Admin needs only to enforce, not impose, new poker fees

If the administration is dead-set in collecting more fees from poker operations, then it only needs to enforce the necessary rules and regulations and not impose additional fees, according to the House leadership.

“We believe that if the enforcement is dealt with, then we would have more revenues. And that should be a first step, even before they impose a $6,000 additional charge because, after all, you can’t even collect what is legally due right now. How will you reasonably expect to collect $6,000 in additional fees?” said House leadership spokesman Charles Reyes Jr.

Part of the enforcement would be the imposition of penalties against violators, he said. “There should be some kind of financial penalty in order to discourage operators who are breaking the law.”

Despite findings of illegal operations on Tinian and Saipan, the Department of Commerce does not see the need to close down shops or impose fines against the operators. Commerce Secretary Andrew Salas recently said that illegal operators would only be asked to register their machines and pay the accrued taxes.

“The Executive Branch should adhere to its proper function to enforce the law. The Legislatures makes laws and the Executive Branch is charged with the primary task of enforcing the laws. They should just enforce the laws regarding the poker industry,” said Reyes.

Commerce public information officer Glenn Manglona said the department is fairly new in the game, noting that Commerce had just accepted the responsibility of collecting poker license fees from the Department of Finance through a memorandum of agreement.

He also said that Commerce aims to provide due process to every concerned party.

“We follow procedures. There is an administrative process that we follow,” he said.

Commerce, which formed a task force last month to go after illegal poker operators following the transfer of responsibility from Finance, said that 42 percent of 116 poker machines on Tinian were violating the law, which means that they are either unlicensed or the operators have not paid the fee appropriately.

Poker operators are mandated to pay $6,000 per machine on Tinian, $8,000 on Rota, and $12,000 on Saipan.

They used to pay the license fee upfront but a law was passed that allowed them to pay the amount on a quarterly basis.

Salas said that, based on the task force report, Rota has 100-percent compliance. There are nine poker establishments on Rota. The task force’s work on Saipan, according to Commerce, is not yet completed. There are an estimated 1,200 poker machines on Saipan.

The Babauta administration said the money raised from its proposal to increase the poker fee in Fiscal Year 2006 would be spent for education. The administration endorses the full $50-million budget request of the Public School System. The PSS currently receives $37.2 million a year.

Gov. Juan N. Babauta said that, apart from poker fees, the administration also cut government agencies budget by an average of 6.5 percent to help fund PSS and other essential offices such as the Public Health and Public Safety.

“It’s not entirely poker. We also cut government agencies’ budget to fund education,” said Babauta.

The Legislature, however, is unlikely to support the governor’s proposal on raising poker fees.

Sen. Joseph Mendiola, chair of the Senate Committee on Fiscal Affairs, said that counting the projected poker fee increase for government’s expenditure in FY 2006 is unwise.

“There’s no assurance that it [poker license increase] would ever take place so we can’t consider it for fiscal year 2006 budget discussions,” said Mendiola.

He said it would only be considered if a bill is introduced and passed in the Legislature, favoring the increase.

The administration said existing resources would only amount to $206 million in FY 2006. To get more revenues, the administration aims to divert all available funds from Tobacco Control Fund, and Tobacco Settlement Fund to the General Fund as well as impose an additional $6,000 poker license fee.

All these proposed measures are aimed to generate some $19 million in additional revenue.