Imperial Pacific May Be Done with the Casino Business in Saipan

It was a long time coming, but the writing was on the wall for anyone who could read it. Imperial Pacific International (IPI) is now – at least temporarily – done as a casino operator in the Commonwealth of Northern Mariana Islands (CNMI). The company has spent the past several years building out the Imperial Palace in Saipan and has spent just as long fighting lawsuits, federal investigations, allegations of misconduct, and more. What probably should have happened a year ago when the Commonwealth Casino Commission (CCC) put IPI on notice has finally happened and the casino operator has had its casino license suspended indefinitely.

Too Many Questions, Not Enough Answers

Over the years, IPI has been investigated by the FBI, the Department of Labor (DOL), CNMI gaming regulators, and more. The CCC has finally had enough and ordered that the operator’s license be suspended as of May 10. The proverbial straw that broke the company was a complaint filed by CCC Executive Director Andrew Yeom, who knows all too well how poorly the company has been running, pointing out some of IPI’s more serious transgressions.

Among the latest financial issues to surface, per Yeom’s admission, were the failure to make good on a $15.5-million annual license fee due last August, failure to miss its $3.1-million regulatory fee due last October, failure to make its obligatory $20-million contribution to the CNMI community benefit fund for 2018 and 2019, failure to adhere to $2-billion capital requirement and failure to adhere to a court order to pay outstanding debt owed to vendors.

A Way Out, But Without Guarantees

As a result, CCC Chairman Edward DeLeon Guerrero, intimately familiar with IPI’s inability to fulfill its obligations, ordered the suspension of the operator’s license “indefinitely until IPI complies” with a new order by the CCC. That order gives the company six months to come up with the funds to cover the $15.5-million casino license fee, the $3.1-million regulatory fee, and a $6.6-million fine. However, no one is overly optimistic that this will happen.

Even if it were able to come up with the money, IPI would still be behind with the other payments. The company has repeatedly made excuses for its inability to cover its responsibilities, including blaming them on the “inexperience” of its chairwoman, Cui Li Jie. IPI, as it has done repeatedly, will likely try to shift blame once again as the six-month deadline approaches, blaming its financial woes on the hardships the COVID-19 pandemic has caused. Completion of an expansion project at the Imperial Palace is well behind schedule and has only fallen further behind during the pandemic.

IPI almost went into receivership a month ago but was able to avoid a further disaster at the last minute. The company was sued by the DOL after it fell behind on employee pay and essentially forced many of its employees to live in squalor with no water or electricity, trapped without money to leave. IPI worked out a deal with the DOL and was given an extension; however, the pattern of incompetence remains intact.