Mark Brown, CEO of Saipan casino operator Imperial Pacific International, says the company’s recent takeover of the Marianas Resort & Spa is a positive sign for the embattled company, plagued in recent years by headlines about sky-high VIP debt, illegal construction workers, missed construction deadlines, destruction from storms and other setbacks at its Imperial Palace resort.
IPI’s takeover of the resort and the arrival of new, legal construction workers are two in the plus column for an operator that badly needs a boost, said Brown. “We just had over 300 investors on island. We basically flew them all ourselves … and all of our investors are excited.”
About the new workers, Brown said he is expecting around 100 workers a month from Thailand and Taiwan to help complete construction of Imperial Palace, the plush integrated resort that first drew attention for generating high VIP turnover, and later for the amount of unpaid debt from those VIPs.
“We are stepping in and we are going to manage the property,” Brown told the Commonwealth Casino Commission last month, according to an account in the Saipan Tribune. “We will take care of the Mariana Resort, the golf course, go-kart area, pool area, and the entire site.”
IPI also announced it expects to partially open the recently renamed Palace by the end of September, along with the Beach Villa Resort adjacent to the casino complex.
Forbes magazine likely is unimpressed by Brown’s optimism. In a recent story, it noted that the Rotary Club of Saipan garnered US$34,000 from a recent Las Vegas Night, and carped, “Perhaps the Rotarians can teach Imperial Pacific International how to operate a profitable casino.”
IPI posted a loss of nearly HK$3 billion (US$382 million) in 2018, and has written off more than HK$9.7 billion in player debt. It still carries almost HK$5 billion in debt, “more than five times its reported profits since opening a temporary casino in a shopping mall in July 2015,” according to Forbes. “Worse, its partly built hotel in Garapan, Saipan’s central tourist district, is an eyesore, a federal case and to some, a desecration. After providing more than half the CNMI budget in fiscal 2018, IPI is failing to deliver government revenue, a justification for casino legalization despite consecutive referendums that voted no. Deemed too big to fail, IPI is failing.”
The magazine quoted an email from local legislator Tina Sablan in which she wrote, “Since October 2018, the government has collected just $41,000 in casino gross revenue taxes. That’s it. And just so we are clear that I am not missing zeros in that number, that’s forty-one thousand dollars.
“We’ve gone through the first half of the fiscal year, and that’s all that IPI has paid. Compare that to nearly $44 million in casino GRT in 2018, and about $68 million in 2017—taxes that went to retirees’ pensions, public schools, the hospital, infrastructure. The impact of this sudden tumble in collections is huge.”
The company has blamed devastation from Typhoon Yutu in October 2017 for part of its woes. But iGamiX Director of Casino Operations Eric Coskun told the magazine, “IPI’s main problem is their business model, it is utterly unsustainable. Almost all of their efforts are focused on the top end of the VIP market, yet most experts know that top level VIP players have a shelf life of two to three years, and most of these top level players usually play on credit.”
