Slot parlors in Saipan aren’t happy with the government and believe that they’re taking the fall for Imperial Pacific International’s (IPI) incompetence. A new law that effectively doubles the amount they have to pay in taxes, while IPI, which is clinging onto the Imperial Palace casino, still hasn’t paid millions of dollars in outstanding taxes and fees, has led to a lawsuit against the Commonwealth of Northern Mariana Islands (CNMI). It has also led to a warning that the local gambling market is close to shutting down completely if changes aren’t made.
New Slot Machine Taxes in Saipan Lead to Lawsuit
According to Marianas Variety, slot machine clubs are going after the CNMI government after lawmakers approved a law that requires them to pay more taxes. Last week, the Saipan and Northern Islands Legislative Delegation passed a measure that adds a new fee on each machine, requiring operators to pay an additional $2,500 or 15% of net gaming revenue per slot, depending on which figure is greater. The operators already pay a license of $100,000 per property, as well as 5% in business gross revenue.
Yesterday, Club 88 operator MARIANA Entertainment LLC and Saipan Vegas operator MP Holdings LLC took their complaint to the CNMI Superior Court. They argue that the new tax, which was implemented without any public hearing or committee report, is unlawful. They want the government to intervene and reverse the decision and, if it doesn’t, the market could come to a complete standstill. A consultant to MARIANA Entertainment, Gus Noble, told Marianas Variety that lack of favorable results “may have the opposite effect, causing the e-gaming industry in the CNMI to shut down entirely.” He added, “If this happens, despite the imposition of a new tax, the citizens of the CNMI will receive zero revenue from e-gaming,”
New Taxes Allegedly a Direct Result of IPI’s Influence
While some might argue that the new taxes are a necessity due to the problems that have emerged in the wake of COVID-19, the operators aren’t convinced. In fact, the source of the new tax is proof enough that this isn’t the case. The law was proposed by Representative Ralph Yumul, the brother of IPI CEO Ray N. Yumul. That connection, and the fact that IPI has been fighting for monopolistic control of Saipan’s gaming industry, is enough to make the operators feel that this is just another underhanded attempt by IPI to manipulate the government.
IPI has a history of not playing by the rules and is now paying the price as assets are being confiscated to cover its financial obligations. It also owes $18 million to the CNMI government in licenses and fees, and that’s just from last year. Imperial Palace remains closed due to COVID-19 and the expansion IPI promised to have completed by now may not be done for another five years. Given the company’s track record of continuous missteps, it wouldn’t be surprising to learn that the company had something to do with the new tax on the slot parlors.