JUDGE Kenneth L. Govendo on Thursday heard arguments pertaining to the motion for a temporary restraining order filed by MP Holdings and Mariana Entertainment LLC against the CNMI government over Saipan Local Law 22-6 which doubled the electronic gaming license fee.
Attorney Michael W. Dotts appeared on behalf of the plaintiffs. MP Holdings general manager Bart Jackson and consultant Gus Noble also attended the hearing.
Assistant Attorney General Keisha Blaise represented the Department of Finance, the defendant in the civil case.
Judge Govendo said the hearing will resume on Sept. 16. He “strongly encouraged” lawmakers and the e-gaming operators to “discuss it and see if there was room for compromise before returning to the court.”
The judge noted that the bill was transmitted to the Saipan and Northern Island Delegation for action on June 18, 2021, and was passed five days later.
“The law indicates that the mayor has 30 days to comment,” the judge said. “Why have a 30-day limit for the mayor’s comment if you’re going to pass it as fast as you want?”
The judge added, “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.”
“Mr. Dotts,” he added, “you raised something that I think you should pursue. I realize there are ethical matters to consider…and I think you started with the right one with Mr. Propst when I see something happen this fast,” the judge added, referring to Rep. Edwin Propst, the House Gaming Committee chairman.
“I know Mr. Propst — he is a neighbor of mine, and I am just surprised that something can happen this fast under his watch and [Rep.] Tina Sablan’s watch. That they would do something like this without getting the stakeholders in and asking, ‘How are you affected by this? Is it going to put you out of business? Is the tax too much, and if it is, how much can you afford?’ — in other words, get some feedback.”
Representative Sablan is the vice chair of the House Gaming Committee.
For her part, Assistant Attorney General Keisha Blaise told the court that “the government objects to an introduction of any more financial records….”
As far as the merits of the plaintiffs’ claim, the government attorney said the plaintiffs “just admitted that poker machines are subject to a license fee from both Commonwealth and local laws.”
“So I don’t see how the plaintiffs would succeed on that merit,” Blaise added.
But Judge Govendo replied, “I disagree with that. I would like to see the financials. I think they’re important in deciding this case and whether a preliminary injunction should be issued or not.”
After the hearing, MP Holdings consultant Gus Noble said: “We were encouraged by the judge’s comments and recommendations at the hearing, and in the spirt of cooperation, we have proposed an amendment to the double tax law to the local delegation.”
He added, “We remain available at any time to meet with [lawmakers] to discuss and find a compromise solution, to keep a viable e-gaming industry and save over 70 local people their jobs. We will be reaching out to them,” he said, referring to the lawmakers.
“We appreciate the judge’s observations about the speed in which the bill was passed with little notice, and without comment, and the judge’s recommendation that both parties open a dialogue and for the delegation to get feedback on the impact of the bill.”
Kenneth L. Govendo
