Missouri Minute: Boeing ousts CEO; Ferrellgas to delist from NYSE

Good morning, MBA readers,

The sudden rise of so-called “gray machines” across Missouri has been well-documented by officials and the media. Now, lawmakers seem poised to act on the matter, as the pseudo slot machines have taken center stage a debate around gambling. The chairman of a special Missouri House committee on gambling hopes that a remedy will come as early as first quarter of 2020, depending on momentum in the legislature.

On one side of this debate are companies like Torch Electronics of Wildwood, which argue their gaming machines ought to be free of state regulation since they don’t technically meet the legal definition of a gambling device. Conversely, casinos, outraged by the upstarts potentially poaching their business, have called on lawmakers to outlaw the devices. Further complicating the matter is the use of the devices in fraternal organizations like the American Legion, which for years have relied on both traditional and nontraditional gambling terminals to pad their income.

At the heart of the matter is the question: Are they legal or not? For now, the devices continue to operate en masse and largely without harassment from state and local enforcement officials, who lack adequate legal guidance on how to regulate these devices. Read on to discover more about the complexity of this issue, Ferrellgas’ delisting from the stock market and an unusual verdict favoring Johnson & Johnson in a St. Louis trial over its talc-based products.


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From our newsroom

As Missouri starts issuing medical marijuana licenses, aspiring entrepreneurs plan, hope
Katherine Nolting has worked in health care for over 30 years. Now, she is hoping to use that experience to break into Missouri’s new world of medical marijuana. She and her business partner submitted one of about 2,200 applications to open a medical marijuana business in Missouri. The state will issue fewer than 350 licenses to such businesses.

KC ‘proof-of-concept’ program funds four more startups in Q4
Digital Sandbox KC provided funding to four startups during the final quarter of the year. The companies represent a range of industries, from property management to personal finance.


Stay alert

Boeing ousts Muilenburg as CEO
The aviation giant on Monday fired CEO Dennis Muilenburg, whose handling of the 737 Max crisis has drawn criticism from lawmakers, airlines, regulators and families of the 346 passengers killed in two crashes. Boeing CFO Greg Smith will serve as interim CEO effective immediately, until Chairman David Calhoun takes over on Jan. 13. (New York Times)

DOJ, FCC file documents endorsing Sprint/T-Mobile merger amidst trial
The federal agencies have weighed in on a lawsuit against Sprint and T-Mobile, criticizing state attorneys general for their effort to block the two companies’ merger. U.S. District Judge Victor Marrero, who is presiding over the case, has called the Justice Department the “elephant not in the room.” (Wall Street Journal)

Ferrellgas to voluntarily delist from NYSE
The Overland Park, Kansas-based propane supplier intends to file to be delisted from the New York Stock Exchange around Dec. 30, with plans for its shares to be traded in over-the-counter markets. Ferrellgas was notified in July that it had fallen out of compliance with the NYSE’s continued listing standards after its shares closed at less than $1 for 30 consecutive days. (Kansas City Business Journal)

St. Louis jury sides with Johnson & Johnson in local talc case
The jury ruled 9-3, denying a 56-year-old St. Louis woman’s claim that more than 30 years of using talcum-based powder from Johnson & Johnson caused her ovarian cancer. The decision breaks from earlier rulings in St. Louis courts, which awarded $4.7 billion to 22 women who said asbestos in Johnson & Johnson’s baby powder caused their cancers. (Associated Press)

MLS4TheLou hires Kwame as representative
Kwame Building Group has been selected as the MLS4TheLou Ownership Group’s representative and program manager for the new Major League Soccer Stadium planned for downtown St. Louis. The firm will assist in various parts of the project, such as planning, scheduling, budgeting and coordinating with the city and utility companies. (St. Louis Post-Dispatch)

Judge clears McBride venture to proceed with Manchester project
A St. Louis County judge has cleared Elite Development Services, a joint venture of McBride Homes and J.H. Berra Construction, to begin work on a $48 million, 250-unit apartment project in Manchester. The project, first proposed in January 2018, had been held up due to a legal dispute over zoning. (St. Louis Business Journal)

Houston restaurant group wins $40 million bid for Houlihan’s parent
Landry’s, the lone bidder for the assets of HRI Holding Corp., will absorb substantially all of the assets and liabilities of the parent company of Leawood, Kansas-based Houlihan’s Restaurants. HRI filed for bankruptcy in November, citing unfavorable industry and financial conditions. (Kansas City Business Journal)

Columbia appoints first members of sports tourism commission
The Columbia City Council has appointed six members to the new Columbia Sports Commission, an entity created to assist the Convention and Visitors Bureau in promoting local sports tourism. (Columbia Missourian)


Go figure

$25 million

That’s about how much the Missouri Attorney General’s Office has recovered through Medicaid fraud convictions, the Jefferson City News Tribune reports. Missouri’s Medicaid Fraud Control Unit has secured 29 convictions out of 30 indictments in cases this year. That’s up from six convictions in 18 cases in 2018.


Hello, my name is

Phas3

This St. Louis startup, founded by two Saint Louis University graduates, is planning an expansion to Colorado, the St. Louis Business Journal reports. The company’s founders, Lucas Rydberg and Dan Ebeling, were awarded $20,000 after winning Colorado’s Prime Health Challenge. They will pilot their technology, a mobile and web application that supports remote cardiac rehabilitation, in three Colorado hospitals early next year. The pilot program will last six months. Rather than having patients drive to the hospital, the platform allows patients to complete their care plan from home, saving money on transportation costs.


Word to the wise

‘Gray machines’

That’s the name some have given to video gaming terminals popping up in places like gas stations and union halls across the state. The machines resemble slot machines but are not subject to Missouri gambling taxes, unlike similar devices operating in casinos. The term “gray machines” refers to the color of many of the devices, as well as their legally ambiguous status. The machines have drawn the ire of casino operators and lawmakers, and they are expected to be the subject of intense scrutiny in the upcoming legislative session. In an interview with St. Louis Public Radio, Rep. Dan Shaul, chairman of the Special Interim Committee on Gaming, said there are currently between 10,000 and 14,000 gray machines across the state. According to Wildwood-based Torch Electronics, one of the companies that owns such devices, the machines don’t meet the legal definition of a gambling device because players can find out whether they will win cash before making a wager. Shaul said his committee, which held hearings on this issue throughout the summer, faced pressure “from all sides” of the debate.


It’s been a pleasure doing business with you this morning. Happy holidays.


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