Time is running short for Saipan casino operator Imperial Pacific International (IPI) to settle its outstanding debt to the Commonwealth Casino Commission (CCC), which regulates gaming in the Commonwealth of the Northern Mariana Islands (CNMI).
On November 30, commissioners gave IPI 30 days to pay US$62 million in gaming license fees it owes the CNMI government or lose its right to operate. The annual license fee is $15.5 million, and according to the Saipan Tribune, the fees have gone unpaid for four years.
IPI is fighting back, saying that it had paid the fee each year between 2014 and 2019, but that a $3 million additional regulatory fee added in December 2015 was unconstitutional and voids its casino license agreement (CLA).
Previously, IPI had claimed that it couldn’t pay because of the Covid-19 pandemic, which caused it to close the casino in 2020. According to Inside Asian Gaming, the Imperial Palace Saipan closed in March 2020 due to the pandemic and its license was suspended in April 2021 due to nonpayment of various fees. But at a hearing before the CNMI Supreme Court in January 2023, IPI acknowledged that the “force majeure” event was over.
Commission Vice Chairman Rafael S. Demapan said 30 days is “sufficient time” for IPI to make good on the payment.
Marianas Variety reported that IPI is now seeking a jury trial in the matter, wants an injunction to prevent enforcement of the payment order, and has demanded that the CCC pay restitution for regulatory fees it’s collected in the past.
Its lawsuit states that IPI “was and is still required by CCC to pay the US$3 million annual regulatory fee as a prerequisite to exercising its existing contractual and property rights set forth explicitly in the CLA, rights for which it already has compensated the commonwealth.”
But it adds that additional fees “effectively nullify the explicit terms of the CLA and impose completely unexpected and new liabilities and limitations on the operation of IPI.
“CCC requires IPI to pay excessive and unlawful fees pursuant to the later enacted regulatory fee statute without formal condemnation, as a condition for IPI to operate its business under the CLA despite the CLA already expressly providing for an annual license fee and no such regulatory fee, and further, despite IPI being legally prohibited from operating the casino during the pandemic and when its license was suspended.”
It demanded that the CNMI stop “interfering with IPI’s use and enjoyment of its contractual and property rights, amounting to an unauthorized taking without just compensation.”
CNMI Rep. Marissa Flores has called on commissioners to either promptly revoke IPI’s casino license or tender their resignations.
