THREE poker operators and a taxpayer yesterday filed a $2.1 million lawsuit against the Department of Finance, Finance Secretary Frank B. Villanueva, 21 poker operators, and 30 unidentified persons over the continued operations of unlicensed gaming machines in the commonwealth.
L&W Amusement Corp., Northern Marianas Investment Group Ltd., Pacific Amusement, Inc., and Leonard G. Wolf Jr. sued Finance and Villanueva for allegedly failing to properly monitor and enforce the applicable laws and regulations of the CNMI.
Villanueva was not available for comment yesterday, his staff told Variety.
The 21 co-defendants are Hyun In Corp., Sharon Corp., MKK, Inc., Management & Employment Consultant, Inc., Kanda International, Inc., Martha’s Retail Shop, Inc., Leo Corp., Jimin Enterprises, Inc., You Rim Corp., Liya Import & Export Corp., Han Ho Corp., Pacific Island Creations, Inc., Give and Take Corp., Saipan Lucky Corp., Ever Developing Corp., Life Corp., BGK Corp., Gum Choun Corp., K&K Corp., Soi-In Corp., and Tapa Bar, Inc.
The other co-defendants are 30 John Does representing fictitious names of poker operators whose true names are unknown to the plaintiffs, but who are also believed to be operating poker machines in the CNMI.
The plaintiffs, through attorneys Danilo T. Aguilar and Timothy Farrell, sued the 21 poker operators and 30 others for unfair competition and unfair business practices.
The plaintiffs sought for general and special damages against each of the 21 operators in the amount of $100,000. They also demanded for liquidated damages and treble damages.
Aguilar and Farrell asked the Superior Court to issue a temporary restraining order and preliminary injunction enjoining the 21 defendants from operating unlicensed or unregistered machines.
The lawyers sought for an order preventing the operators from moving, selling, or disposing any of their gaming machines.
The plaintiffs requested the court to allow them to seize all machines that are not licensed or that are owned by unregistered persons.
The plaintiffs asked the court to order Finance and Villanueva to collect all license fees and taxes owing from operators.
The plaintiffs said the finance secretary should seize unlicensed machines and organize the Department of Finance’s collection and enforcement efforts in a manner that allows for public oversight of his efforts.
The Gambling Devices Act makes it unlawful for any person during any calendar year to engage in the business of using or making available for the use by others of any gambling device unless such person has registered with the U.S. attorney general before the date such person buys or receives the gambling device.
Under CNMI law, the complaint said, “the violation of such a federal law is grounds for denying or revoking a poker machine license and should result in the revocation of licenses to operating defendants and a seizure of their machines.”
The defendants, the complaint said, failed and continue to fail to register with the U.S. attorney general.
“CNMI law requires the registration and payment of fees for the commercial operation of amusement machines. Among other fees and taxes, each operator of machines is required to pay an annual $8,000 licensing fee per machine plus the payment of a jackpot tax of 10 percent; and each operator is required to record all jackpot winnings and to collect the tax on such winnings for the CNMI government,” the complaint said.
Since 1988, the plaintiffs said, Finance has failed and refused and continues to fail and refuse to collect license fees, gross receipts taxes, and collect taxes on jackpots from the defendants.
“Because of such failure, the people of the CNMI have lost an approximate amount of $6.4 million per year from licensing fees alone and the people will in the future continue to lose millions of dollars each year,” the plaintiffs said.
They said they have licensed their machines, paid their annual licensing fees, gross receipts taxes, and taxes on their jackpots as required by law.
