Acting executive director says CCC can survive only a few months

Yeom

Commonwealth Casino Commission acting executive director Andrew Yeom said yesterday that if Imperial Pacific International (CNMI) LLC fails to pay the $3.15 million in regulatory fee by the October 2020 deadline, CCC can manage only to survive for a few months.

Yeom in an interview said CCC will not entertain IPI’s request to delay the payment of the regulatory fee until 30 days before the scheduled reopening of its casino in Garapan.

“That is not an issue that could be entertained by anyone here. It is engraved into the law,” he said, citing the statute.

The acting executive director said the law specifically clarifies the number how much IPI is supposed to pay and by when.

Yeom said CCC is merely the enforcing entity of local and federal gaming laws.

He said the $3,150,000 in regulatory fee is set by a local statute.

On the $15,502,570 in annual casino licensing fee, Yeom said CCC is in no position to entertain bargains or deals with IPI as it is set by local statute.

“Only the CNMI Legislature has the authority to amend this,” Yeom said.

He said since both the annual casino licensing fee and regulatory fee are set by law, CCC is in no position to bargain how much or when IPI pays their responsibilities.

The deadlines for the annual casino licensing fee was last Aug. 12 and for the annual casino regulatory fee is this Oct. 1.

He said if the regulatory fee is not paid by the Oct. 1 deadline, it will affect CCC tremendously because it’s their source of operation.

“It’s much the same thing like the Las Vegas Commission, New Jersey Commission. They are all funded by the operators. In this case, only one operator,” he said.

Yeom confirmed that CCC still has some reserve funding for the upcoming months should IPI fail pay the annual regulatory fee, which funds the commission.

“At this time, the commission cannot discuss these hypotheticals in specific as the dialogues are ongoing and there are no definitive courses of actions that have been determined,” he said.

Yeom said the usual process would have the CCC initiate an investigation on the late or nonpayment of the fees.

“Conclusion of the investigation may or may not result in disciplinary actions e.g. monetary sanctions, license suspension, and/or even license revocation among other things after proper approval from the board,” he said.

Yeom said they have discussions within CCC about the issue and as well as the Legislature to see what else can be done in terms of prolonging the life of CCC’s operation.

He said CCC has 45 to 50 employees.

Last Aug. 18, Gov. Ralph DLG Torres notified IPI of the government’s intent to suspend or revoke IPI’s exclusive casino license.

Torres wrote a letter that serves as a notice of the government’s intent and also in response to IPI chief executive officer Donald R. Browne’s letter dated last Aug. 11.

The governor said pursuant to Section 31 of the Casino License Agreement (CLA), IPI is now entitled to an “adequate and reasonable time to cure” the breach.

In the Aug. 11 letter, Browne informed Torres, Senate President Victor B. Hocog (R-Rota), House Speaker Blas Jonathan T. Attao (R-Saipan), and other government officials that IPI indeed will not be able to pay the $15.5 million in annual license fee due by the Aug. 12 deadline.

Browne said pursuant to Section 25 of the CLA, and because of the worldwide pandemic, IPI requests an abatement of the casino license fee for the year 2020.

Browne also proposes that payment of the $3 million to support the operations of CCC that IPI owes by this October, be delayed until 30 days before the scheduled reopening of IPI’s casino.

Citing the COVID-19 pandemic that grips the world, Browne described what happened as a classic “force majeure,” and event that effects more than just IPI and that was beyond IPI’s control.