As to just what its intentions are, what it seeks to accomplish (and how) and what it plans to offer the CNMI in order to justify the planned introduction. It has all been very quiet, yet both the Attorney General’s Office and the Department of Finance in demure, unassuming and brief statements indicate they have been working on “regulations” and the “go” light may soon be issued. In fact, at least one machine is already here!
I was under the impression that “regulations” are supposed to go through a public hearing process and comment period. What happened? What are the proponents (and these government offices) afraid of? This whole process now leads me to believe there is a lot more than meets the eye here and the result is a lot more questions than answers.
Anyway, let’s take a closer look at local prospects. P.E.T. Plans to introduce 750 VLT units. Currently, there are about 791 “slots” in the CNMI (roughly 680 on SPN, 52 on TIQ and 59 on Rota). Thus P.E.T. Plans to just about DOUBLE the number of playing units available and, I suspect, they expect to acquire about half of all the gambling “take” in the CNMI; and further, that the gambling take will increase even more due to the combined presence of existing and new units. But will it? Have the proponents studied all the consequences of such a large impingement on the community and compared that to the demographics of the gambling phenomenon? Is more always really more?
We have already seen that the most probable effect is that up to 40 per cent or more of local gamblers will shift from existing poker units to the new VLTs (at least at first), thus reducing the “take” from existing units and in the process drastically reducing revenues from poker currently relied upon by local municipalities for scholarships or other local funding. But that’s only splitting up existing volume; where does P.E.T. Expect to obtain the rest of its needed revenue? We have also seen that, in general, gamblers from outside the local region simply do not travel long distances to visit stand-alone VLT units. Therefore, a large influx of cross border gamblers should not be expected. After all, Saipan (and the CNMI) have not exactly developed the kind of attractions (and entertainment climate) that anyone would be attracted to anyway as indicated by severely depressed tourist arrivals and the virtual non existence of tourist gambling at existing units.
There is yet another effect well known among experienced gamblers: They “vote”! In other words, gamblers have a keenly developed sense about “payoffs”. They KNOW (or quickly determine) where the machines are that have the best daily payouts. In Nevada, the average daily payout per machine is about $90, one of the lowest in the nation. In Maryland, that payout is about $235, one of the highest in the nation. BUT, these two states are VERY far apart and sport drastic differences in the type of unique gambling excitement they offer, so gamblers do not FREELY “vote” (with their feet) and bounce from one side of the border to the other. The CNMI is not so fortunate — it’s a stand-alone unit. Has P.E.T. Determined what daily payoff rate they will set? What attractiveness they will offer? Will they let us know?
In the CNMI, under present proposals, there will be two competing sets of machines, all the poker units vs. All the VLTs. They will, in effect, compete; good for the gamblers, not so good for the state. P.E.T. MUST set its daily pay out rate higher to draw gamblers away from competition. To do that the percentage pay out must be higher, thus reducing the percentage left over for revenue AND reducing the take available for the state. Gamblers will vote with their feet. Without any expected influx of outside gamblers (and there is NO reason to expect any), will there be an increase in OVERALL gambling revenue? I think not.
Now here’s the “caution” in all this: There is only one way that the owners of P.E.T. Can expect a reasonable profit by doubling the number of stand-alone gambling units in a place like the CNMI. They MUST somehow put all (or nearly all) of the existing units (poker) OUT OF BUSINESS! I’m not saying this might not be a good thing, though! HOW? Remember, gamblers vote with their feet and the owners of P.E.T. Are HIGHLY CONNECTED politically. It wouldn’t take much for these owners to persuade legislators to impose such restrictions (or outright bans) that local poker parlors would simply be run out of business — quickly. What’s the downside to this? After all, it doesn’t sound like such a bad idea after all, or is it?
Tomorrow, in the last of our series, we’ll look at the “caution” in all this, what to expect, and a possible silver lining for Rota and Tinian.
DR. THOMAS D. ARKLE JR.
San Jose, Tinian
(temporarily writing
from Winter Haven, FL.)
