Another poker operator sues

Another poker parlor operator is suing the CNMI government and the Commonwealth Zoning Board so it wouldn’t be required to move two of its four arcades out of villages.

Pacific Amusement Inc. is suing the government, the Zoning board, and Zoning board chair Diego C. Blanco for violations of due process and the equal protection clauses of the CNMI Constitution.

According to PAI secretary and treasurer James B. Gebhard, High Roller 3 in Koblerville, which is one of their two affected poker arcades, is expected to generate approximately $4,800 in earnings per day or $435,000 during the remaining three months of its business license.

In his declaration before the Superior Court, Gebhard said that High Roller 1 on Middle Road Garapan is also in an area not authorized for adult gambling machine businesses under the zoning law.

PAI also operates two other poker rooms on Saipan: the High Roller 5 on Beach Road, Garapan and High Roller 7 on Middle Road in Gualo Rai.

PAI, through counsel Joseph E. Horey, wants the court to affirm the company’s right to continue operating High Roller 1 and High Roller 3 at their current locations until at least Jan. 26, 2018.

In the alternative, PAI asked the court to invalidate the law that would require them to relocate the two arcades as unconstitutional and in violation of the due process clause and equal protection clauses of the CNMI Constitution.

Saipan Local Law 18-5 states that within four years after Oct. 25, 2013, all gambling machine businesses shall be located in areas allowed by law. Other laws also restrict the operation of adult gambling machine businesses to certain geographic areas on Saipan.

PAI sought an injunction to prevent the government, the Zoning board, and Blanco from imposing any fine or taking any other adverse action against PAI until at least Jan. 26, 2018.

Horey said since PAI raises several serious legal questions, and since the balance of hardships tips in its favor, a preliminary injunction should be granted while the case is being tried.

Horey said the business licenses of High Roller 1 and High Roller 3 were renewed by Finance for a one-year period ending Jan. 16, 2018.

Horey said the Zoning board has announced that penalties will be assessed against the operators of adult gambling machine businesses operating in unauthorized zones on or after Oct. 25, 2017, even if such businesses still hold valid and unexpired business licenses.

“There is no rational basis, when enacting a law to take effect four years after its enactment, for requiring it to take effect during the term of an annual business license rather than at the expiration of such term,” Horey pointed out.

He said there is no logical or rational basis for prohibiting adult gambling machine businesses in the area where High Roller 1 is located while allowing it in the adjacent areas, as well as in the numerous hotel within High Roller 1’s area.

In his declaration, Gebhard said that High Roller 1 and 3 account for about 60 percent of PAI’s total gross revenue.

Meanwhile, Gebhard said, PAI’s expenses, such as employee payroll, rent, utilities, insurance, taxes, etc., account for approximately two-thirds of its gross revenues, leaving approximately one-third as profit. Therefore, he said, closing either one would all but eliminate the company’s profit margin.

He said the closure of both High Roller 1 and 3 would mean that PAI’s expenses would exceed its revenues to such a degree that it would not be possible to stay in business without drastically reducing expenses, including such steps as laying off up to 80 percent of its workforce.

Sin Ho Nam and his company, Winnerslife Inc., and Nam’s poker machines operator, Dan Bi Choi LLC, recently filed a similar lawsuit against the same defendants.