Casino: Not in our future!

The two-headed snake is back in our midst. Obviously, legislators must have learned well Nancy Pelosi’s infamous chime, “Let’s approve it now and find out what’s in it later.”
Legislators quickly approved the measure hoping to tiptoe out of the garden of public scrutiny like midnight thieves, undetected. It’s a show of sheer arrogance, ignoring the powerful voice of the people who shot it down twice in recent past. Sorry, this sentry of public conscience is a very light sleeper.

The exclusive 80-year license is set at $15 million per year plus $1 million application fee and a two-year advance of $30 million. The attractive feature of the license is its exclusivity. Isn’t the requirement of the settlement agreement that pays 75 percent of pension pay (excluding the 25-percent cut) agreed at $45 million annually? It’s obvious the huge shortfall in casino revenue earmarked for the Fund, discounting other obligations, true? So it’s a superficial answer that isn’t an answer either, right?

The exclusive license makes it vital that we maximize revenue collection to the tune of $600 million for the first 25 years with renewal for another 25 years plus a 20-percent increase in COLA. No tax breaks at all, otherwise the investment turns into zero-sum at our expense.

Have our visionaries taken stock of fully poised casino competition from nearby Macau, Singapore, the Philippines, South Korea, and Japan by 2016? Each has a wealthy population to support their industry. With this in mind, where’s our market share in an industry that begins to turn into a glut? Would not this competition reduce casino revenues here and isn’t it an issue that requires some sense of responsible review and thoughtful disposition?

The pipe dream and suspect Holy Grail that casino is the answer requires reading what has happened elsewhere on an industry that has failed to scrounge up the salivated projected revenues. “Casino revenues have been less than half the initial projection. After two years of operation, Ohio’s casino tax revenues are already dropping,” according to a magazine article from the Institute for American Values.

“Indeed, casino revenues are down in a number of states, including Colorado, Louisiana, Missouri and Wisconsin. In Indiana, casino revenues hit an eight-year low. In Mississippi, revenues are down 27 percent from the 2007 peak and the casinos have slashed 8,500 jobs.

When “larger neighboring states legalized casinos, Delaware’s gambling tax revenues plummeted. To offset losses, Delaware legalized table games and sports betting in 2010. Online gambling was added in 2012.

“The added gambling has not stopped the losses. The problem is Delaware no longer attracts out-of-state gamblers because the surrounding states all have casinos. With a population of less than 1 million, Delaware does not have enough gamblers to support its casinos.

“Last year, the casinos threatened layoffs unless Delaware lowered their tax rate. Instead, Gov. Jack Markell gave the casinos $8 million in subsidies. So, the Delaware casinos have gone from generating tax revenues to receiving a government bailout. The state is now scrambling to prop up an industry that produces nothing and entices residents to lose money.”

Nearby Philippines has a lot going for its visitors other than its now thriving casino industry. There’s a lot to see, be it for individual visitors or the family. It tried opening a casino in Subic and Clark but failed to get anywhere. So it turned it into a free trade zone area for industrial purposes.

Is the rush to judgment prompted by having attracted billionaires like Lawrence Ho, chairman of Melco International, David Chow of Macau Legend, fashion icon Karl Lagerfeld, US firms like MGM, Las Vegas Sands and Wynn? Or did we invite ourselves to our own imaginary investor’s table?

2019 end of retirement

The usual icing on the cake is placed prominently on the casino legislation to silence retirees whose salaries were axed by 25 percent. It’s an act of desperation with superficial political salvation that lasts as long as morning dew.

In other words, the projected revenue generation is as real as a three-dollar bill. Furthermore, it would be years before the proposed industry gets off the ground. Is 2019 when the retirement program ends a realistic date or is there a more realistic timeline?

The biggest concern is rather very simple: Do we know what the beast entail, its size, operations and who’s involved and, most importantly, is the investor trustworthy? How do we know that the suspect investment isn’t accompanied by “big time” criminal elements beyond our comprehension? Isn’t the murder of 11 Chinese indicative that a criminal group has already infiltrated the islands and is it our intention to roll out the carpet?

Right off the bat, the projected revenue has a shortfall of some $41 million so how would this pay for the 75 percent pension pay, much less the 25 percent cut in pension? Something doesn’t add up in this fuzzy math. But do policymakers care about our economic, fiscal future, peace and tranquility on the islands? Are we ready to serve as slaves of criminals with tons of money from nearby Asia? The projected revenue is missing, making casino revenues a pipe dream.

It won’t cover the 25-percent cut, increase in health premiums, constant increase in power bills, pending food price increases, among others. It’s a pure case of liarship, not leadership, di ba?

It goes to show the caliber of policymakers who have succumbed to the instant soba mindset. It’s an equal surrender to fiduciary responsibility that requires thoughtful policies.

Perhaps there’s truth to the saying “history repeats itself.” It’s time to do instant replay of the 1979 election when all pro-casino lawmakers were soundly booted out of office. We forced former commander-in-mischief Benigno Fitial out of office. Let’s render the same to incumbents this November. It’s the right thing to do, so let’s do it right!

John DelRosario Jr. is a former publisher of the Saipan Tribune and a former secretary of the Department of Public Lands.