0001 1 BEFORE THE MISSOURI GAMING COMMISSION STATE OF MISSOURI 2 3 4 5 MEETING 6 March 23, 2016 10:00 A.M. 7 3417 Knipp Drive Jefferson City, Missouri 8 9 10 BEFORE: 11 Herbert M. Kohn, Chairman Brian Jamison, Vice Chairman 12 Larry D. Hale, Commissioner Thomas Neer, Commissioner 13 Richard F. Lombardo, Commissioner 14 15 16 17 Reported by: 18 Julie K. Kearns, CCR 993 19 Midwest Litigation Services 20 3432 West Truman Boulevard, Suite 207 21 Jefferson City, Missouri 65109 22 (573)636-7551 23 24 25

0002 1 AGENDA 2 PAGE 3 I. Call to Order 4:15 4 II. Consideration of Minutes A. February 24, 2016 4:16 5 III. Consideration of Relicensure of Certain 6 Class A & B Licensees 5:16 B. Tropicana Entertainment, Inc. (Class A) 7 Tropicana St. Louis, LLC d/b/a Lumiere Place Casino & Hotels (Class B) 8 + Presentation by Applicant 5:21 + Presentation by City of St. Louis 30:17 9 + Public Comment 32:16 + MBE/WBE Compliance Review 32:22 10 + Investigative Summary 33:13 + Staff Recommendation 34:23 11 1. Resolution No. 16-008 (Tropicana Entertainment, Inc.) 34:25 12 2. Resolution No. 16-009 (Tropicana St. Louis, LLC d/b/a Lumiere Place 13 Casino & Hotels) 35:19 14 IV. Consideration of Joint Petition for Approval of Transfer of Interest and Change in Control 15 C. Presentations + Presentation by Pinnacle 36:22 16 Entertainment, Inc. + Presentation by Gaming & Leisure 17 Properties, Inc. 99:9 + Presentation by Staff 18 - Investigative Summaries 156:19 + Public Comment by persons filing 19 written requests pursuant to 11 CSR 45-2.010 20 - UNITEHERE! 160:19 + Staff Recommendation 190:22 21 Commissioner Deliberation - Motion for 22 Closed Meeting under Sections 313.847, RSMo., Investigatory, Proprietary and 23 Application Records and 610.021(1), RSMo., Legal Actions, (3) & (13) Personnel and 24 (14) Records Protected from Disclosure by Law 191:1 25

0003 1 AGENDA CONTINUED 2 PAGE 3 D. Resolution Incorporating the Commission's 4 findings on the Petition for Change in Control and any related ancillary 5 Resolutions. 192:21 6 V. Motion for Closed Meeting under Sections 313.847 RSMo., Investigatory, Proprietary 7 and Application Records and 610.021(1), RSMo., Legal Actions, (3) & (13) Personnel 8 and (14) Records Protected from Disclosure by Law 9 VI. Motion to Open Meeting 10 VII. Adjournment 195:9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

0004 1 P R O C E E D I N G S 2 (Meeting started at 9:58 A.M.) 3 CHAIRMAN KOHN: We can all watch the hands of 4 the clock move together. Angie, are you ready? 5 MS. FRANKS: Commissioner Lombardo. 6 COMMISSIONER LOMBARDO: Present. 7 MS. FRANKS: Commissioner Neer. 8 COMMISSIONER NEER: Present. 9 MS. FRANKS: Commissioner Hale. 10 COMMISSIONER HALE: Present. 11 MS. FRANKS: Commissioner Jamison. 12 COMMISSIONER JAMISON: Present. 13 MS. FRANKS: Chairman Kohn. 14 CHAIRMAN KOHN: Here. Is there a motion to 15 approve the -- well, the meeting is called to order and is 16 there a motion to approve the minutes of the meeting of 17 February 24? 18 COMMISSIONER HALE: So move. 19 COMMISSIONER LOMBARDO: Second. 20 CHAIRMAN KOHN: Any discussion? Angie. 21 MS. FRANKS: Commissioner Lombardo. 22 COMMISSIONER LOMBARDO: Approve. 23 MS. FRANKS: Commissioner Neer. 24 COMMISSIONER NEER: Approve. 25 MS. FRANKS: Commissioner Hale.

0005 1 COMMISSIONER HALE: Approve. 2 MS. FRANKS: Commissioner Jamison. 3 COMMISSIONER JAMISON: Approve. 4 MS. FRANKS: Chairman Kohn. 5 CHAIRMAN KOHN: Approve. 6 MS. FRANKS: By your vote, you've adopted the 7 minutes of the February 24, 2016 meeting. 8 CHAIRMAN KOHN: So we have, as you can tell, a 9 very full agenda today and some very important issues to 10 consider. So what we'll do, so that you'll know, is we'll 11 take up all the items under Roman numeral three, which are 12 relicensure items, then we'll take a five-minute break and 13 then we will continue without break for the rest of the 14 agenda. So we're ready for Consideration of Relicensure 15 of Certain Class A and B. Mr. Seibert. 16 EXECUTIVE DIRECTOR SEIBERT: Yes, sir. The 17 first item of business is Consideration of Relicensure of 18 Certain Class A and B Licensees, Tropicana Entertainment, 19 and Mr. Brian Marsh will present. And make your 20 introductions, too, please. 21 MR. CANTWELL: Thank you, Executive Director 22 Seibert. I've got a handout that I'm going to pass out to 23 the commissioners and a few staff members. Just take a 24 moment. 25 CHAIRMAN KOHN: Would you please introduce

0006 1 yourself and anyone else that's going to be speaking with 2 you? 3 MR. CANTWELL: Certainly, sir. Chairman Kohn, 4 Commissioners, Executive Director Seibert and Staff, good 5 morning. My name is Robert Cantwell and I am Missouri 6 regulatory counsel for Tropicana Entertainment, Inc. and 7 its affiliated companies. This includes Tropicana St. 8 Louis, LLC, which operates Lumiere Place Casino & Hotels 9 in St. Louis, Missouri on the riverfront. 10 I am here today with Brian Marsh, the General 11 Manager of that facility, and also Don Perkins, who is the 12 Corporate Director of Compliance for Tropicana 13 Entertainment, Inc. at large, all of its operations. Don 14 is a true veteran of the gaming industry and brings a 15 tremendous amount of experience in the compliance function 16 to all of Tropicana's operations throughout its system, 17 including the operation in St. Louis, Missouri. 18 We are here today at the request of your staff 19 to provide you an overview of our operations. It is our 20 hope that this will assist you in your consideration of 21 our request to renew the Class A license for Tropicana 22 Entertainment, Inc. and the Class B license for Tropicana 23 St. Louis, LLC, which operates Lumiere Place Casino & 24 Hotels in St. Louis, Missouri. Tropicana St. Louis, LLC, 25 d/b/a Lumiere Place Casino & Hotels is a bit of a

0007 1 mouthful, so for the rest of the presentation, we'd like 2 to refer to that entity and operation at Lumiere Place. 3 I'd like to begin the presentation with a few 4 details about Tropicana Entertainment, Inc. I'd also like 5 to find the clicker here. Give it one click. Tropicana 6 Entertainment, Inc. is the parent company, publicly 7 traded, of Lumiere Place. Along with Lumiere Place, 8 Tropicana Entertainment, Inc. has eight different casinos 9 and resorts that it operates in seven different 10 jurisdictions. 11 It operates in Indiana, Louisiana, Mississippi, 12 Nevada, Missouri, New Jersey and Aruba and throughout its 13 entire enterprise, it has approximately 5,500 hotel rooms, 14 over 8,000 slots, nearly 300 table games and it employs 15 nearly 7,200 individuals. It's quite a large operation 16 and it just got -- or it's going to get, most likely, 17 larger as the company recently signed a management 18 agreement to run the Taj Mahal in Atlantic City. 19 Another note about the company, the executive 20 team there, much like Don Perkins, who is a significant 21 part of it, they're all veterans of the gaming industry. 22 They have an incredible depth of experience and I think 23 Brian Marsh will speak about that a little bit as well, 24 but they bring that experience to all their operations, 25 including our facility here in St. Louis.

0008 1 Again, we're here to respectfully request 2 renewal of the Class A license for Tropicana 3 Entertainment, Inc. We'll begin the more substantive 4 portion of the presentation with regard to the Lumiere 5 Place operation with Brian Marsh in a moment, but I just 6 wanted to take a moment to generally express my 7 appreciation for all the commissioners taking the time to 8 consider our request for today. With that, I'd like to 9 introduce Brian Marsh, the General Manager of Lumiere 10 Place. 11 MR. MARSH: Thank you, Rob. Good morning, 12 Chairman Kohn, Commissioners and Executive Director 13 Seibert and Staff. My name is Brian Marsh and I'm here to 14 present on behalf of Lumiere Place Casino, and I know that 15 we'll be referring to it as Lumiere Place in the 16 presentation, and respectfully requesting consideration in 17 the relicensing of our Class B licensure. 18 So a little bit of background on myself. I've 19 been in the industry for 23 years now. Most recently 20 spent ten years with French Lick Casino. I had the 21 pleasure of actually designing and building the casino 22 portion of the resort and subsequently was allowed to 23 remain on and manage the property for the past ten years. 24 Prior to that, I spent time with Harrah's 25 Entertainment, approximately ten years, as well as a year

0009 1 with an outside -- or a slot machine manufacturing 2 company, WMS Gaming, which was an interesting year, and 3 then I also spent time with the Trump organization, 4 specifically in Trump, Indiana. 5 More personally, I have six daughters, I have 6 two granddaughters and I have a third granddaughter on the 7 way. I also have four dogs, so very lively household. 8 Fortunately some of them are -- most of them are off the 9 payroll at this point, but we're still working through a 10 lot of that. 11 My wife is an attorney and one of my daughters 12 is also an attorney and daughter number five is thinking 13 about becoming an attorney. So I have to mind my Ps and 14 Qs not only at home, but here as well and I assure you 15 that -- 16 CHAIRMAN KOHN: That's great because the world 17 needs more attorneys. 18 MR. MARSH: Yeah. I have a house full of them, 19 actually. So if you need an attorney -- anyways, that's a 20 little bit on my home life there. And, you know, I -- so 21 this is week ten at Lumiere Place and I have really 22 enjoyed this first ten weeks. 23 One of the things that has been interesting is 24 just watching the integration and the interaction between 25 our troopers that are on the property and our security

0010 1 staff. And it really -- it helps me be very comfortable 2 that operationally these two groups work extremely well 3 together in addition to what we do with the City of St. 4 Louis. 5 We are rebuilding the leadership team and I'd 6 like to introduce two of the newer individuals that are on 7 that team. Mike, if you don't mind standing up. So this 8 is Mike Donovan. Mike Donovan has been with Tropicana 9 Entertainment in various positions for the past nine 10 years. More specifically, Mike was an executive director 11 of marketing for the overall company so we convinced Mike 12 that he needed to come to St. Louis. He was getting a 13 little tired of the east coast and the west coast, maybe 14 the ocean, and we are very, very happy to have him. Very 15 keen on what we do on a direct marketing standpoint 16 throughout the company and certainly going to be a 17 valuable asset to the property. Thank you, Mike. 18 I'd also like to introduce an individual. 19 Carla, would you please stand up? Carla Shelby was 20 somebody that was a day one employee of Lumiere Place 21 Casino and she held multiple positions throughout her 22 tenure there in the HR function. Most recently she was 23 the manager of HR. Carla is -- with Gaming Commission 24 approval, obviously, will become our Director of HR. 25 Carla sees things very balanced between employee

0011 1 and the company. More importantly, she takes a very 2 inclusive approach on how she deals with all issues. And 3 we're very, very pleased that she's willing to step up to 4 this new role and this new responsibility as we reenergize 5 the leadership team at the property. Thank you, Carla. 6 At any point during this presentation -- again, 7 I am very thankful that I'm getting an opportunity to 8 speak on behalf of the property and the current state, so 9 at any point during the presentation, please stop me and 10 ask any questions. I do tend to talk too much sometimes. 11 The first area that we'd like to talk about, 12 based on the request of Staff, is our development 13 agreement with the City of St. Louis and while the 14 substantive obligations of the agreement have been met, I 15 want to demonstrate our longer commitment in maintaining a 16 strong partnership with the City of St. Louis. 17 Further, there has been exceptional development 18 on the historic St. Louis riverfront that we're working 19 very hard to ensure that our gaming operation actually 20 synchronizes with it. Specifically, as you see on the 21 slide there itself, is the CityArchRiver project and the 22 Great Rivers Greenway Association. It's a beautiful view 23 as you actually look out towards the Mississippi River. 24 The project itself was a $380 million project 25 over the years primarily funded through the efforts

0012 1 through the CityArch Foundation. So these projects, along 2 with what the future brings for the City of St. Louis, is 3 where we're going to be and be in partnership with that 4 going forward. 5 So specifically, our development agreement, 6 we've spent over $11.5 million for specific downtown 7 projects. 6 million of that was with the National Blues 8 Museum. The museum itself is set to open on April 2. So 9 if any of you enjoy blues and that whole -- the whole 10 history of St. Louis, we've had a chance to actually see 11 the museum and it's wonderful. You've got to take a few 12 minutes to actually come down and check it out. It's 13 going to be extremely nice and a great addition to the 14 city. 15 The property has spent $5 million associated 16 with the CityArchRiver project, an additional $500,000 to 17 the City of St. Louis Police Department for the 18 hot-spotting strategy. We actually donated riverfront 19 land to the Great Rivers Greenway project. The land 20 itself is between the hotel and the river. It's going to 21 be actually green space and a park when it's all done. 22 We continue a million dollar payment to the City 23 each year. And, more importantly, we spent $2 million to 24 convert an old historic building into affordable housing, 25 which is supported by the St. Patrick's Center, which is

0013 1 right around the corner from the property. 2 CHAIRMAN KOHN: What's the source of the million 3 dollar payment to the City? How did that originate? How 4 long does it go on for? Is it an agreement? 5 MR. MARSH: It's an agreement. It's embedded in 6 the local development agreement for -- between us and the 7 City. 8 CHAIRMAN KOHN: For how long? 9 MR. MARSH: I believe it's -- 10 MR. WILLIAMS: It's continuous. 11 MR. MARSH: Yeah. I think it's continuous as 12 long as there's an agreement between the two of us. 13 CHAIRMAN KOHN: Is it dedicated to a certain 14 purpose? 15 MR. WILLIAMS: Yes. My name is Otis Williams 16 and I'm with the St. Louis Development Corporation, the 17 City of St. Louis and the agreement is one that was 18 promulgated at the beginning of the project. And it 19 provides for security, it also augments some of the issues 20 that relate to the properties around it. So the City uses 21 it to support efforts along the riverfront. 22 MR. MARSH: So from our standpoint, Lumiere 23 Place is going to continue to have a very coordinated 24 effort and do everything we possibly can to ensure that 25 this development agreement between us and the City of St.

0014 1 Louis continues and I'm personally committed to making 2 sure that effort takes place. 3 As you can see, this is a quick snapshot of our 4 capital investment. At the acquisition in April of '14, 5 the acquisition amount was 261 million. Subsequently, 6 there was another $13.6 million spent at the property, 7 this was between 2014 and December of 2015. And more 8 importantly, what I'm really excited about is what we're 9 doing in 2016. We're going to put another $16 million 10 into the property. I'll go into a little bit of detail 11 here in just a second of what that's going to be. 12 The 13 million that was spent prior to 2015 -- 13 or, excuse me, 2016, so it consisted of a complete 14 enclosure around the casino with a glass partition, new 15 carpeting, refinishing all the different hallways that our 16 customers visit, and more specifically, this surrounding 17 glass that has been put around the property, around the 18 casino floor, has dramatically improved the air 19 circulation. I think the stats alone, we went from like a 20 ten -- or a nine or a ten changes per hour and now we're 21 up around 16. So it's dramatically improved the 22 environment on a Saturday night when it can be fairly 23 smoky. 24 If you take a look at the picture on the 25 left-hand side. I know in your handout you only see this

0015 1 picture, so we purchased that piece of land. And what it 2 looks like is this at this point. And take notice of the 3 little tower right there in the corner. I'll talk about 4 that in a second. This -- so that old warehouse was now 5 converted into outside parking. 6 In addition, we've added a Wet Willie's daiquiri 7 bar to the facility. It's been very, very well received. 8 We're managing it to the best possible outcome we can and, 9 I'll tell you, it's begun to draw on maybe a younger 10 demographic to the facility that is going to be accretive 11 in the long run. 12 So this is the part that I'm very excited about. 13 Starting in June, actually June 1, we are getting ready to 14 completely renovate the Lumiere hotel portion of the 15 facility. As you know, the hotel itself was an Embassy 16 Suites. It was built in 1985. This is the first time 17 it's actually going to be completely renovated on the 18 inside. 19 That's a depiction of what the -- since they're 20 all suites, all of our hotel rooms, this will be what the 21 living room will look like when we're done. We'll be 22 completely redoing the restroom in each one of the suites 23 to a very modern, nice, contemporary look and feel. And 24 then this is what the bedroom areas are going to 25 eventually look like when we're complete with this

0016 1 renovation. 2 The renovation is going to start in June and 3 should end no later than the first of October. Again, 4 it's about 11 to $12 million of the $16 million that we're 5 planning on spending this year on the property. You know, 6 again, we are very, very committed to doing whatever we 7 need to do to make sure that this property remains vibrant 8 and modern and so forth. And that's what our commitment 9 is moving forward. 10 So I want to talk a few minutes about our 11 security enhancements. One of the things that we're doing 12 right off the bat is we're putting our officers into an 13 actual security officer uniform. When the Cardinals play 14 and all of our fans come to the property, they're in red 15 and our security officers are in red, so it's tough to 16 actually distinguish them from fans sometimes. We feel 17 that this will give an even stronger presence of security. 18 In addition to that, just recently I had our 19 Corporate Vice President of Security for Tropicana 20 Entertainment visit the property and do a complete 21 evaluation from soup to nuts. We hit every room, every 22 parking lot, every corner, surveillance, all the way 23 through and he's got some initial recommendations for me 24 in regards to how we can make the property even safer. 25 I showed you the security tower. That security

0017 1 tower in the parking lot is manned 24/7 now. It actually 2 goes up 40 feet. Apparently it got hit by lightning and 3 so we kind of have a very strong SOP that says if there's 4 any bad weather, you're not allowed to be in the tower. 5 So rest assured. 6 But where the tower is located, it actually 7 gives us a very good view back up on the property itself. 8 It's an area where I don't have cameras and so we actually 9 have that person, that -- you know, that first-person view 10 of what's going on. 11 That is an addition to we're adding -- in our 12 security monitor room, we have our normal surveillance, 13 but we also have an active security monitoring area with a 14 lot of camera setups and so forth. We're going to be 15 bringing in additional monitoring capability. 16 Here's an example. When we do the renovation on 17 the hotel, we're going to add approximately 16 cameras 18 that are dedicated to the eight floors of the atrium area. 19 These 16 cameras will be on one very large display, 20 constantly up in front of the person monitoring it. The 21 idea is that we'll have the ability to actually see 22 anything going on immediately and react to it. We don't 23 have this presently. We do have good camera coverage in 24 the hotel. This is just going to enhance that effort. 25 One of the things I'm really interested in and

0018 1 moving forward with is the -- I don't know if you're 2 familiar with the City of St. Louis. There's a Real Time 3 Crime Center that's essentially the surveillance setup for 4 the City of St. Louis. So I've had a chance to actually 5 visit the crime center, Real Time Crime Center, and I'm 6 very impressed on how their -- have made an impact in the 7 City of St. Louis. 8 Specifically, they use license plate reader 9 cameras. When these reader cameras actually take a hit, 10 depending on what -- what criminal activity the individual 11 registered to the car did or whatever comes up on a 12 screen. 13 So the idea is actually allowing the City of St. 14 Louis to have the ability to utilize some of our camera 15 equipment that's outside of the gaming area and 16 specifically in the parking areas, not the parking garage, 17 but everything on the outside. It's just one example of 18 how we think it will continue to enhance what we're doing. 19 Secondarily, we're going to give the City, with 20 Gaming approval, the ability to access our license plate 21 reader cameras as well. So just it's one more defense 22 mechanism that we feel that's needed. 23 The last bullet point speaks to our continued 24 involvement in the community for improving a security 25 standpoint. Susan Trotman, the director of the Great

0019 1 Rivers Greenway project has asked me to be a part of a 2 security task force for the near north area properties. 3 And so I'll be -- I will be involved in that, as well as 4 the annual contributions that the property has done in the 5 past, we're going to continue those efforts for the 6 additional police presence that I have on the property. 7 As you can see, this is a year-over-year trend 8 for the crime rate, more specifically down in the lower 9 right-hand corner, which is where we're located, we've 10 actually seen an additional decrease in the crime rates, 11 specific to where the property is located. 12 So moving into an area that is a very personal 13 area for me and having been at the property now for ten 14 weeks, I have to tell you that I'm very impressed with 15 what has been taking place prior to me getting there with 16 our security staff. The efforts with the security team at 17 the entrance into the casino are really good and I am 18 very, very proud to say that I don't have concerns with 19 what has taken place in the past. 20 So what we're going to do is we're actually 21 going to enhance that ability. Our current turnstile 22 setup is one where you actually have an ingress and then a 23 separate egress. What I want to do is actually go in and 24 have bidirectional. What this allows us to do is actually 25 narrow down the entrance and exit. It will give the

0020 1 security officer a better opportunity to actually make 2 sure that nobody gets into the casino floor under 21. 3 Again, it's a very important principle to 4 understand why we're doing this. We truly believe that 5 keeping somebody out of the gaming area that is under 21 6 and keeping them from any alcohol consumption is 7 important. And I'm extremely proud that the team is -- 8 these are just enhancements that we're going to do with 9 the team. 10 So along with what the team currently does with 11 the Gaming Commission to continually stay sharp on fake 12 IDs, some past experience. In French Lick, Indiana 13 University, similar to what happens in St. Louis with the 14 universities there, the individuals at each school are 15 getting really good at making fake IDs. And so this 16 whole -- it's kind of a game that you have to play and you 17 have to be sharp with. So we're going to continue to 18 actually make sure that we're prepared to deal with this. 19 I think everybody is familiar with what a 20 Veridocs scanner does. One of the things is it actually 21 produces a red light, green light or yellow light. So 22 what we've done is change that procedure specifically that 23 if a yellow light happens to come up when a person's ID is 24 scanned, in the past, the security officer was able to 25 make that decision on their own, whether or not a person

0021 1 can go in or not. So in the future, now they actually 2 have to have a supervisor and/or a gaming agent with them 3 in order to allow that person to go through. So that's 4 just one of the improvements that we've done. 5 We've also installed our Veridocs scanning 6 equipment at Wet Willie's. That's an area that because 7 it's a younger demographic, we want to make sure that 8 we're doing everything there to make sure we keep underage 9 from drinking. So we also have black lights and all of 10 the right tools at the turnstile. 11 What I'm most proud of is that in 2015, nearly 12 2 million people entered the casino and we actually 13 scanned 334,000 of them through the Veridocs. That's 14 about 18 percent. And with that, only seven instances of 15 somebody underage actually gained access. 16 The next page is a letter from Captain Renee 17 Kriesmann of board seven, which is the captain that I deal 18 with specifically and directly. It's a letter speaking to 19 our relationship in the past and how we're going to 20 continue this relationship between the City, myself, the 21 team at the property, as well as the Gaming Commission. 22 So I just want to speak a little bit to what the 23 property has accomplished in the past from a charitable 24 contribution standpoint. Obviously, by the pictures, the 25 team at Lumiere Place is very, very dedicated to giving

0022 1 back. We spend a lot of time outside of the property with 2 our teams in different functions and in different 3 projects. 4 We're getting ready to do another Habitat for 5 Humanity build in three weeks, I believe, or four weeks, 6 as well as we just recently were at the St. Patrick's 7 Center serving lunch to 200, 250 individuals that are 8 participating in that project there. Our commitment going 9 forward is to continue this. We believe, and I believe 10 personally, that giving back is a very vital and very 11 important thing that we need to continue to do. 12 Moving into our hiring practices, we are tapping 13 into every resource we possibly can to make sure that we 14 make the connection with as many individuals that need a 15 job. I think one of the most important things that you 16 can do is actually give somebody a job and so what we're 17 doing is, as you can see, we're tied into the Urban League 18 of St. Louis. We're tied into the St. Louis Diversity 19 Awareness Partnership and all the way through, 20 specifically working very closely with the St. Patrick's 21 Center to make that connection with individuals that 22 actually are willing to make the leap that they need to 23 make and, you know, we're there and we're taking them in 24 as employees when we can. 25 The next slide depicts the current demographics

0023 1 and the current makeup of our current workforce. 2 62 percent of our workforce is minority and 45 percent of 3 that workforce is female. I'd like to speak a little bit 4 about where we're at from a minority and women-owned 5 business utilization. 6 So in 2015, the property did very well in both 7 areas. We finished at 16 percent on the minority side and 8 finished close to 19 percent on the women-owned business 9 side. Our overall spend was 19.4 million and 7 million of 10 that -- close to 7 million of that or 34.5 percent was 11 with a minority or women-owned business. 12 So some of the things that are really important 13 with this project -- and, again, this is an area that we 14 take extremely serious. I think that any time that you 15 can help a small business, either on a startup or 16 continued or expanding in either the minority-owned 17 business category or women-owned business category is 18 important and it's an area that we're going to continue to 19 work very closely with. 20 We participate in the diversity fairs. In fact, 21 I think there's one coming up at Hollywood in three weeks. 22 We network with other businesses to find new minority and 23 women-owned business opportunities. We have an existing 24 resource and database within Tropicana that we're tapping 25 into. We're utilizing multiple online database and

0024 1 sources to make sure that we're doing everything we can to 2 find these businesses and more specifically in 2015, we 3 added ten minority-owned businesses as well as 14 4 women-owned businesses. So, again, it just kind of 5 depicts and shows where our efforts are. I'm personally 6 committed to this project. I think it's extremely 7 important. It's the right thing to do. 8 So I'd like to take just a second to close. 9 That actually went a little bit faster than I expected. I 10 usually talk a little bit too much. But, you know, in 11 closing, I just -- I've been there for ten weeks and I'm 12 extremely happy that I made this decision to leave French 13 Lick. I didn't have to leave French Lick. French Lick 14 was a great property, we did a lot of great things there. 15 The reason why I left is because of Tropicana 16 Entertainment and the veterans that are with Tropicana 17 from the top down. 18 And secondary to that, outside of maybe going to 19 the Aruba property, which you guys didn't offer that one, 20 I really wanted to come to St. Louis. I felt that Lumiere 21 Place has -- it's a great property to begin with. It's 22 doing very well. And I just think there's opportunities 23 there that I'd like to have an opportunity to get involved 24 with and see if we can move the needle. So I'm extremely 25 happy to be a part of this team.

0025 1 I want to thank you for allowing me to present 2 the current state of affairs at Lumiere Place. It's -- 3 again, I'm extremely excited to be here. People ask me 4 that -- you know, why are you so excited? It's just the 5 property has so many things that we can do that are great 6 moving forward. I'm happy to answer any questions that 7 you might have at this point. 8 CHAIRMAN KOHN: Any questions? I'm just 9 curious, can you give us a couple of examples of the MBE 10 and WBE vendors that you added last year? 11 MR. CANTWELL: He might be able to help. 12 MR. PETTIBONE: I'm sorry, you're looking for a 13 couple of vendors that we had in 2015. 14 CHAIRMAN KOHN: Especially the MBE. 15 MR. PETTIBONE: 2015 for MBE. 16 EXECUTIVE DIRECTOR SEIBERT: Can you state your 17 name, please? 18 MR. PETTIBONE: I want to know -- 19 MR. MARSH: Why don't you come to the mike? 20 EXECUTIVE DIRECTOR SEIBERT: Can you have him 21 state his name? 22 MR. MARSH: I assure you, by week 15, I'll 23 actually know a lot of this detail off the top. It's been 24 a whirlwind. State your name, first. 25 MR. PETTIBONE: Sure. Nick Pettibone,

0026 1 Purchasing Manager for Lumiere Place. I brought some 2 numbers. I know I come off babbling here, but again C&B 3 Lift Truck was one particular vendor we added that was 4 discovered at the Minority Business Council. I believe 5 that was downtown last year. 6 On the entertainment side, women-owned business, 7 we had The Lalas, which is a women-owned production that 8 we brought in for entertainment last year. Gosh. Oh, a 9 printing company, Cross Rhodes Reprographics was another 10 one that we actually discovered through an online 11 database, the Missouri Office of Equal Opportunity site 12 that actually led us to a connection there, and they are 13 now printing quite a few things for us. I think we had a 14 spend in possibly second, third and fourth quarter from 15 them. 16 CHAIRMAN KOHN: Okay. I was curious as to not 17 only who they were, but how you went about getting them 18 and you've answered that question well. 19 MR. PETTIBONE: Okay. 20 CHAIRMAN KOHN: You attend fairs and things of 21 that nature? 22 MR. PETTIBONE: Correct. Networking and one was 23 actually kind of a cross between the two. The connection 24 I made at a fair, later couldn't recall and then 25 reconnected with a former employee who is also on the

0027 1 diversity side, development side and he was able to kind 2 of reconnect me with that vendor. 3 CHAIRMAN KOHN: Any other questions? 4 COMMISSIONER JAMISON: No. 5 COMMISSIONER LOMBARDO: Yeah, I think so. 6 CHAIRMAN KOHN: Oh, I'm sorry. 7 MR. MARSH: Yes, sir. 8 COMMISSIONER LOMBARDO: Mr. Marsh, kind of on 9 the same subject. I was looking at the demographic 10 statistics. Is there any impetus at Lumiere Place to 11 increase the participation in management of minorities or 12 women? 13 MR. MARSH: Yes, there is. You know, they -- 14 the current demographics are the 2015 statistics. You're 15 speaking of our actual employee demographics? 16 COMMISSIONER LOMBARDO: Yeah, you show 17 employees, then you also show management -- 18 MR. MARSH: Yes; that's correct. 19 COMMISSIONER LOMBARDO: -- on the same page. 20 MR. MARSH: That's correct. So just recently, I 21 will be adding to our director staff an African American 22 individual, as well as we have recently promoted from 23 within as well. Very, very committed to making sure that 24 the diversity matters and it's a big part of what is going 25 forward. I'm personally committed to that.

0028 1 COMMISSIONER LOMBARDO: Thank you. 2 MR. MARSH: You're welcome. 3 COMMISSIONER HALE: May I, Mr. Chairman? 4 CHAIRMAN KOHN: Sure. 5 COMMISSIONER HALE: Brian, is it? Your first 6 name is Brian? 7 MR. MARSH: Yes, sir. 8 COMMISSIONER HALE: Brian, as long as I've been 9 here, which is, I guess, a bit over a year, I've looked at 10 the MBE/WBE numbers because that's an issue that's of 11 significance to me and I know, obviously, others on this 12 commission. 13 MR. MARSH: Yes, sir. 14 COMMISSIONER HALE: Since you've been here eight 15 weeks, I just want to say to you that my understanding is 16 that since approximately 2011 and continuing through to 17 2015, which are the numbers that I've seen from the 18 commission staff, your facility has certainly been one of 19 the leading facilities in WBE and MBE compliance. 20 Since you're new to that facility, I'm sure that 21 you, based upon what you've said, will continue to take 22 seriously the commitment that you made mention of and 23 certainly the commitment to MBE and WBE participation as 24 well as minority participation at your facility. Thus 25 far, what I've seen, I have to tell you, I think it is a

0029 1 good thing and I know that we'll continue to see that same 2 thing. Thank you, sir. 3 MR. MARSH: Thank you very much. And you're 4 right. My -- I appreciate that comment. I certainly do, 5 sir. And it's a personal commitment as well as the 6 property commitment that -- to continue down those paths. 7 You know, a lot of times what happens is you make a 8 connection with a minority or a women-owned business and 9 because they're a bit smaller of an organization, they're 10 not caught up in infrastructure, they're not caught up in 11 the things that can slow them down and we actually have 12 seen situations where they actually get product to us 13 quicker, so our service from them is actually better. 14 So it's truly -- it's finding those -- finding 15 those companies and making sure that they work right 16 for -- work with us. We're going to continue to support 17 the ones that want help as well. You know, we've got a 18 distributor of all of our EBS supplies and we actually 19 help them with some bookkeeping and some recordkeeping 20 situations. 21 So those are the things that the team -- you 22 know, again, it's week ten, but the team -- I didn't mean 23 to bring Nick up and do that, but -- I do apologize I 24 wasn't able to answer the question specifically, but 25 that's the commitment that the team has demonstrated to me

0030 1 and, you know, through the leadership team and myself, 2 we're going to continue that. So thank you very much. 3 COMMISSIONER HALE: Well, thank you. 4 CHAIRMAN KOHN: Thank you. Are we moving ahead 5 now with the City presentation? 6 MR. MARSH: Yes, sir. If I may, so I -- what 7 I'd like to do and I failed to introduce Otis when he 8 already came up to speak. I met Otis Williams, our 9 Director of the St. Louis Development Corporation, I met 10 him on day three and I found him to be an incredibly 11 impressive individual. The project that he is personally 12 committed to and his overall commitment to the City of St. 13 Louis is great and I am very happy to be a partner with 14 him. So with that -- and I'll remain up here, too, if 15 there's any additional questions -- I'd like to introduce 16 Otis Williams, please. 17 MR. WILLIAMS: Thank you, Mr. Chairman and the 18 commissioners. Again, I'm Otis Williams and I'm Executive 19 Director for the St. Louis Development Corporation, which 20 is a City of St. Louis economic development arm and I 21 report directly to Mayor Slay, the mayor of St. Louis. 22 He's been the mayor for the last 16 years, four terms. 23 So -- and actually was the mayor when this property was 24 brought online. We have worked as a team with Lumiere, 25 both previously with Pinnacle and now with Tropicana.

0031 1 It's been a great experience. 2 To speak to some of the things that's happening 3 along there, Brian mentioned a few things with the 4 development of the CityArchRiver project, a $380 million 5 project that he spoke about. In addition to that, we're 6 taking that further north through Laclede's Landing, 7 through the Lumiere property, and then toward the new Stan 8 Musial Veterans Bridge. 9 So many of you probably read about our efforts 10 to retain the Rams, which was going to be a part of the 11 larger project. But we always had a project that was 12 there for the taking without a sports team and so we're 13 furthering that with our partnership with the Great Rivers 14 Greenway, which is the entity that Brian mentioned, but 15 we're also working with our stakeholders and Brian and the 16 folks at Tropicana are part of that team. 17 We are in the midst of beginning the 18 implementation of this development plan. We hope that the 19 next few years, as you are reviewing this, that you will 20 be -- that you will be able to see some of the fruits of 21 our labor. 22 Let me speak to the issue at hand, which is 23 essentially that the St. Louis Development Corporation and 24 the City of St. Louis strongly support the efforts here of 25 approving the continuation of the -- or renewing the

0032 1 license for the Tropicana. I'd like to express the 2 support of the City in this whole process and be happy to 3 answer any questions that you might have as to our 4 commitment to supporting this property and the commitment 5 they have in supporting us. So it has been a great 6 relationship over the years and we look forward to the 7 continued relationship. 8 CHAIRMAN KOHN: Any questions? 9 COMMISSIONER HALE: I have none. 10 COMMISSIONER LOMBARDO: No. 11 COMMISSIONER NEER: No, sir. 12 CHAIRMAN KOHN: Thank you very much. 13 MR. WILLIAMS: Thank you. 14 EXECUTIVE DIRECTOR SEIBERT: At this time the 15 Chair will take any public comments. 16 CHAIRMAN KOHN: Is anybody registered to -- from 17 the public to make a comment? Anybody not registered who 18 would like to make a comment? Okay. We got through that. 19 Mr. Seibert. 20 EXECUTIVE DIRECTOR SEIBERT: The next order is 21 the MBE/WBE compliance review by Miss Cheryl Bonner. 22 MS. BONNER: Good morning, Mr. Chairman, 23 Commissioners. On January 2, 2015, the Missouri Gaming 24 Commission Staff conducted a hundred percent audit of 25 MBE/WBE records for the Class B Licensee Lumiere Casino --

0033 1 Lumiere Place Casino. The results of our audit and 2 specific details related to those findings are contained 3 within the summary report in your possession. I would be 4 happy to answer any questions. 5 COMMISSIONER LOMBARDO: No questions. 6 MS. BONNER: Thank you. 7 COMMISSIONER NEER: No. 8 CHAIRMAN KOHN: Thank you very much. 9 Mr. Seibert. 10 EXECUTIVE DIRECTOR SEIBERT: Next order is the 11 investigative summary that will be presented by Sergeant 12 Sammy Seaton. 13 SERGEANT SEATON: Mr. Chairman, Commissioners, 14 good morning. 15 CHAIRMAN KOHN: Good morning. 16 SERGEANT SEATON: Under Tab B, you'll find a 17 resolution for relicensure of Class A and Class B 18 licensees, Tropicana Entertainment, Incorporated, 19 hereinafter referred to as Tropicana, and Tropicana St. 20 Louis, LLC doing business as Lumiere Place Casino & 21 Hotels, hereinafter referred to as Lumiere. 22 Tropicana and Lumiere were originally granted 23 Missouri Gaming Commission Class A and Class B licenses in 24 April 2014 and their current licenses are set to expire on 25 March 31, 2016.

0034 1 On December 20, 2015, Tropicana and Lumiere 2 submitted applications for the renewal of their Class A 3 and Class B Riverboat Gaming Licenses. Upon receipt of 4 those applications, investigators from the Missouri 5 Highway Patrol and the Missouri Gaming Commission 6 conducted an investigation of Tropicana and Lumiere to aid 7 the Commission in determining their continued suitability 8 for licensure. This investigation consisted of 9 jurisdictional inquiries, feedback from affected local 10 governmental agencies, a financial analysis and a review 11 of the key persons associated with the companies. 12 At this time, Tropicana and Lumiere are being 13 presented for your consideration and approval of their 14 respective Class A and Class B applications for 15 relicensure. A comprehensive summary report was submitted 16 to the Missouri Gaming Commission Staff and you possess a 17 copy of that summary before you. I can answer any 18 questions you may have at this time. 19 CHAIRMAN KOHN: Any questions? 20 COMMISSIONER NEER: No, sir. 21 COMMISSIONER JAMISON: No, sir. 22 CHAIRMAN KOHN: Mr. Seibert. 23 EXECUTIVE DIRECTOR SEIBERT: Staff does 24 recommend approval. 25 CHAIRMAN KOHN: Okay. Is there a motion to --

0035 1 we need to adopt both resolutions, right? Is there a 2 motion to approve -- to adopt Resolution No. 16-008? 3 COMMISSIONER HALE: So move. 4 COMMISSIONER LOMBARDO: Second. 5 CHAIRMAN KOHN: Any discussion on the motion? 6 Angie. 7 MS. FRANKS: Commissioner Lombardo. 8 COMMISSIONER LOMBARDO: Approve. 9 MS. FRANKS: Commissioner Neer. 10 COMMISSIONER NEER: Approve. 11 MS. FRANKS: Commissioner Hale. 12 COMMISSIONER HALE: Approve. 13 MS. FRANKS: Commissioner Jamison. 14 COMMISSIONER JAMISON: Approve. 15 MS. FRANKS: Chairman Kohn. 16 CHAIRMAN KOHN: Approve. 17 MS. FRANKS: By your vote, you've adopted 18 Resolution No. 16-008. 19 CHAIRMAN KOHN: Is there a motion to approve 20 Resolution 16-009? 21 COMMISSIONER JAMISON: So move. 22 CHAIRMAN KOHN: Second? 23 COMMISSIONER NEER: Second. 24 CHAIRMAN KOHN: Discussion on the motion. 25 Angie.

0036 1 MS. FRANKS: Commissioner Lombardo. 2 COMMISSIONER LOMBARDO: Approve. 3 MS. FRANKS: Commissioner Neer. 4 COMMISSIONER NEER: Approve. 5 MS. FRANKS: Commissioner Hale. 6 COMMISSIONER HALE: Approve. 7 MS. FRANKS: Commissioner Jamison. 8 COMMISSIONER JAMISON: Approve. 9 MS. FRANKS: Chairman Kohn. 10 CHAIRMAN KOHN: Approve. 11 MS. FRANKS: By your vote, you've adopted 12 Resolution No. 16-009. 13 CHAIRMAN KOHN: Okay. So as I said at the 14 beginning, we'll take a five-minute break and then we'll 15 continue on for the rest of the session on the next item 16 before us. 17 (Break in proceedings.) 18 CHAIRMAN KOHN: Okay. If you'll all take your 19 seat, we'll begin. Ready for item Roman numeral four, 20 which is about two thirds of a page, so shouldn't take us 21 more than ten, 15 minutes. Go ahead. 22 MR. SANFILIPPO: Good morning. My name is 23 Anthony Sanfilippo, I'm the CEO of Pinnacle Entertainment 24 and we appreciate the Chairman and members of the 25 Commission and Executive Director Seibert to allow us to

0037 1 be here with you and talk with you for your approval on a 2 transaction that, once approved, will continue to be the 3 license holder, Pinnacle Entertainment, of three terrific 4 facilities that we are the license holder of today in the 5 state of Missouri. 6 There are a number of people who have traveled 7 here to be with us and if I may introduce them and also 8 ask them to stand. They're members from our Pinnacle 9 Entertainment team. Our President and Chief Financial 10 Officer, who will also speak, is Carlos Ruisanchez. Jack 11 Godfrey, who is our General Counsel and Secretary. 12 And then here in Missouri we have a number of 13 individuals that live and operate here. The next 14 individual lives in St. Louis, oversees seven properties 15 for us, including the three that are here in Missouri. 16 Neil Walkhoff, who is our Executive Vice President of 17 Operations. Troy Stremming, who lives in the Kansas City 18 area, and for our company he oversees government relations 19 and public affairs. 20 Donna Negrotto, who is based in Las Vegas with 21 the three of us who is in our legal department as a vice 22 president. And then operating our properties, Ward Shaw, 23 who is our General Manager of our Ameristar property in 24 St. Charles. Chris Plant, who is our General Manager of 25 our River City property.

0038 1 Gary Stella, who is our Assistant General 2 Manager of our Kansas City property and then two directors 3 of regulatory compliance are here with us, Shaun Ledbetter 4 and also Rayna Stover who are with us. These are the team 5 members of Ameristar, River City, Pinnacle Entertainment. 6 And then there's some individuals who have 7 traveled here who are community public elected officials 8 or leaders in their communities. Mayor Sally Faith from 9 St. Charles, Missouri. Great to have her with us. Frank 10 McHugh, who is the Chairman of the St. Louis County Port 11 Authority, along with Ed James, who is the Vice Chairman 12 of the Port Authority. 13 Sheila Sweeney, who is the Executive Director of 14 the St. Louis County Port Authority and CEO of St. Louis 15 Economic Development Partnership, and Andrea Young, who is 16 the Associate Counsel for the Kansas City Port Authority. 17 All these individuals, thank you for coming here to 18 Jefferson City to support us in our effort to have this 19 transaction approved. 20 What I'd like to do, I'm going to take a few 21 minutes to take you through Pinnacle Entertainment and our 22 company and our presence here in Missouri and then Carlos 23 Ruisanchez, who is our President, will take you through 24 the transaction. 25 Now, you have a copy of the presentation in

0039 1 front of you and I'm going to also display it as we're 2 doing right now through this PowerPoint. Our company is a 3 gaming entertainment company and we have right at 15,000 4 team members with approximately 3,800 of our team members 5 here in Missouri. 6 We have a portfolio of properties in 15 7 different gaming jurisdictions, Indiana, Mississippi, 8 Missouri, Iowa, Nevada, all which have approved this 9 transaction prior to today, Colorado who will approve it 10 post the transaction, they don't require an approval prior 11 to, and then the state of Louisiana where we have four 12 properties and we're on their agenda for approval in 13 April. We also operate in Ohio, but the property there is 14 not impacted by this transaction, as well as Texas where 15 we have a racetrack in both locations and neither one of 16 those properties are part of this transaction. 17 When we think about who makes up Pinnacle 18 Entertainment and the 15,000 team members, a little bit 19 more than -- well, almost half of our properties are of a 20 diverse nature. You can see from the PowerPoint, the 21 slide that's up in front of you right now, that we have 22 30 percent of our team members are African American and I 23 won't read the rest for you, but we're a very, very 24 diverse company. And here in Missouri, from a minority 25 employment as part of our total employment, almost

0040 1 42 percent of our team members are minority employees and 2 then 45 percent are female. 3 Our profile, we are a company with well over 4 $2 billion in gaming revenue and 83 percent of that comes 5 from -- $2 billion in revenue and 83 percent comes in 6 gaming revenue, and then you can see how it's broken down 7 on the graph that's in front of you with food and beverage 8 being quite a large part of it, 266 million, and then you 9 can see how much we get from hotel revenue, which is over 10 a hundred million, and then retail revenue and other 11 revenue, which would also include revenue we get from 12 entertainment. 13 In 2015 we had net revenue of almost 14 $2.3 billion and EBITDA of $617 million. Next line you'll 15 see that Missouri is very important to us with almost 16 30 percent of our total revenue coming from the state of 17 Missouri and our three properties. I know Mayor Faith's 18 favorite property is our property in St. Charles. It's 19 12 percent of the revenue that we have of the three 20 properties, and then 8 and 9 percent respectively from 21 Kansas City and our River City property. 22 We are very involved in our communities and 23 we -- we have -- our company has a program that for every 24 dollar that our team members commit to charities, that 25 we'll match 25 percent of that. And in 2015, $800,000 was

0041 1 committed by Pinnacle Entertainment team members and we 2 matched our company to the same charity 25 percent of 3 that. 4 Our three Missouri properties have had over 1500 5 team members pledge a total of $189,000 and then with the 6 Pinnacle Entertainment match, that brought it over 7 $236,000. And then you can see at the bottom of this 8 page, a number of examples of where those contributions 9 go. 10 When I mentioned we have three terrific 11 properties, we truly have three terrific properties here, 12 properties that we're very proud of and properties that 13 all in their own right are destination properties. You 14 can see from the page that we're on right now where 15 they're located, two that are in the greater St. Louis 16 area, one that is in Kansas City and all three are 17 outstanding properties. 18 Our Kansas City property is the largest casino 19 with the most games in the Kansas City area. Over 140,000 20 square feet of casino space. We're very proud that we 21 received a Three Diamond Award at that property and we 22 have 184 guest rooms that's there. This property also has 23 a theater and 15,000 square feet of meeting space and you 24 can see the number of awards and recognitions that we 25 received at our Kansas City property. And then the next

0042 1 page just shows you some photographs of that property and 2 tries to give you a flavor for the quality of the property 3 that we have there. 4 Our Ameristar St. Charles property is 130,000 5 square feet of gaming space with 2,400 slots, 58 table 6 games. I'll mention that in all three of our properties 7 right now, we are going through refurbishments of those 8 properties. 9 So we're improving our gaming floor, we're 10 adding amenities at this property that will include an 11 Asian restaurant, as well as specifically an Asian gaming 12 area, as well as relocating our poker room. And this 13 whole floor is being redone at our Ameristar St. Charles 14 property. And then at our other two properties, we also 15 have fairly significant work that we are at the beginning 16 of to improve those properties. 17 This property has received AAA Four Diamond 18 Award and both our property in St. Charles, as well as our 19 River City property, have received for a number of years 20 an award that is the top workplace in the St. Louis 21 greater area. And then you'll see photos on the next 22 couple of pages of our property in St. Charles. 23 And River City, which is the newest of the 24 Pinnacle Entertainment properties in Missouri, you can see 25 that that property has 90,000 square feet of gaming space,

0043 1 200 guest rooms. We opened up that hotel in 2013. It was 2 part of a $82 million expansion where we put in place a 3 hotel, a convention area, as well as a parking garage and 4 we received the AAA Four Diamond Award there at this 5 property. 6 Next couple of pages you're going to see photos 7 of that property and you'll see the expansion that I just 8 talked about that we completed in September of 2013. One 9 of the things unique to this property that, you know, we 10 find our guests like quite a bit, you can tell in the 11 photo at the bottom right-hand corner, we actually have 12 rooms on the first level that each have their own terrace 13 or garden area where guests can walk out and sit in an 14 area that is outdoor area. 15 And when we built this, we said, look, we really 16 want to try to make this property -- and our other 17 properties are the same way. While the center of the 18 business is casino operations, we really focus on it being 19 a full entertainment destination for our guests. 20 In River City, we're very involved from a 21 community involvement standpoint. You can see with the 22 Lemay Community & Aquatic Center, we had quite a bit of 23 funding through the Port Authority that helped build that 24 center and we've also participated with the Civil War 25 Museum there.

0044 1 And then you'll see photos of that property with 2 all three properties and all the properties that we have 3 throughout our portfolio. We are very much focused on 4 maintaining and improving the facilities we have. In 5 fact, we just did at our River City property, improved a 6 capital project that we're going to take a restaurant that 7 when -- we opened up six years ago and redo it. It was 8 more of a coffee shop that we're redoing to an Italian 9 restaurant. Along with there we're putting in an Asian 10 restaurant. 11 So part of how we do business and what's 12 important to do is to continue to refresh the properties 13 that we have. And you'll hear as we go through the 14 presentation for this transaction that nothing that we're 15 doing will get in the way of us continuing to improve the 16 properties that we have like we've done historically. 17 And then this page has a lot of numbers on it, 18 but the intent is to give you by line item the economic 19 impact of the Missouri properties that we have and you can 20 see it by line item. In 2015, so this is -- this shows 21 you for 2015 the amount of gaming tax that we paid $142 22 million, the admission fees 36 million. 23 I won't take you down this page, but it does 24 give you a very good idea of the impact that our company 25 has in the state, including charitable donations, overall

0045 1 capital improvements, the total capital investment in the 2 state of well over a billion and a half dollars, etcetera. 3 So hopefully you find this helpful in taking a look at 4 metrics for '15 that reflect our presence here in the 5 state. 6 And then this page just shows you a direct 7 annual impact of us in Missouri. The 2015 supplier spend 8 by all of our properties, $72 million, and when you then 9 look at our total team member compensation for '15, over 10 $100 million. The taxes and fees paid by our three 11 Missouri properties, over $200 million, with an annual 12 reincurring spend -- this is just in those three 13 categories -- of over $400 million, state of Missouri. 14 Carlos is going to come up and take you through 15 the transaction. We look forward to any questions that 16 you may have for us. Thank you. 17 CHAIRMAN KOHN: I should have asked and I'll ask 18 now. I hope you don't object to our asking questions 19 while you're presenting. Is that okay? 20 MR. SANFILIPPO: We would be happy to field 21 questions, any question you may have at any time. 22 CHAIRMAN KOHN: Thank you. 23 MR. RUISANCHEZ: Good morning, Chairman, 24 Commissioners, Executive Director, members of the Staff. 25 Again, thank you for the opportunity to present here our

0046 1 transaction. I think, as Anthony took you through, we 2 have been, I think, a contributor to the state of Missouri 3 and we take great pride in both our culture and our 4 approach to the businesses that we have here, including 5 the communities that we're in, as well as all our team 6 members that are part of our company. And that will not 7 change going forward as part of this transaction. 8 This transaction is about taking advantage of a 9 situation that we think will position us better going 10 forward from where we are today. And I'll take a few 11 minutes to take you through some of the specifics. 12 Essentially, back in 2014, we had made a 13 determination, our board made a determination that it 14 would make sense to actually separate real estate from our 15 operations, not the use of that real estate, but that 16 there would be operationally no difference between owning 17 the real estate or leasing it. 18 And as a matter of fact, in River City, we don't 19 own the land. That's been leased since the beginning of 20 our involvement there. We also -- that's the same case in 21 some of our other properties in other jurisdictions, in 22 Indiana as well as out in Louisiana, we do not own the 23 land. It is leased under a long-term lease. 24 As part of this transaction, when we have made 25 the determination to go and at least go and pursue the

0047 1 separation of our real estate from our -- the rest of our 2 company -- 3 CHAIRMAN KOHN: I'm sorry. Is the River City 4 strictly a land lease or does the owner of the -- 5 MR. RUISANCHEZ: It is a land lease today. 6 CHAIRMAN KOHN: It does not own the building. 7 MR. RUISANCHEZ: We own the building today. We 8 do not own the land. The land is leased under a 99-year 9 lease or something to that effect. 10 CHAIRMAN KOHN: Okay. 11 MR. RUISANCHEZ: The -- as part of the pursuing 12 our transaction to try to split the real estate from our 13 company, we have gone and pursued an IRS ruling in regards 14 to trying to do a tax-free transaction on that separation. 15 And along that process, we were approached by Gaming & 16 Leisure Properties saying you do not need to go and create 17 your own real estate investment trust. We'll be happy to 18 buy your assets and enter into a long-term lease. 19 Through the negotiations, we came up with this 20 transaction. There were two big focuses on it. One, we 21 have studied this now for over two years and in great 22 detail and we were focused on making sure that we had a 23 lease that we could work with long term where our view and 24 approach to our properties would not be any different than 25 it is today.

0048 1 This is a triple-net lease, therefore, we're 2 responsible for taxes, maintenance, obviously, as well as 3 the rent and insurance. And long-term lease licenses, 4 which we will own and continue to operate under, are 5 specific to these sites. So our approach had been we're 6 going to be in these places forever, so this will become 7 basically about setting up this company financially to a 8 better position than we had been prior to the transaction. 9 And that leads to the second part of the -- at 10 least our analysis as we went through is how do we make 11 sure that we have a healthy, strong company on the other 12 side of this, to be able to take advantage of the things 13 that we have as a company going forward and continue to 14 grow and improve our businesses the way that we have, 15 certainly over the last six years that Anthony, and I have 16 been with the company about seven years, have gone 17 through. 18 The transaction we think would accomplish both 19 of those, both of those goals. We ended up with a 20 transaction where we would enter into effectively a 21 merger. We would spin off the rest of our company, 22 leaving back the operations that -- leaving back the real 23 estate that is subject to this. GLPI would then purchase 24 that and, as part of that purchase, they will address 25 $2.7 billion of debt that we have within our company today

0049 1 and they will provide our shareholders .85 shares for 2 every share of Pinnacle that our current shareholders own. 3 So .85 shares of GLPI that they're free to do whatever 4 they want to do following the transaction. 5 As part of the lease, we would have a lease 6 payment of $377 million that will be practically like a 7 lot of real estate transactions, will have a land-based 8 component, will have a building-based component and then 9 they will have a small revenue component that will move as 10 we go on. 11 The transaction would be under a 35-year lease. 12 Largely that was driven by accounting. Practically 13 speaking, we will be here for as long as we have the 14 privilege of doing business in this state under these 15 licenses. 16 And lastly, that the transaction, which we 17 expect will be able to close next month, subject to, 18 obviously, approvals in two remaining jurisdictions, this 19 one and Louisiana. The transaction will lead Pinnacle in 20 a very, very strong footing financially as our debt will 21 actually be down from what it is today, about 22 $3.6 billion, to under 900 million on our borrowed debt, 23 debt that we would have to go back and repay and refinance 24 as we go along. 25 The transaction rationale is pretty

0050 1 straightforward. We are unlocking value in the real 2 estate and using that to bring down our conventional 3 leverage of borrowed money. And if you take as a given, 4 which recognize that that is an assumption, that we would 5 look to split -- we look to do this on our own and doing 6 this with GLPI allowed us to not have to deal with the IRS 7 and the pursuit of that private letter ruling, close this 8 transaction sooner and, as importantly, the -- being part 9 of a larger REIT would establish a more stable, bigger 10 REIT that would help us as a company going forward and 11 certainly for the State as you have a landlord in these 12 facilities that has a stronger credit rating by virtue of 13 being larger and more diversified than we would have been 14 on our own. 15 And as importantly, as I mentioned, getting us 16 to be well established to take advantage of what we have 17 going forward was a key focus for us as, obviously, we're 18 staying with the company. The management, every person, 19 every process, all the licenses, all the assets, except 20 the real estate associated with the facilities that are 21 part of this transaction, will be exactly the same post 22 this as they have been before. 23 Structurally, the -- what we would be doing, 24 this is one lease, over 14 properties that would act as 25 one. It's not an individual lease for every single asset.

0051 1 The licensees would remain the same, at least the B 2 licensees would remain the same. 3 There are things that we are -- that are not 4 part of this transaction that do include real estate. 5 Among them, there is excess land in Louisiana near our 6 Baton Rouge facility as well as our Lake Charles facility 7 that would remain with the company and they're not part of 8 the operations today. 9 So, you know, looking to monetize things that 10 don't produce cash flow today didn't make economic sense, 11 so, therefore, they were no part of it. Belterra Park, 12 similar reason, the real estate associated with Belterra 13 Park, which is right outside of Cincinnati, Ohio is not 14 part of that transaction. That property opened up a 15 little more than a year ago and it is still ramping up, 16 but it is not contributing great cash flow at the moment, 17 and, therefore, we did not include it. 18 Retama Park and the rest of the other boxes that 19 you see here, they are not good real estate assets by 20 virtue of us not owning all of them. They do have some 21 real estate included in them, but since we do not own all 22 of them, they do not qualify under REIT rules. 23 CHAIRMAN KOHN: Can I get you to back up for a 24 second? 25 MR. RUISANCHEZ: Sure.

0052 1 CHAIRMAN KOHN: In your materials, you said 2 there was an exchange ratio of .85, but you mentioned the 3 25 for one exchange. What is that? 4 MR. SANFILIPPO: It's .85. 5 MR. RUISANCHEZ: It's .85. 6 MR. SANFILIPPO: For every share. 7 CHAIRMAN KOHN: I misunderstood. 8 MR. RUISANCHEZ: For every share of Pinnacle, 9 they will receive .85 shares of GLPI. 10 CHAIRMAN KOHN: All right. My second question 11 is I understand that you're going to be out from under 12 significant debt by this transaction and you will also 13 have some cash coming in. Did you mention what that was? 14 MR. RUISANCHEZ: There is actually -- 15 technically, there is no cash coming into the company. 16 What's happening is we are separating -- we would separate 17 everything except the real estate and we would leave 18 behind $2.7 billion of debt that we currently have today 19 and that will get addressed by Gaming & Leisure 20 Properties. 21 CHAIRMAN KOHN: So you're picking up the debt 22 service on that debt that you would not have to pay? 23 MR. RUISANCHEZ: Yeah. That 2.7 billion, they 24 will address at closing through funds that they're 25 raising.

0053 1 CHAIRMAN KOHN: Right. So you will not have 2 debt service on that debt which you currently have? 3 MR. RUISANCHEZ: Correct. 4 CHAIRMAN KOHN: But you'll also have a lease 5 payment of 700 and some? 6 MR. RUISANCHEZ: 377 million. 7 CHAIRMAN KOHN: 377 million. So how do those 8 numbers compare to each other? 9 MR. RUISANCHEZ: Last year, we spent about 10 $569 million between debt service and interest and -- 11 which are roughly about split. And this going forward, it 12 would be under 420 between the lease payment and interest 13 associated with under 900 million that we would have on 14 our company going forward. 15 CHAIRMAN KOHN: So you pick up free cash of 16 what? 17 MR. RUISANCHEZ: We would have -- our free cash 18 will be in excess of $100 million. 19 CHAIRMAN KOHN: A year. 20 MR. RUISANCHEZ: A year. After interest, after 21 capital expenditures, that would be in the same manner 22 we've always took care of our business and not only in 23 Missouri, but in every jurisdiction that we work in. 24 CHAIRMAN KOHN: And have you proposed somewhere 25 in your plans a use of those funds?

0054 1 MR. RUISANCHEZ: We have not specifically done 2 that. We continue to be focused on running the best 3 businesses that we can and looking to grow the company as 4 we move forward. We, to start off, had a very significant 5 transaction in the acquisition of Ameristar back in 2013 6 where we grew -- pretty much doubled overnight. 7 And as part of that transaction, we built a 8 number of capabilities, which I'll spend a minute talking 9 about, and our intent is to continue to leverage those to 10 improve the existing businesses that we have, as well as 11 to acquire other businesses to increase that diversity and 12 the stability that we have within the company. 13 CHAIRMAN KOHN: What would those other 14 businesses be? Can you give us an example? 15 MR. RUISANCHEZ: Buying other properties. 16 CHAIRMAN KOHN: Other casinos? 17 MR. RUISANCHEZ: Buying other businesses, other 18 gaming, entertainment properties in either jurisdictions 19 where we can or new places, new jurisdictions. 20 CHAIRMAN KOHN: Would that include Missouri? 21 MR. RUISANCHEZ: Well, it -- certainly if they 22 are available, absolutely, if they make economic sense to 23 pursue. Obviously, on the Ameristar transaction, the 24 Federal Trade Commission had a point of view as it relates 25 to St. Louis, so practically speaking, that probably will

0055 1 speak for at least that market. But certainly Missouri 2 has some great markets. We have some great businesses 3 here and to the extent that it makes economic sense, we'll 4 certainly pursue things that would become available. 5 MR. SANFILIPPO: Let me -- if I may add. To go 6 back a little bit, so post -- post our payment of rent to 7 them, because I know it's a subject that says we get -- we 8 relieve -- we're relieved from a large amount of debt, 9 which was important to us. 10 When we made this deal with the Gaming & Leisure 11 Properties, we ended up announcing it last July, we said 12 we want to have a very viable company going forward. We 13 want to have a very healthy company going forward. So 14 part of our negotiation was that Gaming & Leisure 15 Properties would take $2.7 billion in debt. And so I want 16 to go back a little bit to your question and then our 17 available cash after that. 18 We earmark about $100 million a year for capital 19 improvements companywide. We're doing a lot of capital 20 improvements at our Missouri properties right now. When 21 Carlos said that after maintenance capital, he's taking 22 into account that $100 million that we say we're going to 23 continue to reinvest in all of our properties post this 24 transaction which gives us about a hundred million dollars 25 in available cash for us to pay more debt down, for us to

0056 1 expand properties or whatever we want to do. 2 So the point for us was we want to have a very 3 healthy company post this transaction so that we can 4 continue to, first, invest in the properties that we 5 operate, which is part of the agreement, because we know 6 if we're not investing in these properties, they're not 7 going to be viable properties. 8 And Gaming & Leisure Properties will tell you 9 they want us to invest in these properties because they'd 10 like to see us succeed and for us to be a healthy company 11 because the only way these properties have any value to 12 them is that the person who has the skill to operate them 13 and hold the license, has the privilege to hold the 14 license, can do a good job with it. 15 CHAIRMAN KOHN: When you say these properties, 16 you're talking about 14 properties or just the Missouri 17 properties? 18 MR. SANFILIPPO: I'm talking -- when I say these 19 properties, it's the properties that's part of the 20 transaction that we just talked with you about and the 21 transaction we're making with Gaming & Leisure Properties 22 is a one set of properties transaction. 23 So going forward, when we look to expand the 24 company, there is no further tie with Gaming & Leisure 25 Properties. If we elect for them to buy an asset and for

0057 1 us to buy the operation, we can do that. If we elect for 2 us to go out and buy the property completely, we can do 3 that. 4 There's other REITs that are starting in this 5 space if we elect to go with another REIT. MGM just 6 announced that they're going to be starting a REIT. We 7 could go to MGM and we could -- they could own the asset 8 and we could -- if they have approval by the jurisdiction, 9 they can own the physical asset and we can own the 10 operation. 11 So it's important to know that this transaction 12 is a one-time transaction with Gaming & Leisure 13 Properties. We are two separately traded public 14 companies. We have two board of directors. We have two 15 CEOs and what we're asking you to approve is just a 16 one-time transaction that we believe is not only in the 17 best interests of our company, but we believe it's in also 18 the best interests of the jurisdictions that we operate 19 in. 20 We'll get to that in a second, but we appreciate 21 the questions because I think it's important to understand 22 that we are going to be a -- continue to be a very healthy 23 company with a lot of cash to continue to grow our company 24 and that what we have been able to negotiate as part of 25 this transaction with Gaming & Leisure Properties is that

0058 1 both the rent and the debt payment is such that it ends up 2 being a good transaction for them and ends up being a good 3 transaction for us. 4 It allows us to continue to grow our company and 5 we feel like there just are no restrictions or burdens on 6 us. In fact, we think it's for a healthier company and 7 you're going to hear -- I would think when Gaming & 8 Leisure Properties comes up, that this industry is moving 9 to more of a REIT model, that we're seeing different 10 companies, Caesars Entertainment is trying to do it, MGM 11 is doing it, trying to separate their assets from their 12 operations and more monetize that value. 13 A REIT is a company that at least is in the 14 business of paying back 90 percent of everything it takes 15 in. So we very much appreciate the question and we want 16 to make sure that we've articulated clearly what's 17 happening here and any questions that you continue to 18 have, we welcome them. 19 CHAIRMAN KOHN: Let us just go back, again, to 20 make sure that at least I understand because you've 21 mentioned other jurisdictions and you've mentioned the 22 REIT and your company. Of course, our interest is in the 23 state of Missouri. So let me get back to the numbers for 24 a minute. It frees up, if I understood what Carlos said, 25 $100 million, but that $100 million of free cash after the

0059 1 transaction is not -- you are not required to spend that 2 in the state of Missouri; am I correct? 3 MR. RUISANCHEZ: Let me clarify. 4 CHAIRMAN KOHN: Let me get the second part of 5 the question out. 6 MR. RUISANCHEZ: Sure. 7 CHAIRMAN KOHN: The hundred million, which is 8 the bottom line, if you want to call it that, of this 9 transaction, as far as free cash going to the company, 10 results from the Missouri transaction, but if I'm also 11 correct, that money could be spent in any other 12 jurisdiction that you operate in; is that correct? 13 MR. RUISANCHEZ: Technically, the -- we actually 14 approach every one of our properties in the exact same 15 way. In order for us to be competitive and relevant and 16 continue to grow the way we've been growing, that we have 17 to reinvest in them. And as part of that, our commitments 18 to all of our existing properties remains steadfast, that 19 this is things that we need to do in order to make sure -- 20 it's in our best interests to do in order to make sure 21 that our business is healthy and goes forward. 22 Put that aside for a second, Missouri is a big 23 state for us. As you saw earlier, this is about 24 30 percent of our revenue and cash flow of our company. 25 We have every intention to operate in the exact same way

0060 1 that we have and reinvest in our properties in the exact 2 same way that you've seen us do and really try to -- for 3 self-interest in one regard, but more importantly, to 4 continue to make sure that we have a viable, healthy 5 company going forward. 6 As it relates to the hundred million, that's a 7 hundred million dollars every year and that is after we've 8 spent all the money reinvesting in our properties. So we 9 will have cash flow after interest, after taxes in excess 10 of $200 million every year and we'll spend about half of 11 that or so in reinvesting, doing things like what we're 12 doing at River City and what we're doing in St. Charles 13 and in Kansas City where we're doing refurbishments in all 14 of those three casinos. That is part of that pool of 15 capital to continue to do that. 16 COMMISSIONER JAMISON: Let me ask a question, 17 though, and I think I'm a little confused. The hundred 18 million that we're referencing, the 200 million that then 19 after capital improvements gets down to a hundred million, 20 that isn't recovered from just the Missouri properties, 21 that's recovered from all 14 properties -- 22 MR. RUISANCHEZ: In the company. 23 COMMISSIONER JAMISON: -- that are involved in 24 this transaction? 25 MR. RUISANCHEZ: That's correct.

0061 1 COMMISSIONER JAMISON: And so the three Missouri 2 properties would be a portion of that hundred million 3 dollars in savings and so the hundred million dollars 4 isn't generated just by the Missouri transaction, it's 5 represented by whatever percentage of the overall costs 6 are. And so it doesn't necessarily mean that Missouri is 7 going to save you a million dollars in free cash flow, the 8 whole transaction is, and then proportionally, it would 9 be -- 10 MR. SANFILIPPO: What we're talking about, what 11 we were trying to explain to you is that -- how healthy 12 our company will be -- 13 COMMISSIONER JAMISON: On a whole? 14 MR. SANFILIPPO: -- with this deal. Right. 15 That after we pay rent, after we pay all our team members, 16 after we pay our taxes, marketing, we'll have in excess of 17 $200 million today, if the business stayed as it is. We 18 expect to continue to grow the business. 19 So we have a healthy amount of money to then 20 say, look, we want to maintain our properties. And what 21 we've been spending on our properties has been -- a year, 22 all of our properties, about $80 million. What we have 23 earmarked is a hundred million. And so in reference to 24 available cash flow, we're saying once we've paid 25 everything we need to pay to everybody, including the rent

0062 1 on this, including the interest that we have, we expect to 2 have over $200 million. 3 We earmark, as a team we say, look, we're going 4 to put a hundred million back in because we want to redo 5 rooms, restaurants, things like that, replace carpet, new 6 slot machines, which gives us, then, about a hundred 7 million dollars -- we were using that just as big buckets 8 for you -- a hundred million dollars, then, to decide do 9 we pay debt down further or what should we do with that. 10 The point we were trying to illustrate is that 11 we remain a very healthy company with a materially reduced 12 debt burden. That was the point we were trying to 13 illustrate with that. 14 COMMISSIONER LOMBARDO: Okay. So Brian's 15 explanation, essentially you agree with it, that it's 14 16 properties and the money gets spread over all 14 17 properties, correct? 18 MR. SANFILIPPO: Well, not equally, though. 19 COMMISSIONER LOMBARDO: I didn't say that. 20 MR. SANFILIPPO: But it is used for us -- when 21 we look at maintenance projects, we do want to make sure 22 we have carpet in good repair, we want to make sure 23 that -- if you went to any of our facilities, you would 24 see that our facilities are in very good repair, which is 25 part of our competitive advantage.

0063 1 COMMISSIONER LOMBARDO: Sure. 2 MR. SANFILIPPO: Our ability to allow our guests 3 to come in and experience a property that's in good repair 4 is part of who Pinnacle Entertainment is. 5 COMMISSIONER LOMBARDO: On the subject of how 6 the -- well, to aspects of how the money is split up, do 7 you have some internal analysis -- if I understand 8 correctly, you've got $377 million on the master lease 9 that's being paid by a total of 14 operating entities, 10 correct? Is that right? 11 MR. RUISANCHEZ: That is correct. 12 COMMISSIONER LOMBARDO: Okay. Have you done 13 some internal division as to what portion of that 14 377 million is being paid by each property? 15 MR. RUISANCHEZ: No, we have not and, in part, 16 because it is one lease across all 14 collectively. 17 COMMISSIONER LOMBARDO: So it would be 18 impossible for you to answer me if I was to ask you what's 19 the difference between what River City's paying on their 20 current ground lease and what their portion of this master 21 lease payment would be? 22 MR. RUISANCHEZ: Well, we can have some 23 allocation mechanism, but if for some reason River City 24 were not there, the lease -- the master lease still 25 stands.

0064 1 COMMISSIONER LOMBARDO: I understand. 2 MR. RUISANCHEZ: So it's not really allocatable 3 to each one. You can do it in a number of ways, but it 4 would just be a mathematical exercise because it's one 5 lease for all 14 properties. 6 COMMISSIONER LOMBARDO: But you haven't done 7 that particular exercise. 8 MR. SANFILIPPO: Here's what -- I don't want to 9 speak for Gaming & Leisure Properties. What they cared 10 about was what was the total bucket of rent that they're 11 going to receive and then -- so the transaction was here's 12 the rent we're going to receive as a real estate 13 investment trust, here is what we're paying to you, which 14 is the $2.7 billion of debt, as well as to your 15 shareholders, which is .85 shares for every share of 16 Pinnacle stock. 17 So the transaction was just looking at a 18 combination of the rent payment for the assets that we've 19 described to you. It wasn't a asset by asset let's figure 20 it out. It was a bucket of assets that is part of this 21 transaction. We are still responsible -- using River 22 City, we are still responsible to pay the lease -- the 23 lease payments to the port, that's still our 24 responsibility. We're still responsible for insurance, 25 we're still responsible for the real estate taxes.

0065 1 In a triple-net lease, we act as if we own it, 2 we just don't own the asset. It's just like someone that 3 may be in an office building. They have the use of that 4 building, but somebody else, typically a REIT, owns that 5 asset. And so we have the ability to continue to use that 6 asset, in this case for 35 years, with -- we are very 7 careful in how we negotiated this to make sure that we 8 would be able to continue to operate that asset as a 9 gaming entertainment facility. 10 COMMISSIONER LOMBARDO: In the case of River 11 City, this is the last question here for me for a while, 12 then the flow of money, does the REIT pay the Port 13 Authority and then River City in turn pays the REIT? I 14 know this is kind of an unusual piece of the thing. 15 MR. RUISANCHEZ: Technically, there will be -- 16 we would be subleasing that land underneath, so we would 17 make payments to the REIT and the REIT will make payment 18 to the port. 19 COMMISSIONER LOMBARDO: Okay. Thanks. 20 COMMISSIONER JAMISON: Yes. You reference the 21 35 years and I just want to make sure I understand. 22 That's a ten-year and five five-year renewals. Are those 23 automatic renewals that you cannot be, I guess, booted out 24 of or eliminated from? Is that your decision on the 25 renewal of the five-year renewals or is that a joint

0066 1 renewal or how -- can you give me a little insight on 2 that? 3 MR. RUISANCHEZ: Sure. It is our decision to go 4 ahead and renew and at the end of the 35 years, we'll just 5 negotiate a new lease term. 6 COMMISSIONER JAMISON: But it's an automatic -- 7 each renewal is automatic determined by you as opposed to 8 an agreement between? 9 MR. RUISANCHEZ: It is our call to give -- we 10 have to give notice. So we have to say we are renewing 11 for the extension. 12 COMMISSIONER JAMISON: Okay. 13 MR. RUISANCHEZ: And it is our option under the 14 same terms of the lease and at the end -- 15 CHAIRMAN KOHN: As I understand it, there are 16 escalators in those renewals; is that right? 17 MR. RUISANCHEZ: It's the same terms that we 18 have under the lease. There was escalators every year and 19 this is totally normal in lease transactions. There is 20 actually protections in here to protect us as a company on 21 those escalators where the escalators do not come in 22 unless we have at least 1.8 times coverage of rent. 23 That is unusual in REIT transactions. Usually 24 it's a CPI or a set rate and it happens every year no 25 matter what. In this instance, in order to make sure that

0067 1 we're protected, those escalators come in only to the 2 extent you can afford them. 3 COMMISSIONER LOMBARDO: And the escalators, 4 two percent annually. 5 MR. RUISANCHEZ: It's two percent on the 6 building piece of the tran -- of the total rent payment, 7 which is roughly about 289 million of the 377. 8 COMMISSIONER LOMBARDO: Okay. Are there any 9 other escalator clauses? 10 MR. RUISANCHEZ: The only other one that would 11 come in of the remaining -- we'll come back to this. Of 12 the remaining -- 75 percent of the lease payment is this 13 building rent, which is subject to the two percent 14 escalator. The remaining quarter is split in two. One of 15 them is land rent, which is a fixed number and it's fixed 16 for the entirety of the 35 years, and then the other one 17 is the piece that's tied to revenue. 18 So as revenue goes up or down, that component 19 will end up being adjusted every two years. And it's 20 basically four percent of the change in revenue that is 21 associated with the pool of properties, you know, whether 22 it's up or it's down and reset every two years. 23 COMMISSIONER LOMBARDO: Four percent cap? 24 MR. RUISANCHEZ: No, it's four percent of the 25 change. So if we do a hundred dollars more in revenue,

0068 1 relative to when we start, then $4 would be an adjustment 2 to the rent under the context of making more revenue, 3 should be able to afford more rent. 4 Going back to -- as we evaluated this with our 5 board and talked through, we -- you know, our company has 6 come a long way since we first came into this state and 7 developed some of the properties here and acquired 8 properties in the context of Ameristar. And in it, how we 9 created value, not only for ourselves but in the 10 communities that we're in and with all of those that have 11 been involved with us, really comes down to what you see 12 here on the left. It is by virtue of having the right 13 product offering and the facilities that we have. 14 We have a loyalty program that's been highly 15 effective for our company. Our team members are core 16 assets that our company has that allow us to provide the 17 services and the know-how that we have. Our operating 18 capabilities, you know, we've gotten better. As we talk a 19 lot about being a learning organization, learning how we 20 can improve what we offer, how do we create better value 21 for guests and our imprint in the communities that we're 22 in. 23 Our scale has been a big source of synergies as 24 we go through -- this is just purchasing power, being able 25 to aggregate whatever, the amount of protein we buy for

0069 1 our restaurants, the paper goods or what have you, just 2 that scale has been meaningful. Our culture, we actually 3 spent a lot of time on our culture and we think that it 4 not only is important for our company, but it allows for 5 an environment where our team members have -- can really 6 blossom and have careers and that has led to better 7 service, better ideas that come forward and our ability to 8 continue to improve our operations. 9 The service level that we've had is really a 10 cornerstone to the things that we talk about and we focus 11 on and it's part of the reason why our casinos in the 12 state have been as successful as they are. Intellectual 13 property is our names from River City, Ameristar, 14 mychoice, etcetera, the names that we use within our 15 company. 16 Obviously, the gaming licenses are the key part 17 of having this business and paramount to executing that 18 and today we own the real estate in most places. River 19 City is one of them that we don't, where we don't own the 20 land, that we continue to -- that have been part of our 21 company. 22 The only thing that's changing here is that we 23 will no longer own it. However, we will maintain the use 24 of it and the reality is that these licenses are specific 25 to these sites and, you know, our mindset is going to be

0070 1 we'll go beyond the 35 years because in 35 years, moving 2 these licenses is not practical or feasible. And, 3 likewise, if gaming were not taking place at these 4 locations, the value of that real estate would be 5 different. 6 So for that reason, at the end of 35 years, 7 we'll enter into another lease to be negotiated at that 8 point and go into this indefinitely and hence why our 9 mindset surrounding these buildings and the land 10 associated with them would really be no different than we 11 have today given that we're responsible for maintaining -- 12 we have a requirement under the lease to maintain it and 13 it's in our best interests to continue to do that going 14 forward. 15 COMMISSIONER JAMISON: I have a question in 16 reference to that. Since it's a lease, one lease on 14 17 properties, at the end of the ten-year period, you can't 18 alter that lease of saying we only want ten of those 14? 19 It's still all or nothing on the renewal and so you're 20 responsible for the rent on all 14? You're responsible 21 for the lease which encompasses 14 properties and so 22 you're -- you have no ability then to buy or sell 23 operations in that or how does -- is that a sensible 24 question? 25 MR. RUISANCHEZ: Sure. It's a good question.

0071 1 We -- this is one group. To the extent that we wanted to 2 break up the group, the -- that would have to be a one-off 3 negotiation. Under the terms of the lease, it's an all or 4 nothing. If we wanted to do it, it would just be -- have 5 to be an agreement as to how do you adjust things in the 6 context of selling one asset or two assets or what have 7 you. 8 The point is just like the State of Missouri as 9 well as our company benefits from the diversity of our 10 company by virtue of having stability on our financials, 11 stability that, hey, if something goes off the rails in 12 one location, hey, you have a big company that's behind 13 you to get you through that, GLPI values the same thing in 14 that diversity of that portfolio. 15 If you want to break it up, I'm sure -- I'm not 16 sure they'll be happy to have the discussion, they 17 probably would be happy to have the discussion, but it 18 would have to be a one-off discussion. So it would be 19 under the terms of the lease an all or none. 20 COMMISSIONER JAMISON: Okay. 21 COMMISSIONER LOMBARDO: What happens if for 22 whatever reason you have underperforming properties 23 amongst the 14 properties for any number of reasons? 24 Let's take worst case scenario, they end up being 25 underperforming to the point where they're not viable

0072 1 anymore. In essence at that point you have less 2 properties making the 377 million blanket lease payment, 3 correct? 4 MR. RUISANCHEZ: That is correct. Fortunately 5 that's not the case today and our goals are to continue to 6 grow to ensure that doesn't happen. But in that instance, 7 you're leasing all of them, so they are part of the 8 portfolio. 9 COMMISSIONER LOMBARDO: And there's no provision 10 in the lease that would allow for a change in rent payment 11 if that occurred? 12 MR. RUISANCHEZ: No, unless there was a 13 catastrophic loss where the property for whatever reason 14 ended up being shut down, there is, under the lease, 15 provisions to remove that if it's not rebuilt. 16 COMMISSIONER LOMBARDO: Okay. 17 MR. RUISANCHEZ: Because it's not feasible or 18 whatever the case may be, in which case proceeds from the 19 insurance would go to the landlord, but it would have to 20 be a catastrophic event that you couldn't actually go back 21 and rebuild. 22 COMMISSIONER LOMBARDO: Okay. 23 MR. RUISANCHEZ: I think we've -- we've covered 24 this page. Just highlighting, again, the one thing that 25 is unusual about this is that the escalators don't come in

0073 1 unless you're at least at 1.8 times coverage, which is 2 unusual and is to the benefit of us as licensees and us as 3 a company. 4 As it relates to the -- how different is this 5 from the other master lease that I'm sure you're familiar 6 with by virtue of the prior transaction with Penn, you 7 know, the only differences here is that the rent 8 associated with the -- the reset associated with the 9 revenue gets reset every two years and that one is five 10 and that the initial term is 15 on theirs and this one is 11 ten. Otherwise, it's pretty similar to the one that 12 already came before you a few years back. 13 In regards to the covenants, certain master 14 lease covenants that we thought prudent to bring up that 15 have been discussed with the staff, we discussed all of 16 them, but just highlighting some. There is a minimum 17 maintenance CapEx requirement of one percent of revenues. 18 This is truly -- you know, right now, we actually spend 19 around three and a half, so this is really put here as a 20 pure minimum. One percent of our revenue is about 21 $23 million. 22 As we mentioned, we're spending between 80 and 23 100 million. This is, from our perspective, something 24 that was easy to agree to from our point of view because 25 no way that we will ever be this low. And from the

0074 1 standpoint of the key point here is that we have a 2 requirement to continue to maintain the properties in 3 similar fashion to the way they are now as we move forward 4 and that requirement, put aside this one percent, will 5 still need to be done and that will apply to all the 6 properties here in Missouri just like it would to all 14 7 properties that are within this portfolio. 8 CHAIRMAN KOHN: I'm curious about something 9 else. 10 MR. RUISANCHEZ: Sure. 11 CHAIRMAN KOHN: If one of the 14 properties 12 would fail to perform to the point where they'd be in 13 breach of the lease, if it was a one-party lease, and they 14 don't cure it, so they're in default -- 15 MR. RUISANCHEZ: If we don't cure it? 16 CHAIRMAN KOHN: On one property. What does that 17 do to the master lease? 18 MR. RUISANCHEZ: Well, there would be -- under 19 that scenario, if there was a property that we have not 20 maintained according to those standards, that would create 21 a default. I'm sure we'll get a notice and we'll have to 22 go and cure it, go and address it. 23 CHAIRMAN KOHN: It's a default of the entire 24 master lease. 25 MR. RUISANCHEZ: Technically, it's one document,

0075 1 one lease. 2 CHAIRMAN KOHN: So the other 13 properties would 3 have to -- if number one bad property is bad because they 4 just can't make it for whatever reason in the market, the 5 other 13 would have to make that up? 6 MR. RUISANCHEZ: Well, this is about the 7 physical structure, so it's not about the financial 8 viability of that property, but if we allow a building to 9 decay to the point where it's not safe, yeah, that would 10 be a default and we would have to go and address it, but 11 this is about the physical structure of the property and 12 that it's a safe building in accordance with code as it 13 moves forward. And that part is irrespective of the 14 financial viability of that asset. Does that answer your 15 question? 16 CHAIRMAN KOHN: I think so, but I guess it could 17 be an operational issue, too, which would keep that one 18 property from being viable. Even though it may be 19 physically okay, the operations and the marketplace may be 20 such that it can't. 21 MR. RUISANCHEZ: No different than we do today. 22 MR. SANFILIPPO: So today, if we had a property, 23 which we don't, but if we had a property that the market 24 was completely saturated and we had a negative cash flow 25 there, we could make the decision that said it's no longer

0076 1 viable to operate this and we're no longer going to 2 operate it. We still owe the rent payment. So there's 3 not a relief on the rent payment. 4 So what Gaming & Leisure Properties wanted, they 5 said, okay, what is your overall EBITDA right now which, 6 as we talked about, was over $600 million. We structured 7 the deal based on our base of EBITDA today, not about 8 individual property performance. 9 They are not -- their concern is not to a 10 property, it's to how we operate that basket of properties 11 and continue to pay our rent. And we're responsible -- I 12 know we're repeating ourselves, but we're responsible to 13 maintain the property. We're responsible for the 14 relationships with the home dock representatives. 15 Gaming & Leisure Properties would be very 16 similar to someone that owns an office building and 17 there's a tenant within that office building. It's the 18 tenant that is the one that has use of that building. 19 They're in the business of owning assets is what they're 20 in the business for and I think they would tell you what 21 excites them, one of the things about us, is that we're a 22 very good operator. 23 And so for their company, they look long term to 24 Pinnacle Entertainment is a terrific operator, it's going 25 to continue to grow its business and has long-term

0077 1 viability for them. They would not want an operator that 2 is in one of their buildings that didn't have the skills 3 to perform to the level that we perform. 4 CHAIRMAN KOHN: So I guess the summary, then, 5 having a failed operation in Council Bluffs, I don't know 6 if that's one of the 14 or not -- 7 MR. RUISANCHEZ: It is. 8 MR. SANFILIPPO: It is. 9 CHAIRMAN KOHN: -- somewhere else would not have 10 an adverse impact on the Missouri operation? 11 MR. SANFILIPPO: That's correct. 12 MR. RUISANCHEZ: That's correct. 13 MR. SANFILIPPO: That is correct. So if we had 14 a property that we just said we're going to close it 15 because it has negative cash flow and that market is no 16 longer viable, which again, we don't, they don't care. 17 They're just every month, where's my rent check, you know, 18 and that's what they're in the business for. That's the 19 deal that's being made. 20 COMMISSIONER HALE: But it would have a negative 21 impact upon the remaining 13 properties in the event that 22 the 14th property was not generating revenue to be used to 23 pay this 377 million? 24 MR. SANFILIPPO: Let me give you an example. We 25 sold -- we had a property in Reno that a number of years

0078 1 ago, three or four years ago we sold because it literally 2 had -- it broke even. Its cash flow was breaking even. 3 It was an old property. Didn't make any sense -- we were 4 at that point not a natural owner of that property, so we 5 did find someone. We sold it for a very, very little 6 amount of money. 7 We have a portfolio of properties today we feel 8 good about. We think that they're very, very viable. 9 Over time we've somewhat pruned what our portfolio was and 10 we're in the business of growing the business. So we can 11 either grow it organically through existing properties, 12 and we're looking to do that. 13 In fact, I'll tell you, I've had discussions 14 with Mayor Faith here about adding more hotel rooms in 15 St. Charles. We would be interested in doing that. And 16 we ought to use that as an example on if we wanted to 17 build a hotel at St. Charles, how that process would work 18 so that you understand that. 19 But we're in the business of continuing to grow 20 our portfolio, either organically through existing 21 businesses or by adding new properties, which we can do 22 with Gaming & Leisure Properties or without. We're not 23 required to do it with them. This is a sort of one basket 24 deal that we're doing. So may we use an example of adding 25 a hotel tower, just to give you an example on how we could

0079 1 organically grow? 2 MR. RUISANCHEZ: One last point before I go into 3 that. Under the scenario where somebody is not 4 contributing, they're not contributing to the rent in that 5 scenario either, so there is really no -- no adverse 6 effect relative to that contribution towards that rent. 7 COMMISSIONER JAMISON: I mean theoretically it 8 wouldn't be any different if that property had a mortgage 9 on the building and the land that the -- I think sometimes 10 we get focused on the three properties in Missouri and not 11 look at it as the corporate level, but if you had an 12 underperforming property that wasn't making its monthly 13 mortgage payment as opposed to a rent payment, the other 14 13 properties are going to be subsidizing that mortgage 15 payment, no different than they're subsidizing their 16 portion of the rent payment. And if they closed that 17 property, they would still be making that mortgage payment 18 until they were able to liquidate that piece of real 19 estate. 20 CHAIRMAN KOHN: There's a master mortgage. 21 COMMISSIONER LOMBARDO: If they were cross 22 collateralized. 23 COMMISSIONER JAMISON: Well, but the company 24 itself overall had that debt. The corporation -- 25 MR. RUISANCHEZ: The obligation is the same.

0080 1 COMMISSIONER JAMISON: The corporation would 2 have that obligation and debt so until the property got 3 sold, they would still be making a mortgage payment 4 without any income on that particular property. I don't 5 know that it's a completely different scenario if you had 6 one underperforming. 7 COMMISSIONER LOMBARDO: Yeah. Let me ask you 8 this: It seems obvious to me that the income statement 9 for the operating companies is going to improve because 10 you're going to have a hundred million dollars extra 11 spread out in some way through these 14 properties, right? 12 MR. RUISANCHEZ: Well, it -- you know, GAAP is a 13 whole other animal that -- where we've had a lot of 14 discussions about. I think the leverage profile, 15 financial profile of our company certainly will improve as 16 a result of this transaction. 17 COMMISSIONER LOMBARDO: I agree with that 18 characterization. 19 MR. RUISANCHEZ: Yeah. 20 COMMISSIONER LOMBARDO: How about the balance 21 sheet for Pinnacle, the operating company in Missouri? 22 Because what you're doing is you're basically -- if I 23 understand correctly, you're basically substituting lease 24 payments for debt for most of these properties. 25 MR. RUISANCHEZ: Yeah.

0081 1 COMMISSIONER LOMBARDO: River City being the 2 outlier. And so -- but these properties, presumably there 3 was equity in them before this transaction, correct? 4 MR. RUISANCHEZ: That will still be the case. 5 COMMISSIONER LOMBARDO: Well, the operating 6 company doesn't own them anymore, so the equity in the 7 actual real estate is not going to be on the operating 8 company's balance sheet, true? 9 MR. RUISANCHEZ: That is true. Neither will the 10 debt. 11 COMMISSIONER LOMBARDO: Okay. But what I'm -- I 12 guess what I'm asking you is before the transaction, 13 the -- when the operating company owned the real estate, 14 there was equity in the real estate, I presume? 15 MR. RUISANCHEZ: Well, clearly there is equity 16 by virtue of what is being paid here and it will be -- as 17 it relates to specifically -- I look at the company as a 18 whole. The specific P&L -- 19 COMMISSIONER LOMBARDO: I apologize. We're 20 sitting here -- and I don't apologize. 21 MR. RUISANCHEZ: No, no need. 22 COMMISSIONER LOMBARDO: But we're looking at it 23 from the state of Missouri standpoint. 24 MR. RUISANCHEZ: Yeah. At the State of 25 Missouri, we -- the -- our business will look exactly --

0082 1 the income statement will look pretty much exactly the 2 same as it is now with the same cash flow dynamics that it 3 has today on those three properties. You know, again, 4 this is a single lease, so while there will be -- you 5 know, there may ultimately end up being some allocation of 6 this lease payment, but it will be all in our company. 7 Legally, it's one lease, one payment, akin to exactly as 8 the commissioner mentioned on an obligation that we have 9 to do collectively as a company, as a whole. 10 COMMISSIONER LOMBARDO: Logically, the balance 11 sheet is going to look -- it's not going to be as good 12 because you don't have an asset on there anymore? 13 MR. RUISANCHEZ: Well, technically under GAAP, 14 because we have a continuing interest in the real estate, 15 all that is going to stay on the balance sheet. 16 COMMISSIONER LOMBARDO: Okay. 17 MR. RUISANCHEZ: Even though legally we do not 18 own it. 19 COMMISSIONER LOMBARDO: I understand what you're 20 saying. Okay. 21 MR. RUISANCHEZ: So that's why -- 22 COMMISSIONER LOMBARDO: We don't want to spend 23 the rest of the time talking about GAAP. 24 MR. RUISANCHEZ: That makes two of us. 25 COMMISSIONER JAMISON: Three on this.

0083 1 COMMISSIONER LOMBARDO: Okay. 2 MR. RUISANCHEZ: So going back to the capital 3 improvement process, which understandably it's of 4 interest, we -- the way that these things would work, GLPI 5 would be interested on two things. This is the premise 6 that we have. Clearly they would like for us to invest in 7 an asset that technically they own, it's to their benefit. 8 They are concerned about two things, one, that 9 you continue to do the business that we're doing, and we 10 on purpose had that definition be as broad as we could 11 make it within the entertainment arena, entertainment, 12 lodging, food and beverage, gaming arena as we look 13 through either changing and evolving our business over 14 time. 15 And the second one is that it's within code, 16 that whatever -- that anything that we do it does not 17 compromise the structural strength of the buildings that 18 we're in, which we would do anyway because those are the 19 rules in either case. 20 In the context to the extent that we're 21 replacing things that are there, if they are the same or 22 better quality to what we have, we do not need to get 23 their consent. To the extent that we're going to do 24 something different, there's two things that get 25 triggered.

0084 1 We'll use the example that Anthony had put 2 forward, where there is an interest to add more rooms to 3 St. Charles. In that context, we would have -- we would 4 provide a here's our plan. It is obviously consistent 5 with what we're doing there as we already have hotel rooms 6 there and they're looking to expand our business at that 7 location and obviously we'll do it within code. 8 They -- given that REITs by their rules are 9 not operators, they can't operate, all that they care 10 about is just getting a rent payment, the point that 11 they'll have is they'll want to continue to build assets. 12 So their first point is they want the ability, and we 13 agreed to this under the lease, to, hey, let me make an 14 offer to finance that tower that you're looking to add. 15 To the extent that for the piece of it that 16 qualifies as a real estate asset, we'll go ahead and make 17 an offer that would adjust the lease payment, we will pay 18 any GOP, I will pay for the tower, and then the lease 19 would get adjusted once it opened. They will provide a 20 financing proposal for that. We are not required to take 21 it. 22 Obviously we're going to do what's in the best 23 interests of our company and if that is the best 24 alternative that we have, then sure, and if it isn't, then 25 that's fine, we'll use some other source and go ahead and

0085 1 build it as we move forward. 2 And at the -- just again to give you a sense 3 that we're thinking about long term, technically speaking, 4 if we go to 35 years and we don't renew, then they can 5 say, hey, you own that tower, that building, on our land, 6 you have to remove it. Or you could leave it there and 7 then they get the benefit. The point is we're -- it would 8 not change our perspective about how we actually perceive 9 it. We think we'll be in this facility forever, just 10 subject to this different arrangement relative to where we 11 are today. 12 CHAIRMAN KOHN: Would they have to subordinate 13 to allow you to finance that new tower? 14 MR. RUISANCHEZ: No. The way that it would 15 work, it would be an amendment to the lease that would 16 basically say, hey, they would pay for this and that it 17 will become part of the new lease. 18 CHAIRMAN KOHN: No, the outside, if you go to 19 the third party. 20 MR. RUISANCHEZ: Oh, as far as that building 21 itself? 22 CHAIRMAN KOHN: Yeah, and the land under it. 23 MR. RUISANCHEZ: We would -- it depends on how 24 we actually ended up financing it, but if we do it within 25 our corporate structure, we would technically own that

0086 1 asset, meaning the actual building itself, if we financed 2 it elsewhere. We would have it as collateral. Obviously 3 it would be subject to the same terms under the lease. 4 So whoever is providing that financing otherwise 5 will understand that we're in it forever or that we'll get 6 value if we ended up selling the company as a whole 7 through that valuation, but at the end of the 35 years 8 or -- if the lease actually ever really ended, that that 9 asset would have to get transferred over. So they would 10 have to, obviously, get comfortable in regards to that. 11 Given the long-term nature of that, of the 12 lease, just like, you know, our lease on the River City, 13 the financing sources that we have today are not concerned 14 about that renewal. They will -- they view it as, yeah, 15 you will renew regardless of what happens because it will 16 be in your best interests to do so, given that unless you 17 renew, your licenses are going to be an issue because 18 they're specific to that site. You'll have to give up the 19 license. 20 The other point in regards to the covenant, it 21 has to do with new developments. And under new 22 developments, the premise here is that we are free to go 23 and develop new developments anywhere we want, inclusive 24 of what happens within 60 miles of the existing facilities 25 that are subject to this lease. To the extent we do a new

0087 1 development within 60 miles of the existing facility, so 2 that would be 60 miles around River City and Ameristar 3 St. Charles and Ameristar Kansas City, what will happen is 4 the rent component that is associated with the revenue on 5 our existing places would freeze. 6 Their concern had naturally been, hey, if you 7 build a place right next door, we can move all the revenue 8 over and, therefore, that rent component would go down, 9 which would seem not the spirit of the original 10 transaction. And here we're -- this would basically cause 11 it so they -- the revenue piece of that rent is not being 12 affected if we go and develop a brand new place. 13 To the -- if it were an existing place, 14 different story. If there's an existing place that had 15 been there for 12 months, leased for 12 months, we can go 16 ahead and buy it and the premise is that the competition 17 was a competition when you had it. If you're building a 18 new place, you're changing the dynamics of the competition 19 among the facilities and as a result, this created a 20 protection on that component of the rent on their side. 21 They are not allowed to actually fund a new 22 development within 60 miles of our existing places for the 23 same reasons, that we're protecting our side as well as 24 them funding a new development without us saying okay, 25 that we're okay to do that.

0088 1 COMMISSIONER JAMISON: I've got a question on 2 that. When you say fund a new development, that would be 3 one thing. Could they acquire land and facilities in -- 4 from other licensees within that 60 miles and not be in 5 violation of that covenant? 6 MR. RUISANCHEZ: To the extent that those have 7 existed for more than 12 months since they opened, yeah. 8 COMMISSIONER JAMISON: Okay. 9 MR. RUISANCHEZ: They could do it. And, again, 10 the premise was are you changing the competitive dynamics. 11 COMMISSIONER JAMISON: But they couldn't 12 build -- 13 MR. RUISANCHEZ: As it relates to the revenue. 14 COMMISSIONER JAMISON: But they couldn't build a 15 new casino within 60 miles of you. 16 MR. RUISANCHEZ: Fund it, yeah. Somebody else 17 has to build it because they won't hold the license, 18 but -- 19 COMMISSIONER JAMISON: Could they be the REIT to 20 that new casino? In Missouri it's kind of different 21 because we're limited to the number of licenses we have, 22 but -- 23 MR. RUISANCHEZ: Yeah, to some degree it helps 24 that it's 60 miles and state borders don't apply. 25 MR. SANFILIPPO: He's saying within 60 miles.

0089 1 MR. RUISANCHEZ: Within 60 miles, they cannot 2 fund a new development that would compete with us or not 3 be a financing source without us being okay with it. 4 COMMISSIONER JAMISON: Okay. 5 MR. RUISANCHEZ: There is a really zero, no 6 anti-competitive effect in Missouri. We're the licensee, 7 we're the ones creating the revenue within -- obviously 8 within these facilities. They have no ability to control 9 our operations and decisions on how we market, how we deal 10 with the team members, how our cash flow gets put forward. 11 There is really no -- as I mentioned, no consent that is 12 required if the improvements are of equal or better 13 quality than the existing facilities that we have and it 14 doesn't have an adverse effect to the structure of those 15 buildings. 16 COMMISSIONER LOMBARDO: Who gets to decide 17 whether the improvements are equal or better? 18 MR. RUISANCHEZ: Well, certainly we'll put 19 forward plans that are certified by an architect, the way 20 that we would normally do in any case if we have to put 21 that forward, and to the extent that those are certified, 22 it would be hard to argue that they weren't in the context 23 of having that -- having that done. 24 COMMISSIONER LOMBARDO: I've been practicing law 25 for 35 years and people argue about all kinds of things.

0090 1 MR. RUISANCHEZ: But you -- I'm sure that -- 2 COMMISSIONER LOMBARDO: I'm just wondering what 3 the mechanism is to resolve the argument if there is one. 4 MR. RUISANCHEZ: Jack. 5 MR. GODFREY: Commissioner, first of all, their 6 consent cannot be unreasonably withheld, but the mechanism 7 would be if we got to a real dispute, we can either 8 arbitrate it or we can go to court. We're comfortable 9 that that's not going to be the case and as you'll hear in 10 their presentation with their existing tenant, I believe 11 that of all the capital expenditure projects that needed 12 approval, all have been approved. But technically, if we 13 got to a real dispute, we could either arbitrate it or we 14 could go to court. 15 COMMISSIONER LOMBARDO: Thanks. 16 MR. RUISANCHEZ: I think it's important to keep 17 in mind that it's in their best interests for us to go and 18 improve these properties. They really don't have a real 19 reason to do that, unless it really compromises structure 20 of what's there. 21 COMMISSIONER NEER: Along the same lines, who 22 determines what is unreasonable? 23 MR. RUISANCHEZ: Go ahead. 24 MR. GODFREY: That is somewhat of a subjective 25 standard. There's some case law on that around the

0091 1 country. I think there's some common sense to 2 unreasonable. If we put together a project that is 3 consistent with use of the property and structurally 4 sound, meets code, I think it would be very difficult for 5 them to deny approval if approval is required and for that 6 to be a reasonable denial. 7 But again, the unreasonably withheld is sort of 8 a course of practice standard and if you got to 9 litigation, you know, you'd have to have the Court address 10 that. But we're comfortable with that because of the -- 11 during the course of our negotiations, we took the measure 12 of this company and their executives. They're very 13 reasonable people based upon the negotiations that we've 14 had and going arm in arm through this process to get the 15 approvals and close the transaction and their history with 16 their existing tenant. So we think that we're not 17 concerned about there being an unreasonable withholding of 18 any consent to the extent consent is required. 19 COMMISSIONER LOMBARDO: Is there an arbitration 20 clause in the lease? 21 MR. GODFREY: I don't recall if there's an 22 arbitration clause in the lease. I'm sure Brandon can 23 address that in his presentation, but it would either be 24 arbitration or litigation if there were a dispute that had 25 to be contested.

0092 1 MR. RUISANCHEZ: And lastly, on the 2 anti-competitive effect, you know, the Federal Trade 3 Commission conducted a review of this transaction and 4 ended up taking no action, no concerns around it. 5 They've -- you know, generally REITs -- REITs are 6 exempt from actually filing an HSR largely because they're 7 not operators, they're passive investors, they, you know, 8 don't really come into the competitive landscape as to how 9 businesses end up getting run. They're focused on getting 10 rent. 11 CHAIRMAN KOHN: You're exempt from HSR. 12 MR. RUISANCHEZ: We're not as a company. 13 CHAIRMAN KOHN: The REIT is. 14 MR. RUISANCHEZ: REITs are exempt from providing 15 that notice. Clearly the Federal Trade Commission can do 16 whatever they wish and, in this instance, we provided a 17 notice by virtue of our consent decree with Ameristar that 18 required us to provide that notice to them as it relates 19 to this transaction and that led to a full review 20 internally as to this transaction. They concluded no 21 action needed as part of that. 22 And lastly, on the time line, you know, we have 23 asked for clearance from the SEC in regards to our Form 24 10. Our shareholders have overwhelmingly -- have approved 25 this transaction. In excess of 99 percent of our

0093 1 shareholders -- 99 percent of those voted voted for the 2 transaction for both Pinnacle as well as GLPI. 3 We have received regulatory approvals in 4 Mississippi, Iowa, Indiana and at the time that we 5 provided this to the staff, Nevada had not been done, but 6 Nevada is now done. That got completed last week. And we 7 are on -- we expect to be on the agenda on April 1 with 8 Louisiana. Colorado, as Anthony mentioned, will be -- 9 they do approvals post transaction or through their 10 structure. 11 We have financing -- we have a bridge commitment 12 for the debt. As I mentioned, we will have less than 13 $900 million of debt following this transaction. We have 14 a bridge commitment in case a market is not open to 15 actually put that in place. However, the market is open 16 and healthy and we expect to launch those transactions 17 starting next week under the time frame that we hope to 18 get this transaction completed by the end of next month. 19 And our company, although we're spearing off 20 everything but the real estate, it will be Pinnacle 21 Entertainment, it will be under the same ticker trading on 22 NASDAQ with the exact same people that are here now going 23 forward as we -- as we continue to try to get the 24 transaction to the finish line. 25 CHAIRMAN KOHN: I have just a general question.

0094 1 In the other jurisdictions that have approved the 2 transaction, did any of them have language comparable to 3 what we have in Missouri which requires the transfer to be 4 in the best interests of the state of Missouri? 5 MR. GODFREY: Every jurisdiction which we seek 6 approvals that is a -- if not explicit, an implicit 7 requirement that you have to meet. That language is 8 really designed to give regulatory agencies broad 9 discretion in approving or denying transactions. And it's 10 a bit of an amorphous standard, as you might imagine. 11 We're going to address that standard here shortly, but 12 implicit in every jurisdiction is that it is in the best 13 interests of that jurisdiction and at least it's not 14 negative to that jurisdiction. 15 CHAIRMAN KOHN: Is this the only explicit one? 16 MR. GODFREY: I don't think it's the only 17 explicit one. I can't cite to you the exact rules in all 18 the other jurisdictions, but I can tell you that the 19 standard by which they consider these transactions is 20 certainly there's nothing negative about the transaction 21 from that jurisdiction's standpoint. And as Anthony takes 22 you through the different monikers here that we're going 23 to address, I think you'll agree with us that this is in 24 the best interests of the State of Missouri. 25 CHAIRMAN KOHN: Thank you.

0095 1 MR. SANFILIPPO: Additional questions? 2 CHAIRMAN KOHN: None at this time. 3 COMMISSIONER HALE: No. 4 CHAIRMAN KOHN: I'll bet there are some more. 5 MR. SANFILIPPO: Well, we do have -- we 6 actually -- Carlos and Donna and Jack and I, I've been at 7 River City the last couple of nights and they came in 8 yesterday and we drove over this morning, we got up early 9 and drove over from our River City property and actually 10 in the car we said we thought that it would be important 11 to have a closing statement on really why this is in the 12 best interests of Missouri and we know that's what you're 13 charged with. 14 We believe this is in the best interests of 15 Missouri. We think it's in the best interests of our 16 company. We have confidence that we will continue to have 17 a healthy, growing company. We've explained to you the 18 same people that have been Pinnacle Entertainment and the 19 license holders will continue to be the new Pinnacle 20 Entertainment. We did put together a statement on that 21 drive and I -- if I may just go through the statement. 22 In 2014 Pinnacle Entertainment determined a 23 separation of our real estate from the rest of our company 24 made sense and, in fact, we announced that in November of 25 2014. We were going to pursue the separation ourselves,

0096 1 which would have been putting in place a separate company 2 with a separate CEO, separate management staff, separate 3 board, separate publicly traded company, which is the same 4 as Gaming & Leisure Properties is. 5 But we -- the transaction with GLPI, it became 6 clear that the benefits accelerated by us having these 7 properties part of Gaming & Leisure Properties and for 8 Gaming & Leisure Properties to become the -- basically the 9 landlord. We believe that Gaming & Leisure Properties -- 10 and you're going to see more REITs. You'll end up 11 seeing more REITs in this space, but we do believe that 12 Gaming & Leisure Properties becomes a much stronger 13 company, much more diverse company by having these assets 14 as part of their company. 15 This transaction, it won't impact, and I hope 16 we've been clear about that, our day-to-day operations or 17 our long-term approach to our facilities and our 18 businesses as a whole. It also has no impact on the 19 competitive landscape of our properties in Missouri. It 20 has no impact on the competitive landscapes of any 21 property that we operate. 22 We will be able to continue to focus on 23 excellence in operations and growth and hopefully we have 24 been able to express that appropriately to you. And 25 through this transaction, we'll materially reduce our

0097 1 conventional debt by $2.7 billion, which will leave our 2 company with less than 900 million of borrowed money. Our 3 borrowed money leverage will be about 3.5 times our cash 4 flow, down from six times our cash flow today. 5 In 2015, we spent approximately $569 million in 6 debt service, including debt pay down and interest. Our 7 annual lease payments of 377 million to GLPI coupled with 8 our expected interest on our borrowed money debt will be 9 less than $420 million. 10 The transaction will not have a negative impact 11 on home dock cities, team members, vendors or revenues 12 since the operation and management will not change as a 13 result of this transaction. The leased real estate assets 14 will be owned by a REIT that has a stronger credit rating 15 than we do as a company today. 16 In addition, GLPI will be a potential financing 17 source for us to go forward and is licensed and regulated 18 by you, Missouri Gaming Commission. Pinnacle will be in a 19 better position to grow following this transaction as our 20 conventional debt will be lower, but our capabilities as a 21 company will be the same. 22 Ultimately we believe the focus should be on two 23 main points as it relates to this transaction. The first, 24 will the revenue potential of the State be affected? The 25 answer to that question is no. If anything, our company's

0098 1 ability to grow, bring new ideas, better operations should 2 enhance the ability to grow revenues and corresponding 3 taxes to the State. 4 And second, the financial strength and 5 reputation of your licensees, we have a very healthy 6 financially strong company after this transaction with 7 meaningfully less refinancing risk as our borrowed money 8 leverage will be materially down. And more importantly, 9 Pinnacle has developed a strong reputation in the 10 investment community as a company that not only operates 11 well, but is a great steward of the investments that 12 institutions have made in it, in our company. 13 This reputation has allowed us to continue to 14 receive capital to invest in our business, capital to 15 grow, capital to refinance, capital that has been invested 16 in the State of Missouri. This reputation yields to the 17 benefit of the State of Missouri. That is because we are 18 partners with the State. 19 Our business has had a big impact in the 20 economic development of the communities that we are in. 21 The impact is, in part, possible due to the reputation 22 that we have developed with investors to continue to fund 23 our company. Approving this transaction will continue to 24 support that reputation that both the State of Missouri 25 and Pinnacle currently have and we hope to continue to

0099 1 move -- to move forward with this. 2 In summary, we believe this transaction is in 3 the best state -- in the best interests of the State of 4 Missouri and I very much appreciate the amount of time and 5 the questioning that you've had in considering this 6 transaction. Thank you all very much. 7 CHAIRMAN KOHN: Thank you very much. Now we're 8 going to hear from GLPI. 9 MR. CARLINO: It is now afternoon, so good 10 afternoon, Mr. Chairman, members of the Commission, Staff. 11 CHAIRMAN KOHN: I'm waiting for good evening. 12 MR. CARLINO: I may drag this out, but I hope 13 not that long. I'm Peter Carlino, Chairman and CEO of 14 Gaming & Leisure Properties. And with me is Bill 15 Clifford, our Chief Financial Officer, and Brandon Moore, 16 our trusted general counsel who's had a busy time with 17 this transaction, let me tell you. 18 Before I -- I'm going to go through a couple of 19 bullet points. I'll keep it mercifully short, but I 20 thought I'd make just a couple of comments following what 21 I heard and questioning here, the Pinnacle presentation. 22 In no particular order, I want to emphasize that what is 23 different about this process of what they're doing -- and 24 by the way, they were going to do this anyway, 25 irrespective of co-joining with us.

0100 1 I mean, I think you can quickly intuit that a 2 bigger, better, stronger, more diversified entity makes 3 sense and not duplicative management and all those kind of 4 things, so -- but this was going to happen, just the 5 choice was it was better for their shareholders to do it 6 with us. And believe me, they've been tough, looking out 7 for their interests through this entire negotiation 8 process. 9 But it's worth remembering that the difference 10 with this financing -- because in the end that's what 11 we're doing, we're providing a long, long-term financing 12 to them, a 35-year deal, fixed. So the economy could go 13 up and down, interest rates could do whatever they do. I 14 was around trying to do business when rates were over 15 21 percent. Some of us here would remember that. It was 16 not a happy time. It could happen again, but that risk 17 falls to GLPI, not really to these folks. 18 To the question of, well, what happens if you 19 get a problem with a property. Remember, they've got that 20 now anyway. I think, sir, you had mentioned that, that 21 they could have one property, two properties, ten 22 properties and they've got a whole pile of debt and 23 they're going to have to deal with it, irrespective of 24 what they have with us. 25 The difference is that they're now going to

0101 1 actually have more cash to deal with potential problems 2 than they had before and they're going to have a very 3 sympathetic landlord. Because remember, we need to keep 4 these guys -- take the worst case analysis, you've got to 5 keep them going. 6 So it is in our self-interest to be a very 7 interested, though passive, landlord who would help them 8 under this hypothetical situation work through a difficult 9 time should it ever occur, I mean, but the risks and 10 exposures are no more. In fact, they're actually less 11 than what they'd have if they did not do this because 12 they've got more available cash and the real credit risk 13 falls to our side. 14 To the value of a business and the asset, you 15 had asked about that. I have a simple thought. I spent a 16 lot of my life in the real estate business. An asset is 17 worth no more than it can earn, so irrespective of what 18 was spent. And I think the Revel in Atlantic City is 19 certainly one of my favorite illustrations, $2.5 billion, 20 something in that order. I think it was sold for, what, 21 about a hundred million dollars. 22 So an asset is only worth what it can earn. It 23 doesn't matter what it looks like, how cool or cute or 24 whatever, it's only worth what it can earn. So, excuse 25 me, the -- it's real -- there's no change. I guess that's

0102 1 the point I'm trying to make. There's no diminution in 2 value, but actually the addition of strength in what we're 3 proposing. 4 To the question of unreasonable, to the 5 unreasonably withheld, I think it was said that it is 6 clearly in the REIT's best interest to put as much money 7 into these facilities as you like, guys, make it better, 8 make it stronger, God bless you, just keep those rent 9 checks coming. 10 Our involvement as a REIT is so neutral that the 11 joke -- think of it this way: In our offices at the time 12 we contemplated this from Penn, and I'll get into a little 13 bit of the Penn spin and how this all began, I jokingly 14 said, well, let me figure out what my new job is going to 15 be. What's my new job running this REIT? 16 Well, I figured that I'd take -- get my 17 assistant the first of every month and send them over to 18 that Penn place, grab our money and she'd bring it back to 19 the office, take it down to the bank, deposit it and once 20 a quarter, we'd make a dividend distribution to 21 shareholders. And the truth -- and the rest of the time 22 you go fishing. 23 And if you think about it, that really is, in a 24 perverse sense, the sign -- the responsibility of a REIT. 25 Get the money, pay it out. Now, if you don't care about

0103 1 doing more, that could be the case. Turns out, I think 2 our ambitions are a little bit bigger than that and we'll 3 talk about why we did what we did. 4 So I -- my understanding is there have been -- 5 and I'd have to look to these guys, scores and scores of 6 requests from Penn National to do all manner of stuff 7 that -- I haven't seen a one. Well, I take that back. I 8 saw what they're doing up at Penn National because it was 9 a major rip out stuff and replace it with something 10 entirely different. But the truth is we really don't 11 care. 12 I mean the only thing that could ever be a 13 problem might be something really horrendous. They're 14 going to paint the building pink or, you know, I can't 15 even imagine. So reason always will be -- 16 MR. MOORE: I don't think we can stop that one. 17 Sorry. 18 MR. CARLINO: We can't? 19 MR. MOORE: They don't need consent to paint it 20 pink. 21 MR. CARLINO: All right. There you have it from 22 our general counsel. The point is we really don't care 23 what they do and you know, as do we, the quality of 24 Pinnacle facilities. They're about the best in the United 25 States in the regional market, certainly among the best,

0104 1 period, and they're well maintained, they're gorgeous, so 2 our concern about what they're going to do with the 3 properties is about zero. It's truly zero. 4 Getting back to -- I guess I have some kind of 5 slide thing here. I'll take a few seconds to talk about 6 what happened with Penn National. We're not here to talk 7 about them, it's a different company, but clearly Penn 8 National -- or Gaming & Leisure Properties is a spinoff of 9 Penn National Gaming. 10 And small history with Penn National, it's a 11 company that you know I was involved with for many years, 12 actually more than 40. We went public in 1994 with 13 $35 million in sales, $35 million in sales. At the time 14 we made the decision to do this split in a well-considered 15 and carefully considered decision, sales were in the range 16 of $3 billion and if you take the couple of properties 17 that we kept with GLPI and my understanding of what Penn 18 will do this year, we're well over 3 billion today in that 19 20-year period of time. 20 We grew at Penn at a compounded growth rate 21 every year for more than 20 years of 26 percent. 22 Thousands and thousands, over 10,000 percent growth in 23 that company. And the responsibility for all of us, for 24 us and certainly for the Pinnacle folks, is to our 25 shareholders. I mean, that's certainly a big obligation.

0105 1 And the question is -- and I'll add further 2 something that we internalize, certainly in my Penn days, 3 which are past, and with GLPI, that nobody cares -- our 4 shareholders don't care how good you used to be and we 5 have to have the presumption that every shareholder -- I 6 do -- that is in our company today bought yesterday. So 7 he doesn't care how good you were last year, last month or 8 how good your record was over two decades. He wants to 9 know what you're going to do today. 10 And it was our judgment that the way to unlock 11 value for our shareholders, which is apparently a 12 conclusion that Pinnacle itself came to, was to form a 13 REIT. You know that just yesterday, I think, MGM filed 14 with the SEC, so they're going ahead. Harrah's, Caesars 15 are talking about doing it and they undoubtedly will 16 somehow as they emerge from wherever the heck they are 17 today. And you're going to see others. So this is a 18 reality of where the -- and it's all about unlocking 19 shareholder value, which is a huge responsibility for 20 those of us who run a public company. 21 The combination of our two entities brings 22 synergy, just operational synergies with the two REITs, 23 scale, financial power, I mean, just the ability to reach 24 the markets and to help us maintain as we go forward an 25 investment-grade vehicle that will be our REIT, your

0106 1 licensed entity here in the state, GLPI, so that this 2 makes financial sense. 3 It makes -- and by the way, just as an aside -- 4 I checked because I'm not involved day to day at all. I 5 think Penn National has spent, since its spin way back in 6 '13, over a billion dollars in a new facility, by the way, 7 which we're not involved with, GLPI is not. We have 8 nothing to do with whatever the heck they're doing up in 9 Massachusetts. They opened the first casino in that 10 state. They bought since the spin the Tropicana in Las 11 Vegas, they're building a 400-plus million dollar facility 12 in San Diego and life goes on. 13 So I think if you were to talk to those folks 14 and as you talk to the folks at Pinnacle, the world does 15 not end. In fact, they're in a better place to do the 16 things that they want to do and I think that's been well 17 expressed. 18 So if I can even read what's on the balance of 19 that, GLPI has been very active since we began. We bought 20 the Casino Queen in 2014, small transaction. We've 21 announced the purchase of the Meadows Racetrack in -- near 22 Pittsburgh, Pennsylvania for $440 million and, of course, 23 this merger, if you will, with Pinnacle and we'll continue 24 down that path in a responsible, careful way. 25 If nothing else, I'd like to think, if you look

0107 1 at our record, even here in this state over the years, and 2 ask about the United States, I think our performance, both 3 at Penn and the old -- in those days, and believe me, 4 those days are separate days, and in the GLPI day has been 5 a company that has been utterly focused on carefulness, 6 probity and doing the right thing everywhere that we do 7 business. So that won't change. 8 And the other thing I'd point out, too, is we 9 are public companies. So when you wonder about what we'll 10 do, we have a responsibility to our shareholders, to the 11 public at large, to you folks to do the right thing. I 12 mean, there's an ethical underscore here as well as an 13 actual responsibility to do the right thing, so that's 14 something you can always count on as we do business in the 15 future. 16 So we talked about the 35-year lease. It's a 17 cross-collateralized transaction, again, emphasizing that 18 there really is no difference than the risks that the 19 company faces today, except that they probably have a more 20 sympathetic lender than their banker might be should 21 things go awry. So I think that's -- we have more to say, 22 but I just wanted to highlight a couple of points. And of 23 course, I'm available for questions through this process. 24 CHAIRMAN KOHN: You made the statement a few 25 minutes ago that Penn has no involvement in this. Did I

0108 1 understand you right? In this transaction. 2 MR. CARLINO: Well, I use -- I'm highlighting 3 Penn only because they are a company who is subject to a 4 similar structure that you've already approved here in 5 Missouri, but really no other reason to refer to them in 6 this transaction. 7 CHAIRMAN KOHN: But there is -- there is some 8 interlocking? 9 MR. CARLINO: None. 10 CHAIRMAN KOHN: There's none. 11 MR. CARLINO: Absolutely none. Zero, zip, nada, 12 nothing. Matter of fact, from the day I walked out the 13 door at that facility, I have never walked back in, not 14 once, not once. 15 MR. MOORE: Peter, I think the distinction is in 16 this transaction, Penn is totally unrelated. They don't 17 have a single -- there's no interest in Penn at all. 18 MR. CARLINO: Oh, yeah, as it relates to this 19 transaction, the matter at hand. 20 MR. MOORE: But you are a director. 21 MR. CARLINO: Oh, yeah. I am a director in 22 Penn. I still have one of the largest investments on that 23 side. 24 CHAIRMAN KOHN: I just want to make sure that -- 25 MR. CARLINO: But I am not an officer. I derive

0109 1 no salary other than a director fee and I have no 2 involvement in any day-to-day operations. 3 CHAIRMAN KOHN: So you're like a non-executive 4 chairman. 5 MR. CARLINO: I am not executive chairman. 6 CHAIRMAN KOHN: I said non. 7 MR. CARLINO: Non, correct; that is correct. 8 CHAIRMAN KOHN: Any other questions? 9 COMMISSIONER HALE: I have nothing. 10 MR. CARLINO: Okay. 11 CHAIRMAN KOHN: Thank you. 12 MR. CARLINO: Well, Bill. Have fun. Glad to 13 cede the spot here. 14 MR. CLIFFORD: The next slide. First of all, I 15 wanted to acknowledge the nice job that Pinnacle did ahead 16 of us in explaining the transaction. It took a lot of the 17 responsibility for working through the nitty-gritty 18 details and, therefore, I can talk about probably more 19 interesting things. They may not be more interesting to 20 everybody, but they're certainly more interesting to us at 21 any rate. 22 I think, you know, just as a beginning is kind 23 of a background on what REITs are and a triple-net REIT 24 and what our attributions are and what we do. We are a 25 passive investment entity. We are not an active

0110 1 investment. We derive our income from rent. It's -- 2 we're not there to try to figure out how to generate 3 better gaming revenues or how to operate more efficiently 4 or any of those things. We are absolutely on a passive 5 level. 6 The tenant pays the taxes, insurance and the 7 maintenance. And I was with Penn, just to be clear, when 8 the separation happened. I was a CFO for Penn National 9 Gaming and I was a big part in the process of when we were 10 negotiating the leases and why we did certain things the 11 way we did certain things. And our intentions were always 12 to create a relationship between the landlord and the 13 tenant that was as friction free as possible. 14 And the reality is we could have had provisions 15 that we pay for this and -- you know, on behalf of the 16 tenant in certain situations, but recognized up front that 17 our -- once we separated, our interests were going to be 18 different. We were representing our shareholders, they're 19 going to be representing their shareholders. 20 Maintenance CapEx, as I know we've talked a lot 21 about here today, was one of those areas that we felt like 22 there was a real opportunity to create friction because if 23 you think about it -- I don't know -- I don't even know if 24 you guys rent this building or own the building, but if 25 you rent it, you might very well have a disagreement with

0111 1 your tenant -- or with your landlord about the quality of 2 the carpet. 3 Not saying there's anything wrong with your 4 carpet, I didn't mean to infer that, but certainly wanted 5 to highlight the fact that by having the tenant 6 responsible for the CapEx, we recognize that the 7 motivation to have their properties well maintained was 8 absolutely attributable and the consequences of not doing 9 that were first borne by the tenant. 10 So the reality is that spending on maintenance 11 CapEx and spending on CapEx is within their motivations to 12 do so. They pay -- they are the ones that, quite 13 candidly, will pay the outcome or yield the outcome of not 14 doing a good job in that area. 15 And I know that Peter talked on this earlier. 16 At the end of the day, we -- we're not going to turn down 17 or restrict a tenant from spending money in our 18 properties, unless it's just unbelievably stupid. And 19 what I mean by unbelievably stupid is they decided to put 20 up a tin shed. I mean, Peter talked about we can't 21 approve painting the building pink. The reality is we 22 probably can't stop that one. 23 MR. CARLINO: We lost on that one. 24 MR. CLIFFORD: We lost that one. But if they 25 want to put up a tin shed and they want to, you know, get

0112 1 rid of the casino and do it in a structure that's, you 2 know, a tin shed effect, that we can sit there and say 3 you're not doing that. 4 Our ability and our willingness to approve 5 transactions, I think -- and again, I don't want to spend 6 a lot of time talking about Penn, but I think it's 7 illustrative and I spoke at the Indiana commission hearing 8 and we had -- at that point in time there were 27 projects 9 that our tenant, Penn National, had come forward to us 10 requesting approval to go ahead and move forward. We were 11 27 and 0, just to be clear. There was not a single item, 12 not a single project that we turned down because at the 13 end of the day, we're not -- I mean, we're knowledgeable 14 gaming executives, but it's not our business to decide how 15 they optimize their properties. 16 If they want to put in a lazy river, we're going 17 to let them put in a lazy river. Now, a lazy river, you 18 might say what good is that, right? You could have a 19 discussion in whether that's appropriate in a casino or 20 not. We don't make that judgment. If they decide they 21 want to do that, that's their call. 22 MR. CARLINO: That was Mississippi. 23 MR. CLIFFORD: That was in Mississippi, but, you 24 know, as an example. So the more money they spend, the 25 better it is for us and it's better for you as well, if

0113 1 you think about it, right, from the State of Missouri. 2 Our interests are completely aligned with each other, 3 relative to the spending CapEx by our tenants. The more 4 money they spend, the more competitive their products are, 5 the more revenue they generate, the more revenue they 6 generate, the more my rent goes up. 7 So the very concept that says I'm going to start 8 turning down capital projects is almost on its face -- 9 assumes I'm not going to operate in my economic best 10 interests. Sorry, I got on a tangent there, but it was -- 11 you guys spent so much time, I just couldn't help myself. 12 We're not involved in the operations of the 13 business, we're not involved in their marketing 14 strategies, their payroll strategies, any of those types 15 of things. Our corporate staff is very limited. We were 16 joking earlier that Pinnacle brought more people to this 17 meeting than we have at our corporate offices and it's 18 pretty close to true. 19 MR. CARLINO: It is true. 20 MR. CLIFFORD: There are a total of 15 people at 21 our corporate offices, four of which are admins. There's 22 several others that are in the accounting, entry-level 23 staff. We are limited to finance and accounting, tax -- 24 actually, we don't have a tax department. We outsource 25 the tax to one of our -- one of the big four firms. We

0114 1 have one individual in HR, one individual in IT. We've 2 got two in legal, Brandon and Melissa. We have 3 development, which is an individual who helps us look for 4 opportunities for growth, and we have administration. 5 There are no operational staff at the corporate 6 level at GLPI. We don't have anybody sitting up in 7 Wyomissing that's overseeing or looking to oversee what's 8 happening at our tenants. We do have two casinos. We 9 have a casino in Perryville and we have a casino in Baton 10 Rouge. We are the operators. That was part of the 11 original spin. 12 Happy to go into why we kept them if that's of 13 any interest. And the reality is those properties operate 14 relatively autonomously even within what we do on a 15 day-to-day basis. They certainly report up and they 16 report up to different people at corporate, but there's 17 nobody at a corporate level that has aspirations to create 18 a gaming dynasty or a gaming operating establishment. 19 Our job is -- and Peter touched on this, is to 20 grow AFFO in dividends, AFFO being adjusted funds from 21 operations, representing basically the difference between 22 the rent and what we can pay out to our shareholders. We 23 pay roughly 80 percent of our AFFO out in dividends and 24 there's a requirement by the IRS that you have to spend at 25 least -- you have to distribute 90 percent of your taxable

0115 1 income. The difference there being the depreciation and 2 allowances, why we can pay out a little bit more. But the 3 reality is the cash flow that comes from us, we retain 4 20 percent of our free cash flow, which we use to pay down 5 debt and to seek new opportunities. 6 I think you are probably going to be tired of me 7 beating on this dead horse. We have no control or 8 influence over operations. We have no right to direct or 9 control marketing or even really make any suggestions. We 10 have no right to receive confidential operating or 11 consumer information. 12 Any information that is shared with us is 13 completely controlled by the operator. What levels of 14 information that we have that I think could be considered 15 sensitive is none at the end of the day. We get SEC 16 information level on our -- on the operating results. We 17 have some -- there's a covenant in there on the rent 18 escalator relative to the relationship of the rent to 19 their, basically, cash flow, EBITDA, and that, quite 20 candidly, they can aggregate together for all of their 21 properties. We don't even need to see it property by 22 property. 23 You know, there are -- and we don't even have 24 any staff. I mean, just to be quite candid, we don't have 25 anybody who's even sitting around expecting to be

0116 1 analyzing the property operating performances of any of 2 our tenants. You know, there is the capital maintenance. 3 I think I've already talked about that. 4 I will talk a little bit about the one percent. 5 The one percent, just like the rent mechanisms and other 6 mechanisms was, you know, when we were operating as a 7 landlord, we wanted to ensure that we had a healthy tenant 8 and we created what I'll call some safety valves for the 9 tenant. 10 And what I mean by safety valves is, you know, 11 certainly I've gotten criticism from some of the people in 12 the REIT community that says why didn't you require more 13 money for the maintenance CapEx and, you know, why didn't 14 you force the tenant to spend more money? And the reality 15 was we say, well, we protected ourselves with the 16 requirements to be well maintained. And that basically is 17 the standard under which the tenant has to operate that we 18 can protect ourselves with. 19 The one percent was meant to be a floor and that 20 was basically to allow the tenant, if there were -- you 21 know, we have economic cycles, sometimes better, sometimes 22 worse. It gave the tenant the flexibility to be able to 23 reduce their maintenance CapEx for a short period of time, 24 assuming that they could do that, while still holding to 25 the standard of well maintained.

0117 1 So the one percent is a floor, it's not a 2 ceiling. The ceiling is unlimited. We'll let them spend 3 as much as they want. They can knock their brains out on 4 that level, but on the maintenance on the minimum level, 5 you know, we're looking at it as the basic core 6 protections that are, quite honestly, also in your best 7 interests. 8 In other words, the requirement that you have a 9 licensee or a tenant to spend money and to keep their 10 properties well maintained, they don't really have that 11 requirement with typical financings. You know, that's a 12 concept that says you can certainly exert your influence, 13 but I would hazard to guess that you've had some 14 experience with some licensees who haven't necessarily 15 done as good a job as you might have expected to do when 16 they were in financial distress. The reality is we have a 17 mechanism in our lease that says they have to continue to 18 maintain their properties. 19 The structural building, I think we already -- 20 I've already really touched on that. It's really only 21 requiring notice. And with that, I'm going to hand it 22 over to Brandon. 23 MR. MOORE: I get the exciting stuff. 24 MR. CLIFFORD: You do. 25 MR. MOORE: So I guess before we talk about the

0118 1 FTC, which I know everybody is excited about, I'll take 2 Jack's homework assignment on arbitration. So the lease 3 actually does not have an arbitration provision. In our 4 experience arbitration we try to avoid at GLPI just 5 because oftentimes it's a prolonged process that 6 ultimately leads to a judicial process at the end of the 7 day if somebody is still aggrieved. 8 And I think most of the things that could go 9 awry under the lease, we're going to want a quick answer 10 to and I think Pinnacle will want a quick answer to. And, 11 you know, the example of whether or not we have been 12 reasonable in withholding our consent, they're going to 13 want a quick answer to that and they're probably going to 14 want to run in and get an answer that's not going to want 15 to go through an arbitration process. So the lease does 16 not have an arbitration process in it. Of course, we 17 could certainly put one in it. 18 The other thing I wanted to touch on was there 19 was a question about the best interest standard and I know 20 that's the statutory standard here in Missouri and I don't 21 know if it's under statute in a place like Indiana or not, 22 but it's a good example. I don't think I've ever walked 23 into Indiana, Jack, where their first question is why is 24 this in the best interests of the state of Indiana. And 25 that will persist in every meeting we have in Indiana and

0119 1 in Louisiana and other places. 2 So whether or not it's statutory, I think the 3 plenary authority of these gaming commissions across the 4 country is such that that's the first thing in their minds 5 and that's what Indiana wanted to hear and that's what 6 Louisiana wanted to hear and that's a question we address 7 everywhere we go and we'll certainly address it here. And 8 the folks at Pinnacle have addressed it and I think Bill 9 will after I talk about some more exciting regulatory 10 pieces here. 11 So the Federal Trade Commission has been a 12 question that we faced a number of times and so we wanted 13 to make clear we, as GLPI, as a REIT, not just us, but 14 REITs, are generally exempt from the pre-merger filing 15 requirements. So not the entire act. We don't get a free 16 pass. We can't go do whatever we want. 17 REITs get a pass under the pre-merger filing 18 requirements because they're not entities that affect 19 competition generally. They're passive entities. The way 20 they're structured is passive, so they do not affect 21 competition. So they don't generally -- if a transaction 22 is over, I don't know what it is now, 76 million or 23 something where you normally have to go through a 24 pre-merger filing with the FTC, we don't have to do that. 25 The risk we run if you don't do that is that

0120 1 they can come and knock on our door the day after the 2 merger is completed and say we think this is 3 anti-competitive and we will undergo a review and if they 4 find that it is, instead of having the opportunity to not 5 engage in the transaction or to come to an agreement with 6 them to do something to alter the transaction, we'll be 7 forced to come to an agreement with the FTC as to how 8 we're going to fix this problem, namely what are we going 9 to dispose of. 10 So I don't want there to be a confusion that we 11 can somehow operate free from FTC oversight or control. 12 We have to be mindful of what the FTC reviews, we have to 13 be mindful of our structure as a REIT, not only for the 14 IRS and other things, but because the FTC can certainly 15 come in and question this later. 16 So that brings me to, maybe, the FTC review of 17 the Pinnacle transaction. So we didn't have a filing 18 requirement, as we said. Pinnacle had a separate 19 requirement with the FTC through a separate transaction. 20 When they notified the FTC, the FTC asked us to comply 21 with a voluntary review. They made it pretty clear, 22 should we deny the voluntary review, it could very well 23 become compulsory. We had no incentive to do it. In 24 fact, this was the perfect opportunity for us, before we 25 engaged in a transaction of this magnitude, to get an

0121 1 understanding from the FTC of do you think there's 2 something in our structure, with our structure that causes 3 you concern from a competitive standpoint. 4 And the initial request was related simply to 5 the Baton Rouge market and the reason is we actually own a 6 casino in Baton Rouge. So we own and operate a casino in 7 the Baton Rouge market. Pinnacle has in their 8 transaction, as part of the portfolio of properties coming 9 into the lease, a property in Baton Rouge. 10 COMMISSIONER JAMISON: I've got a question. 11 When you say we own and operate, the REIT owns and 12 operates? 13 MR. MOORE: The REIT does. Just to give you -- 14 COMMISSIONER JAMISON: I thought you said that 15 they don't do operations, they do the real estate portion, 16 so I'm confused, I guess. 17 MR. MOORE: We do. We had a tax-free spinoff 18 from Penn National Gaming. As part of that tax-free 19 spinoff, one of the requirements was we had to take with 20 us an active trader business that we had retained for five 21 years. We have two properties in our portfolio that are 22 held in a separate TRS subsidiary that we own and operate. 23 MR. CARLINO: That's a taxable subsidiary. 24 MR. MOORE: One in Perryville, Maryland and one 25 in Baton Rouge, Louisiana. We were required to take those

0122 1 in order for this to qualify as a tax-free spin from Penn 2 National Gaming. So those properties operate in a 3 separate company. As Peter said, they're taxable. So 4 unlike our REIT entity, the REIT entity GLP Capital, this 5 separate corporation that has these two casinos pay taxes 6 just like every other C corporation in the U.S. 7 COMMISSIONER JAMISON: So are they operated 8 under the corporate umbrella of GLPI or is it a separate 9 entity? 10 MR. MOORE: No, it's -- well, it's under the 11 corporate umbrella, I think, in the sense that you're 12 asking. It's a separate subsidiary because it has to be 13 because it's a separate C corporation. But it's under our 14 corporate entity and they have their own management 15 personnel and employees and those two properties are 16 really pretty self-contained. 17 I mean, for the most part, I don't think there's 18 anything -- we at corporate don't spend -- I personally 19 spend very little of my time dealing with either of the 20 operating subsidiaries. Occasionally legal issues will 21 come up that can't be handled at the property or are 22 significant enough as a corporation, from a liability 23 standpoint, that we'll get involved, but not generally on 24 a day-to-day business. 25 COMMISSIONER JAMISON: I know the Chairman has a

0123 1 question about this and I'll preamble it and he can jump 2 into this question because I think that where the 3 perception or where some issues come from is the overlap 4 between ownership of Penn National and overlap of 5 ownership of GLPI and the -- I understand when they're 6 separate initially from each other there isn't any other 7 way but that ownership and to be there, so I think that 8 perception of Penn National's influence on GLPI is a 9 question and -- 10 CHAIRMAN KOHN: Well, let me -- I assume you 11 wrote the 10-K or if you didn't, you at least supervised 12 it. 13 MR. MOORE: Not personally, but yeah, I did. 14 Yeah. 15 CHAIRMAN KOHN: So the -- on February 22 when 16 this was filed, the heading is -- I'm not going to read 17 the whole thing, but the -- well, let me preface this, 18 too, by saying that I understand that Penn is not involved 19 in this transaction. I understand. 20 MR. MOORE: Penn isn't involved in anything we 21 do. Penn doesn't have a single -- they have no interest 22 in our business at all other than being our tenant. 23 COMMISSIONER JAMISON: But they have an 24 ownership. 25 MR. MOORE: They don't. They don't.

0124 1 COMMISSIONER JAMISON: You have co-ownership 2 between -- so let me ask, do people that own GLPI also own 3 Penn? 4 MR. MOORE: We are a publicly traded company, so 5 the answer is probably yes. I'm sure some of the 6 shareholders -- 7 COMMISSIONER JAMISON: But a large percentage of 8 that ownership or a substantial percentage of ownership is 9 the same? 10 MR. MOORE: I think that's not right. 11 COMMISSIONER JAMISON: Okay. 12 MR. MOORE: I actually don't think -- 13 CHAIRMAN KOHN: Let me read this from your 10-K. 14 "The ownership by our executive officers and directors of 15 common shares, options and other equity awards with Penn 16 may create or may create the appearance of conflicts of 17 interest." 18 MR. MOORE: Yeah. 19 CHAIRMAN KOHN: This is what we're wondering 20 about. 21 MR. MOORE: Let's address. There's a couple of 22 issues here I think we can probably address. One, I think 23 that occurs in a set of risk factors. And as a publicly 24 traded company, every publicly traded company, every 25 company with securities registered under the Securities

0125 1 Act has risk factors and they include basically anything 2 you could ever think could happen to this business in a 3 negative way, designed to protect the issuer of that 4 company from a shareholder coming back with some sort of 5 frivolous lawsuit that says had I known it could rain on 6 Thursday, I would have not bought the shares and you owe 7 me a hundred million dollars because of that. 8 So we have numerous risk factors in there, 9 including that one. That risk factor relates to only the 10 ownership of officers and directors of GLPI and Penn. And 11 there is some overlap there because on the spinoff of 12 GLPI, if you had a share of Penn, you got a share of GLPI. 13 They own a minority interest in those two companies. 14 And I can give you a great example. Peter 15 owns -- and his family through some trusts controlled, 16 under our proxy last year, about 12 percent of the vote of 17 GLPI. We had a proposal in our annual meeting last year 18 that the board recommended be denied. Despite Peter's 19 vote with management to deny, it passed 70/30. 20 Peter in his ownership interests in GLPI has no 21 ability to control our vote. And our shareholders will 22 vote as they see fit and as they think is appropriate and 23 our largest shareholder right now is actually Vanguard. 24 Penn doesn't have that shareholder. Vanguard may own a 25 piece of them in some of their funds, but ours is through

0126 1 their REIT fund. 2 What happened was when Penn and GLPI split, to 3 your point, everybody that had a share of Penn got one of 4 GLPI. Two weeks before that spin, and I think very 5 similar to what you'd hear from the Pinnacle folks, which 6 is going to happen with their shares, GLPI began trading X 7 dividend, which means that shareholders could sell off 8 their portion of GLPI if they wanted to before the spin 9 and that happened. 10 So actually on November 1, 2013, when we spun 11 out GLPI, its first day as a publicly traded company, 12 shareholders were already different and they've continued 13 to diverge because shareholders that want to own an 14 ownership interest in a gaming company don't necessarily 15 want to own an ownership interest in a REIT and the other 16 way around, right? The REIT investors are there for the 17 dividend. Gaming companies operate very, very 18 differently. 19 So, yes, we have some overlap between our 20 shareholders. We also have overlap with Simon Properties 21 and a bunch of other publicly traded REITs. We also have 22 some overlap with Boyd and Caesars and MGM, right? That's 23 natural. We're a publicly traded company. We have on 24 average, I think, over 800,000 shares that trade daily. 25 We couldn't tell you how much overlap is in our shares

0127 1 from minute to minute if we wanted to. The officer and 2 director piece is very, very small. 3 COMMISSIONER JAMISON: Can you answer me this? 4 What percentage of the ownership of GLPI will be 5 represented by the .85 shares? 6 MR. MOORE: Sure. So Pinnacle's, I don't know, 7 thousands of individual shareholders today. 8 COMMISSIONER JAMISON: Right. 9 MR. MOORE: In the aggregate will hold about 10 29 percent of our company and that fluctuates a little 11 bit, but that's around about where it's going to be. So 12 as a whole, if you got all of those shareholders into a 13 football stadium, they would hold about 29 percent of our 14 shares. And to give you the example I gave with Peter, 15 even if that group voted as a single unit, they couldn't 16 control the vote of our company. 17 COMMISSIONER JAMISON: Okay. 18 MR. MOORE: And what they will actually do is 19 dilute the ownership interest of people in our company. 20 So individuals like Peter will see their ownership 21 interest cut in half with this transaction. 22 COMMISSIONER JAMISON: Right. So the 23 concentration that may have existed before will be diluted 24 by the fact that the Pinnacle is coming in? 25 MR. MOORE: It dilutes.

0128 1 COMMISSIONER JAMISON: And you have a 2 distribution of shares based on that input of real estate? 3 MR. MOORE: That's exactly right. What you see 4 as a regulatory body, I think, is if shareholders -- I 5 think in this stated five percent. If somebody acquires 6 more than five percent of our company because we are 7 licensed here in Missouri, they have to file with you 8 folks and almost all of them, I think all of them with the 9 exception of maybe Fortress have filed as just an 10 institutional holder. In fact, they may be institutional 11 holders as well. 12 These folks file 13Ds with the SEC. They're 13 not interested in our business. They are large 14 institutional corporations. When you look at our largest 15 shareholders and you see names like Vanguard and Baron 16 Capital, their business isn't to run our business. Their 17 business isn't to run Pinnacle's business. They're 18 investors out to make a dollar. 19 And, yes, there's some overlap, but the overlap 20 you spoke of of officers and directors is incredibly small 21 and actually decreasing quite substantially. I mean, most 22 of us that had options in Penn that came over in the spin 23 have exercised those. That's beginning to peel off pretty 24 rapidly and certainly those of us at GLPI could never 25 affect a vote at Penn. Even Peter with his ownership

0129 1 interest wouldn't be able to control a vote at Penn. 2 Maybe I didn't answer your question, but -- 3 COMMISSIONER JAMISON: No, you did. 4 CHAIRMAN KOHN: Go ahead. I mean, our -- the 5 reason that we're kind of honing in on this issue is that 6 one of our jobs is to make sure that competition among 7 casinos continues to survive in Missouri. 8 MR. MOORE: Sure. 9 CHAIRMAN KOHN: The strength of Missouri and we 10 want to make sure that this transaction in no way 11 diminishes that competition among casinos. So when we 12 read items like this from your 10-K, I think it's cause 13 for us to at least question what that really means with 14 respect to competition or lack of competition going 15 forward. 16 MR. MOORE: I think it actually -- I mean, in my 17 own personal view means nothing about competition. What 18 it means is we don't want a shareholder to come back later 19 and say I bought your shares. Had I known that some of 20 your directors also have -- or officers had a couple of 21 shares of Penn, I wouldn't have bought. It's a frivolous 22 lawsuit, but if we went through those risk factors -- and 23 that would be a painful exercise for everybody in this 24 room, there are lots of them -- we would come up with a 25 number of them that you would say that -- there's an

0130 1 infinitesimal likelihood that would happen. Maybe so. 2 CHAIRMAN KOHN: Let me read one more sentence 3 and I'll get off of this. 4 MR. MOORE: Sure. 5 CHAIRMAN KOHN: But again from your 10-K. 6 "These overlapping positions could create or appear to 7 create potential conflicts of interest when our or Penn's 8 management and directors pursue the same corporate 9 opportunities." 10 MR. MOORE: Correct. 11 CHAIRMAN KOHN: That's a direct competition 12 sentence. 13 MR. MOORE: And the reason that that is there is 14 because there are possibilities, and we haven't seen 15 really many of them in the last two and a half years. 16 Keep in mind, that's been there since we spun, the 17 question of whether or not it needs to still be there. 18 But when we spun out, we knew there might be situations 19 where we'd be competing with Penn. And, in fact, we did. 20 In the New York market, Penn was going after a 21 certain license. We financed a competitor, literally it 22 was months after the spin out. And so we knew there would 23 be -- there would be things that would come up where we 24 both would be interested in something and probably not 25 together. We've pursued a number of things separate from

0131 1 Penn. 2 And The Cosmopolitan that recently sold in Las 3 Vegas, Penn was interested in that, we were interested in 4 that, we didn't do it together. Meadows, which is 5 something we talked about, we agreed to buy that property 6 and bring in our own third-party operator. Penn bid on 7 that just like everybody else and I can tell you Penn 8 wasn't one of the top three bidders and Penn is not 9 involved in the final strokes of that process. 10 So we wanted to have something in place and we 11 do through our corporate governance guidelines that 12 require Peter and there's one other director, David 13 Handler, that overlap that if there's a conflict, 14 perceived conflict by either the independent director on 15 Penn's board or Penn's management team, they can ask those 16 folks to leave and not be part of the process. 17 We have a similar provision in our corporate 18 governance, but because Peter is an executive on our side, 19 the chances of there being an exclusion of him from our 20 board room is very slim. The chance of him being excluded 21 from Penn is a little bit higher and, in fact, Penn, when 22 then put in their bid on the Meadows, made it clear to us 23 that Peter was not included in some of the discussions 24 around what they were going to bid and how they were going 25 to bid.

0132 1 We have the processes in place, we believe 2 they're working, but we have a risk factor all the same 3 just so everybody knows that's buying our shares that that 4 structure exists. 5 MR. CARLINO: Let me give you another example. 6 I think it's important, and that was shortly after we spun 7 as well; Massachusetts. Penn had an interest in 8 Massachusetts and, in fact, did open the first casino in 9 the state, but we were partnered with at least two 10 different groups -- 11 MR. MOORE: Two different. 12 MR. CARLINO: -- for competing sites. They 13 weren't, unfortunately for us, the winner but that went 14 without a flaw. As I say, and I say it not smartly, but 15 those guys were doing whatever the heck they were doing, 16 we're doing what we're doing and never the twain would 17 meet. We were aware that they were looking at something 18 up there, but only that and that was it. 19 And by the way, that's -- should well apply with 20 Pinnacle as well. We could find ourselves competing with 21 them or any combination and I think as Anthony well 22 pointed out, it could go the other way. They could make a 23 better deal. Let's say they have a new thing they want to 24 finance and they choose not to do bank financing, want to 25 go to the REIT. They're going to talk to us. I'm a

0133 1 hundred percent sure you're going to talk to MGM. They're 2 right in your town in Las Vegas. You're going to talk to 3 every other REIT in the planet and we'll make it or we 4 won't make it. So normal market forces will prevail in 5 these situations. 6 COMMISSIONER JAMISON: Let me ask one other 7 question, then, going back to your owning and operating a 8 casino. Is that a stagnant corporation that you were 9 forced to take and it's not -- it's not a growing -- 10 MR. MOORE: It doesn't grow. It's a one off. 11 It's an entity that holds -- there are two separate 12 companies, one -- 13 COMMISSIONER JAMISON: So you're not in 14 competition, then, with other operators as far as 15 pursuing -- 16 MR. MOORE: We are in those markets. 17 COMMISSIONER JAMISON: Pardon? 18 MR. MOORE: We are in those markets. We compete 19 in those markets. 20 COMMISSIONER JAMISON: Correct. But, I mean, 21 you're not pursuing additional to add to that or -- 22 MR. MOORE: No. Our goal would be to empty the 23 TRS from operating assets rather than acquire more. 24 MR. CARLINO: We have a five-year requirement to 25 hold those properties. That's really the answer.

0134 1 COMMISSIONER JAMISON: Right. 2 MR. CARLINO: But building up stuff in a taxable 3 subsidiary is really not our business. 4 MR. MOORE: Not our goal. 5 MR. CARLINO: We had to do it to effect the spin, 6 period. 7 COMMISSIONER JAMISON: I understand there are 8 some comeback regulatory requirements to do that, but your 9 goal is to get out from under that operations portion when 10 applicable? 11 MR. MOORE: Absolutely. Yeah. Because that 12 taxable REIT subsidiary, we can only hold 20 percent. 13 It's now 20 percent, it used to be 25, assets in there. 14 And that ability is really important to us because if we 15 came on a transaction where we needed to take the 16 operations for a period of time. Let's say we didn't have 17 a third-party operator, great opportunity. 18 If that capacity is available to us, we could 19 conceivably put a property in there, clean it up, get an 20 operator and spin it out. If that basket is full, it's 21 hard for us to do, right? It could prohibit us from doing 22 transactions. We have them there now. We have to -- as 23 Peter said, we have to hold them for five years and then 24 we can conceivably dispose of them. 25 MR. CLIFFORD: I was just going to -- we're not

0135 1 an operator, we're not a competitor, we're a source of 2 financing. 3 COMMISSIONER JAMISON: I understand that. 4 MR. CLIFFORD: We're really competing with banks 5 as much as we are with anybody else. At the end of the 6 day, we're just a source of capital and I think -- 7 COMMISSIONER JAMISON: I understand that, but it 8 is a little clouded by the fact that you say that you have 9 an owned and operated casino subsidiary. 10 MR. CARLINO: When we say we competed in 11 Massachusetts, that's with an operating partner. 12 COMMISSIONER JAMISON: Correct. 13 MR. CARLINO: We were their lender, they needed 14 money, we paired with them, but always that would be the 15 case. We're only a lender. 16 COMMISSIONER JAMISON: But it wasn't through 17 your operation subsidiary -- 18 MR. CARLINO: Oh, no, no, no, no. We're not 19 looking to build; zero. 20 MR. MOORE: We haven't pursued anything with the 21 operating subsidiary other than the Meadows. We did agree 22 to purchase the Meadows outright. Now, we don't plan to 23 get to the closing table without an operator and take the 24 operating assets, but in that instance, which did agree to 25 purchase the whole thing simply because the owner there

0136 1 wanted out entirely. 2 CHAIRMAN KOHN: What is the Meadows? 3 MR. MOORE: The Meadows Racetrack and Casino is 4 a property outside of Pittsburgh. 5 CHAIRMAN KOHN: It's a casino? 6 MR. MOORE: It's a casino, casino and racetrack. 7 COMMISSIONER LOMBARDO: Let me ask you this: If 8 this transaction is approved and let's say Pinnacle wanted 9 to sell one, two or three of the properties in Missouri, 10 would GLPI have to approve it? 11 MR. MOORE: No, we wouldn't have to approve it. 12 I think if Pinnacle wanted to carve out one or more 13 properties from the lease, they don't have that right to 14 do so under the lease. If they brought it to us and it 15 made economic sense and maybe we're getting some 16 diversification of our tenants -- I mean, diversification 17 of our tenant base is important to us. We're trying to 18 diversify our tenant base. It may be very well be a 19 transaction that's good for them and good for us. 20 COMMISSIONER LOMBARDO: Let's say they sold to 21 MGM. 22 MR. MOORE: If they sold to MGM and MGM was 23 going to pay our rent and we felt as though MGM was going 24 to be a good operator, that might be good for us, right, 25 because now we don't have three tenants, now we have four

0137 1 tenants. That's good for us. If they wanted to go and 2 sell the three properties to some operator that had never 3 run a casino business or that had some small casino 4 business and never run anything of these magnitudes, we 5 might have a problem with that. 6 COMMISSIONER LOMBARDO: So they have no right 7 under the lease to sell any of the properties? 8 MR. MOORE: Correct. 9 COMMISSIONER LOMBARDO: They would have to come 10 to you and then convince you that the new operator was 11 going to be in the best interests of your company? 12 MR. MOORE: I think that's right. I mean, 13 there -- 14 MR. CLIFFORD: I was just going to say part of 15 the reason we paid what we paid is because it's a 16 portfolio of assets. So we couldn't allow for all of a 17 sudden this portfolio of assets to become a bunch of 18 little rents, right? There's real value in having the 19 rent cross-collateralized across all 14 properties. 20 So for them to go off and sell one, there's 21 still 13, you might say that's fine, but the problem is 22 now I've got one and I've got rent and the question would 23 really come up in that situation was whether Pinnacle 24 would continue to guarantee the rent associated with that 25 property when they sold that property. At that point in

0138 1 time, we would probably be -- we'd be a lot more inclined 2 to say yes. That would be not very attractive to them, 3 obviously. 4 COMMISSIONER LOMBARDO: You would be inclined to 5 say yes if the new owner was acceptable and also under -- 6 MR. CLIFFORD: Had financial wherewithal and, 7 you know, we thought that -- there could be, as Brandon 8 pointed out, you know, one of our criticisms that we 9 received from the REIT community is that we're not as 10 diversified across our tenant base as they might like to 11 see. 12 So it's not like we wouldn't be incentivized to 13 be cooperative in the process of potentially carving out 14 an asset if they wanted to do that. There would be a 15 motivation and there's a positive outcome that could come 16 from that. However, we'd have to weigh that against all 17 the negatives, especially around the credit worthiness of 18 the tenant, the likelihood of the strength of the 19 property, what the rent adjustment would be, whether 20 that -- how that rent would still be continued to be 21 guaranteed. 22 CHAIRMAN KOHN: Sounds pretty much like a -- 23 some kind of a net worth condition on a sublease. 24 MR. MOORE: The other thing I'll point out, 25 since we talked about the overlapping of directors a

0139 1 little bit, is that the spinout from Penn National Gaming, 2 the tax-free nature of that resulted in a savings of over 3 a billion dollars, Bill, in tax savings. 4 MR. CLIFFORD: With our taxes, yes. 5 MR. MOORE: Part of that, it was a very long 6 process with thousands of pages of submissions to the IRS. 7 The overlapping directors was a part of that that the IRS 8 looked at in determining whether or not these two 9 companies would still be independent. And so it's not 10 just that we say that they're independent. It's not just 11 that we've put some things in place that we hope work. 12 There are a whole host of things that could 13 result in that transaction with Penn being taxable and 14 this is -- that is but a small part, but it's a part. And 15 so that's not something we came up with on our own. It's 16 not something that hasn't been reviewed by someone. It's 17 not something that we take lightly. 18 So, you know, we are constantly vigilant of the 19 things that gave us the tax status we have today, that 20 being but one of literally maybe a hundred things that 21 result, but we're very careful about how we operate. And 22 that's a very important aspect of the business and I think 23 it's very important to Peter and his family and his 24 ownership interest and it's very important to Penn and 25 ensuring that there's no conflict there.

0140 1 So I didn't want you to think that that's 2 something we just kind of came up with on our own and we 3 decided between the two companies it was okay. That was 4 something we did vet. 5 CHAIRMAN KOHN: Thank you. Any other questions? 6 COMMISSIONER HALE: Nothing. 7 COMMISSIONER NEER: No. 8 CHAIRMAN KOHN: Does that conclude your 9 presentation? 10 MR. MOORE: Do you want me to finish -- 11 CHAIRMAN KOHN: I'm sorry, I thought you were 12 finished. 13 MR. MOORE: Competition seems to be important. 14 CHAIRMAN KOHN: I didn't want to cut you off. 15 MR. MOORE: It's been -- I know this is 16 exciting, but -- 17 COMMISSIONER JAMISON: If you say good evening 18 when you're done, you're in trouble. 19 MR. MOORE: No, I won't. I promise. If you say 20 we're approved, I'll say good evening. So competition is 21 clearly important and I understand that and I understand 22 why and we'd be fooling each other if we didn't look at 23 the properties that we'll own in the St. Louis market, the 24 properties we own in the Baton Rouge market to say 25 competition isn't a concern.

0141 1 But what I think needs to be understood here is 2 that the FTC -- so while this was voluntary, they made it 3 very clear should we say no, they were going to look at it 4 anyway. We received a letter from the FTC in August that 5 says we want to look at your Baton Rouge market, for the 6 reasons we talked about. We actually operate a facility 7 there. 8 When the FTC started -- and we provided them 9 volumes of e-mails, documents, I mean hundreds if not 10 thousands of files. And when they came back to us, they 11 came back and they sent us an e-mail and said we'd like to 12 take a closer look at St. Louis and we'd like to take a 13 close look at your master lease. 14 We said great. This is, quite frankly, what we 15 hoped for. If we're going to go to the FTC, we'd like for 16 them to review it all, because if we're going to do other 17 transactions, we want to know that the FTC doesn't view 18 our lease as a problem. Because at the outset, the 19 reason, again, why we don't have that pre-merger filing is 20 because we're a passive entity. 21 If the FTC were to look at our lease structure 22 and say you're not passive, you have the ability to 23 control this, we want to know that now. We want to know 24 that before we enter into this transaction with Pinnacle 25 and we want to know that before we do any other

0142 1 transactions. 2 That actually seems counterintuitive, but we 3 viewed it as a positive. And we gave them, again, I 4 think, volumes of information. I think we provided an 5 entire copy of everything, hundreds of e-mails and 6 documents provided to them to Missouri pursuant to the 7 request we received. 8 So the FTC came back after months of review, 9 several different e-mails and questions, and we hired an 10 economist out of Georgetown that did some work looking at 11 things and came back with one request. And it wasn't that 12 we change our master lease, but they wanted us -- they 13 wanted me to send a letter to Jack, which I did, that said 14 when we're looking at any capital improvement projects in 15 the Baton Rouge market, we won't take into consideration 16 any impact that we think it will have on our Baton Rouge 17 facility. 18 That was a letter that we were able to provide. 19 I didn't go to Peter. I didn't go to Bill. I wrote the 20 letter, we sent it over because that's not our business. 21 I didn't have any concerns that us saying we won't 22 consider the impact on our property is a problem because 23 we don't. It's not how we operate, it's not what we do. 24 That was the only request that came back. And I 25 want to stress that this investigation went through the

0143 1 director of the Bureau of Competition and subsequently 2 went all the way up to Chairwoman Edith Ramirez before 3 they concluded their investigation. So any suggestion 4 that this wasn't reviewed fully at the FTC, this reached 5 the very highest level of the FTC. And they closed their 6 investigation, I think, in November or December of last 7 year. 8 So in addition to the FTC, we are also licensed 9 in addition here in Missouri. We have licenses in 10 Illinois, Indiana, Louisiana, Maryland, Mississippi, Ohio 11 and Pennsylvania. One or more of our directors and 12 officers have all been found suitable in those 13 jurisdictions. We also own properties in Maine, Nevada, 14 New Mexico and West Virginia, but we're not licensed in 15 those states. Those gaming regulatory bodies did not 16 believe that the lease of property was something that 17 needed to be licensed. 18 As I said before, we're subject to very complex 19 IRS regulations that permit us to maintain our REIT 20 status. Keeping in mind we are a creature of tax. Should 21 we lose our REIT status, the whole thing begins to crumble 22 for us, the purpose of our business. Now, there may be an 23 evolution in that that we someday say we want to be a C 24 corp again, but it's not today and it's not how we operate 25 and it's not something we're taking lightly.

0144 1 We talked about the tax-free spinoff from Penn 2 National Gaming, so we're not -- I wouldn't say we're 3 regulated by the IRS. We operate by virtue of a private 4 letter ruling from the IRS that we take very seriously and 5 we're obviously subject to the Securities and Exchange 6 Commission and NASDAQ and the rules and regulations that 7 we are subject to as a public company. This we've been 8 through numerous times. I won't even insult you by going 9 through it again. 10 COMMISSIONER JAMISON: Thank you. 11 MR. MOORE: I think I'll turn it over to Bill to 12 talk about some of the benefits here. I do -- because I 13 probably won't come up again unless I have to, I'd like to 14 thank -- just to let you know, the staff here was very, 15 very good with us and I don't -- I wanted to thank them 16 for all the work that they've done. 17 I know some folks spent quite a bit of time in 18 Wyomissing interviewing officers and directors and for 19 those of you who don't know where Wyomissing is, it's not 20 conveniently located to any significant international 21 airport or anything. And so a lot of time and effort went 22 in by some of those folks to understand our business and 23 what we do and who we are and we very much appreciate 24 that. 25 CHAIRMAN KOHN: Thank you.

0145 1 MR. CLIFFORD: I think we've probably touched on 2 a number of these things and I touched on them earlier, 3 but I think it's important that we highlight a few factors 4 in terms of why we believe this transaction has benefits 5 to the state of Missouri. 6 One, as Brandon already touched on, but the 7 reality is unlike most of your financing sources in the 8 state of Missouri, we're actually licensed by yourselves. 9 Our conduct to the extent that you find it objectionable 10 or you find that we're doing something that's 11 inappropriate, we are subject to your oversight and 12 overview and clearly could be called forward for whatever 13 conduct we've done that, quite candidly, is not within 14 your -- that's within your realm of authority. 15 And I would highlight that, you know, we are 16 long-term. In other words, unlike what you might find 17 with creditors, typically the people that have the 18 $2.7 billion worth of their debt that we're going to take 19 care of and pay for, those individuals initially may well 20 be very friendly creditors. They may be very nice people 21 that are lending you money and they're expecting to get 22 paid back. 23 But when things go poorly, that -- those banks, 24 those institutions, those people that are -- you know, the 25 JPMorgans and the Bank of Americas and even the Fidelities

0146 1 and the Penncos and all of the guys that are out in the 2 business of lending money, they sell that paper and they 3 sell that paper to basically distressed debt investors. 4 Those distressed debt investors have zero interest in 5 getting anything other than making a marginal profit 6 between what they paid for that debt instrument and what 7 they ended up actually being able to get out of it in 8 settlement. 9 So when you think about that perspective, 10 it's -- they would -- they might well come back when -- if 11 the operator were to come back and say I'd like to spend 12 some more money on maintenance CapEx, that creditor might 13 be saying huh-uh, I don't particularly think that's a good 14 idea because that's not going to maximize my proceeds and 15 that's going to diminish my profits. 16 Whereas for us, we're going to own that building 17 and we're going to own that property and we're going to 18 own that -- you know, basically we're going to have a 19 relationship with that tenant for a very long period of 20 time and certainly having a property that's not well 21 maintained or is suffering diminished returns or is not 22 operating as well or as profitable is not in our 23 interests. 24 You know, the other thing I would point out is 25 that, you know, we are aligned with you guys on a number

0147 1 of issues where creditors may or may not be. The reality 2 is when we talked about the anti-competitive stuff in 3 terms of the ability that they have to -- Pinnacle has to 4 ensure that our rent, the variable rent portions is 5 stabilized if they go off and grab another property within 6 60 miles, well, I suppose on one hand you might think, 7 well, that's bad because maybe they're going to be in 8 Missouri. Maybe they're not going to be in Missouri and 9 the reality is all the Pinnacle properties are owned on 10 the border with another state. 11 So I don't understand exactly why that's 12 necessarily a negative from the State of Missouri's 13 perspective that you're going to have Pinnacle considering 14 the impact of the -- of the fixing of the rent because 15 it's not in your interests to watch Pinnacle end up with a 16 property across the river and ship all their customers 17 over there. 18 So we're somewhat -- we're aligned on that issue 19 in terms of across-the-river line items, right? So 20 there's -- some of those concepts -- similarly it's not in 21 your interests the fact that if somebody was to come 22 along -- and let me tell you what happens in a lot of 23 greenfield projects. 24 You know, we -- people come to us looking for 25 financing when they're struggling to get financing with

0148 1 very cheap sources of capital. And when we -- if we're 2 the guys that necessary -- not always, I don't want to 3 paint that with a broad brush, but certainly we've had 4 some people who don't have any money, don't have the 5 capital, don't have the equity to go build a facility, but 6 they want to go ahead and build one anyway and the reality 7 is they come to us. Sometimes we get involved with them, 8 sometimes we don't. Some of the ones in Massachusetts 9 were absolutely about guys who didn't have enough money to 10 get the project done. 11 And so the fact that we can't build a greenfield 12 in competition with Pinnacle or Penn, which is in 13 Missouri, is also in some ways in your interests as well, 14 to the extent it's outside the state borders, state lines. 15 So what that says is that in Illinois or Kansas, somebody 16 wants to come in and do something crazy that's going to 17 suck business out of the State of Missouri, we're not 18 going to be there helping them get it built. 19 Now, we can get involved if, in fact, down the 20 road that place gets built and somebody goes off and lends 21 them the money and it's up and running and there's -- you 22 know, the bottom line is every casino that gets built 23 rarely gets shut down. In fact, they never get shut down 24 as long as they're positive EBITDA. Yes -- can we get 25 involved at that point? The answer is yes. But at that

0149 1 point the cat's out of the bag, so to speak. The place is 2 built, it's up and running and so on. 3 You know, the -- we are interested in, you 4 know -- we provide a bit of oversight that typically is 5 not necessarily within your purview. We talked a little 6 bit about that on the maintenance CapEx. You know, we are 7 absolutely focused on continuous -- the properties are 8 continuously open. 9 We are interested in the fact that the 10 properties are run well, not that we have very much say at 11 all. But to the extent that there's a process, you know, 12 where there's -- sorry, I lost my train of thought. I'll 13 have to move on from that one. It was a great point and 14 if I remember it, I will come back to it. 15 CHAIRMAN KOHN: There's a -- I'm looking at a 16 statement and I guess the previous edition of the 17 anticipated impact on the state, the statement is -- and 18 this may be what you're talking about. "GLP is a licensed 19 landlord providing oversight by MGC to greater extent than 20 traditional bank financing." 21 MR. CLIFFORD: That's right. In other words, 22 that was the point I was making. That was my first point, 23 is that you license us, right? You don't license Bank of 24 America, JPMorgan. You certainly don't license distressed 25 debt holders who have the ability to impact your property

0150 1 operations. 2 So at the end of the day, you have a lot more 3 oversight of us than you'll have of the creditors that 4 might be lending money to your -- to the entities within 5 your state. And I think that's an advantage. I think 6 that's a situation that, quite candidly, is to Missouri's 7 benefit versus just an unknown creditor who is going to 8 turn around and, as soon as there's trouble, potentially 9 sell to some guy whose special skills is how to maximize 10 the proceeds out of a distressed debt situation. That was 11 my point. 12 CHAIRMAN KOHN: I was just trying to help. 13 MR. CLIFFORD: Thank you. You do. I appreciate 14 that. I need a lot of help up here, trust me. The end of 15 term provisions in the master lease are -- is really -- I 16 think, to Carlos's point earlier, you know, he said that 17 it would happen at the end of the 35 years. 18 I can tell you that with two publicly traded 19 companies, that shareholders from both companies when they 20 look like they're coming up against the final termination, 21 there is going to be an enormous amount of pressure to get 22 that lease renegotiated well before the end of the 35th 23 year. Nobody is going to want to sit around with that 24 level of uncertainty knowing -- especially from Pinnacle. 25 Hopefully we'll be so large and big that maybe our

0151 1 shareholders will be less concerned. 2 But from a Pinnacle shareholder perspective, 3 they're going to want to know that they've got a 4 continuing business and they're going to want to know that 5 before six months before the end of the lease. They're 6 going to want to know that well in advance. And I think 7 the reality is that the most likely outcome is that there 8 will be a renegotiated lease well before the end of the 35 9 years. 10 The terms that are in the lease relative to the 11 35 years in terms of, you know, how does that happen is 12 those situations that say you have to have an escape 13 clause, you have to have a way for the parties to 14 separate. You have to have a way for it, for whatever 15 reason -- I can't imagine what it is, but for whatever 16 reason if a company no longer wants to continue to operate 17 the property -- now, they've had that option several times 18 before, but there had to be a final date and there had to 19 be a renegotiation. 20 And I think, you know, one of the things that I 21 probably should have mentioned earlier is when you look at 22 what we've done and how much we've paid for these assets 23 and the fact that the cap rate is roughly -- you know, 24 it's probably around eight, eight and a half percent. 25 That's 35 year paper at eight to eight and a half percent.

0152 1 I can tell you right now there are a number of licensees 2 in your state that are paying more than eight percent and 3 that's on short-term paper. 4 And the reality is if you look out over the long 5 term with where the federal reserve is going and where 6 everybody's expectations on interest rates are over the 7 long term, this is a situation where, quite candidly, your 8 tenant, your licensee has access to capital that's 35 9 years at eight percent, that rate does not go up. 10 It can go up with escalators, I suppose, to the 11 extent that they've got the ability and capacity to pay 12 it, but they're not going to have to run into the risk of 13 refinancing risks and where interest rates may go in that 14 interim period. Not like we're buying land from some guy 15 over there, but that's okay. 16 COMMISSIONER JAMISON: I'm listening. 17 MR. CLIFFORD: You're listening. That's good. 18 In the process when there's a new tenant, if there -- I 19 think, one, we're talking about an unlikely event where 20 there would be a new tenant replacing Pinnacle, yes, 21 there's a process in place and we have a certain -- we 22 have a vested interest, right, in the quality of that 23 tenant. But we don't have the final say. That is 24 absolutely the gaming regulators. 25 The gaming regulators have the absolute final

0153 1 say on whether somebody is suitable to be a tenant or not. 2 There is no doubt about that. That's not -- you know, 3 we're not disputing that in any way. So whatever concerns 4 there may be around our involvement around the end of 5 lease process, which is 35 years from now and I will make 6 one guarantee, it will not be me sitting in this room 7 explaining who the new tenant is going to be in 35 years. 8 CHAIRMAN KOHN: Unless we're all still here. 9 MR. MOORE: Unless I'm still here. With that 10 cue, I'll move on. 11 COMMISSIONER LOMBARDO: I'm going to make a 12 motion the gaming commissioners be paid by the hour. 13 MR. CLIFFORD: You know, let's move on to the 14 next one. There's more. You know, obviously -- I think 15 these are points that have been well discussed. We're 16 obviously -- we're a REIT, we've got stable cash flows, 17 we've got access to capital. Pinnacle is going to have 18 lower leverage. You've already heard all of those things. 19 They're a licensed operator. 20 I would correct the one point on here which it 21 talks about 96 percent of each incremental dollar of 22 EBITDA. It's really -- it should have said 96 percent of 23 revenue. Each incremental dollar of revenue in order for 24 Pinnacle's benefit. I'll correct that if anybody was too 25 focused on that sentence.

0154 1 The other thing is there will be no negative 2 impacts, at least I cannot come up with a scenario that 3 says there will be a negative impact on the amount of 4 gaming revenues that are going to get generated as a 5 result of this transaction. There is no situation that I 6 can dream up that says that that will happen. 7 And then I would point you to look at basically, 8 you know, our track record. We have obviously been a 9 landlord since 2013 with Penn. You've heard a number of 10 stories about our tenants, Penn, have done well and 11 they've invested enormous amounts of money and capital in 12 seeking new opportunities and they've done -- you know, in 13 fact, I know they've -- because I was there just when -- I 14 was part of Penn when they purchased the Hollywood Casino 15 or basically what used to be the Harrah's facility. 16 There was an enormous amount of CapEx spent at 17 that Harrah's facility to bring it up to a better standard 18 than I think it was when they were there themselves in 19 terms of the physical plant. So I think I would encourage 20 you to take a look at that as well in terms of when you 21 make your determinations and hopefully vote yes. Thank 22 you. 23 CHAIRMAN KOHN: Thank you. Does that conclude 24 your -- 25 MR. MOORE: Promise, that's it.

0155 1 MR. CARLINO: We quit for now. 2 CHAIRMAN KOHN: Before we hear from the staff 3 report, I can't believe you brought the mayor all the way 4 up here from St. Charles and we're not going to hear from 5 her. 6 MAYOR FAITH: Well, I'm not bashful. 7 COMMISSIONER NEER: I can vouch for that. 8 MAYOR FAITH: Yes, yes. Tom knows. First of 9 all, thank you for the opportunity. I've got a couple of 10 points I'd like to make and one of them is that Ameristar 11 and Pinnacle have been very important in the growth of the 12 City of St. Charles because of the revenue that the City 13 receives and it has been spent wisely, I believe. We have 14 a lot of road constructions going on and etcetera. 15 But the other thing I would say is that I 16 remember when I was in Jeff City -- you know, when I came 17 to be mayor, my concept was transparency. People need to 18 know where the money is coming from and where it's going. 19 And Pinnacle and Ameristar have been that way since I've 20 been mayor and this is my second term. Also, that 21 transparency gives -- carried on to the -- I'm not running 22 for reelection. I'm just saying I've carried it on. I've 23 carried it on to the newsletters of an annual report to 24 all the residents. 25 The second thing is that they're involved in the

0156 1 community and the community sees them. I was at Ameristar 2 Saturday night at Youth in Need who had a fundraiser, 3 certainly, in the upstairs and it was packed, but they're 4 there and they give and they contribute and I think that's 5 very important. 6 And my closing statement is my campaign -- my 7 election, my campaign election theme is, "Keep Faith in 8 government," okay? Before I was in government, it was, 9 "Put Faith in government." And I also have a theme for 10 the City of St. Charles and it's, "If it's happening, it's 11 happening in St. Charles," and it is happening. Thank 12 you. And I have a green rock. I hope that means it will 13 go forward in 2016. 14 CHAIRMAN KOHN: Thank you very much, Mayor. 15 When your second term is over, go see Anthony about a job. 16 Staff report, Mr. Seibert. 17 EXECUTIVE DIRECTOR SEIBERT: The investigative 18 summaries will be presented by Sergeant Gary Davidson. 19 SERGEANT DAVIDSON: Well, I guess it's still 20 afternoon, so good afternoon, Mr. Chairman and 21 Commissioners. I'm going to be presenting -- excuse my 22 voice, but I came down with a cold last weekend. I'm 23 going to be presenting a joint presentation for the Class 24 A riverboat applicant PNK Entertainment, Incorporated and 25 the KBE or Key Business Entity Gold Merger Sub, LLC.

0157 1 On July 21, 2015 Gaming & Leisure Properties, 2 Incorporated, hereinafter referred to as GLP, Inc., and 3 Pinnacle Entertainment, Incorporated, hereinafter referred 4 to as Pinnacle, announced that they had entered into a 5 definitive agreement the prior day under which GLPI (sic), 6 Inc. would acquire substantially all of Pinnacle's real 7 estate assets. GLPI (sic), Inc. would own these assets 8 through its newly formed Real Estate Investment Trust, or 9 REIT, subsidiary, Gold Merger Sub, LLC, hereinafter 10 referred to as Gold Sub. 11 Under this plan, Gold Sub would serve as a 12 landlord to Pinnacle's surviving operating business and 13 lease back most of these assets by the use of its 14 subsidiaries under a triple-net 35-year master lease 15 agreement, to include extensions. After the proposed 16 separation, Pinnacle would operate these leased gaming 17 facilities and own and operate the other assets. 18 PNK Entertainment, Incorporated submitted an 19 original application to the Missouri Gaming Commission, 20 hereinafter referred to as the Commission, for a Class A 21 Riverboat Gaming License on September 1, 2015. Gold Sub 22 submitted an original application to the Commission for 23 licensure as a Key Business Entity on September 8, 2015. 24 You will find those resolutions under your investigations 25 under Tab IV.

0158 1 Pinnacle is a publicly held Delaware corporation 2 formed on August 12, 2002. Pinnacle is the parent company 3 of three licensed casinos in the state of Missouri; River 4 City Casino-St. Louis, Ameristar Casino-St. Charles, and 5 Ameristar Casino-Kansas City. PNK Entertainment, 6 Incorporated, a wholly owned subsidiary of Pinnacle, was 7 incorporated in the state of Delaware on July 23, 2015 for 8 the sole purpose of completing this proposed REIT merger 9 transaction with GLPI (sic), Inc. 10 GLPI (sic), Inc. was incorporated in the 11 commonwealth of Pennsylvania on February 13, 2013 to hold 12 real estate through one or more wholly owned subsidiaries 13 and lease back those such subsidiaries -- or those such 14 properties. Gold Sub, a limited liability company, was 15 formed in the state of Delaware on July 15, 2015. Gold 16 Sub was currently -- or is currently a direct subsidiary 17 of GLPI (sic), Inc., but immediately upon consummation of 18 the merger, GLPI (sic), Inc. will contribute the equity 19 interest in Gold Sub to its subsidiary, GLP Capital, L.P. 20 At that point in time, Gold Sub will then be a wholly 21 owned subsidiary of GLP Capital, L.P. 22 Missouri State Highway Patrol investigators, 23 along with working in conjunction with Missouri Gaming 24 Commission financial investigators, conducted 25 investigations into the suitability of PNK Entertainment,

0159 1 Incorporated to hold a Class A Gaming License and Gold Sub 2 to hold a Key Business Entity license. 3 The investigations included, but were not 4 limited to criminal, financial and general character 5 inquiries of associated key personnel as well as contact 6 with state and federal agencies, which have regulatory 7 authority over the associated entities. There were no 8 concerns, no issues or negative information discovered by 9 the investigators during the course of this investigation. 10 The findings of our investigations were provided 11 to the Commission staff for your review and you possess 12 the detailed summary reports before you. All 13 investigators that conducted this investigation are here 14 at this present time and will be happy to entertain any 15 questions you might have. 16 CHAIRMAN KOHN: Any questions? 17 COMMISSIONER HALE: None. 18 COMMISSIONER JAMISON: None. 19 COMMISSIONER NEER: No, sir. 20 SERGEANT DAVIDSON: Thank you. 21 CHAIRMAN KOHN: Thank you very much, Sergeant. 22 Before we go to public comment, we have received a half a 23 dozen letters or so and I want to make sure they're a part 24 of the record. If you don't have them, Angie will make 25 them available. First one is from Tom McDonald, State

0160 1 Representative from the 28th District. We have a letter 2 from Congressman Emmanuel Cleaver, Fifth District of 3 Missouri. We have a letter from Mayor Francis Slay of St. 4 Louis. We have a letter from state -- Missouri State 5 Senator Scott Sifton, Sifton. I'm not sure. 6 COMMISSIONER LOMBARDO: Sifton. 7 CHAIRMAN KOHN: Sifton, okay. We have a letter 8 from Missouri House of Representatives Michael Colona. 9 And we have a letter from State Representative Joe 10 Runions. And with that, we only have had one request for 11 public comment from UNITEHERE!. Are the representatives 12 here? I understand that you've requested 15 minutes for 13 your comments. 14 MR. MORTON: Yes, sir. 15 CHAIRMAN KOHN: Okay. You're on. So all four 16 you are of you are with UNITEHERE!; is that correct? 17 MR. MORTON: Yeah. 18 CHAIRMAN KOHN: Okay. 19 MR. MORTON: Yes, sir. Excuse me. Good 20 afternoon, Chairman Kohn, Commissioners, Executive 21 Director Seibert and Staff. Thank you for giving us the 22 opportunity to speak today. My name is Dave Morton. I'm 23 the organizing director for UNITEHERE! Local 74 and we're 24 based in St. Louis. UNITEHERE! represents 270,000 North 25 American workers in the casino, hotel and food service

0161 1 industry. We represent over a thousand -- a hundred 2 thousand gaming workers in the United States. 3 I'm joined by Shanita Whalen. She is a casino 4 worker from Lumiere Casino. I'm also joined by Keith 5 Benson, a bartender from the Casino Queen, and Kate 6 O'Neil, who is one of our research analysts out of our 7 research department. 8 CHAIRMAN KOHN: Just to put all those numbers in 9 context, how many of the employees that are involved in 10 our transaction are members of your union? 11 MR. MORTON: Directly in this transaction, there 12 are none. 13 CHAIRMAN KOHN: None. 14 MR. MORTON: There is none. We represent 800 15 casino workers in the state of Missouri. 16 CHAIRMAN KOHN: But none that are involved in 17 this transaction. 18 MR. MORTON: None in either property. At one 19 time we represented workers at Lumiere Casino that was 20 owned by Pinnacle, before the sale, before they had to 21 sell. But in this transaction, we have none. 22 CHAIRMAN KOHN: So your interest in this 23 transaction is what? 24 MR. MORTON: Our interest in this transaction 25 is, and I'm going to explain this, is about the good and

0162 1 welfare of the state -- for the state for the workers and 2 the State of Missouri as a whole. 3 CHAIRMAN KOHN: Okay. Go ahead. 4 MR. MORTON: Our union is extremely concerned 5 about the proposal that is before you today. To be clear, 6 we didn't think that REIT -- we do not think that REITs 7 are good for the overall health of the gaming industry. A 8 healthy industry is essential if we're going to realize 9 the benefits of gaming, which is to provide good jobs and 10 to maintain a much needed tax revenue in the State of 11 Missouri. 12 We also have specific concerns about the sale of 13 leaseback arrangements between GLPI and Pinnacle. I will 14 turn it over to my colleagues to walk you through these 15 concerns. 16 COMMISSIONER JAMISON: Are they going to address 17 those individual concerns because if they're not, I have a 18 question about them. 19 MR. MORTON: Yes, they are. 20 COMMISSIONER JAMISON: Okay. 21 MS. WHALEN: Good afternoon Chairman, 22 Commissioners. My name is Shanita Whalen and I have been 23 a slot attendant at Lumiere Casino for seven years and I 24 started back in 1999 at the President Casino. My 25 coworkers and I have played a huge role in keeping only --

0163 1 not only Lumiere, but all of Missouri's gaming industry 2 successful. Our experience running the casino, as well as 3 customer service we provide has been a necessary part of 4 building this industry. I understand how important it is 5 for casinos to thrive, not just for tax revenue to 6 generate, but also for the quality of jobs they provide 7 for the community. 8 My coworkers and I are concerned that one 9 company has the possibility of owning five or six casinos 10 in the St. Louis area. Lumiere is the only casino that 11 won't be owned by this company. We also read about the 12 proposed terms of the deal and how it could end up hurting 13 us. Our ability to negotiate for fair wages is 14 threatened. 15 As a member of the bargaining committee at 16 Lumiere, let me explain. If five out of six casino 17 operators face rent payments to GLPI, there is a risk that 18 they will cut raises and benefits for their employees. 19 This increased pressure to make cuts due to high rent 20 payments could lower the market averages over time that 21 would affect us. 22 It's hard for us to negotiate for more hours and 23 better wages if the other casinos are under pressure to 24 cut back. I believe the Missouri Gaming Commission's 25 decision will impact the stability of our jobs and our

0164 1 families, so I ask the Gaming Commission to protect the 2 future of our gaming industry and the jobs of our family 3 members and vote no on these positions. Thank you for the 4 opportunity to speak today. 5 COMMISSIONER JAMISON: I have a question. If 6 their rent payment is less than what their mortgage 7 payment -- annual mortgage payment would be, would they 8 not have more money to pay wages and compensation? 9 MS. WHALEN: I wasn't really aware if the rent 10 payment was lower than what they're paying now, but -- 11 COMMISSIONER JAMISON: You said that you were 12 concerned because the rent payment was going to be -- 13 MS. WHALEN: But I am -- 14 COMMISSIONER JAMISON: -- more. 15 MS. WHALEN: Okay. I'm sorry, go ahead. 16 COMMISSIONER JAMISON: You said you were 17 concerned that the rent payment was going to be more and 18 cut into their ability to make compensation to staff. 19 MS. O'NEIL: May I jump in? 20 COMMISSIONER JAMISON: Sure. 21 MS. O'NEIL: We are -- 22 CHAIRMAN KOHN: You want to introduce yourself, 23 please? 24 MS. O'NEIL: Sure. I'm Kate O'Neil. I'm a 25 research analyst with UNITEHERE!'s Gaming Division and we

0165 1 are concerned that the rent payment as a fixed cost, that, 2 you know, most of which, you know, is a fixed cost over a 3 very long time period of the lease, as it's been described 4 today, that that puts particular pressure on the companies 5 and, you know, I will go into more detail in a minute, so 6 that's our concern. 7 COMMISSIONER JAMISON: So your concern is a 8 hundred million dollars extra cash flow will be negative 9 how? 10 MS. O'NEIL: I don't think that -- Pinnacle is a 11 company that has been successful in recent years and has 12 been healthy and they have had a cash flow. What they 13 didn't address in their presentation, you may want to ask 14 them, is, you know, what their cash flow looks like, you 15 know, if this transaction doesn't go through. 16 COMMISSIONER JAMISON: I understand that, but 17 you heard the testimony of what the cash flow is going 18 to -- what their projected cash flow is going to be with 19 that and so my understanding would be and the opposite of 20 that would be there would be $200 million less available 21 cash flow if they didn't do this transaction in this 22 manner. Would that be the way you would have understood 23 their testimony? 24 MS. O'NEIL: That's not how I understood it. 25 COMMISSIONER JAMISON: What did you understand?

0166 1 MS. O'NEIL: I understood that they are 2 expecting that if they continue to spend similar amounts 3 on payroll, if they continue to spend similar amounts on 4 maintenance as they have, that they'll have about a 5 hundred million dollars in free cash flow. But what they 6 haven't done today is present to you an analysis, clearly, 7 of what Pinnacle looks like as an operator and owner going 8 forward compared to this particular model where they sell 9 off their real estate and their properties. 10 COMMISSIONER JAMISON: I guess I'm at a loss. 11 If they're giving you a projection of what it's going to 12 look like if they do the deal and compare that to what 13 cash flow there would be without the deal, I don't know 14 what other projection they would give you that would 15 explain that. I guess I'm at a loss of you're saying, 16 well, they didn't tell you what it would be if they didn't 17 do the deal. That would be the hundred million dollar net 18 less cash flow, correct? 19 MS. O'NEIL: That's not my understanding. 20 COMMISSIONER JAMISON: Okay. 21 CHAIRMAN KOHN: You want to go ahead and finish? 22 MS. WHALEN: I was done. 23 CHAIRMAN KOHN: You're done. 24 MS. WHALEN: Yes, I was done. 25 CHAIRMAN KOHN: Okay.

0167 1 MS. WHALEN: Thank you. 2 CHAIRMAN KOHN: Are you next? 3 MR. MORTON: I just want to introduce Keith 4 Benson. He's a member of ours from the Casino Queen 5 that's currently operating under GLPI REIT. 6 MR. BENSON: Good afternoon, Commissioners. My 7 name is Keith Benson. I am a bartender at the Casino 8 Queen where I have worked for 23 years. I was one of the 9 workers who opened the Queen back in 1993. I'm also a 10 member of UNITEHERE! Local 74. 11 The casino I work at was acquired by GLPI in 12 2014 and leased back to the Casino Queen, which is now an 13 employee-owned operating company. The leaseback to GLPI 14 has happened in the context of increased competition from 15 the video lottery terminals that are like slot machines in 16 bars and taverns. 17 Here's what's been happening at the Casino 18 Queen. The hours of operation have been cut back at the 19 casino, the steakhouse restaurant and buffet hours have 20 been drastically cut back, as a result hours for workers 21 have been cut back and the cost of health insurance has 22 gone up. I'm on the bargaining committee and we've been 23 bargaining our next contract for 20 months. Never before 24 has it taken this long to reach an agreement on the next 25 contract.

0168 1 It's true we don't have many years experience 2 under GLPI because the REIT model is so new, but I can 3 tell you that the sale and lease with GLPI has not solved 4 the problems at the Casino Queen and the conditions on the 5 floor have actually gotten worse. Thank you for your 6 attention. 7 COMMISSIONER JAMISON: I've got a question. 8 What part of that do you feel is attributable to who they 9 make their mortgage or lease payment to? Because you're 10 not dealing with GLPI; is that correct? 11 MR. BENSON: Correct. I would say if the -- I 12 guess my feeling would be that if the -- if we took a loan 13 out with GLPI and then it was -- to help lower the loan 14 that had been taken out before and then -- I mean, I might 15 be rambling here with this because -- we haven't seen -- 16 as an employee, I haven't seen any improvements under this 17 deal, I guess is what I'm getting at. 18 COMMISSIONER JAMISON: Okay. But you've dealt 19 with -- you've not dealt with GLPI in the process, you've 20 dealt with -- is it Penn National that operates yours or 21 what company is operating yours? 22 MR. BENSON: We're an ESOP now. 23 COMMISSIONER JAMISON: Okay. So you're an ESOP, 24 so you're a part owner of your own company and so you're 25 dealing with yourself as far as your salaries?

0169 1 MR. BENSON: Basically. 2 COMMISSIONER JAMISON: So you're dealing with 3 your own ESOP as -- and you negotiated with GLPI -- your 4 ESOP negotiated with GLPI for the lease payment? 5 MR. BENSON: Yes. 6 COMMISSIONER JAMISON: So they came to an 7 agreement that this is what they wanted to pay for rent 8 and you feel that that's too high or you'd be better off 9 owning your own land and making mortgage payments? 10 MS. O'NEIL: Could you repeat the question? 11 COMMISSIONER JAMISON: I guess his assertion is 12 they would be better off making mortgage payments than 13 lease payments and so then their operating company would 14 be better off. 15 MS. O'NEIL: Yeah. I mean, what we want to 16 point out, you know, what people have asked, you know, 17 given that the REIT of GLPI is so new to the industry is, 18 you know, what have been the consequences for workers? 19 And it hasn't been some kind of boon to the Casino Queen 20 and so, I mean, that's what we wanted to point out. 21 COMMISSIONER JAMISON: And I understand -- 22 MS. O'NEIL: And if they did have their real 23 estate, you know, they would have the ability potentially 24 to take out, you know, more loans, you know, there would 25 be other -- in order to weather the current increased

0170 1 competition that's happening in Illinois. 2 COMMISSIONER JAMISON: But to compare the 3 financial troubles of the operation strictly to the REIT 4 because it occurred at a similar time may or may not be 5 related. 6 MS. O'NEIL: Okay. I do understand your 7 question and that's right. I mean, unfortunately, this is 8 so new, we're just trying to offer our perspective and 9 what we've seen happening so far and it really -- I mean, 10 you know, we don't know -- I mean, one thing that we think 11 is incredibly important to think about, given that we all 12 suffered through, and the gaming industry in particular 13 that we once, you know, believed to be recession proof, we 14 just suffered through a recession not so long ago and saw 15 the impact that it had on gaming revenue. 16 This REIT model in the industry is so new that 17 we haven't seen what happens in an economic downturn when 18 operators have fixed charges that are permanent and high. 19 And as, you know, some of the commissioners noted, you 20 know, it's kind of swapping debt for rent payments. 21 COMMISSIONER JAMISON: But if you had a loan 22 with the bank and you owed them interest on that loan, you 23 would have an obligation of a payment. It's not like the 24 lease payment is something additional that you wouldn't 25 have if you didn't have a real estate loan. I mean, it's

0171 1 like a homeowner. You either buy the home and pay the 2 bank your monthly mortgage payment or you pay a landlord 3 rent. 4 MS. O'NEIL: Right. 5 COMMISSIONER JAMISON: As an operator, you have 6 to decide which one of those is best and a homeowner, you 7 have to decide which one of those is best for you as a 8 homeowner. To say that I'm having trouble making my house 9 payment or my rent may or may not be who you borrow the 10 money from. It may have external circumstances that are 11 unrelated to who you owe the money to. Would that be 12 fair? 13 MS. O'NEIL: I think that -- I think that what 14 we're trying to point out is that we don't know -- I mean, 15 this is a very complex deal. 16 COMMISSIONER JAMISON: But you're making the 17 inference that it's because of the REIT. 18 MS. O'NEIL: No. Actually, to be clear, I don't 19 want to make the inference that, you know -- 20 COMMISSIONER JAMISON: Okay. That seems to be 21 the inference so far. 22 MS. O'NEIL: I do just want to point out what 23 we've observed, what members have observed at the Casino 24 Queen -- 25 COMMISSIONER JAMISON: Okay.

0172 1 MS. O'NEIL: -- is that conditions have still -- 2 you know, there's been a -- as Keith was explaining, 3 there's been a decrease in operations of the buffet, of 4 the casino as a whole. I mean, I just -- that's what we 5 want to make clear. 6 CHAIRMAN KOHN: So here's my question. Outside 7 of the transaction that we're going to be considering 8 today, your casino, the casino that we're talking about, 9 the Queen, whatever it's called. 10 COMMISSIONER LOMBARDO: Casino Queen. It's in 11 Illinois. 12 CHAIRMAN KOHN: Yeah. The Illinois casino's 13 revenues are down for whatever reason, probably unrelated 14 to whether they're paying a mortgage or a lease payment. 15 The operations are down and fewer people are coming in and 16 spending less money. 17 MS. O'NEIL: Correct. 18 CHAIRMAN KOHN: I'm just curious, as I said, it 19 has nothing to do with this issue, but what's happened? 20 Is it just the recession? 21 MS. O'NEIL: Illinois has added video lottery 22 terminals that operate like -- you know, to a customer a 23 lot like a slot machine at taverns and bars and so that 24 increased pressure. You know, in addition, the Casino 25 Queen, to be fair, competes with Missouri casinos as well

0173 1 in the St. Louis area. 2 COMMISSIONER HALE: Right, right. 3 MS. O'NEIL: So it is a property that has 4 experienced increased competition. 5 COMMISSIONER HALE: When did the REIT become 6 involved with the Casino Queen? 7 MS. O'NEIL: I believe GLPI purchased the Casino 8 Queen in 2014, at the end of that year. 9 COMMISSIONER HALE: Okay. The Queen was in 10 trouble financially before then. 11 MS. O'NEIL: That's correct. 12 COMMISSIONER HALE: Okay. All right. 13 CHAIRMAN KOHN: So has the Queen made all its 14 payments to GLPI? Are you current? Not you, but is the 15 casino current? 16 MS. O'NEIL: I think you would have to ask GLPI. 17 MR. CLIFFORD: Yes. 18 CHAIRMAN KOHN: They are current. 19 MS. O'NEIL: I know that this has, you know, 20 been a long hearing and I do have a few more things that 21 we wanted to present to you. So in addition to this 22 testimony, we have also provided Staff with two detailed 23 research reports on the GLPI leaseback model. One was 24 titled Outlier in the REIT Industry and the other is House 25 Divided. While I'm not going to go over those reports in

0174 1 great detail, I hope that they have been passed on to you 2 as commissioners and that you've had a chance to read 3 them. 4 The proposed Pinnacle acquisition would result 5 in GLPI owning five out of 13 casinos statewide and we 6 note that casinos -- those casinos generated 62 percent of 7 the state's gaming revenue in the last fiscal year. 8 COMMISSIONER JAMISON: Can I make a distinction? 9 When you say they would own the casinos, they would own 10 the real estate and the building, they wouldn't own the 11 operating casino, correct? 12 MS. O'NEIL: That's correct. 13 COMMISSIONER JAMISON: Okay. 14 MS. O'NEIL: In the St. Louis gaming market, 15 GLPI would own a whopping five out of six casinos, 16 including two on the Illinois side, including the Casino 17 Queen we were just discussing. And if GLPI has its way, 18 it could try to buy even more Missouri casinos. 19 Speaking recently to investors, Peter Carlino, 20 who is both CEO of GLPI and Chairman at Penn National, 21 said GLPI plans to continue pursuing casino acquisitions 22 over the next couple of years. Back in 2014, the St. 23 Louis Post Dispatch reported speculation among industry 24 analysts that the Isle of Capri was trying to sell itself. 25 That's another four casinos in the state of

0175 1 Missouri. We wonder would the Commission be comfortable 2 if one company owned the real estate of nine out of the 13 3 casinos in the state of Missouri? 4 In our analysis, GLPI is not a passive landlord, 5 nor should it be viewed as a financial partner like a 6 bank. In fact, according to the proposed lease, GLPI has 7 certain types of veto power over Pinnacle's ability to 8 construct new amenities within the leased facilities, over 9 ability to development new casinos or take over management 10 of existing casinos within the restricted area of 11 60 miles, over Pinnacle's ability to sublease space at the 12 properties they manage and over Pinnacle's ability to 13 undergo a change in control. 14 Also related to what -- you know, what type of 15 entity is GLPI, we wonder what happens if Pinnacle is no 16 longer to operate the casinos? GLPI has the right to 17 evict the operator for an uncured default, such as a 18 non-payment of their rent. If Pinnacle for any reason 19 continues operating a leased property, it does have to -- 20 it must transfer the gaming license to the successor for 21 fair market value, subject to your regulatory approval. 22 But what I want to point out is that 23 historically, the way licenses have been thought of in the 24 State of Missouri, is that they're tied to a particular 25 casino and a particular location and operated by a

0176 1 particular company that is your licensee. And so we know 2 that you will have regulatory approval in some sort of 3 change, but, you know, wonder what impact a company that 4 owns real estate of casinos generating 62 percent of the 5 State's gaming revenue has in that decision making. 6 You know, when the President Casino lost its 7 license, the Commission was able to not just, you know, 8 approve a new operator for that casino, but actually 9 determined that a new location, a new real estate, a new 10 building and a new operator would be in the best interests 11 of the State. 12 We also have financial concerns related to the 13 proposed lease payments. Pinnacle in its first year will 14 have, by its own numbers, only 35 percent of its cash flow 15 after rent and interest for its discretionary spending. 16 The company -- I'll go through this quickly because the 17 company has shared much of this information with you just 18 today. 19 But they expect earnings before rent of 20 635 million. With the rent payments, anticipated interest 21 and taxes, that leaves about 201 million for other uses, 22 including capital expenditures. As Mr. Ruisanchez said, 23 his company typically spends about a hundred million a 24 year on upkeep, that's maintenance CapEx. So if they 25 continue at that level, that's how they'd get the

0177 1 101 million of free cash flow. 2 And this is really important because this is how 3 Pinnacle is able to grow through capitalizing improvements 4 on existing structures, new acquisitions and -- you know, 5 so we wonder what happens if their projections of earnings 6 are not met? So what happens if there's another economic 7 downturn and revenue falls? 8 Pinnacle's consolidated adjusted EBITDA was 585 9 million in 2014. That was the first year after they had 10 Ameristar and had the full portfolio of properties. Now 11 suppose Pinnacle doesn't meet its expectation and they 12 just have 585 million like they had in 2014, which was 13 still a good year for the company. When you subtract out 14 the rent and the interest, taxes will be somewhat lower on 15 lower earnings, so let's say 17 million. What would be 16 left for both maintenance CapEx and other discretionary 17 uses would be 153 million. That makes us wonder, you 18 know, will they really maintain spending at the hundred 19 million level across all their portfolios within and 20 without the state of Missouri. 21 COMMISSIONER JAMISON: Can I ask a question? 22 MS. O'NEIL: Sure. 23 COMMISSIONER JAMISON: You want to use that as a 24 what if, but if they were under their current status of 25 servicing debt, what would be their what if at the bottom?

0178 1 MS. O'NEIL: Well, I mean, at that point, I 2 mean, they would have to think about, you know, going 3 perhaps to the lenders and refinancing that debt. 4 COMMISSIONER JAMISON: So creating more debt to 5 create more annual payment to service that debt to where 6 this one is a set amount of debt. This is a set lease 7 payment, but if you -- under your scenario, if they came 8 up short, they'd have to go back and borrow more money 9 which would -- then they would pay more debt service on 10 that new borrowed money? 11 MS. O'NEIL: Our point is that in a situation 12 with declining revenues, they will have very little left 13 to do the things that they need to do to reinvest in their 14 own properties and to grow the company. 15 COMMISSIONER LOMBARDO: But let me ask what I 16 think may be almost the same question Brian asked, but a 17 little differently. The second line up there is 18 $377 million for rent. Do you have any idea what the 19 number would be for what they're paying on debt service 20 now? Debt service and rent to the Port Authority because 21 two of the properties, I assume, are paying debt service 22 and River City pays rent. 23 MS. O'NEIL: I don't. I mean, they're public. 24 I could look up that information and get back to you on 25 that. You have the company here, however. You might ask

0179 1 them that and also ask your staff financial analysts that 2 question. 3 COMMISSIONER JAMISON: Well, I think they 4 provided that information and it was more like 577. 5 COMMISSIONER LOMBARDO: Wait a second. I think 6 we're going down a wrong road here. The three Missouri 7 entities are not paying $377 million. 8 COMMISSIONER JAMISON: No. 9 COMMISSIONER LOMBARDO: Fourteen properties are 10 paying $377 million, if I understand it. Is that the way 11 you understand it? 12 MS. O'NEIL: Yes, that's our understanding, too. 13 COMMISSIONER LOMBARDO: Okay. 14 MS. O'NEIL: And then the master lease is, you 15 know, kind of like cross-collateralized across all of 16 these properties. They all have to -- they still have to 17 pay the rent regardless of if a particular property is 18 struggling. Let me move on. 19 I mean, we are concerned about their commitments 20 to maintaining the properties. And what we do note, 21 again, it's -- we wish we had a much longer time period, 22 but the GLPI model is brand new. But when we look at Penn 23 National's maintenance and project CapEx, since the 24 spinoff, in the past six full quarters, after Penn -- the 25 Penn leaseback transaction, Penn's average quarterly

0180 1 maintenance capital and expenditures has gone down and, in 2 fact, project CapEx fell to about half the level of the 3 spending in the first six quarters right before the 4 transaction. So that's, you know, what we are able to see 5 in terms of the impact of this model. 6 A Pinnacle official, Mr. Godfrey, has argued 7 that because Pinnacle will remain a public company, it 8 will have an incentive to continue to reinvest in its 9 properties. Well, maybe, as long as shareholders take the 10 long view. 11 On September 30 of last year, ten out of the top 12 20 Pinnacle shareholders were hedge funds, including some 13 of the same ones who urged Pinnacle to consider monetizing 14 its real estate by spinning off its own REIT. Those ten 15 hedge funds collectively held 26 percent of the company. 16 Many other hedge funds held smaller stakes and still 17 others, by September, had already sold off their stakes 18 following the brief run-up in share price while GLPI was 19 courting Pinnacle. How many of these remaining hedge 20 funds will be sticking around long enough to be concerned 21 about the long-term viability of the operating company? 22 We also think it's important to ask if, you 23 know, the Commission and Staff have asked Pinnacle 24 executives how much they personally stand to gain from 25 this transaction. After all, the top executives have

0181 1 received sizable stock options over the years. As of 2 September 30 of last year, Pinnacle's CEO was the 3 company's 13th largest shareholder, I believe. 4 As of January, the CEO reported he and his 5 family members and a family trust own a combined 912,000 6 shares. Like the other shareholders, they'll be getting 7 the .85 of GLPI stock and if you do the calculation of 8 what that's worth, based on last Friday's closing price, 9 those shares were worth more than $22 million. 10 Are the CEO's interests and the interests of the 11 other executives and directors who are significant 12 shareholders perfectly aligned with the interests of those 13 who would like to maximize reinvestment in the casinos? 14 GLPI's offer manages to align perhaps briefly, for a 15 moment, the interests of Pinnacle's insiders with its 16 hedge fund shareholders, but who is looking out for the 17 long-term interests of the company? 18 Respectfully, long after the hedge funds have 19 moved on to their next opportunity, long after the 20 insiders have cashed in their stakes, the other 21 stakeholders, and by that I mean the workers, their 22 communities, the State of Missouri, casino customers, 23 they're the ones who are left. 24 We aren't the only ones raising these concerns. 25 Alex Bumazhny, Director of Gaming Research at Fitch, the

0182 1 respected credit rating agency, speaking about the U.S. 2 gaming industry recently said, "We would also be more 3 positive should the pending REIT plans be canceled or the 4 REIT leases are underwritten more favorably with respect 5 to the operating companies." 6 Fitch also wrote that, "REIT leases have 7 weakened casino operators as they are not well suited to 8 be long-term triple-net lease tenants given the cyclical 9 and capital intensive nature of gaming." 10 So in conclusion, we applaud the Commission's 11 foresight in enacting the new rule which defined 12 leasebacks as a change in control. And we know that the 13 regulations also state that the Commission may grant a 14 petition to approve a material change in control or owner 15 if the petitioner proves, by clear and convincing 16 evidence, that several criteria are met, and among those 17 are that the transfer is in the best interests of the 18 State of Missouri, that it would have no material negative 19 competitive impact and that it would not potentially 20 result in any significant negative changes in the 21 financial condition of the licensee. 22 We do not see how the proposed sale and 23 leaseback resulting in one company owning casinos that 24 generate over 60 percent of the State's gaming revenue is 25 in the best interests of Missouri, nor do we see how lease

0183 1 terms that leave the operator with limited cash flow can 2 be in the best interests of Missouri. It's clear to us 3 who the winners would be, the investors. We believe it is 4 equally clear who the losers would be, customers, 5 taxpayers, workers and their communities and the State of 6 Missouri. And we urge you to withhold approval and deny 7 the joint petition for change of control. We thank you 8 for your consideration. 9 I did also want to just address some -- one 10 statement that was made by the companies presenting 11 earlier about how -- you know, that REITs are inevitably 12 coming to the gaming industry. And it's true that MGM is 13 putting out an IPO currently. However, they have a 14 different model than the GLPI model. 15 They may not be of much concern to you right now 16 because they don't operate or own anything here in the 17 state of Missouri, but theirs is not a tax-free spinoff. 18 In fact, federal law changed the -- changed laws so that a 19 publicly traded company cannot do a tax-free spinoff into 20 a publicly traded REIT anymore. So this model that Penn 21 National and GLPI did -- 22 COMMISSIONER JAMISON: But that doesn't really 23 have a reflection on the lease agreement, that's just the 24 spinoff -- that doesn't really address how much is being 25 paid in rent?

0184 1 MS. O'NEIL: But what -- details are -- 2 COMMISSIONER JAMISON: I know, but you're making 3 an inference that the lease payment under this system is 4 being prohibitive. You're talking more about the spinoff 5 isn't a tax-free capability now. 6 MS. O'NEIL: To speak to that, as the details 7 are emerging about the MGM REIT IPO that they're doing, 8 MGM will continue to control a majority of the REIT, so 9 the alignment of interests is very different in that view. 10 We're still, you know, getting our heads around it as 11 well, but I just wanted to point out that there may be 12 other REITs coming, but under a different structural 13 arrangement and, you know, with Caesars being in 14 bankruptcy, we really don't know how that company is going 15 to emerge. 16 CHAIRMAN KOHN: Okay. Any other questions? 17 COMMISSIONER LOMBARDO: Yeah. You -- 18 CHAIRMAN KOHN: Rick. 19 COMMISSIONER LOMBARDO: Yeah, please. 20 CHAIRMAN KOHN: Go ahead. 21 COMMISSIONER LOMBARDO: You said that after the 22 transaction, that Penn National properties actually spent 23 less on capital expenditures. 24 MS. O'NEIL: Correct. 25 COMMISSIONER LOMBARDO: What properties are we

0185 1 specifically talking about? When you say the Penn 2 National properties, what are you talking about? 3 MS. O'NEIL: Oh, the Penn National -- this is 4 from SEC filings of Penn National Gaming Company, so that 5 would include properties -- almost all of their properties 6 are owned by GLPI and subject to the lease. They do, as 7 they pointed out, have, you know, a property in 8 Massachusetts and so forth that is not, but we were able 9 to look at their spending on CapEx as a company as a whole 10 because that's what they report to the SEC. 11 COMMISSIONER LOMBARDO: So this involves casinos 12 that Penn National operates all around the country? 13 MS. O'NEIL: Correct. 14 COMMISSIONER LOMBARDO: And how many of those 15 casinos are involved in relationships such as this with 16 GLPI, such as the one we're considering? 17 MS. O'NEIL: I don't have the exact number in 18 front of me, but it's the vast majority of them. And you 19 could ask Mr. Carlino, who is the chairman of the board of 20 that company. 21 COMMISSIONER LOMBARDO: Well, it -- Herb, if 22 somebody from GLPI wanted to respond to that, that would 23 be great. 24 CHAIRMAN KOHN: I'm not sure they're still here. 25 I think GLPI left.

0186 1 COMMISSIONER LOMBARDO: No, they're still there. 2 I see them. Second row. 3 MR. CARLINO: Wouldn't miss this. 4 CHAIRMAN KOHN: Does somebody want to provide an 5 answer to that question? 6 MR. CARLINO: What? I was hiding behind 7 Anthony. 8 CHAIRMAN KOHN: Rick, repeat the question. 9 MR. CARLINO: You know, offhand, I have no clue. 10 I do know that there have been massive capital spends in 11 projects over this time, including, by the way, before we 12 left. I began the remake of a very tired, very tired 13 Harrah's property, as you know, in St. Louis and spent 14 some $80 million to do that. 15 I -- we just had a board meeting. I understand 16 that right now they're renovating the entire hotel in St. 17 Louis. I can't swear to that because I'm not -- I don't 18 get that kind of information, but I believe that's going 19 on. So we -- they've spent over a billion dollars, I do 20 know that, since the spend, in various things. Now, if 21 you want more information about where it went, I'll get it 22 for you, but believe me, it's not slowed down. Not even 23 close. 24 COMMISSIONER LOMBARDO: The general statement in 25 the exhibit up there was that since the transaction, that

0187 1 the Penn properties had spent -- yeah, that one right 2 there, had spent less on capital expenditures since the 3 transaction than before. I followed up and I said, okay, 4 is this for the entire group of Penn companies and then 5 further how many of these Penn companies are actually 6 involved in a lease arrangement with GLPI. 7 MR. CARLINO: It is the majority without a 8 doubt. And I can't give you a definitive answer except to 9 say I know it's not less. So if you want detail, I can 10 certainly get it for you, but I have no immediate access 11 to it. 12 COMMISSIONER LOMBARDO: Okay. 13 MR. CARLINO: I'd have to call the company and 14 ask them, frankly. 15 COMMISSIONER LOMBARDO: All right. 16 CHAIRMAN KOHN: If you want to know, we can 17 probably have him make a call. Just so that we have all 18 questions answered, if you don't mind having somebody make 19 the call, that would be great. 20 MR. CARLINO: Sure. 21 CHAIRMAN KOHN: And is UNITEHERE! finished? 22 MS. O'NEIL: Yes. Thank you very much. 23 CHAIRMAN KOHN: Thank you very much. 24 MR. SANFILIPPO: May I suggest one thing? If 25 he's okay with it, the general manager of the Penn

0188 1 property is in the room if you would like to ask him a 2 question. 3 CHAIRMAN KOHN: We just want the answer. 4 COMMISSIONER HALE: That will make it easy. 5 CHAIRMAN KOHN: I don't know how many more times 6 you can kick it down the road. 7 MR. SANFILIPPO: He can answer directly. 8 CHAIRMAN KOHN: If he's here and if he knows and 9 if he's willing to tell us, that would be great. You're 10 going to have to identify yourself. Is there anybody here 11 we haven't heard from yet? 12 MR. GEORGE: Good afternoon. Yes, good 13 afternoon. I am Todd George, General Manager of the St. 14 Louis Hollywood property. As Mr. Carlino stated, we are 15 redoing the entire hotel project. We -- when Penn 16 purchased this property, we spent approximately 17 $70 million to fix up a lot of the infrastructure, the 18 entire gaming floor, much of the common space, the hotel 19 lobby. 20 I've been at this property going on two years. 21 Our spend has not gone down. If anything, it's gone up, 22 as Mr. Carlino touched on. We will look at a complete 23 remodel of the -- both hotel towers in the next year and a 24 half. That's in addition to the other things we've done 25 around, completing the infrastructure with the parking

0189 1 lots, some ancillary roads that were used for our 2 agreement with the amphitheater. I've seen no difference. 3 I was with Penn before the spin and after the spin at 4 another property in Indiana, but I have not seen a decline 5 in capital spend by any means. 6 COMMISSIONER LOMBARDO: This may be a question 7 you can't answer. The exhibit or the slide appears to 8 show from a companywide perspective that less money was 9 spent on capital expenditures. There could be all kinds 10 of explanations for that. It could have been the year 11 before it was an exceptionally high year for spending. 12 MR. GEORGE: Correct. 13 COMMISSIONER LOMBARDO: I mean, do you have an 14 explanation? I understand, you know, I'm asking a broad 15 question and you're -- maybe don't have that broad 16 perspective, but -- 17 MR. GEORGE: Yes. I understand. The -- there 18 was a lot -- that was a period of massive growth for Penn 19 prior to the spin, so the decrease in spend could be 20 simply that a lot of that capital was involved in getting 21 properties ready to open in Ohio. We opened up -- as 22 Penn, we opened up four properties in Ohio, which was a 23 major investment. Post spend, the -- we did not open as 24 many properties. So a lot of that was probably just based 25 on new properties coming online and the spend associated

0190 1 with opening those. 2 COMMISSIONER LOMBARDO: Okay. Thanks. 3 MR. GEORGE: Yep. 4 CHAIRMAN KOHN: Any other questions? 5 COMMISSIONER JAMISON: No, sir. 6 COMMISSIONER NEER: No, sir. 7 CHAIRMAN KOHN: All right. Thank you very much. 8 MR. GEORGE: Thank you. 9 CHAIRMAN KOHN: Just so you know, what's going 10 to happen, we're going to hear from Mr. Seibert, who is 11 going to give the Staff recommendation. We will then go 12 into a closed session and hopefully come up with a vote. 13 We will come back out here, then, in open session and 14 adopt a resolution signifying what the result of our 15 deliberations are. 16 I'm telling you all that because I don't know 17 how long it's going to take. So if you want to go out for 18 breakfast or lunch or dinner, feel free, but when we're 19 finished, we're going to come back out here and start. So 20 I just don't know how long that's going to be. So 21 Mr. Seibert. 22 EXECUTIVE DIRECTOR SEIBERT: Staff does 23 recommend approval. 24 CHAIRMAN KOHN: Okay. Is there a motion to go 25 into closed session?

0191 1 COMMISSIONER JAMISON: I move we go into a 2 closed meeting under Sections 313.847, Revised Missouri 3 Statutes, Investigatory, Proprietary and Application 4 Records and 610.021, Subsection 1, Revised Missouri 5 Statutes, Legal Actions, Subsection 3, Subsection 13, 6 Personnel, and Subsection 14, Records Protected from 7 Disclosure by Law. 8 CHAIRMAN KOHN: Is there a second? 9 COMMISSIONER NEER: Second. 10 CHAIRMAN KOHN: Angie. 11 MS. FRANKS: Commissioner Lombardo. 12 COMMISSIONER LOMBARDO: Approve. 13 MS. FRANKS: Commissioner Neer. 14 COMMISSIONER NEER: Approve. 15 MS. FRANKS: Commissioner Hale. 16 COMMISSIONER HALE: Approve. 17 MS. FRANKS: Commissioner Jamison. 18 COMMISSIONER JAMISON: Approve. 19 MS. FRANKS: Chairman Kohn. 20 CHAIRMAN KOHN: Approve. 21 (Break in proceedings.) 22 CHAIRMAN KOHN: Angie, do we have to have roll 23 call? 24 MS. FRANKS: Yes. Commissioner Lombardo. 25 COMMISSIONER LOMBARDO: Present.

0192 1 MS. FRANKS: Commissioner Neer. 2 COMMISSIONER NEER: Present. 3 MS. FRANKS: Commissioner Hale. 4 COMMISSIONER HALE: Present. 5 MS. FRANKS: Commissioner Jamison. 6 COMMISSIONER JAMISON: Present. 7 MS. FRANKS: Commissioner Kohn. 8 CHAIRMAN KOHN: Present. So we're going to 9 adopt some resolutions, but before we do, I want to just 10 thank everybody for an outstanding presentation, 11 regardless of what side you were on, and that includes 12 Staff and our General Counsel and everybody on the Gaming 13 Commission that participated in this. 14 You made our jobs a lot easier and there was an 15 awful lot of work that went into preparing all the 16 documents that we have received and, believe it or not, 17 have read in great detail. So thank you all. At this 18 time we're ready to approve a series of three resolutions. 19 COMMISSIONER JAMISON: I can do it. 20 CHAIRMAN KOHN: Okay. 21 COMMISSIONER JAMISON: I move for the adoption 22 of Resolution Number 16-011 approving Pinnacle 23 Entertainment, Incorporated's and Gaming & Leisure 24 Properties, Incorporated's joint petition for approval of 25 transfer of interest and change of control.

0193 1 COMMISSIONER LOMBARDO: Second. 2 CHAIRMAN KOHN: Roll call. 3 MS. FRANKS: Commissioner Lombardo. 4 COMMISSIONER LOMBARDO: Approve. 5 MS. FRANKS: Commissioner Neer. 6 COMMISSIONER NEER: Approve. 7 MS. FRANKS: Commissioner Hale. 8 COMMISSIONER HALE: Approve. 9 MS. FRANKS: Commissioner Jamison. 10 COMMISSIONER JAMISON: Approve. 11 MS. FRANKS: Chairman Kohn. 12 CHAIRMAN KOHN: Approve. 13 MS. FRANKS: By your vote, you've adopted 14 Resolution 16-001. 15 COMMISSIONER JAMISON: I move for approval of 16 Missouri Gaming Commission Resolution No. 16-012 regarding 17 finding of suitability and licensure of PNK Entertainment, 18 Incorporated. 19 CHAIRMAN KOHN: Is there a second? 20 COMMISSIONER NEER: Second. 21 CHAIRMAN KOHN: Angie -- discussion? Angie. 22 MS. FRANKS: Commissioner Lombardo. 23 COMMISSIONER LOMBARDO: Approve. 24 MS. FRANKS: Commissioner Neer. 25 COMMISSIONER NEER: Approve.

0194 1 MS. FRANKS: Commissioner Hale. 2 COMMISSIONER HALE: Approve. 3 MS. FRANKS: Commissioner Jamison. 4 COMMISSIONER JAMISON: Approve. 5 MS. FRANKS: Chairman Kohn. 6 CHAIRMAN KOHN: Approve. 7 MS. FRANKS: By your vote you've adopted -- is 8 12? 9 COMMISSIONER JAMISON: 12. 10 MS. FRANKS: Okay. Resolution No. 16-012. 11 CHAIRMAN KOHN: Next. 12 COMMISSIONER JAMISON: I move for the Missouri 13 Gaming Commission Resolution No. 16-013, approval of, 14 regarding licensure of certain key business entity license 15 applicants. 16 CHAIRMAN KOHN: Second? 17 COMMISSIONER NEER: Second. 18 CHAIRMAN KOHN: Angie. 19 MS. FRANKS: Commissioner Lombardo. 20 COMMISSIONER LOMBARDO: Approve. 21 MS. FRANKS: Commissioner Neer. 22 COMMISSIONER NEER: Approve. 23 MS. FRANKS: Commissioner Hale. 24 COMMISSIONER HALE: Approve. 25 MS. FRANKS: Commissioner Jamison.

0195 1 COMMISSIONER JAMISON: Approve. 2 MS. FRANKS: Chairman Kohn. 3 CHAIRMAN KOHN: Approve. 4 MS. FRANKS: By your vote you've adopted 5 Resolution No. 16-013. 6 CHAIRMAN KOHN: Any other business to come 7 before the meeting? 8 COMMISSIONER HALE: No, sir. 9 CHAIRMAN KOHN: If not, is there a motion to 10 adjourn? 11 COMMISSIONER HALE: So moved. 12 COMMISSIONER LOMBARDO: Second. 13 CHAIRMAN KOHN: One more roll call. 14 MS. FRANKS: Commissioner Lombardo. 15 COMMISSIONER LOMBARDO: Approve. 16 MS. FRANKS: Commissioner Neer. 17 COMMISSIONER NEER: Approve. 18 MS. FRANKS: Commissioner Hale. 19 COMMISSIONER HALE: Approve. 20 MS. FRANKS: Commissioner Jamison. 21 COMMISSIONER JAMISON: Approve. 22 MS. FRANKS: Chairman Kohn. 23 CHAIRMAN KOHN: Approve. Now, get out. 24 (Proceedings concluded at 2:49 P.M.) 25

0196 1 CERTIFICATE OF REPORTER 2 I, Julie K. Kearns, Certified Court Reporter 3 (MO), Certified Shorthand Reporter (IL), Registered 4 Professional Reporter and Certified Realtime Reporter 5 within and for the State of Missouri, do hereby certify 6 that I was personally present at the proceedings had in 7 the above-entitled cause at the time and place set forth 8 in the caption sheet thereof; that I then and there took 9 down in Stenotype the proceedings had; and that the 10 foregoing is a true and correct transcript of such 11 Stenotype notes so made at such time and place. 12 13 14 ______15 Julie K. Kearns, CCR #993, CSR, RPR, CRR 16 17 18 19 20 21 22 23 24 25