Saipan Governor Ralph DLG Torres has signed a bill to levy an additional tax on electronic gaming devices on the island, including poker machines inside iGaming halls and hotels. Industry consultant Gus Noble says the new tax could shut down two gaming venues, Saipan Vegas and Club 88 and put 70 people out of work.
The employees told Marianas Variety they can’t afford to lose their jobs during Covid-19 pandemic and the resulting economic downturn. They protested in “Save Our Jobs” T-shirts while on duty, and are also launching a petition drive to force the repeal of the law, saying it was passed “undemocratically,” without a public hearing.
Authored by House Floor Leader Ralph N. Yumul, S.L.L. 22-6 imposes an additional tax of $2,500 or 15 percent of net gaming proceeds, whichever is greater—essentially doubling the fees on these gaming devices.
Noble described the levy as a “harsh and unfair double tax,” and added, “Backroom deals done by politicians with clear conflicts of interests cannot be tolerated by the people and voters.”
He also said the measure, designed to raise revenues, is self-defeating, as it may cause the shutdown of an entire industry. “If this happens, despite the imposition of a new tax, the citizens of the CNMI will receive zero revenue,” he added.
Saipan Vegas and Club 88 are already paying the highest tax rates on island: a 15 percent gaming tax, a 5 percent business gross revenue tax, a $100,000 annual license fee and the regular CNMI income tax.
According to Inside Asian Gaming, the operators of Club 88 and Saipan Vegas filed a complaint claiming a conflict of interest related to troubled casino operator Imperial Pacific International (IPI), which last year claimed it should have exclusive rights to all gaming operations on Saipan.
The complaint states that the law was proposed by Rep. Ralph Yumul, “the brother of the CEO of IPI, plaintiffs’ direct competitor…. For this reason, passage of the bill was invalid.”
IPI’s license is currently suspended for failure to comply with requirements under its license agreement, including payment of its annual $15.5 million license fee last August and annual $3.1 million regulatory fee.
