Consultants: It’s Best Sunshine

Two U.S.-based consultants hired to investigate and review two applications for a license to build a casino on Saipan separately recommended Best Sunshine International Ltd. over Marianas Stars Entertainment Inc. But the final decision whether to award the hard-fought license to Best Sunshine still rests with the Lottery Commission, which meets again at 2pm today for that decision.

The Lottery Commission hired The Innovation Group of Companies and B2G Global Strategies for a total of some $500,000 to look into the proposed casino resort development plans and the backgrounds of the applicants, respectively.

Best Sunshine scored 67.5, while Marianas Stars got a rating of 51.0 on a scale of 1 to 100 with 100 as the highest. That’s a 16.5-point difference.

This is based on the Innovation Group’s evaluation of the applicants’ Saipan casino resort development plan.

“While Best Sunshine’s score of 67.5 out of 100 points reflects an acceptable threshold on which to base negotiations, the successful negotiation of a strong development agreement should effectively increase the score to above at least 85 points on a parallel basis,” The Innovation Group president Michael Soll said.

Soll presented the findings to the public during a Lottery Commission meeting yesterday afternoon at the Pedro P. Tenorio Multi-Purpose Center in Susupe.

He was accompanied by Joel Rittvo, director of architecture design at the Innovation Group, an international provider of consulting and management services for the gaming, hospitality, leisure, and entertainment industries.

B2G Global Strategies found “significant adverse finding” regarding the failure of Marianas Stars’ parent company, Mega Stars Overseas, to comply with regulatory requirements and failure to sufficiently cooperate with a regulatory agency, the Tinian Casino Gaming Control Commission.

B2G Global Strategies, through project manager for the CNMI Steve Gomez, said the significant adverse finding relates to involvement in the operations at Tinian Dynasty without proper licensing and problematic compliance with the TCGCC.

Mega Stars has bought Tinian Dynasty Hotel & Casino.

In his presentation, Gomez said B2G concluded that Best Sunshine would be “suitable” to be issued a license.

Gomez was accompanied at the presentation by B2G’s Lisa Garcia.

B2G, an international consulting and investigations firm specializing in security consulting, due diligence investigations, and strategic solutions for the business sector and government entities, looked into four areas in evaluating Best Sunshine and Marianas Stars’ background: gaming experience and regulatory compliance, organizational structure, source of financing, and personnel background checks.

Sixto Igisomar, chairman of the four-member Lottery Commission, said yesterday that no decision was made during the commission’s executive session following the consultants’ presentation.

He said the commission meets again at 2pm today at the multi-purpose center to discuss the consultants’ recommendations.

“We will make a decision [Tuesday]. What that decision is, we would not know until [Tuesday],” added Igisomar, who is also the Department of Commerce secretary.

The three other commissioners present yesterday were Finance Secretary Larrisa Larson, Deputy Attorney General Gil Birnbrich, and Department of Public Safety Commissioner James Deleon Guerrero.

Best Sunshine

Terence Tay, Best Sunshine’s chief operating officer, said the evaluation results were a “pretty good health check” on what Best Sunshine is doing right and the issues it has to take note of.

“We’re quite happy to hear the presentation by the consultants because at least we know what we have to do to improve, what are the things that we are doing right,” he said shortly after the consultants’ presentation.

As to B2G’s findings that Best Sunshine may attract negative attention because of First Natural Food’s close ties to junket operator Hang Seng, Tay said, “Junket operations sometimes bring about negative press reports but not all junkets are involved in shady businesses.”

“There are very well-run junket operators and I believe Hang Seng is one of them. There are junket operators even in Singapore, and these are very closely regulated by authorities,” he said.

Tay said some junket operators are known as independent agents, while some are known as international marketing agents “but basically they by and large contribute to the business of casino.”

B2G’s evaluation of Best Sunshine’s organizational structure indicates “no adverse finding.”

When asked whether Best Sunshine is confident it would be granted the exclusive Saipan casino license, Tay said it would be up to the Lottery Commission but he said Best Sunshine is “heartened” by what they heard yesterday from the consultants.

Tay also reiterated that Best Sunshine has been checking out properties on Saipan, but was not saying which ones are on the top of their list. When asked whether a public land in Marpi and the current site of the Hopwood Junior High School are among them, Tay said they have looked at those as well.

The Innovation Group said their recommendation implies that Best Sunshine and its casino resort proposal are commercially acceptable as a basis for entering negotiations for a “development agreement,” and between the two proposals submitted, Best Sunshine’s has the highest potential for maximizing benefits to the CNMI based on the weighing criteria that the Lottery Commission has set.

Marianas Stars

Marianas Stars representatives and consultants were also at the Lottery Commission meeting and presentation, just like representatives from Best Sunshine.

In a statement hours after the meeting, Marianas Stars said it “respects and appreciates the findings from consultants The Innovation Group and B2G Global Strategies.”

However, with respect to B2G’sconclusions regarding parent company Mega Stars’ gaming operations on Tinian, “Mega Stars wants to clarify that it has in fact been cooperating with the Tinian Casino Gaming Control Commission as it regards TCGCC Resolution No. 14-01 dated May 23rd, 2014.”

“While there had been some areas of confusion between Mega Stars and the TCGCC that led to said resolution, these matters have since been addressed in a series of exchanges between the two parties. Mega Stars has attempted at every step along the way to explain our positions clearly to the TCGCC, to seek its input, ideas, and to work cooperatively with it to resolve any issues that arise. We remain committed to Tinian, and we hope that our investment there remains economically viable for us,” it added.

Public

At the start of the meeting and before the presentation of reports, two individuals got up for the public comment period. Businessman Juan Demapan said he wanted to comment but he didn’t know about the consultants’ report, while Gary Dubrall sought clarification as to when a decision will be made.

Dubrall later said the presentation and commission meeting were “a continuation of the farce” on the whole casino matter.

He believes it’s a “foregone conclusion” to pick Best Sunshine, accusing the governor and some lawmakers of promising Best Sunshine an exclusive license when they were invited to Macau.

Paul Zak, a businessman, said he was at the presentation to see whether there’s any business opportunity to be had, now that a casino license award is imminent.

“Any time a company wants to spend money here, we should look for a business opportunity,” he said. Zak is a shareholder of local airline Arctic Circle Air.

Clyde Norita, a retiree, said he was at the presentation as a “concerned citizen,” along with former lieutenant governor Diego Benavente and Commonwealth Ports Authority board chair Joe Lifoifoi.

Norita was one of three individuals who rallied retirees to Capital Hill last week to put pressure on the House and Senate to pass a bill that would fix the ambiguities in the Saipan casino law and fully empower the Lottery Commission to award a license. Gov. Eloy S. Inos signed the bill into law on Friday, also in the presence of retirees and former defined benefit plan members.

A grant of an exclusive license would trigger the release of a $30 million bank deposit that would be used to pay retirees’ deferred 25-percent pension since last year, as well as the accrued interest on withdrawn DB plan contributions.

Authorizing casino operation on Saipan remains one of the most divisive issues in the CNMI.