HOUSE Floor Leader Ralph N. Yumul has introduced local legislation that would allow five casino licenses on Saipan.
Currently, the beleaguered Imperial Pacific International holds the exclusive casino license on island.
According to the “findings” of House Local Bill 22-26, “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. Tying the fate of the retirees’ pension to one single industry was risky — it was even more dangerous to tie the funding for the retirees’ pension to an exclusive licensee.”
“To better provide for the retirees and obtain the goal of increased stability and dependability,” the bill added, “the [Saipan and Northern Islands Legislative Delegation] finds that we must move away from the current single licensee framework that is totally dependent on one business entity.”
H.L.B. 22-26 would also “mandate that the casinos operating in the Third Senatorial District will provide license fees to pay the 25 percent portion of pension benefits to all the retirees in the Third Senatorial District and [reduce] reliance on the funds generated from the Casino Gross Revenue Tax.”
The local bill stated that the original intent of P.L. 18-46, which legalized casino gaming on Saipan, was to create a reliable funding source for retiree pensions.
The local legislation “shall provide for up to five independently viable entities. By increasing the number of locally licensed casinos, there will be more economic support for the industry as the casinos can compete but still work together, sharing costs and expenses for promoting the industry and bringing in tourists for the benefit of not just the Third Senatorial District, but also the entire CNMI.”
The local bill also stated, “By increasing the number of licenses from 1 to 5 while simultaneously requiring annual fees of not $15 million but $3 million, there will be less risk for all concerned. Assuming five local casinos pay a reasonable sum of [$5 million] each, this will result in [$25 million], which is [$10 million] more than what is being presently required by P.L. 18-56.”
The local bill likewise stated that “the present exclusive casino license holder [IPI] has strongly indicated that it cannot or will not be paying its $15 million fee in full, its annual $3 million regulatory fee to the [Commonwealth Casino Commission] nor does it intend to pay its community benefit obligation. Based on these recent indications as well as the record of financial difficulties that is evident to the [Saipan and Northern Islands Legislative Delegation], we believe that the time has come to establish a local industry that will be set up and designed for success as opposed to failure.”
The local bill noted that Public Law 18-56 is a duly enacted Commonwealth law.
“Significantly, this…law provided an exception to the prohibition of gambling for casinos licensed by any Senatorial District. Furthermore, Title 1 of the Commonwealth Code, section 1402(a)(8) allows a local delegation to enact a local law that provides for ‘gambling prohibition and regulation,’ so long as such regulations are in addition to Commonwealth regulations. The SNILD hereby finds that this Act, regulating casino gambling exclusively within the Third Senatorial District, is within the parameters of ‘gambling prohibition and regulation.'”
