Commonwealth Casino Commission chair suggests IPI consider giving up casino licence exclusivity
CCC’s board chair Edward DeLeon Guerrero has said IPI should voluntarily surrender its casino licence exclusivity to sell its assets.
Northern Mariana Islands.- The Commonwealth Casino Commission (CCC) board chair Edward DeLeon Guerrero has recommended that Imperial Pacific International (IPI) give up its exclusive casino licence rights in order to have a greater chance of selling its assets. The recommendation was suggested in a letter to governor Arnold I. Palacios, the Office of the Attorney General, and the CNMI Legislature.
According to the Saipan Tribune, DeLeon Guerrero wrote: “There is a greater chance of success for IPI to sell its assets and the casino licence if they voluntarily surrender the exclusivity, the Casino Licence Agreement (CLA) gets amended, and the Legislature entertains amendment to P.L 18-56.
“It is my understanding that the District Court in the Oct. 1, 2024 IPI’s bankruptcy hearing, decided to allow the sale of IPI’s assets along with the casino licence to increase its value. While the CCC is not necessarily against this idea, it is important to remember that IPI has not satisfied the requirements of the CNMI casino gaming statute (P.L. 18-56), specifically the requirements for IPl to invest a minimum of US$2bn and construct a minimum of 2,000 new hotel rooms of 5-star quality. If the casino licence is to be included in the sale of IPI’s assets, then the potential buyers need to be informed that they would be required to satisfy these requirements as well. To date, IPI has invested an estimated US$400m in the construction of the Initial Gaming Facility (Imperial Pacific Resort or Imperial Palace) in Garapan with 329 rooms under construction and 15 completed 5-star villas.”
DeLeon Guerrero also proposed that the minimum investment requirement for licensees looking to construct new hotel accommodations be reduced from US$2bn to US$300m. He suggested decreasing the necessary number of new hotel rooms from 2,000 to 300 per licensee. The CCC chair also recommended lowering annual casino licence fees from US$15m to US$5m, regulatory fees from US$53m to US$1m per licensee and implementing a tax of 5 per cent on gross gaming revenue.
The CCC also proposed a US$1m application fee to cover investigation costs and due diligence, which would include financial, criminal, and probity checks. It also asked for amendments to the existing CLA between the Lottery Commission and IPI to eliminate and waive IPI’s future obligations to complete Phase I and Phase II of the CLA.
DeLeon Guerrero said: “IPI’s obligations should be restricted to completion and satisfaction of the requirements of the Initial Gaming Facility (Imperial Pacific Resort or Imperial Palace). The House of Representatives, in the recent budget hearing, expressed their willingness to entertain additional licenses but noted its concerns to amend the gaming laws because IPI still has the exclusive license.
“In the past, however, IPI has publicly agreed to waive the exclusivity if they can retain one license. As noted, these are my recommendations on how to move forward with our casino industry. If we do not consider these options, this matter will drag on for many years and the Commonwealth will not realise the economic potential and other benefits that the gaming industry can contribute to our economy.”
