Expert: Politics, self interest, real issues behind defeat of Saipan casino bill

Politics and self interest are the real issues behind Saipan casino bill’s latest defeat and not problems related with gambling itself, a Macau-based Asian gaming consultant said even as pro-casino lawmakers in the CNMI prepare a popular initiative so that the question of casino gaming on Saipan can be placed in the Nov 6 ballot.

Ben Lee, managing partner of IGamiX Management & Consulting Ltd., said some lawmakers’ objections to a bill legalizing casino gambling on Saipan are “purely out of self preservation as that solitary casino (on Tinian) is the only employer on that island.”

“The fact that the casino has not paid their staff salary for three months nor their government tax dues seems not to be a factor in their consideration,” Lee said in an interview with Macau Daily Times.

But Rota and Tinian senators have repeatedly said they want Saipan voters to decide on the issue.

“Let the people of Saipan decide,” Senate President Paul Manglona (Ind-Rota) said yesterday. “I support former governor Froilan Tenorio and Governor Fitial’s decision to push for a popular initiative.”

Lee visited Saipan in August 2011 to make a neutral presentation before lawmakers and the administration on what he thinks about the prospect of a casino industry on Saipan.

Seven months later, Lee’s company has been retained by a private regional firm to conduct a feasibility study on the prospects of introducing gaming to Saipan.

The House casino bill that the Senate killed on Wednesday night allows for a percentage of the tax revenues to be shared with Tinian and Rota.

Lee said he sees the latest rejection as “nothing more than a negotiating move to increase their share.”

“However by engaging in this brinkmanship strategy they are in danger of dragging the whole CNMI economy down on its collective knees. For some reason, the local Saipan residents are not asking the question ‘why is Tinian objecting to us having casinos when they have issued 5 licenses themselves?’” Lee told Macau Daily Times.

Rep. Ray Basa (Cov-Saipan), who is one of the strongest advocates for Saipan casino in the House, said yesterday the popular initiative he’s working allocates only to Saipan all revenues from casino gaming should the initiative pass.

Rep. Ralph Demapan (Cov-Saipan), author of the bill that the Senate killed last week, said he is “very disappointed” with senators’ decision.

“One casino license alone costs $10 million. That’s money we can have right away. If we have five investors, there’s $50 million, plus the other economic benefits. I believe the Senate refused to acknowledge the economic impact of this bill,” he added.

Rep. Stanley Torres (Ind-Saipan), who is also pushing for a popular initiative, said they only need about 1,600 signatures to have the Saipan casino question placed on the ballot.

The House members reiterated that they do not see a proposal from the Senate that will equal the benefits of allowing a casino industry on Saipan, adding that the senators’ proposals are minute.

Lee echoed this observation.

“Right now, the government has had to reduce the paid working days of its staff, and they have issues with a serious shortfall in the funding of their pension fund. There are currently no other viable alternatives on the horizon for them except to try and stimulate their once healthy tourism industry,” he told the Macau daily.

Lee said the problem with the CNMI situation “is one of entrenched self interests.”

“Tinian has had a casino on it for about a decade or so, but due to the difficulties in access from Saipan and the lack of any other supporting attractions, the casino has not made a profit from the beginning. Despite that history, the Tinian senate went ahead and issued four more licenses which have not progressed beyond the inking of the agreements. Rota also issued its own gaming license which saw a small casino open and shut after just three months,” he said.

He also does not believe that gambling itself is the real issue.

“The locals already have walking access to the many dozens of video poker arcades all over the island and access to the casino in Tinian. In fact, one of the accompanying clauses to the casino bill called for the closure of all the arcades, which would ameliorate the concerns over problem gambling,” he added.

Lee said as a neutral yet interested observer, he sees a lack of leadership amongst some of the local elders who object strenuously to the idea of casinos yet remain silent when asked for alternative suggestions to their economic and social dilemma.

“Right now, there are no jobs being created, rather, the reverse holds true. With the number of tourist arrivals declining month on month, paid working hours are being cut in all sectors. If the pay in the government sector was to be cut yet again, and this is a distinct possibility, I would say the chance of the subject arising yet again is very strong,” he told Macau Daily Times.

Lee repeated what he said in August about not expecting huge casino resorts on Saipan but he pointed out that gaming could still play a significant role in revitalizing new investments “and more importantly in underpinning new air access arrangements which will boost the critical Korean and China tourism segments.”

“My advice to them now would be to look not just at the direct gaming tax revenue, but at the larger picture, which would be the tourism receipts that will come in with the new gaming tourists,” he told the Macau daily.