Marianas Variety

Last updateSat, 23 Nov 2019 12am

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    Thursday, November 21, 2019-11:23:46P.M.

     

     

     

     

     

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E-gaming operator opposes 10% gambling tax measure

MP HOLDINGS LLC, which operates Saipan Vegas and owns Marianas Entertainment LLC, the operator of Club 88, opposes House Local Bill 21-23 which would impose a 10 percent tax on net gambling revenue.

Introduced by Rep. Tina Sablan, House Local Bill 21-23 is still with the Ways & Means Committee of the Saipan and Northern Islands Delegation which is also waiting for the comments of casino operator Imperial Pacific International and Club C, a gaming facility at Kanoa Resort.

In his comment, MP Holdings general manager Angus Noble told Ways and Means Committee chairman Ivan Blanco that “we strenuously oppose the enactment of H.L.B. 21-23 because it would unfairly add to the numerous and burdensome governmental fees and taxes already imposed on electronic gaming in the Commonwealth.”

He said gaming establishments are already obligated to pay a $2,500 electronic game licensing fee for each machine; a minimum of $100,000 electronic game site operator license fee; and a 5 percent annual business gross revenue tax.

Moreover, he said, electronic gaming establishments are required to operate in an enclosed area or resort premises with a prescribed number of hotel rooms, which means they also have to pay another 5 percent BGR tax for hotel revenue, and the 15 percent hotel occupancy tax.

“The accumulative effect of all these taxes and fees is massive. From 2017 through July 2019, we have paid more than $4.5 million in taxes and fees to the CNMI government, comprising approximately 25 percent of our total revenues during that period. It would simply be unfair and unduly burdensome on electronic gaming businesses such as ours to add yet another tax, this time equal to an additional 10 percent of net gaming revenue,” Noble said.

For its part, the Saipan Chamber of Commerce said it “cannot comment in favor or against the bill without being provided more information on the impacts on the entire economy.”

The chamber said lawmakers should conduct a thorough study before imposing a new gambling revenue tax.

House Minority Leaders Edwin Propst, who co-sponsored the bill, said it is “very kind” because the 10 percent tax is imposed on net gaming revenue and not on gross revenue. It also gives credit for the annual license fee, he added.