Rota casino commission cuts fees, OKs phased-in projects

To entice businesses during these tough economic times, the Rota Casino Gaming Commission now allows a phased in casino development to meet the required $25 million investment threshold, and has cut the license application filing fee by 90 percent or from $100,000 to $10,000.

The commission also reduced its casino license fee, from a flat rate of $200,000 a year to a tiered rate of $150,000 for one year, $300,000 for three years, and $400,000 for five years.

These are among the amendments made by the Rota Casino Gaming Commission to its regulations to cope with the economic slowdown and the challenges facing new developments on Rota.

Diego M. Songao, chairman of the Rota Casino Gaming Commission, said they have worked tirelessly for the past month with a regional gaming expert to identify areas in the commission’s rules and regulations that conflict with the current gaming investor environment.

“We feel that the positive changes we have made will now allow Rota to be one of the, if not the most, favorable gaming jurisdictions to invest and operate a casino in,” Songao said in a statement.

One of the most significant pro-business changes that the commission made was to allow a casino investor to phase in development to meet the required $25 million total investment that the Rota Gaming Act requires.

Section 2-2.1 of the RCGC regulations, as amended, provides via a “conditional license” a 10-year period for investors to meet the total investment requirement of $25 million, as long as the first phase of development is a minimum of $5 million.

The investor will also be required to financially demonstrate that future funding will be available for the phased development plan of $25 million required within the 10-year period.

“This gives investors a lower upfront threshold of investment ($5 million), so that they have less capital at risk in a global recession environment. At the same time, we provide the time that is necessary for the possible improvement in the overall economic environment,” commissioner Abelina T. Mendiola said.

Melchor A. Mendiola, another commissioner, said the overall goal is to create a regulatory environment that is enticing to developers in a very tight global capital market, but at the same time, strengthening protections for the people of Rota.

For example, licensees will be required to set aside 20 percent of their total purchasing for local businesses on Rota.

Rota casino licensees will also be required to maintain a minimum of 20 percent local resident hires.

“We felt it was necessary that while deregulating and lowering fees for the investor, we, at the same time, ensure that Rota’s economy benefits as the people intended in the passage of the Rota Casino Gaming Act,” said Justin S. Manglona, secretary of the Rota Casino Gaming Commission.

The commission added a requirement for licensees to conduct regular open training for Rota residents, and to waive fees for casino service industry businesses that are based on Rota.

“Overall, we strongly believe that we have made the necessary amendments that are fair to the people of Rota and at the same time acknowledge the difficult economic environment our prospective investors face. The impression we wanted to convey to all investors is that although we are one of the world’s newest gaming jurisdictions, we are also one of the most investor friendly,” commission vice chair Elphrem S. Taimanao said.

In the CNMI, only Tinian Dynasty Hotel and Casino operates a five-star casino, although three other investors are now working on developing new casinos on the island.