Last week, beleaguered Saipan casino operator Imperial Pacific International (IPI) offered to settle a longstanding legal case with the Commonwealth of the Northern Mariana Islands (CNMI) and the Commonwealth Casino Commission (CCC).
Since the Covid-19 pandemic, commissioners say IPI has accumulated debts of US$79.63 million—$62 million in annual exclusive casino license fees, more than $17.62 million in regulatory fees, as well as fines and penalties.
The legal standoff began in 2021, when commissioners filed complaints against IPI for failing to pay an annual $15.5 million license fee and a $3.1 million regulatory fee in 2020; failing to contribute $20 million to the community benefit fund in 2018 and 2019; failing to maintain a minimum $2 billion capital requirement; and failing pay its vendors.
At that point, the commission suspended IPI’s license and then threatened to revoke it outright. Revocation hearings began last week, but were tabled on Friday without apparent resolution. According to the Saipan Tribune, CCC Executive Director Andrew Yeom said IPI agreed to drop two lawsuits against the commission and CNMI Governor Arnold I. Palacios in hopes of settling the dispute.
Michael Chen, attorney for IPI, asked commissioners to keep the settlement offer under seal due to its “confidential nature.” He further asked that the proposed terms be kept private “at least for a period of time,” as it contains sensitive business and financial information.
“It’s probably for the benefit of the public to keep this part of the record only to the commission members and sealed from the public,” Chen said, via Zoom from California. “We are talking about the potential harm to IPI or the CNMI if the revocation hearing goes forward without sealing these settlement records.” Assistant Attorney General Keisha Blaise, counsel for Yeom, did not object.
In the lawsuits, IPI called the regulatory fees “excessive and unlawful” and a violation of U.S. and commonwealth constitutions. The CNMI, a group of islands in the western Pacific, is a U.S. protectorate.
IPI asked that the regulatory fee statute be declared unconstitutional and the defendants ordered to pay back all past fees paid by IPI.
IPI holds exclusive gaming rights on Saipan, the largest island in the CNMI. It is the owner-operator of the Imperial Pacific Palace, which closed in March 2020, at the onset of the Covid-19 pandemic.
Meanwhile, according to Inside Asian Gaming, the Hong Kong Stock Exchange has agreed not to delist IPI shares as planned on February 22.
