“WE are at the finish line of our budget,” Commonwealth Casino Commissioner Martin Mendiola said during a meeting on Thursday, August 25, 2022.
He said the commission which, he added, aims to protect the interest of the Commonwealth, is “the real victim” that suffered “permanent injury because our budget will soon be zero, and who’s going to be responsible for that?”
He was referring to the federal court’s temporary restraining order that prevents the commission from pursuing the revocation of Imperial Pacific International’s exclusive casino license for its failure to meet its obligations, including the $3.15 million regulatory fee which is the main source of the commission’s budget.
Commission Executive Director Andrew Yeom said they have 10 employees, including himself. The commission had over 50 employees prior to the Covid-19 pandemic.
He did not say how much is left in the commission’s fund, but Variety learned from other sources that it is less than $300,000 and may last only until November.
Mendiola said he hopes the Office of the Attorney General will look into the federal court’s TRO “because it is a very serious matter — I think there is a discriminatory aspect in that, in my opinion, which does not weigh too much because I’m not a lawyer.”
Mendiola said he is concerned because “we are at the finish line of our budget. Once that happens, we will shut down. Then, what? Who is going to do something to make us survive?”
Yeom responded, “We understand the frustration. This is a very frustrating…experience.”
Mendiola has “asked a billion-dollar-question” to which “nobody has the perfect answer.”
Commission Chairman Edward C. Deleon Guerrero said their “dire [financial] situation…is something I feel I have to bring to the attention of the Office of the Governor.”
As of Thursday, he said the annual $15.5 million license fee from August 12, 2020, to Aug. 12, 2022, amounted to $46.5 million and had not been paid by IPI.
He added that if IPI fails to pay the $3.15 million regulatory fee by October 1, 2022, it will owe the commission an additional $9.4 million.
He said the total amount IPI owes the commission is close to $56 million already.
House Bill 22-111
“Since we started, we’ve trained all of our staff on gaming regulations at the best institutions,” he added.
“And throughout the years, we attempted our very best to make sure that we regulate this industry to the best of our ability,” Deleon Guerrero said as he reiterated his opposition to Rep. Celina Babauta’s House Bill 22-111 which proposes to “bring the compensation of the commission members in line with other public boards and commissions.”
In his letter to Babauta and Speaker Edmund S. Villagomez, Deleon Guerrero said the measure “will cause significant challenges to the Commission’s efforts to efficiently and effectively regulate the casino gaming industry and enforce its statutory mandates.”
He also reminded lawmakers that the commission has been receiving an annual appropriation of $1 only from the general fund, although recently the central government offered to increase the amount to $1,000.
Deleon Guerrero said while IPI is not operating due to its suspended license, the commission’s work does not stop.
He said as long as IPI is in possession of the casino license, it will fall under the purview of the commission, and still be subject to regulations.
Currently, he said the commission’s 10 employees work daily to provide support and regulatory oversight. They work hand-in-hand with the Office of Attorney General in an effort to enforce and resolve the current woes of the casino industry, Deleon Guerrero added.
“As long as the licensee is under litigation, under appeal or under suspension, the Commission will be required to be in existence,” he said. “Should the current license be successfully revoked, the Commission will be required to provide due diligence, investigations, and research for all potential new operators.”
Deleon Guerrero said H.B. 22-111 does not reflect its intention “to bring the compensation of the Commission members in line with other public boards and commissions.”
He said the measure “effectively caps the pay of Commission employees to an already outdated, non-competitive and insufficient scale.”
Reducing the salaries of the commissioners or capping the salaries of the commission’s employees “does not benefit anyone,” he added.
As a matter of fact, he said it does the opposite. “It takes away interest, it discourages motivation and limits our capabilities,” Deleon Guerrero said.
He said, “It would seem a more beneficial and better use of the Legislature’s time and energy to figure out ways to progress and to raise the CNMI’s standards rather than imposing limitations on hard-working government employees.”
Casino Commissioner Martin Mendiola speaks during the commission meeting on Aug. 25, 2022.
