SEVERAL members of the Saipan and Northern Islands Legislative Delegation expressed support for Saipan Local Law 22-6, which Gov. Ralph DLG Torres signed last week to double the license fee of electronic gaming machines on Saipan.
The measure was not referred to a delegation committee, and no public hearing was conducted.
On Tuesday, during a delegation session, e-gaming arcade employees and Gus Noble, the consultant of the companies that operate Club 88 in Garapan and the Saipan Vegas in Chalan Laulau, appeared before the lawmakers.
Noble urged them to reconsider their action. He also asked lawmakers to give all the stakeholders “an opportunity to present our case,” adding that the $2,500 fee or 15% of the gaming proceeds is already, “by far, the largest fee paid by a business on island.”
He said Marianas Entertainment and MP Holdings have invested significantly on the island, but the massive and unprecedented increase in fees will “put us out of business.”
Noble added, “We understand these difficult times. We understand you had to make difficult decisions and raise revenue. We are not fighting here. We just want our opportunity to present our position in a fair and reasonable way and we can work with the delegation, on what we can do on both sides, where we don’t destroy an industry, but you guys get something and we continue to be a supporter of this community. Please reconsider the bill. Bring it back to the House and give us an opportunity to present our case, and then we will be quiet and move on.”
For his part, Rep. Edwin Propst defended the measure and its author, Rep. Ralph N. Yumul.
“Who actually are the e-gaming operators profiting off? The tourists? Or the locals or our people?” Propst said, adding that each poker machine is charged a $12,000 fee.
“So I still don’t see [what is] sinister [about the measure]. My dear colleague, Representative Yumul, was not hiding in the dark trying to push all of us and somehow, convincing the chairman and all of us to suddenly support the bill.”
Propst said lawmakers were “portrayed as doing nothing to generate revenue, but then, when we do come with this bill…[which is] bipartisan, [and] we all agreed to [pass] it, for the simple reason of raising revenue, how is it that one of our colleagues is being singled out?”
If the gaming operators are going to blame all the delegation members, “then, blame the governor, too, because he signed it into law.”
Propst said his “conscience is clear when we voted on this because I knew the reason for it. I don’t see any of us doing something sinister, working in the dark to somehow hurt somebody.”
He said he also asked the House legal counsel to look into the allegation of conflict of interest. From his understanding, he said, the new fees also apply to Imperial Pacific International. “So if IPI will also pay higher fees, then where is the conflict of interest?”
The bill’s author, Rep. Ralph N. Yumul, is the brother of IPI’s chief executive officer, former Sen. Ray N. Yumul.
Early this year, Rep. Yumul withdrew his membership from the House Gaming Committee so he would not have to “recus[e] myself from possible meetings or actions on legislation….”
For his part, the delegation chairman, Senate Floor Leader Vinnie Sablan, said that the delegation “zoomed in” on the bill and “provided some good amendments.”
He added, “It actually took us an hour doing that and that is due diligence.”
He also said the revenue that will be generated by the measure “will go to our students.”
Rep. John Paul Sablan suggested that the House legal counsel monitor the complaint for declaratory judgment and injunctive relief filed by the operator of Club 88 and Saipan Vegas in Superior Court against the Department of Finance.
The complaint stated that the newly imposed license fee “is unreasonably high and will destroy Plaintiffs’ business.”
The complaint likewise stated that the measure was proposed by Rep. Ralph Yumul, the brother of the CEO of IPI, “Plaintiffs’ direct competitor, who has a conflict of interest in this matter, and he also voted for its passage. For this reason, passage of the Bill was invalid.”
Rep. John Paul Sablan said part of the lawsuit is “questioning the proceedings of this August body. I think it is fitting that we allow our counsel to monitor the case, as [the plaintiffs] are also questioning our votes and how we voted on this bill.”
Rep Tina Sablan recommended the submission of “an amicus brief, for intervening in some way just to assert the power of this body.” She noted there are procedural questions raised in the lawsuit.
She said there had been “suggestions that the bill was rushed, done in the cover of darkness, and there were also some suggestions that they, the delegation members, were secretive in some way.”
She said a local bill has to appear in the House calendar for three session days at least before it can be passed, “so there were ample opportunities for the public and stakeholders to weigh in and, as [Rep. Edwin Propst has] said, the [Saipan] mayor was present in the gallery when the bill was on the agenda.”
But she also suggested that they “engage in a dialogue” with the e-gaming companies.
Rep. Angel Demapan, for his part, said when they unanimously passed the bill, “it was never the intent of this august body to displace employees.”
He said an appropriate committee should “shed light” on the issue and take a look at the gaming operators’ annual revenue, and how much they are spending on personnel.
“And then we talk about who really has the bigger slice of the pie and the profitability ratio because the legislative intent we undertook on this bill is being misconstrued. If we put the numbers and data in there to support the actions we took for the benefit of the Commonwealth…I think the appropriate committee should take a look at that,” Demapan said.
Noble, the consultant of Saipan Vegas and Club 88, has said that the local law will shut down both businesses and put their employees out of work amid the Covid-19 pandemic.
Rep. Edwin Propst speaks in defense of Saipan Local Law 22-6 and its author, Rep. Ralph N. Yumul, during the Saipan and Northern Islands Legislative Delegation session on Tuesday.
MP Holdings and Marianas Entertainment consultant Gus Noble addresses the members of the Saipan delegation on Tuesday.
Reps. Angel Demapan and Edwin Propst confer during a break from the delegation session on Tuesday.
