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Lottery Commission to hear IPI’s amendment request

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THE CNMI Lottery Commission will meet on Oct. 8 in the governor’s conference room to discuss Imperial Pacific International’s request for a ninth amendment to the casino license agreement, Commerce Secretary and commission chairman Mark Rabauliman said on Thursday.

In its proposed Amendment No. 9, IPI is seeking a 50% reduction in this year’s $15.5 million casino license fee. IPI also wants to be allowed to pay the 2021 license fee by installments.

In addition, IPI is seeking a 50% reduction in the $3 million annual regulatory fee that the Commonwealth Casino Commission is using for its personnel and operations.

 

Commonwealth Casino Commission Acting Executive Director Andrew Yeom, second left, reads a report as vice chairman Ralph Demapan, board member Ramon Dela Cruz, chairman Edward Deleon Guerrero, second right, and board member Diego Songsong, right, listen during the commission’s regular meeting on Wednesday at its office in Gualo Rai. Photo by Emmanuel T. Erediano

Moreover, IPI wants the CNMI government to make Public Law 20-85 retroactive to July 2015 so that IPI can sue patrons over debts starting from 2015.

P.L. 20-85 was enacted in January 2019 “to strengthen the protections against fraudulent misuse of financial instruments in casino gaming and other transactions in the Commonwealth.”

IPI Chief Executive Officer Donald Browne said 15% of bad debts that will be recovered through IPI’s legal action “will be paid to the CNMI as a tax contribution.”

Doubts

But the Commonwealth Casino Commission, the regulatory body that oversees casino operation on Saipan, doubts whether the lottery commission has the authority to accommodate IPI’s requests.

During Wednesday’s meeting, CCC Chairman Edward C. Deleon Guerrero  said he and other commissioners will have to attend the lottery commission hearing.

He also told Tao Xing, IPI senior vice president for marketing & public affairs, that some of IPI’s requests will require amendments to the casino law.

Deleon Guerrero said the lottery commission does not have the authority to unilaterally change  the CNMI gaming law.

“It requires an act of Legislature and the governor has to sign it [into law],” Deleon Guerrero said.

“So for you to come and expect the lottery commission to quickly grant you that, makes no sense. I don’t know how the company does not see that,” Deleon Guerrero said.

The deadline to pay the $3 million regulatory fee and the $20 million community benefit contribution was on Thursday. IPI also failed to pay the 2020 casino license fee that was due on Aug. 12, 2020.

Deleon Guerrero also noted that the IPI board of directors  has appointed Browne as CEO, but did not give him important information regarding the company’s financial standing.

“I cannot imagine how you, Mr. Browne, or anyone from IPI who are here, can negotiate on behalf of IPI with the lottery commission. With what authority do you really have? Do you really know where the money is coming from? Do you really have authority over that money or no?

“Poor Mr. Tao Xing, poor Mr. Browne — you’re doing your very best to save the company, you’re doing your very best to satisfy some obligations, but the people who have the money are not talking to you. And that, I think is very disturbing,” Deleon Guerrero said.

Rep. Tina Sablan, who attended the meeting, said she was surprised to hear that the lottery commission will hear IPI’s request.

She said IPI is asking a lot from the CNMI government. Can the CNMI trust IPI to keep its promises? she asked.

Precinct 1 independent House candidate and former IPI employee, Vince “Kobre” Seman Aldan said the casino investor is treating the CNMI government and the community “like fools.”

But if IPI’s proposed Amendment No. 9 is approved, “it will show that we’re a bunch of fools,” he said.

“I’m not a fool, and it is very frustrating to see the government bending over backwards,” he added.

Tao Xing said if IPI gets the CNMI government’s commitment on the proposed Amendment No. 9, “we will have a clear picture of…our obligations and it is much easier for us to commit the money.”

He said their source of funding to meet all these obligations “is an external entity.”

“So we have to give them a clear picture of whatever commitment and liabilities [we have]…. Once the money reaches the company, the CEO will have the authority. If the money is not here, of course we have no authority. That is why I want to make sure you have the copy of  Amendment No. 9. If you have recommendations, let us know, but we are asking for your support,” Tao Xing said.

“We understand the [CNMI] government’s perspective. We’re kind of trying to broker a deal between the government and our funding entity. So you put yourself in the shoes of the funding entity. If there is no clear picture of future liability you are not going to wire the money…. There is funding, they are just asking for a clear picture,” he added.

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