Officials, analyst criticize local gaming law
A Chinese development firm is moving ahead with its plan to build a megaresort with gaming on Tinian in the Northern Marianas Islands.
The deal was struck in September 2014, between the island commonwealth and Macau-based Alter City Group Holdings Ltd. and its CNMI subsidiary. The government agreed to lease 1.5 million square meters (372 acres) of public land on Tinian for the proposed casino project, according to the Pacific Daily News. China Construction Engineering Corp., a state-run company, will also act as a partner in the plan.
Phase I of the project will include 500 hotel rooms. The resort ultimately will include 1,500 rooms and an 18-hole golf course.
Tinian is home to a single gaming hall, the Tinian Dynasty Hotel and Casino. Ray Cing, director of the island’s Department of Public Lands, told the News he supports a new casino on the island, which is home to about 2,000 people.
But as the gaming industry expands, one analyst has called Tinian’s two-tier tax system “highly impractical,” according to Marianas Variety.
Maureen D. Williamson, director for regulatory advisory services at White Sands Gaming, criticized a system that taxes gross gaming revenue from “premium” players at 5 percent, and GGR from “non-premium” players at 15 percent. It is very difficult to differentiate players, she said.
“For example, a junket operator representing five players obtains a total of $100,000 in credit. He then distributes $90,000 to Player 1 and $2,500 each to Players 2, 3, 4 and 5. Only Player 1 is a premium player for tax purposes, as only he is placing at risk $20,000 or more,” she said.
However, at Tinian Dynasty, she said, “Players 2, 3, 4 & 5, when seated with Player 1, were treated as premium players for tax purposes when, in fact, the revenue that they generated should have been taxed at 15 percent.”
Williamson said such misunderstandings have had a “deleterious” impact on gaming tax revenues for Tinian, and the problem could have been avoided “had a modest amount of due diligence been undertaken.”
She also suggested that local recordkeeping is unable to assess the creditworthiness of some high rollers. Tinian will not be able to maximize its gaming industry unless it earns a reputation for practices that are “strict, honest, stable, reliable and apolitical,” she added.
Officials with the Tinian Casino Gaming Control Commission agree that commissioners should be free and independent of the “political machinations of the Tinian Legislative Delegation, and free to work, without concern for the shifting political winds, in the sole interest of the people of Tinian who established it for that purpose.”
