Dynasty owner confirms likely stop to Tinian expansion plans

Tinian Dynasty Hotel & Casino’s new owner, Hong Kong-based Mega Stars Overseas Ltd., confirmed Tinian Mayor Ramon Dela Cruz’s fear that it may stop additional planned investments in the CNMI over the newly enacted law allowing casino gaming on Saipan and its subsequent amendment.
Mega Stars did not say in a statement whether it is applying for an exclusive casino license on Saipan, days after Gov. Eloy S. Inos said he expects them to be one of the applicants.

What was clear is the casino law’s impact on Mega Stars’ plans for additional investment on Tinian, including building a new 1,000-room hotel on Kastiyu, a scenic Tinian area atop Carolinas Plateau. The planned investment in the Puntan Kastiyu project alone is estimated at $200 million.

The plan includes a 36-hole golf course, and a $5 million water park on Tinian.

Mega Stars said its management team, investors, and lawyers are carefully reviewing each aspect of Public Law 18-38 or the Saipan casino law that was later amended by PL 18-43, “to see how they will affect what was to be a very significant additional investment on Tinian.”

“Simply stated, we are seriously considering discontinuing any additional investment in the CNMI due to what our investors perceive to be an irrational business environment here. At the same time, Mega Stars does not want to see major economic disruption for the people of Tinian, to Mega Stars’ existing investments, or the CNMI because one particular potential investor was able to persuade a few politicians to do his bidding,” Mega Stars said in a statement.

The investor said it was “shocked” that a Saipan casino bill would pass the Senate, barely months after it invested in Tinian Dynasty Hotel & Casino and began laying the groundwork for its other planned significant investments on Tinian.

“In July 2013, Mega Stars Overseas Ltd. decided to invest in the Tinian Dynasty Hotel & Casino based on its vision that the island of Tinian could be developed into an upscale international resort and casino destination. Mega Stars saw that Tinian has unspoiled beaches, plentiful fishing, natural terrain suitable for world class golf courses, and beautiful ocean views available for the development of villas and additional high-end hotels,” it said.

It added that the people of Tinian were very friendly and welcoming to visitors and investors, and seemed committed to assisting Mega Stars in carrying out its vision that would also benefit the people of Tinian.

It said it received assurances from the CNMI government, including Tinian and Saipan lawmakers, that a bill allowing casino gaming on Saipan won’t be passed because casinos on Saipan “would have a significant competitive advantage over gaming operations on Tinian because of the lack of direct flights into Tinian.

Mega Stars, however, was aware that casino could be legalized on Saipan if approved by a majority of Saipan voters.

“Knowing that the people of Saipan had already twice rejected such legislation, Mega Stars decided to proceed with its investment in the Dynasty in December 2013 and to begin laying the groundwork for its other planned significant investments on Tinian. Who could have imagined that three months later a new casino bill would be introduced and passed through the House and the Senate in two days, without even the benefit of public hearings?” it said.

They said the same senators—including two from Tinian—who repeatedly assured Mega Stars that they would not support the legalization of casino gaming on Saipan “went ahead and voted contrary to their repeated promises.”

The casino bill became law on March 21. To address many of its problematic provisions, the original law was later amended.

“Mega Stars was shocked by this sudden development. Mega Stars had nothing to do with the drafting or the passage of PL 18-38,” it said.

It said even the amendment measure has some “very significant defects, not the least of which is that it clearly appears to have been drafted and passed solely for the benefit of one particular anticipated investor.”

“To this day, no CNMI politician will even admit responsibility for participating in the drafting of the dreadful legislation—doing away with tax rebates for everyone except the new casino investor—that would become PL 18-38,” it added.

Rep. Trenton Conner (Ind-Tinian), one of the lawmakers who voted against the Saipan casino bill, said yesterday that while it is up to Mega Stars to decide whether to continue or not its planned additional investments on Tinian, he hopes they will still pursue them.

“It’s a wait and see for now,” Conner added.

Lawmakers and the governor went to Hong Kong to meet with investors the past few months. One of those investor groups told lawmakers they plan to invest close to $3 billion in tourism-related developments in the CNMI.