THE Saipan and Northern Islands Legislative Delegation’s Gaming Committee on Wednesday last week approved an amendment to the electronic gaming law with inputs from the operators and the Office of the Attorney General.
To address the concerns of MP Holdings LLC and Marianas Entertainment LLC, the two remaining e-gaming operators on Saipan, House Floor Leader Ralph N. Yumul introduced House Local Bill 22-28 last year, proposing substantial changes to S.L.L. 22-6, which, according to the operators, will shut their business down because it doubles their license fee.
Signed by Gov. Ralph DLG Torres on Aug. 2, 2021, the local law imposes an additional fee of $2,500 or 15% of net gaming proceeds, whichever is greater, on all electronic gaming devices on Saipan, including poker amusement machines located within e-gaming facilities or hotels.
Lawmakers did not conduct a public hearing before passing the controversial bill.
Over a week after the enactment of the measure, Marianas Entertainment LLC, which operates Club 88 in Garapan, and MP Holdings LLC, the operator of Saipan Vegas in Chalan Kiya, sued the CNMI government in Superior Court.
Judge Kenneth Govendo “strongly encouraged” that lawmakers and the e-gaming operators “discuss [the issue] and see if there was room for compromise before returning to the court.”
Over the last six months, the committee has held a series of meetings with the e-gaming operators regarding proposed amendments.
The new bill, H.L.B. 22-28, “is the product of private businesses and the government putting their heads together to solve a problem,” according to MP Holdings LLC General Manager Bart Jackson who appeared Wednesday before the delegation gaming committee.
Present in the committee meeting were its chairman, Rep. Edwin Propst, vice chair, Rep. Tina Sablan, and members, Sen. Edith Deleon Guerrero, Vice Speaker Blas Jonathan Attao, Reps. Celina Babauta, Richard Lizama and Vicente Camacho.
‘Well thought-out’
In his testimony, Jackson said H.L.B. 22-28 is a “well thought-out” bill. He said the fee structure it proposes “is very fair” and the bill will save the e-gaming industry.
“It will bring in more revenue for Saipan. The amendment is the product of private businesses and the government putting their heads together to solve a problem. The operators fully support the passage of the amendment,” said Jackson who thanked the delegation for giving him an opportunity to comment.
He said the delegation “has been very receptive to the comments and concerns of the operators throughout the process.”
The operators are very much appreciative of all the time they were given to explain how S.L.L. 22-6 would affect the operators and how the proposed amendment would very much help, according to Jackson.
He noted that MP Holdings and Marianas Entertainment are the only two remaining companies involved in the operations of electronic gaming on Saipan. “And, as with any businesses, the…taxes and license fees can be profound.”
Jackson said the delegation “has been very welcoming and has clearly wanted to understand, and the operators very much appreciate this.”
The operators, he added, have noted that the delegation’s aim is to raise funds for education and other purposes, and the operators and members of the community fully support the same goal.
H.L.B 22-28, he said, will enable the operators to continue their businesses. Fees will be increased and will benefit the community, but the increase in fees, will be manageable for the operators, he added.
Without the amendment, the operators would likely close, and instead of raising more funds there would be lost revenue for Saipan, he said.
Substitute bill
Jackson added that the e-gaming operators have no objection to the recommendation of the Office of the Attorney General, and are “satisfied to move forward” with it.
The committee then went on a recess to address, among other things, the AG’s recommendation.
When the committee resumed its meeting, Rep. Tina Sablan offered a substitute bill, which included language recommended by the AG.
It reads, “There is hereby imposed, pursuant to 1 CMC Section 1402(c)(4), an annual local license fee on all poker amusement machines, electronic gaming machines, or electronic table games as defined in 6 CMC Section 3154(a)(3)-(4), and also on such machines, and games situated in a hotel pursuant to 6 CMC Section 3156(b), within the Third Senatorial District, equal to $2,000 per machine.”
Sablan said this is the flat rate “that we agreed upon,” adding that “this is the local license fee that would be imposed on each machine on top of the fees that the operators are paying by Commonwealth law.”
The substitute bill also includes a provision that reads, “Upon enactment, retroactive payment shall be assessed for license fees that would have accrued from the date of enactment of S.L.L. 22-6 to the date of enactment of this bill at the rate provided for in this legislation.”
In addition, the substitute version added language in the bill’s findings stating that:
“This Act is to amend Saipan Local Law 22-6. The Delegation finds that by structuring the license fee as a flat fee, the collection of more revenue without overburdening the e-gaming business is possible.
“The Delegation further finds that the amendment to Saipan Local Law 22-6 should be retroactive in its application to August 2, 2021, the date when Saipan Local Law 22-6 became effective, so that there will be a uniform application of the amounts due under Saipan Local Law 22-6 both before and after its amendment.”
The committee unanimously voted to accept the new version of the local bill in the form of H.L.B. 22-28 House Substitute 1, and recommended its passage by the delegation.
