THE House Gaming Committee chairman and vice chair on Tuesday expressed their “frustration” with “daily articles in the newspaper” that are making them “look horrible” for passing Saipan Local Law 22-6 which doubled the e-gaming license fees.
E-gaming operators MP Holdings and Mariana Entertainment LLC have said that they could not afford the steep increase and may have to shut down their establishments and lay off their 70 local workers.
Rep. Edwin Propst, who chairs the gaming committee, said the delegation members are being accused of “hurting” the 70 employees.
He added, “They sound like [they’re] saying, ‘Shame on you Saipan lawmakers!’ ” But “they conveniently missed out on many important facts and they also have lied to us.”
He said on the day Club 88 announced it was shutting down “immediately” due to the enactment of S.L.L. 22-6, it did not really close.
Rep. Tina Sablan, the vice chair of the gaming committee, said when she went to the restaurant next to Club 88, she noticed the lights in front were on and people were going in.
When she went in to take a look inside, she added, people were gambling, the machines were working and the staffers were working.
“So who is the liar?” Propst asked.
Last week, Mariana Entertainment said it was temporarily postponing the closure of Club 88 in Garapan after the Saipan and Northern Islands Legislative Delegation received a copy of the electronic gaming operator’s proposed amendment to S.L.L. 22-6 which was passed without being assigned to a committee and without a public hearing.
The e-gaming operators said they are seeking “a dialogue with [lawmakers] to find a compromise and a fair reasonable local tax.”
On Tuesday, Propst said the e-gaming operators “singled out one person, a good colleague, Rep. Ralph Yumul who happened to be the author of the local bill.”
Prost said MP Holdings and Mariana Entertainment lodged an ethics complaint against Yumul because he is the brother of Imperial Pacific International chief executive officer Ray Yumul.
Early this year, Rep. Ralph Yumul withdrew his membership from the House Gaming Committee because his brother is IPI’s CEO.
According to Propst, “it is insulting to our intelligence, and I say this because, unless you live on Jupiter or Mars, we already know that IPI has already shut down, can’t even pay to take down its cranes, is already struggling with its future looking bleak, with its exclusive license suspended and looks like it’s going to be revoked.”
Propst accused the e-gaming operators and their representatives of trying “to bully us, shame us, and make us…suddenly repeal [S.L.L. 22-6] [but it] is not going to work….”
Propst echoed Rep. Angel Demapan’s recommendation that MP Holdings and Marianas Entertainment “open their books so we can have a better understanding.”
Propst said the Legislature’s financial analyst can look into their books “and see what we can determine as fair.”
“So let’s call their bluff,” Propst said. “Come on, bring in your books, we can talk and make a decision with fiscal analysis.”
He said if the e-gaming operators are sincere and want to negotiate, “wouldn’t they simply come to do that instead of launching a lawsuit…and insulting our good colleague, insulting us, insulting our intelligence?”
Propst added, “I’m sorry, I am really disappointed in what is happening and what is being said. It is easy to lie and to hide the obvious truth.”
TRO
The e-gaming operators said they have sought a temporary restraining order from the court because S.L.L. 22-6, which was signed by Gov. Ralph DLG Torres on Aug. 2, 2021, states that it will take effect upon the governor’s approval.
At a hearing last week, Judge Kenneth L. Govendo “strongly encouraged” lawmakers and the e-gaming operators to “see if there was room for compromise before” the next court hearing set for Sept. 16, 2021.
According to the judge, “I got the impression [that] this thing was introduced and passed before the affected parties had any idea what was going on — in other words, after it became law and was signed by the governor that’s when they first found out about it.”
The judge said he has been on island for a long time, and “when something passes this fast and this quickly without comment it’s very difficult for me to believe that the public interest has been considered at all.”
Taking notes
For Rep. Edwin Propst, the e-gaming operators’ consultant “should first and foremost follow the law and register as the lobbyist, same as anyone else who is paid by companies to register as a lobbyist.”
The e-gaming operators, he added, “should also make an apology to our good colleague [Rep. Ralph Yumul] and if they want to negotiate, they should be sincere. Don’t blame us for all your shortfalls.”
Propst said, what has been said of them, the Saipan lawmakers, “is degrading and not acceptable.”
For her part, Rep. Tina Sablan said that she, “like many of her colleagues,” has been taking notes of a “media campaign that has been happening with at least one of our local newspapers, in support of this industry and their interest, this particular e-gaming business interest.”
She said lawmakers have seen “a few examples of these agents operating in bad faith.”
A “number of people representing businesses who are not registered as lobbyists are actively lobbying the members of the Saipan delegation to change the law to benefit their businesses,” she added.
She said she was able to verify from the Department of Finance that “not a penny has been collected in additional fees from e-gaming machines since the local law has been enacted.”
So she wonders why “there were headlines claiming that the local bill’s effect was immediate, and that the business will shut down immediately.”
Section 6 of S.L.L. 22-6 states: “This Act shall take effect upon its approval by the Governor….”
A week after the governor signed it into law, e-gaming consultant Gus Noble was quoted as saying that it would shut down Saipan Vegas and Club 88, and put 70 locals and other U.S. workers out of work.
Rep. Tina Sablan reiterated that the local bill was “not rushed” as it appeared on the House calendar “for months” before the delegation passed it.
According to legislative records, the local bill was introduced on April 23, 2021 and was transmitted to the delegation for action on June 18, 2021.
It wasn’t referred to any committee, and there was no standing report about it.
On June 23, 2021, the delegation passed the bill unanimously. The media learned about it when it was signed into law by the governor on Aug. 2, 2021.
Like Propst, Rep. Tina Sablan said the e-gaming operators should “open their books and show us that their business cannot sustain additional fees that, still, if taken all together, are a fraction of what the poker establishments are already paying.”
She said the owners of MP Holdings are the same owners of Bridge Capital which, she added, is a beneficiary of the qualifying certificate program which grants the company “100% abatement on corporate tax, individual income tax, business gross revenue tax, excise tax, earnings tax, for 25 years.”
So “the people of the Commonwealth have been extremely generous to the owners and executives of Bridge Capital, the same people who operate e-gaming, yet they cannot pay an additional fee.”
“I’d like them to be more honest,” Sablan said. “Let’s stop the media campaign, the accusations and the falsehood-propagated headlines. Let the lawsuit run its course, let these guys register as lobbyists and let’s follow the law.”
She added, “I don’t appreciate the demonstrations of very bad faith and dishonesty, frankly, that we are seeing from agents and representatives of this business.”
Rep. Edwin Propst, right, speaks while Rep. Tina Sablan, left, listens during a session of the Saipan and Northern Islands Legislative Delegation last month.
