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Dan Gustafson Updates Senate Gaming and Casino Oversight Committee

26 October 2005

Michigan Gaming Control Board Executive Director Dan Gustafson recently gave an update on the state of gaming to the Michigan Senate Gaming and Casino Oversight Committee reflecting on his agency's accomplishments. The Senate Committee is chaired by Senator Jason Allen and includes Senators Michael Bishop, Patricia Birkholz, Dennis Olshove and Robert Emerson. All of the Senators were present for the hearing except Senator Emerson. Mr. Gustafson was joined by several key members of his staff including Ben McMakin, Deputy Director of Licensing; Tom Barker, Deputy Director of Administration; John Page, Deputy Director of Enforcement; and Eric Bush, Manager of the Tribal Gaming Division.

Mr. Gustafson told the Committee that the MGCB currently has 98 employees and is authorized for 106 positions. He noted that the Office of Management and Budget has been helpful in waiving the hiring freeze, allowing the MGCB to remain fully staffed. He said that the MGCB staff levels are adequate and noted that the only problem is keeping the 106 positions filled. Two of the vacant positions are auditors, and there is frequent turnover in this position because of the private sector's high demand for people with this training. He did note, however, that he feels he needs an additional level 15 manager in Detroit. He is working with the Office of Management and Budget to accomplish this. Mr. Gustafson also noted that he believes that additional staff is needed for the Michigan State Police, which acts as a partner agency within the casinos.

Mr. Gustafson said that all three Detroit casinos are actively pursuing permanent casino facilities. This will result in the Board staff being very busy in the coming years issuing licenses to suppliers and various employees, working on monitoring the construction process, and assuring that each project is adequately and appropriately financed. In response to a question from Senator Olshove regarding the interplay between the MGCB and the final approval of the plans as to the size of the permanent casinos, Mr. Gustafson noted that these issues are governed by the development agreements with the City of Detroit. He said that any change in facility size is between the operators and the City.

Mr. Gustafson highlighted some key agency accomplishments over the past two years, noting that a recent AP wire story on the launch of gaming in Pennsylvania cited Michigan as an example that should be followed. Mr. Gustafson told the Committee that the MGCB has made "tremendous strides" over the last two years and gave the following examples.

- The Administrative Division, under Tom Barker, has launched a new training initiative which is very innovative. The new program will allow the MGCB to give specific training to state employees based on particular needs.

- An internal Internet site has been developed to enhance communication between the divisions. On Fridays, the MGCB has a live chat room available with the Executive Director for members of the staff.

- The Enforcement Division, under John Page, has conducted 12 audits during the past year and reviewed daily tax returns.

- The Michigan Gaming Lab is considered to be one of the best in the country. The lab tests gaming devices to make sure everything operates correctly.

- The MGCB Enforcement Division conducted over 6,000 tests of machines on the casinos' floors last year making sure all internal controls were followed.

- The Licensing Division, under Ben McMakin, licenses all suppliers and employees. Gustafson noted that two years ago there was a backlog of 2,200 employees and this backlog is now gone. The Licensing Division now averages a 90-day turnaround for a permanent occupational license. Mr. McMakin noted that there are currently about 7,500 employees in the Detroit casinos. This number has trended down since the passage of the increased state tax.

- Gustafson said that the MGCB now has specific, measurable goals and has followed through on suggestions the agency received from the State Auditor General.

Mr. Gustafson was asked by Senator Allen if the gaming market will continue to grow. After noting that he is not a market analyst, Mr. Gustafson said that he believes the analysts are projecting a 1.6 percent annual growth. However, he said that some predict the possibility of a 10 percent increase as a result of Windsor's ban on smoking.

Mr. Gustafson will return to the Committee to make a presentation on Tribal Gaming. This originally was set for Wednesday, October 26th. However, the Committee will instead be conducting a hearing on the appointment of Christine White as Racing Commissioner. Thus, Mr. Gustafson's Tribal Gaming presentation is being rescheduled.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com