‘Separate regulation of IPI casino, hotel will create giant ‘blind spots’”

The current form of a Senate bill that will separate the regulation of Imperial Pacific International (CNMI) LLC’s casino and its hotel will create giant “blind spots” where gaming proceeds will be inadvertently and wholly left unmonitored and unregulated, according to Commonwealth Casino Commission executive director Andrew Yeom.

For this reason alone, Yeom said, Senate Bill 22-09 should not be given further consideration in its present form.

In his March 16, 2021, letter to House Committee on Gaming chair Rep. Edwin K. Propst (D-Saipan), Yeom said the proposed bill in its present form would impede CCC’s ability to effectively enforce its regulatory duties in monitoring the movement of funds in non-gaming areas of Imperial Pacific Resort, including hallways, restaurants and bars, the hotel and casino lobby areas, or even parking lots.

The Senate already passed Senate Bill 22-09 on first and final reading last February. It is now with the CNMI House of Representatives and Propst had asked the CCC to comment on it.

During a session on Tinian, Sens. Paul A. Manglona (Ind-Rota) and Edith E. DeLeon Guerrero (D-Saipan) voted “no” to the bill. Sen. Teresita A. Santos (Ind-Rota) abstained.

Sen. Victor H. Bocog (R-Rota), who introduced the legislation, stated in the bill that the purpose is to clarify that the CCC shall regulate only the gaming facilities and activities of IPI and not its hotel facilities and other non-gaming activities.

In his comments that Saipan Tribune obtained yesterday, Yeom noted that it is the Department of Public Works’ Division of Technical Services that has jurisdiction over the implementation and enforcement of the CNMI’s building code and that CCC has never had and still does not have jurisdiction over the construction of the hotel and/or other IPI facilities.

Public Law 18-56 requires IPI to build 5-star facilities. The Casino License Agreement awarded to IPI provides further clarity on the specific deliverables of the 5-star hotel. Yeom said CCC was not involved in developing the CLA.

A new law, Public Law 21-38, made reference to the CCC having concurrent authority in regulating the interior design and cleanliness of the integrated resort. Yet “the CCC has not had any opportunity to develop regulations over these areas as P.L. 21-38 is a new law signed only in the beginning of 2021,” Yeom said.

He said this apparent jurisdiction is not referencing authority over the CNMI’s building code, but compliance with the 5-star quality and other amenities required in the CLA.

Regardless of the intent of Senate Bill 22-09, Yeom said there is no doubt that, as presently constituted, it is overbroad and untenable given the peculiarities of the Initial Gaming Facility (Imperial Pacific Resort), which is presently undergoing construction.

Yeom said the Initial Gaming Facility has a main casino and various gaming facilities within the villa and higher floors of the hotel.

He said the proposed language in a section of a Senate Bill 22-09 would prevent CCC from regulating the hallways and elevators of the hotel area in-between the gaming areas, even though these are areas where casino employees, gaming chips, and gambling money would traverse in day-to-day casino operations.

“The result of the proposed language is that the commission would most likely not be able to fully regulate the gaming that happens within the hotel facility,” Yeom pointed out.

He said this impediment may be counterproductive in guarding against money laundering activities, which may circumvent Anti-Money Laundering regulation.

As an example, he cited that the proposed bill would prevent CCC from implementing AML practices such as requiring all employees of IPI—both gaming and non-gaming (including valet parking staff and janitors of the hotel)—to acquire basic AML training to collectively enable all hotel and casino employees to identify possible money laundering activities.

Yeom underscored the importance that CCC maintains jurisdiction over IPI’s gaming and non-gaming financial activities in order to adequately ensure financial compliance by IPI, particularly pertaining to accurate revenue tracking and its associated tax reporting and/or filing.