC issued seven (7) permanent occupational licenses during calendar year 1997. The IGC is testing a tracking system that will monitor the status of occupational licenses. This system should be completed and operable in 1998 so that those persons holding a temporary occupational license whose background investigation have been favorably completed can be issued permanent licenses.
B. STATUTORY REQUIREMENTS
- Pursuant to IC 4-33-4-1, IC 4-33-4-2, and IC 4-33-4-3, the IGC is directed to adopt rules to regulate, administer, and enforce the Act. The following rules are final, effective rules as of December 31, 1997:
Article 1 General Provisions Rule 1 Definitions Rule 2 General Procedures Rule 3 Economic Development Reports Rule 4 Contracts Rule 5 General Reporting Requirements Rule 6 Appearance by Attorneys or Representatives for Hearings and Reviews Rule 7 Weapons on the Riverboat Rule 8 Support Facility Standards Rule 9 Riverboat IGC Surveillance Room, IGC Dockside Office and Processing Area Rule 10 Floor Plans Rule 11 Riverboat Gaming Area Rule 12 Complimentary Chip and Token Distribution Programs Rule 13 Reporting of Interest in a License Article 2 Licenses and Approvals Rule 1 Riverboat Owner's License Rule 2 Supplier's License Rule 3 Occupational License Rule 4 Waiver of Convicted Felon Disqualification Rule 5 Occupational Training School Rule 6 Electronic Gaming Device Rules Rule 7 Associated Equipment Article 3 Minority and Women's Business Enterprises Rule 1 General Provisions Rule 2 Certification Process and Procedure Rule 3 Compliance Rule 4 Challenges of the Designation of a Certified Minority or Women Business Enterprise Rule 5 Certification; Hearings on Denials and Challenges Article 4 Corporations Rule 1 Publicly Traded Corporations Article 5 Transfer of Ownership Rule 1 Publicly Traded Companies Rule 2 Persons other than Publicly Traded Corporations Rule 3 Debt Acquisition Article 6 Exclusion of Persons Rule 1 Exclusion List Article 7 Denial and Exclusion Hearings Rule 1 General Provisions Article 8 Public Safety and Excursions Rule 1 Excursions, Routes, and Public Safety Rule 2 Medical Services; Emergency Response Article 9 Ethics Rule 1 IGC Members Rule 2 IGC Employees Rule 3 IGC Agents Rule 4 Restriction on Gaming Article 10 Conduct of Gaming Rule 1 Applicability; General Provisions Rule 2 Blackjack Rule 3 Roulette Rule 4 Craps Rule 5 Big Six Rule 6 Caribbean Stud Poker Rule 7 Let It Ride Article 11 Internal Control Procedures Rule 1 General Provisions Rule 2 Drop Bucket Process and Hard Count Rule 3 Soft Count Procedure Rule 4 Opening and Closing Live Gaming Devices Rule 7 Sensitive Key Control Rule 8 Handling of Cash at Gaming Tables Article 12 Security and Surveillance Rule 1 General Provisions for Surveillance System Article 13 Seizure, Forfeiture, and Disciplinary Hearings Rule 1 Seizure, Forfeiture, and Disciplinary Hearings Article 14 Gaming Equipment Rule 1 General Provisions> Rule 2 Live Gaming Device table Requirements Rule 3 Cards and Dice Rule 4 Chip Specifications Rule 5 Token Specifications> Rule 6 Blackjack Tables Rule 7 Roulette Wheel and Table Rule 8 Craps Table Rule 9 Big Six Wheel and Table> Rule 10 Caribbean Stud Poker Table Rule 16 Destruction of Counterfeit Chips and Tokens Article 15 Accounting Records and Procedures Rule 1 General Provisions Rule 2 Currency Transaction Reports and Multiple Transaction Logs Rule 4 Token and Chip Inventories Rule 5 Rule 6 Admission Tax Rule 7 Audit Procedures Rule 8 Internal Audit Procedures Rule 9 Tips and Gratuities Rule 10 Main Bank Responsibilities Rule 11 Electronic Gaming Device Hopper Fills and Credits Rule 12 Live Gaming Device Fills and Credits Rule 13 Manually Paid Jackpots Article 16 Credit Rule 1 General Provisions Article 17 Movement of Gaming Equipment Rule 1 Electronic Gaming Device Movements Rule 2 LIVE Gaming Device Movements Article 18 Dispute Procedures Rule 1 Patron Dispute Procedures The IGC continues to draft rules and has additional rules in various stages of the promulgation process. Additionally, during 1997 the IGC amended various rules and continues to amend rules that have been fully promulgated as the need arises or changes in technology necessitate such changes.
- The IGC passed 46 resolutions in calendar year 1997. The topics covered by the resolutions adopted by the IGC may be broken down into the following topics:
Adoption of Rules; Promulgation Process 13 Debt Acquisition Consideration 10 Issues Concerning Supplier's Licenses 9 Extension of Certificates of Suitability 5 Issues Concerning Occupational Licenses 3 Bond Consideration 3 Transfer of Ownership 2 Miscellaneous 1 - Disciplinary Actions. As a result of regulatory activities, the IGC has initiated a number of disciplinary actions against riverboat licensees and occupational licensees who have violated the Act or rules promulgated thereunder (68 IAC).
a) Riverboat Licensees-The following disciplinary actions were initiated by the IGC during calendar year 1997:
(1) In Re Disciplinary Action Of: Indiana Gaming Company, L.P. (Argosy), Comp. No. 97-AR-1. On August 7, 1997, the IGC initiated a disciplinary action against Argosy that consisted of 6 counts. Counts 1 and 2 of the Complaint dealt with violations that occurred when Argosy employees left uncounted tokens in the hard count room when they left the riverboat prior to the end of their shift. Additionally, the hard count room was utilized for the storage of tokens in violation of Argosy internal control procedures. Count 3 of the Complaint addressed hard count log violations. Count 4 deals with the fact that security failed to utilize a metal detector on trash taken out of the hard count room. Count 5 addresses the fact that security failed to utilize a metal detector on individuals exiting the hard count room. Count 6 deals with the fact that uncounted tokens were transported on a cart that was not locked. Members of the IGC staff and Argosy reached a settlement agreement whereby the IGC determined that the actions of Argosy were in violation of the Riverboat Gambling Act, rules promulgated thereunder (68 IAC), and internal control procedures that Argosy had adopted. Further Argosy agreed to a total fine of Ten Thousand Dollars ($10,000). The IGC adopted this settlement agreement and Argosy remitted the fine.
(2) In Re Disciplinary Action Of: Indiana Gaming Company, L.P. (Argosy), Comp. No. 97-AR-2. On August 7, 1997, the IGC initiated a disciplinary action against Argosy that consisted of one count. During the course of an investigation of an internal theft, the IGC discovered that Argosy had not been following the policy outlined in its internal control procedures for the investigation of variances in the casino cage. Members of the IGC staff and Argosy reached a settlement agreement whereby the IGC determined that the actions of Argosy were in violation of the Riverboat Gambling Act, rules promulgated thereunder (68 IAC), and internal control procedures that Argosy had adopted. Further, Argosy agreed to a total fine of Fifteen Thousand Dollars ($15,000). The IGC adopted this settlement agreement and Argosy remitted the fine.
(3) In Re Disciplinary Action Of: Trump Indiana, Inc., Comp. No. 97-TR-1. On September 2, 1997, the IGC initiated a disciplinary action against Trump due to the fact that Trump had insufficient surveillance crew on duty to provide coverage for the cage located on the barge which is not a statutory reason to cancel or disrupt an excursion pursuant to IC 4-33-9-2. Additionally, the Trump employee who completed the excursion report indicated that the excursion was canceled due to bowthruster problems. Members of the IGC staff and Trump reached a settlement agreement whereby the IGC determined that the actions of Trump were in violation of the Riverboat Gambling Act and rules promulgated thereunder (68 IAC). Further, Trump agreed to a total fine of Five Thousand Dollars ($5,000). The IGC adopted the settlement agreement and Trump remitted the fine.
b) Riverboat Licensees-The following disciplinary actions were initiated in calendar year 1996 by the IGC, but were resolved during calendar year 1997:
(1) In Re Disciplinary Action Of: Empress Casino Hammond Corp. (Empress), Comp. No. 96-EM-2. On November 7, 1996, the IGC initiated a disciplinary action against the Empress for having insufficient camera coverage on Cage 6 of the Ruby Level in violation of 68 IAC 12-1-6(c) and for employing individuals in the Surveillance Department who destroyed a videotape that IGC agents had requested to view as part of an investigation into a customer dispute. Members of the IGC staff and Empress reached a settlement agreement whereby the IGC determined that the actions of Empress were in violation of the Riverboat Gambling Act and rules promulgated thereunder (68 IAC). Further, Empress agreed to a total fine of Seven Thousand Five Hundred Dollars ($7,500). On January 27, 1997, the IGC adopted the settlement agreement and Empress remitted the fine.
(2) In Re Disciplinary Action Of: Aztar Indiana Gaming Corp. (Aztar), Comp. No. 96-AZ-1. On November 15, 1996, the IGC initiated a disciplinary action against Aztar due to Aztar's failure to maintain an accurate count of tokens received, the failure to maintain an accurate token inventory log, the failure to retain paperwork generated with respect to token deliveries, the failure to compare actual token counts and packing slips received from Olde Philadelphia Mint, and the failure to immediately contact the IGC when Aztar became aware of the discrepancy with the token inventory. Members of the IGC staff and Aztar reached a settlement agreement whereby the IGC determined that the actions of Aztar were in violation of the Riverboat Gambling Act and rules promulgated thereunder (68 IAC). Further, Aztar agreed to pay a total fine of Ten Thousand Dollars ($10,000). On January 27, 1997, the IGC adopted the settlement agreement and Aztar remitted the fine.
(3) In Re Disciplinary Action Of: Trump Indiana, Inc., Comp. No. 96-TR-1. On December 9, 1996, the IGC initiated a disciplinary action against Trump due to Trump's failure to properly maintain a hard count room log, a soft count room log, the failure to properly restrict access to the hard count room while the hard count was in process, and the failure to properly secure the door to the hard count room. Members of the IGC staff and Trump entered a settlement agreement whereby the IGC determined that the actions of Trump were in violation of the Riverboat Gambling Act and rules promulgated thereunder (68 IAC). Further, Trump agreed to pay a total fine in the amount of Eight Thousand Dollar ($8,000). On January 27, 1997, the IGC adopted the settlement agreement and Trump remitted the fine.
c) Occupational Licensees-The following disciplinary actions were initiated by the IGC during calendar year 1997:
(1) In Re Disciplinary Action Of: an Empress employee, Comp. No. 97-OL-EM-5. On August 12, 1997, the IGC initiated a disciplinary action against an Empress Quality Assurance Technician due to the fact that the employee attempted to assist her niece, a minor, in entering the Showboat Casino; the employee falsely advised Showboat Casino security personnel that her niece was of legal age to enter the casino. The employee failed to respond to the Complaint. The IGC moved for the entry of default judgment which would result in the revocation of the employee's temporary Occupational License and the denial of her application for a permanent license. After the employee failed to respond to the IGC's motion for default judgment, the Administrative Law Judge recommended the entry of a default judgment. The IGC adopted the Administrative Law Judge's recommendation on December 15, 1997.
d) Occupational Licensees-The following disciplinary actions were initiated in calendar year 1996 by the IGC, but were resolved during calendar year 1997:
(1) In Re Disciplinary Action Of: an Empress employee, Comp. No. 96-OL-EM-1. On November 7, 1996, the IGC initiated a disciplinary action against the Surveillance Supervisor for the Empress Casino, for his intentional destruction of a surveillance videotape that IGC Agents had requested to review as part of an investigation of a customer complaint. It was determined that the employee destroyed the videotape at the direction of his supervisor. The IGC and the employee reached a settlement agreement whereby the IGC determined that the actions of the employee were in violation of the Riverboat Gambling Act and rules promulgated thereunder (68 IAC). Further, the settlement agreement called for a three months suspension of the employee's Occupational License. On February 21, 1997, the IGC adopted the settlement agreement; the employee's Occupational License was suspended for the requisite term.
(2) In Re Disciplinary Action Of: an Empress employee, Comp. No. 96-OL-EM-2. On November 7, 1996, the IGC initiated a disciplinary action against the Surveillance Manager for the Empress Casino, for his involvement in and his order to destroy a surveillance tape that IGC Agents had requested to view as part of an investigation of a customer complaint. The destruction was ordered after the employee and other members of the Surveillance personnel discovered that there was insufficient camera coverage on certain areas of the vessel. After an initial contact with the IGC, the employee failed to respond to the Complaint. The IGC filed a motion for the entry of default judgment which would result in the revocation of the employee's temporary Occupational License and the denial of his application for a permanent license. The employee did not respond to the motion for default judgment. The Administrative Law Judge recommended that default judgment be entered on behalf of the IGC. The IGC adopted the Administrative Law Judge's recommendation on February 21, 1997.
(3) In Re Disciplinary Action Of: an Empress employee, Comp. No. 96-OL-EM-3. On November 7, 1996, the IGC initiated a disciplinary action against a Surveillance Trainee for the Empress Casino for being present in the surveillance room when a videotape that IGC Agents had requested to review as part of an investigation of a customer complaint was destroyed and for failing to report the incident to the appropriate authorities. Members of the IGC staff and the employee reached a settlement agreement whereby the IGC determined that the employee's actions were a violation of the Riverboat Gambling Act and rules promulgated thereunder (68 IAC). Pursuant to the terms of the settlement agreement, the employee's Occupational License was placed on probation for a period of six months.
(4) In Re Disciplinary Action Of: an Empress employee, Comp. No. 96-OL-EM-4. On November 7, 1996, the IGC initiated a disciplinary action against a Surveillance Trainee for the Empress Casino, for his involvement in and his failure to report the destruction of a videotape that IGC Agents had requested as part of an investigation into a customer complaint. The employee did not respond to the Complaint. The IGC moved for the entry of default judgment which would result in the revocation of the employee's temporary Occupational License and the denial of his application for permanent licensure. The employee did not respond to the motion for default judgment. The Administrative Law Judge recommended that default judgment be entered on behalf of the IGC. The IGC adopted the Administrative Law Judge's recommendation on February 21, 1997.
- Pursuant to IC 4-33-8-3, an individual who has been convicted of a felony may not obtain an Occupational License to work on a riverboat. However, pursuant to IC 4-33-8-11, an individual who is disqualified due to a felony conviction may seek a waiver of the felony conviction. Five felony waiver requests were pending as of December 31, 1996. Additionally, twenty-three 23 new requests for the waiver of a felony conviction were filed in 1997. Of the 23 individuals submitting the new requests, five of the individuals had been issued a temporary Occupational License since they did not disclose the felony conviction on their application. Once the background investigation revealed those individuals did have a felony conviction, their temporary Occupational Licenses were revoked. The 23 new requests and 5 requests pending as of December 31, 1996 were resolved in the following manner:
Denied due to ineligibility2 19 Denied due to failure to appear 1 Denied after review by a hearing officer 3 Waiver granted 3 Waiver granted after appeal to ALJ3 1 License not needed for position 1 Six of the individuals who were determined to be ineligible appealed the denial of their request for a waiver to an Administrative Law Judge4. Three of those individuals subsequently withdrew their appeals. The remaining three appeals were dismissed based upon a Motion to Dismiss filed either by the IGC staff or initiated by the Administrative Law Judge if the individual did not participate in a pre-hearing conference.
2"These individuals were determined to be ineligible to receive a felony waiver due to the fact that the individuals requesting the waiver did not meet at least one of the statutory criteria mandated by IC 4-33-8-11.
3This individual was denied after a review hearing was conducted by IGC staff. The recommendation of the review officer was adopted by the IGC. The individual appealed the matter to an Administrative Law Judge who recommended that the waiver be granted and the individual issued an Occupational License. The IGC adopted the recommendation of the Administrative Law Judge.
4The Occupational Licenses of numerous other individuals were revoked after a background investigation revealed they had been convicted of a felony that they did not disclose on their application. These additional individuals did not file a request for a waiver of the felony conviction.In the final case set forth above, the individual applied for a waiver of his felony conviction and indicated he would be a security guard at one of the riverboats. During the review hearing it was determined that the individual would be working at an office complex located several miles from the riverboat. Due to the fact that the individual would not be working on the riverboat or have access to any of the assets of the riverboat, the IGC staff determined that his position would not require an Occupational License.
- The IGC staff utilized its ability to revoke temporary Occupational Licenses prior to the issuance of a permanent Occupational License on 18 occasions during 19975. The Occupational Licenses of these individuals were revoked for the following reasons:
Criminal activity in performance of duties 10 Improper action while dealing game 3 Bad conduct on other riverboats 2 Background determined not suitable 2 Failure to disclose criminal history 1 Of these individuals, three have appealed the action of the IGC in revoking their temporary Occupational License and denying their application for a permanent license. In the first appeal, the Administrative Law Judge recommended that the IGC's Motion to Dismiss be granted; this recommendation was adopted by the IGC members. The second appeal proceeded to a hearing; after the conclusion of the hearing, the Administrative Law Judge recommended that the IGC's revocation of the temporary Occupational License and the denial of the application for permanent licensure be upheld. The IGC adopted the recommendation of the Administrative Law Judge. The final appeal remained pending as of December 31, 1997.
- Pursuant to IC 4-33-4-7, the IGC may place individuals on an exclusion list if the IGC makes a determination that the individual has violated the Riverboat Gambling Act or that the individual's reputation or conduct may call into the question the honesty or integrity of the riverboat gambling operation or may interfere with the orderly conduct of the riverboat gambling operation.6
5 The temporary Occupational Licenses of other individuals were revoked by the IGC staff during the latter part of 1997. However, the IGC members had not taken action on those licensing issues before December 31, 1997. As a result, those matters will be addressed in the Annual Report for 1998.
6 Individuals placed on the exclusion list may file a petition to have their name removed from the exclusion list and may appeal the final decision of the IGC to an Administrative Law Judge.The IGC placed one individual on the exclusion list during 1997. That individual had been a dealer on one of the riverboats and was terminated for overpaying his friend's winning wagers. The same individual was subsequently caught pulling a bet (cheating by removing a losing bet from the table once the outcome of the game is known) on an Illinois riverboat.
- The IGC continues its contractual relationships with various entities for professional services.
a) The IGC is continuing its contractual relationship with Gaming Laboratories International, Inc. (GLI), Toms River, New Jersey pursuant to the terms of its renewed contract. Under the terms of the contract, GLI is to provide the following services:
(1) On-site inspection and certification of electronic gaming devices, computer monitoring systems, other on-board electronic gaming equipment and associated equipment that will be utilized by riverboat licensees. These services are to be performed prior to the opening of a riverboat.
(2) Continued on-site inspections and certifications on an as-needed basis.
(3) Testing and evaluation of electronic gaming devices and associated equipment at GLI's main facility and other locations agreed upon by GLI and the IGC.
(4) Training of IGC personnel and agents.
(5) Other related services as requested by the IGC, including consultation services with respect to gaming devices, software programs, and other matters as requested by the IGC.
The terms of this contract require that the riverboat licensee or the manufacturer of the device be responsible for paying the fees of GLI for the inspections, certifications, testing, evaluation and training of IGC personnel and agents. Only when the IGC requests consultation and assistance will the IGC bear the costs of GLI's services.
b) The IGC continues its contractual relationship with Virginia Dill McCarty of the Indianapolis, Indiana law firm of Landman & Beatty. Ms. McCarty provides consultation and assistance with respect to numerous issues, including, but not limited to, bonds and security therefor, the types and amounts of insurance to be obtained and/or maintained by riverboat and supplier licensees, and other areas as requested by the IGC.
c) The IGC continues its contractual relationship with Bernard L. Pylitt, a partner in the law firm of Katzman Katzman & Pylitt of Indianapolis, Indiana. Mr. Pylitt serves as an Administrative Law Judge for the IGC in complaints filed against the IGC, disciplinary actions initiated by the IGC, and issues concerning the revocation or denial of licenses.
d) In 1997, the IGC finalized a contract with R. Jeff Dodson of the law firm of Belcher Dodson & Ryan of Evansville, Indiana. Mr. Dodson serves an Administrative Law Judge for the IGC in complaints filed against the IGC, disciplinary actions initiated by the IGC, and issues concerning the revocation or denial of licenses.
(e) The IGC continues its contractual relationship with Indiana University on behalf of the Center for Urban Policy & the Environment, School of Public and Environmental Affairs (SPEA). Pursuant to the terms of the contract SPEA will analyze, among other issues, the financial impact and viability of an applicant's proposal for a riverboat gambling operation. SPEA will also prepare an annual report for a period of five years that outlines the performance of each riverboat licensed by the IGC.
(f) The IGC is in the process of entering into a contract with a publishing firm whereby the publishing firm will prepare a manual that contains the Riverboat Gambling Act, rules promulgated thereunder (68 IAC), an in-depth index of both the Act and the rules, and annotations to the Act and the rules.
(g) The IGC has entered into a Memorandum of Understanding with each riverboat licensee7 and Identix, Inc. Identix was designated the appropriate vendor to install and service live-scan fingerprint and photo ID systems at the riverboat locations. The goods and services are for the use of the IGC in processing occupational licensees that will work for the riverboat licensees. The goods and services are paid for by the riverboat licensee. Because the monetary expenditure is being made by the riverboat licensee, yet the equipment is being utilized by the IGC, it was determined that a Memorandum of Understanding is the appropriate mechanism in which to outline the various duties and responsibilities of each entity. Similar memorandums will be executed between the IGC, Identix and each riverboat licensee as the riverboat licensees purchase the fingerprint and photo ID system.
(h) In fulfilling its other statutory mandates, the IGC has continued to enter into Memoranda or Letters of Understanding with other agencies regarding the sharing of information with other jurisdictions and agencies to ensure that the IGC has the best possible information on each application for a license with respect to any regulatory matters that may arise after licensure.
- Miscellaneous
a) Lawsuits
(1) Walter H. Schulz, Jack Phillips, Earl Becker v. State of Indiana, Members of the 108th General Assembly, Indiana Gaming IGC, Alan I. Klineman, Chairman, et. al. On October 25, 1996, the Plaintiffs filed a complaint in Floyd County naming the various parties outlined above as Defendants. The complaint alleges the following: 1) that the law regulating riverboat gambling, specifically IC 4-33-6-19 "Docking of Riverboat in county-local approval required-procedure", within the State of Indiana violates Article 1, Section 23 of the Indiana Constitution and creates an unequal privilege to those classes of citizens who support riverboat gambling and does not apply to all counties in Indiana since some counties contiguous to a navigable river capable of supporting a riverboat casino are excluded. 2) That the inclusion of the Riverboat Gambling Act (HB 1107) contained in House Bill 1001 (the budget bill) is void, invalid and unenforceable because riverboat gambling is not related to the remainder of HB 1001. 3) That the Plaintiffs should be granted a jury trial and that the Court should award them costs and attorney's fees incurred for litigation expenses.
On June 13, 1997, the Honorable Michael Cloud, Judge, Orange County Court accepted this case as Special Judge.
(2) Preston Dunham, et. al. v. Trump Indiana, Inc., Barden, Indiana Gaming IGC, et. al. On May 1, 1996, the lawsuit was filed in Lake County by Dunham, et. al., residents of the City of Gary against the IGC, Trump Indiana, Inc., Majestic Star Casino (Barden) and others. The Complaint alleges that both casinos failed to hire the promised percentages of minority Lake County residents. The Plaintiffs further allege that the casinos failed to allow participation by the promised percentage of local investors. The plaintiffs sought to enjoin the IGC from issuing the permanent riverboat owner's licenses to the casinos.8
On May 31, 1996, the Attorney General, on behalf of the IGC, filed a Motion to Dismiss the Plaintiff's Complaint. On July 11, 1996, the Court issued its Order and Judgment of Dismissal which granted the Defendants' Motion to Dismiss the Plaintiffs' Complaint for failure to state a claim upon which relief can be granted. On December 18, 1996, the Court issued an Order and Judgment of Dismissal Nunc Pro Tunc reversing itself in part. In the Nunc Pro Tunc Order, the Court stated that it only intended to dismiss the Plaintiff's request for injunctive relief and not the underlying cause of action. On that same date, Judge Pressler recused himself and Magistrate Glenn Commons was named Special Judge.
8The permanent riverboat owner's licenses were issued to both Trump and Majestic Star in June of 1996.
A joint defense Motion for an Order Declining the Exercise of Jurisdiction and to Strike and Expunge the Entry of December 18, 1996 and a brief in support thereof was filed before Judge Commons. The Plaintiffs filed a Brief in Opposition to Defendants' Joint Motion and the Defendants filed a Reply to Plaintiffs' opposing brief. On April 10, 1997, Special Judge Commons heard the arguments of counsel and entered an Order that vacated the December 18, 1996 Nunc Pro Tunc Order for lack of subject matter jurisdiction, reinstated the July 11, 1996 Order and Judgment of Dismissal, and declined to exercise further jurisdiction over the matter as there was no pending controversy. This case is no longer pending.
b) Administrative Hearings
(1) Request of Schilling Casino Corp., d/b/a Empire Casino and Resort (Empire), For a Hearing Regarding the Denial of its Application for a Riverboat Owner's License. On November 13, 1996, the IGC issued an Order granting a Riverboat Owner's License to Indiana Gaming Company, LP (Argosy), which order was to become effective at least fifteen (15) days later. Based on this, Empire requested a hearing before an Administrative Law Judge (ALJ), seeking among other things, to revoke or terminate the Riverboat Owner's License issued to Argosy and to compel discovery. Bernard L. Pylitt was appointed as the ALJ in the matter. Argosy was allowed to intervene in the matter. On January 21,1997, the IGC filed a Motion for Partial Summary Judgment, as well as a brief in support thereof, and Argosy filed a Motion for Summary Judgment and a Motion to Dismiss, as well as a brief in support thereof. Argosy also requested the issuance of a protective order with respect to the request for discovery. On February 28, 1997, Empire filed a memorandum in opposition to the motions filed by the IGC and Argosy. Various other pleadings were filed and oral arguments were held in this matter on May 29, 1997.
On June 12, 1997, the ALJ filed Findings of Undisputed Fact and Conclusions of Law, and Recommended Orders Concerning Discovery and Summary Judgment. The ALJ recommended that the IGC's Motion for Partial Summary Judgment be granted, that Argosy's Motion to Dismiss be denied, and that Argosy's Motion for Summary Judgment was moot. The ALJ further recommended that Argosy be issued a protective order. The ALJ found that Empire's sole relief should be a hearing on the denial of its application for a Riverboat Owner's License wherein Empire would have to burden of proving that it should have received the Riverboat Owner's License instead of Argosy. Subsequently, both Empire and Argosy filed objections to the Findings of Fact, Conclusions of Law, and Recommendation filed by the ALJ.
On August 19, 1997, the IGC members adopted the ALJ's Findings of Undisputed Facts and Conclusions of Law as its own Findings of Undisputed Facts and Conclusions of Law and adopted the ALJ's Recommended Orders as its own. Pursuant to correspondence dated September 15, 1997, Empire advised the ALJ that it did not wish to seek a hearing on the denial of its application. As a result, this matter was closed.