‘Review visas of construction workers’

The Commonwealth Casino Commission has tasked Saipan casino owners to revisit contracts with their contractors and sub-contractors, in light of rumors circulating of employees working at the casino’s construction site who may have “questionable immigration status.”

“We are now directing Imperial Pacific to revisit contract agreements with sub-contractors to demand that they demand all employees must be legally authorized to work,” casino commission executive director Edward Deleon Guerrero said, alluding to recent reports of tourist visa abuse by businesses in the Commonwealth that seek to hire these “tourists” to continue or move forward with their hotel, restaurant, or construction projects.

At the same time, the Saipan casino’s—or Best Sunshine, Ltd.’s—projected construction costs for their Grand Mariana casino resort in the heart of Garapan is now estimated to cost about $550 million, taking into account additional costs for sewer pipeline and traffic design and construction they will shoulder for projects nearby and outside their construction grounds.

“Close to $180 million” has already been spent on the Saipan casino project, according to Guerrero. The casino originally raised a first batch of $100 million and then $200 million for a total of $300 million, with the $180 spent toward the casino’s “temporary” gaming facility in the T-Galleria mall and the construction of Grand Mariana.

The casino will feature about 374 rooms, seven restaurants, among numerous slot machines and gaming tables in their casino facility. Best Sunshine currently has 815 employees, with over 65 percent local and U.S. workers and potential to expand to go to 3,500 to 4,000 employees with the Grand Mariana.

“They have a significant amount of that $300 million still in their balance sheet,” said Guerrero. “The gap or the difference to the $550 million is why we asked to them explain how that is to be raised and when. We are comfortable with what we heard,” he said, adding that have asked for additional documents and also discussed the intimate financial details of funding parties in executive session during a commission meeting on Friday.

Best Sunshine has provided a report on “where they’re funding sources” are, and have submitted an annual report for 2014 to 2015, said Guerrero. Hong Kong-based and island-based officials met with the commission last Friday to provide and explain this documentation.

“The $500 million was explained in detail so we are comfortable that they are able to do it,” he said. “They are also assuming a lot of the costs associated with traffic movement in Garapan inclusive of laying of the sewage treatment pipe” two miles down to a treatment plant in Sadog Tasi.

“They will be taking care of that,” he added. “Originally, it was $500 million but now they are looking at perhaps $550 million

“From what we heard, we are confident that Imperial Pacific is in a good position financially and otherwise as earlier envisioned and as improved by CNMI regulatory agencies,” said Guerrero.

Timeline and earnings

The casino’s lease for a “temporary” casino in T-Galleria is good for about 18 months, which the commission takes to mean that the Grand Mariana—at least for casino gaming—should be up and running on or before but not to exceed April 2017.

“Whether the entire facility is done, we don’t know,” Guerrero added. “But at least the gaming portion should be up and operating and should be out of the T-Galleria.”

Guerrero also provided an industry standard formula—without disclosing the results—to assess the casino’s revenue projections and how much taxes have been paid out. The formula multiplies the casino’s average rolling chip volume value per month with 2.8 percent—or the standard house “hold” or share—and multiplies this value with 5 percent, or the maximum percentage of business gross revenue tax, which the casino pays out.

As December rolling chip volume was reported to be $1.44 billion and $1.6 billion in November, the casino’s tax payout would be substantial.

“That is what we are about to report to the government,” said Guerrero, “as to our projections on what this industry may be raising in the fiscal year 2016.”

Guerrero expressed surprise at the casino’s earnings “for such a small facility, with only four VIP rooms, and the fourth one only added in recent weeks.

“The volume of rolling chip activity that is $1.6 billion in November. That volume in a very small facility, where there is no hotel, where it is in a mall, is unheard of,” Guerrero said. “That has been bringing some serious attention to this little island of Saipan. From what we’ve been hearing from other contacts, investors are taking a second look into Imperial Pacific.

The Saipan casino believes this is comparable to Macau gaming on the scale it is now.