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Governor issues ‘notice of intent’ to suspend or revoke IPI casino license

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GOVERNOR Ralph DLG Torres on Wednesday issued a “notice of intent” to suspend or revoke the casino license of Imperial Pacific International in light of its failure to pay the annual exclusive license fee for this year on Aug. 12.

IPI chief executive officer Donald Browne told the CNMI government last week that the casino investor would not be able to pay the $15.5 million license fee for this year because IPI has been closed since March, and will have no income for the next eight months.

“What has happened is a classic, ‘force majeure’…and that was beyond the control of IPI,” Browne said.

In his letter to Browne on Thursday, the governor said the “force majeure” clause in the casino license agreement “cannot supersede an explicit statutory command of the Legislature.”

The governor said the IPI request for abatement for the year 2020 cannot be dealt with administratively as the casino license fee has been set by law, referring to Public Law 18-56, which legalized casino gaming on Saipan.

The obligation to pay the casino regulatory fee, the governor said, was created by Commonwealth law. “The amount to be paid, and the date on which it shall be paid, [are] determined by 4CMC Section 2309.”

Torres said  the reason stated by IPI for delayed payment was foreclosed by the Legislature in 4 CMC Section 2309 (a), which states that the casino regulatory fee is due regardless of actual costs incurred  by the casino commission.

Moreover, Torres said, IPI is in breach of the casino license agreement for its community benefit fund deficiencies.

“Material breach is defined by law as, among other failures, the failure ‘to pay any amount due and payable hereunder upon the date when such payment is due’ and the failure ‘to observe or perform any material obligations or covenant under this agreement,’” the governor said.

“This letter serves as notice of intent to suspend or revoke the license required by Section 31 [of the casino license agreement]. Pursuant to Section 31, IPI now is entitled to an ‘adequate and reasonable time to cure’ the breach.”

The governor also reminded Browne about Section 17 of the casino license agreement, which states: “The continuing validity of the license is conditional upon the licensee’s compliance with applicable laws, rules and regulations of the Commonwealth and the U.S.”

In a brief conversation with Finance Secretary David DLG Atalig at the legislative  building on Monday, IPI senior vice president for public affairs Tao Xing expressed  willingness of IPI to work on a payment plan for the license fee.

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