Ending Imperial Pacific’s Control Over Saipan’s Casino Market Called Unconstitutional

Posted on: January 4, 2022, 08:57h. 

Last updated on: January 4, 2022, 09:21h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Imperial Pacific International (IPI) continues to hold onto its monopoly of Saipan’s casino market through the Imperial Palace casino. It might continue, as one high-ranking official now asserts that removing that control would be unconstitutional.

Imperial Palace in Saipan
The Imperial Palace in Saipan continues to have difficulty. Lawmakers want to allow more casino licenses through a new bill, which is now being called unconstitutional. (Image: South China Morning Post)

It wasn’t too long ago that Andrew Yeom, the executive director of the Commonwealth Casino Commission (CCC), wanted to see IPI’s reign come to an end. A little more than a year ago, he was pushing for the company’s casino license to be suspended.

IPI has repeatedly been able to avoid losing its grip on Saipan, and now that lawmakers are considering expanding the number of casinos there, it has done it once again. Yeom has apparently softened his stance, according to Marianas Variety. He told lawmakers this week that the bill authorizing the additional casinos can’t move forward.

Yeom previously filed at least five complaints early last year against IPI as it repeatedly failed to meet its obligations with the Commonwealth of Northern Mariana Islands (CNMI). Now, Yeom asserts, “We cannot have a local bill trying to supersede a Commonwealth law.”

IPI still owes millions of dollars to government and private entities. It was appointed a receiver last year to sell assets to cover its debts, but was able to sidestep the sale as it miraculously came up with around US$2 million to cover one of its outstanding bills.

Bills Keep Piling Up

IPI owes the government at least US$38.6 million. It didn’t pay its license fee last August, worth US$15.5 million. It also failed to pay its regulatory fee in October, which was US$3.1 million.

The operator also neglected to make US$20 million in contributions to the community benefit fund in 2018 and 2019. Those contributions were included in the licensing agreement it was issued to operate Imperial Palace.

In addition, a judge had ordered IPI to set aside US$2 billion in capital as a type of guarantee that it would be able to make future payments. That hasn’t been done, either.

IPI is still settling several outstanding bills worth a few million dollars as well. None of these financial obligations are likely to be met, as the Imperial Palace remains closed. IPI’s license was suspended in April of last year, and is still suspended. This and COVID-19 have taken the casino’s revenue to nil.

Legislators Try to Dissolve a Monopoly

In November of last year, after years of dealing with IPI’s repeated issues, CNMI lawmakers tried to fix a mistake. They realized that giving IPI a monopoly was wrong and introduced Local Bill 22-26.

The legislation was drafted specifically to end the operator’s control. It reads, in part, “The present situation, where the exclusive casino licensee has not been able to pay taxes and, most relevantly, cannot reliably pay the $15 million guaranteed license fee, demonstrates that it was imprudent for the Commonwealth to rely on just one industry and just one company.”

The bill adds that, as a result of the oversight, and to “obtain the goal of increased stability and dependability,” the government needs to do away with its single licensee framework” and expand the market.

IPI is fighting the bill and the attempts to kick it out, despite not having any money or proper leadership to keep it afloat.