BSI CEO: We pay taxes

Mark Brown

Best Sunshine International, Ltd. wanted to clarify to the public that they are paying taxes—however, not casino taxes.

In a press conference, BSI chief executive officer Mark Brown said he wanted to give emphasis for the people to “understand and know that we are paying a lot of tax.”

Brown was acting in response to previous media reports, which in their view, got the public confused that they don’t pay taxes at all.

Brown said BSI has contributed to the CNMI treasury about $70 million on just mainly taxes of gross revenues and fees.

Brown mentioned some of these fees saying that from the beginning, they have paid a $ 1 million application fee for their license. They also already paid the first, second, and fifth year of the license fee of $15 million a year totaling $45 million, $3 million a year for the casino commission’s salary, $4.4 million for permits and development fees, $1.7 million on excise taxes, have given $10 million to the Commonwealth Utilities Corp., and had other contributions as they buy lands, homes, and brought in yachts.

Aside from these, Brown said they are paying a 5 percent business gross revenue tax on all their revenues including the gaming tables.

As of April 30, Brown said they have paid $14 million in BGRT, averaging $3 million to $4 million a month.

No to adding casino or gaming tax

For this reason, and adding the detail that they will be paying about $38 million a year once they operate and have two buildings, Brown said they are not okay should there be a casino or gaming tax on top of all their other fees and taxes.

“Who actually wants to pay more tax?” Brown said, “We don’t want to pay more tax.”

“Why would we want to pay a $40 million a year fee…it’s almost $40 million that we’re going to be paying, and then we’re paying the 5 percent BGRT,” he added.

“So you’re saying, would you be okay with a gaming tax on top of the 5 percent BGRT on top of the $40 million that you pay every year? The answer would be no, of course not, we wouldn’t be happy with that,” Brown said.

Asked if they would comply should a casino tax be implemented, Brown said “no” because that is stated in their exclusive casino license.

“No, we won’t comply with that. Our license agreement says no gaming tax,” Brown said.

“That was the agreement coming in. You pay this $15 million fee, you pay this $20 million fee, you pay the commission’s salary, and there’ll be no gaming tax. Even though you’re still paying BGRT,” she added.

Brown, who had been in the casino industry in various countries, said other casino jurisdictions don’t require to pay $40 million every year to operate a casino.

“There’s no $40 million fee that they pay every year, that’s the difference. New Jersey, you’ll pay a 9 percent tax, but no one is paying $40 million fee a year to be there, that’s the difference,” Brown said.

Brown said it should be “one or the other” but not both, adding that they will pay casino taxes should “the $40 million a year went away.”

“But that’s not what they’re thinking. They’re thinking on top of the $40 million. That doesn’t make sense. No other jurisdiction does both. You don’t have $40 million fee and pay a gaming tax,” Brown said.

“I’d rather have a 9 percent and no fee, than a 5 percent and a $40 million fee,” he added.

Gaming tax in the future

Previous media interviews with Gov. Ralph DLG Torres, however, said that the government “do need to tax gaming but perhaps right now is not the right time.”

“There are no ifs or buts, we will tax them. But we need them to start the investment now before we start taxing them,” Torres said, referring to casino or gaming tax.

“Wherever you go, in regards the casino, you start them with zero interest and then you build that revenue in. You start that investment and then eventually you tax them,” he added.

However, asked when the right time will be to implement a casino or gaming tax, Torres did not give a direct answer.

“Whenever you look at tax, you got to look at what the investment is and what is the projected revenue to bring back their investment. That is the time when we will discuss do we increase it now? Do we propose 1 percent, 5 percent, 10 percent?” Torres said.

“Eventually, we all know it’s going up to 20 to 30 percent. As to know what point [that is], we got to monitor that,” he added.

Torres mentioned that is what happened in Las Vegas and Macau, before they start taxing 40 years ago and that there is certain growth of the tax.

Torres also recognized BSI’s contributions to the CNMI with their current taxes and investments.

“Don’t forget that for the investment here. We don’t waive the excise tax. They pay excise tax. They are not qualified for a qualifying certificate. Rota and Tinian, on the other hand, they have the qualifying certificates that can apply. If you look at those numbers you can benefit up to $500 million or $600 million dollars,” Torres said.

“So although there are zero taxes for gaming, you see them grow this economy from land, housing, employment, higher salaries, number of employees being hired, and the indirect cost with everyone else, with all the other businesses you’ve seen them with the effect they are coming in with the revenue,” he added. (With reports from Dennis Chan)