Club 88 to shut down

Club 88 and Saipan Vegas gaming consultant Gus Noble, extreme left, joins some Club 88 employees in a group photo outside the establishment in Garapan yesterday afternoon. Club 88 will be closed next Friday, Aug. 27. (FERDIE DE LA TORRE)

Club 88 in Garapan will be shutting down, resulting in the termination of its 30 staff.

The owner of the e-gaming venue, MP Holdings LLC, announced the club’s closure yesterday, blaming the move on the newly enacted Saipan Local Law 22-6, which essentially doubles the license fees imposed on e-gaming machines.

Club 88 and Saipan Vegas Resort gaming consultant Gus Noble said they’ve already shut down Saipan Country Club last Friday and now they’ve had to make this “very difficult decision” to close Club 88 effective next Friday, Aug. 27.

Besides Club 88,MP Holdings LLC also owns Saipan Vegas in Chalan Laulau and the Saipan Country Club in Chalan Laulau.

Club 88 is located on the ground floor of the Ocean View Hotel. The hotel has been closed since March 2020 due to the COVID-19 pandemic.

At a press briefing at Club 88 yesterday, Noble pointed out that their businesses support the local business community, local economy, and supply jobs to over 70 people and their families.

He said they continue to ask the Saipan and Northern Islands Legislative Delegation to meet them so they can come to a compromise and they can get on with a sustainable business model.

Noble said they are asking SNILD to repeal the bill that led to the enactment of Saipan Local Bill 22-6.

“Let us sit down and talk about a reasonable and fair local gaming tax that we can live with,” he said.

Rep. Ralph Yumul (R-Saipan) introduced House Local Bill 22-8, in April 2021. The bill essentially doubles the license fees imposed on e-gaming machines by imposes a local license fee on all electronic devices on Saipan and poker amusement machines, on top of the license fee per e-gaming machine imposed by Public Law 18-30.

P.L. 18-30 established a license fee per e-gaming machine of $2,500 minimum or 15% of gross gaming revenue derived from that machine, whichever is greater. Saipan Local Law 22-6 means the tax on each gaming machine will now total $5,000.

Noble said yesterday that they consulted a couple of SNILD members last week and had a meeting with one member last Friday.

Noble said they also reached out to House Gaming Committee chair Rep. Edwin K. Propst (D-Saipan) and asked for a meeting.

“As of today, we’ve received no reply back on our request for a meeting,” he said.

Once Club 88 is shut down, he said, the machines will be turned off. Noble said Club 88 has 73 licensed e-gaming machines, including 16 electronic roulette stations.

At this stage, Noble said, they have no decision yet on what to do with the machines as this tax came to them as a total surprise, only 10 days or two weeks ago.

Noble said the intent of the bill to raise taxes is having the opposite impact. He noted that currently, there are only 199 e-gaming machine licenses in the CNMI. “And we’re just about to take 73 out of it. It’s a big percentage and it’s lost revenue for the government,” he pointed out.

Noble said with this new local gaming tax, it’s effective immediately as of Aug. 3.

He said they’re actually relicensing some machines and paying the double tax now. “So it’s not like it’s coming. It’s here. And it has a very severe financial impact on our businesses,” Noble said.

He said they are making very difficult decisions on how to continue under this extremely heavy tax burden.

He pointed out that their staff are all local employees as they don’t have Commonwealth-Only Transitional Workers.

Club 88 opened on July 16, 2015. Noble said they’ve been opened continuously since then, including during last year’s pandemic.

He said during Super Typhoon Yutu in 2018, the Ocean View Hotel was opened and the hotel gave free portable water because they have their own well.

Noble said their company also provided emergency accommodation during Yutu and also support local sporting bodies. “We continue to contribute to the community,” he added.

Bart Jackson, general manager of MP Holdings LLC, said they continue to review their business operations, and make very difficult decision to reduce overheads and costs due to the immediate effect “of this devastating tax,” that doubles their “already high tax burden.”

Jackson said they paid all their staff in 2020 despite being closed for five months due to the COVID-19 lockdown.

With the closure of Club 88, he said they will be providing their 30 staff notices of termination effective on Aug. 27.

In this difficult time of the pandemic, Jackson said, this is a very hard decision, but that they have been forced to do this by “this unfair and unreasonable” tax—“the tax that was passed with no public hearings, no mayoral comment, without an opportunity for MP Holdings LLC to present its case to the local delegation, and correct the record on factual inaccuracies presented by the bill’s author, Rep. Ralph Yumul.”

Maureen Javier, 45, who is a shift manager at Club 88, said, “I feel like I want to cry. But what can we do?” said Javier who is the only one supporting the family because her husband has a heart problem.

Javier and her husband have three children, ages 11, 13, and 22 years old. The eldest, who now has her own family, is currently with the U.S. Air Force.

“I will look for a job but I don’t know where,” said Javier, who has been a Club 88 employee since 2016 or before the club even opened.

Javier said MP Holdings or Club 88 are good employers as they always provide the employees’ needs even during the pandemic.

Javier and the other staff were all wearing yellow shirts with the words “SAVE OUR JOBS” printed on them yesterday.