Saipan casino back to 2 applicants

It’s back to two Saipan casino applicants after the Lottery Commission reconsidered Friday its earlier decision to reject Marianas Stars Entertainment Inc.’s application upon closer review of law-imposed deadlines, among other things. The commission, however, gave two conditions; the first of which has already been met by Marianas Stars when it rewired $30 million in escrow.

The second condition is for Marianas Stars to present before the commission, and the public, portions of its business plan during the commission’s meeting on Tuesday at 10am on Capital Hill. The investor group said Friday it is ready to make its Tuesday presentation.

By a 3-1 vote on Friday noon, the four-member Lottery Commission gave Marianas Stars—just like Best Sunshine International Ltd.—a chance to compete for a license to exclusively develop a minimum $2 billion integrated resort with casino on Saipan.

The three “yes” votes to a motion to reconsider the May 8 rejection decision and reaccept Marianas Stars’ application came from Commerce Secretary Sixto Igisomar, Finance Secretary Larrisa Larson, and Deputy Attorney General Gil Birnbrich.

The lone “no” vote was from Public Safety Commissioner James Deleon Guerrero.

Commission counsel Jim Stump said a written decision will be issued shortly.

Igisomar said Saturday that the written decision that will answer the “why” and “how” could be issued as early as today.

Attorney Sean Frink, one of the counsels for Marianas Stars, along with Marcia Schultz, spent some 20 minutes explaining to the Lottery Commission on Friday morning why the investor group thinks their application should not have been rejected on May 8 and why their competitor’s application should have been rejected earlier on, claiming the commission misapplied or misinterpreted the deadlines set by Public Laws 18-38 and 18-43.

The commission also voted Friday to amend the contracts with casino investigator B2G Global Strategies and gaming consultant The Innovation Group of Companies, following the reconsideration of the second investor group’s casino application.

The original contract was “not more than $400,000” for both U.S.-based consultants. The amended contracts are not expected to exceed half a million, as of Saturday.

‘Give it a chance’

Gov. Eloy S. Inos, when sought for comment on Saturday at the Sabalu Market about the commission’s Friday reconsideration of Marianas Stars as a casino applicant, said both applicants “go through the vetting process.”

Inos earlier said Friday he doesn’t think those who oppose casino on Saipan do so with the intention of preventing retirees from getting their 25 percent deferred pension and for other government employees to get the interest on their withdrawn retirement contribution. But he said “that’s going to be the consequence.”

The governor said some people are “hiding behind the technicality and forgetting about the good things that this project will bring about to the community, not just retirees, but everyone in general.”

“[If] this thing is shot down for whatever reason, I don’t think we’ll ever see this opportunity again…a project of this magnitude that would allow for us to be able to address many of the pressing issues. Casino is not the ultimate answer but it is the only available alternative at the moment. For those folks, the naysayers, I’m going to ask them, give this project a chance. There are already things lined up how this project will benefit the community, from the retirees to the subsidy of LEAC, Public School System, land compensation and so forth. These are issues that have never been addressed for the longest time,” Inos said in an interview while the Lottery Commission was having an executive session on Capital Hill on Friday.

Deadlines

The Lottery Commission rejected Marianas Stars’ application on May 8, saying it didn’t deposit $30 million in escrow “on time,” referring to a May 5 deadline.

Marianas Stars, through Frink, said a correct interpretation of the law, P.L. 18-43, puts the deadline on May 16 to deposit $30 million in escrow. May 16, he said, is the 45th day from the April 1 signing of P.L. 18-43, which amended the original casino law or P.L. 18-38. He said P.L. 18-43 changed the deadlines set by P.L. 18-38.

Frink also showed a copy of his email to commission counsel Jim Stump—dated April 7, which is ahead of both the $1 million application fee and $30 million escrow deposit deadline—that states Frink’s concerns about the announced deadlines that were not the same as the ones imposed by law.

“Also, just following the deadlines imposed by the law could avoid potential problems related to someone filing after the RFP deadline but before the deadlines imposed by the law,” he said.

The commission didn’t change the deadlines in the RFP.

In addressing the commission on Friday, Frink said a correct interpretation of P.L. 18-38 would place the 30-day deadline to submit an application and pay the $1 million application fee on April 20, a Sunday. That is 30 days from the March 21 signing of the original Saipan casino law.

Marianas Stars deposited the $1 million application fee and submitted the application on April 17, while Best Sunshine submitted theirs on April 21. Frink said Best Sunshine missed the April 20 deadline.

“With all due respect, but the law determines the deadlines. This commission can’t extend deadlines, this commission can’t shorten the deadlines,” Frink told the commissioners.

Despite concerns over the commission’s announced deadlines, Marianas Stars tried to meet the commission’s May 5 deadline. However, when Marianas attempted to deposit $30 million on May 5, a Hong Kong bank “balks,” Frink said.

A day later or on May 6, they proposed to the commission an amended escrow instruction.

Frink said Marianas Stars has been trying to engage the commission “and try to explain to you why we think the rejection of our application is a mistake and that we respect your authority.”

“Make no mistake. We don’t think you’re making this decision for the wrong reason. We just think you didn’t know all the information you needed. And we think it’s in everybody’s best interest that you reconsider it this morning,” he said.

After Frink addressed the commission, the latter went into an executive session. When the commission came out of the executive session, Marianas Stars executives and the media were back in the room, and that’s when a motion to reconsider Marianas Stars’ application was offered and voted on.

Cario Hon of Marianas Stars, flanked by other executives of the investor group and their consultant, later told reporters that they are “very happy to hear” about the commission’s reconsideration of its earlier decision.

Hon said there may have been “misunderstanding” or “misleading” communication that occurred, leading to the commission’s original decision.

“We will try our best…We are very confident in our project,” Hon said. He added that Marianas Stars will not deviate from its written business plan submitted to the commission on May 5.

He said Marianas Stars has been checking out possible properties for their project, should they be granted a license to develop an integrated resort with casino on Saipan.

Marianas Stars owns 25 percent of Mega Stars Overseas, which now owns Tinian Dynasty Hotel & Casino. Mega Stars continues its improvement and expansion plans for Tinian.

Best Sunshine chief operating officer Terence Tay also told the media that they have been looking around for possible sites for their proposed project should they get a casino license.

The governor and Public Lands Secretary Pete A. Tenorio are hoping that whoever gets the license would look to private properties first before setting their sights on public lands.

Marianas Stars and Best Sunshine each plan to build an integrated resort with casino and with at least 2,000 guest rooms, with a minimum investment of $2 billion.